CREDIT AGREEMENT
among
MDU RESOURCES GROUP, INC.
as Borrower;
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent;
and
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
Closing Date: June 21, 2005
$100,000,000 Revolving Credit Facility
Arranged by
XXXXX FARGO BANK, NATIONAL ASSOCIATION
as Sole Lead Arranger
TABLE OF CONTENTS
ARTICLE I Definitions
Section 1.1 Definitions
Section 1.2 Rules of Construction
ARTICLE II Amount and Terms of the Credit Facilities
Section 2.1 The Facility
Section 2.2 Procedure for Borrowings
Section 2.3 Interest on Notes
Section 2.4 Principal and Interest Payment Dates
Section 2.5 Level Status, Margins and Fee Rates
Section 2.6 Fees
Section 2.7 Prepayments
Section 2.8 Termination of Facility or Reduction of the Aggregate Facility
Amount
Section 2.9 Payments
Section 2.10 Increased Costs; Capital Adequacy; Funding Exceptions
Section 2.11 Funding Losses
Section 2.12 Discretion of Lenders as to Manner of Funding
Section 2.13 Conclusiveness of Statements; Survival of Provisions
Section 2.14 Computation of Interest and Fees
Section 2.15 Purpose of Borrowings
Section 2.16 Increase of Aggregate Facility Amount
ARTICLE III Conditions Precedent
Section 3.1 Initial Conditions Precedent
Section 3.2 Conditions Precedent to All Borrowings
ARTICLE IV Representations and Warranties
Section 4.1 Existence and Power
Section 4.2 Authorization of Borrowing; No Conflict as to Law or Agreements
Section 4.3 Legal Agreements
Section 4.4 Subsidiaries
Section 4.5 Financial Condition
Section 4.6 Adverse Change
Section 4.7 Litigation
Section 4.8 Environmental Matters
Section 4.9 Regulation U
Section 4.10 Taxes
Section 4.11 Titles and Liens
Section 4.12 Intellectual Property
Section 4.13 ERISA.
ARTICLE V Affirmative Covenants
Section 5.1 Reporting
Section 5.2 Books and Records; Inspection and Examination
Section 5.3 Compliance with Laws
Section 5.4 Payment of Taxes and Other Claims
Section 5.5 Maintenance of Properties
Section 5.6 Insurance
Section 5.7 Preservation of Corporate Existence
ARTICLE VI Negative Covenants
Section 6.1 Liens
Section 6.2 Investments
Section 6.3 Distributions
Section 6.4 Sale of Assets
Section 6.5 Transactions with Affiliates
Section 6.6 Consolidation and Merger
Section 6.7 Environmental Laws
Section 6.8 Restrictions on Nature of Business
Section 6.9 Consolidated Total Leverage Ratio
Section 6.10 Borrower Leverage Ratio
Section 6.11 Interest Coverage Ratio
ARTICLE VII Events of Default, Rights and Remedies
Section 7.1 Events of Default
Section 7.2 Rights and Remedies
ARTICLE VIII The Agent
Section 8.1 Authorization
Section 8.2 Distribution of Payments and Proceeds
Section 8.3 Expenses
Section 8.4 Payments Received Directly by Lenders
Section 8.5 Indemnification
Section 8.6 Exculpation
Section 8.7 Agent and Affiliates
Section 8.8 Credit Investigation
Section 8.9 Resignation and Assignment of Agent
Section 8.10 Defaults
Section 8.11 Obligations Several
ARTICLE IX Miscellaneous
Section 9.1 No Waiver; Cumulative Remedies
Section 9.2 Amendments, Etc
Section 9.3 Notice
Section 9.4 Costs and Expenses
Section 9.5 Indemnification by Borrower
Section 9.6 Execution in Counterparts
Section 9.7 Binding Effect; Assignment and Participations
Section 9.8 Disclosure of Information
Section 9.9 Governing Law
Section 9.10 Consent to Jurisdiction
Section 9.11 Waiver of Jury Trial
Section 9.12 Severability of Provisions
Section 9.13 Prior Agreements
Section 9.14 Other Financing
Section 9.15 Termination of Existing Credit Facility
Section 9.16 Headings
CREDIT AGREEMENT
Dated as of June 21, 2005
MDU Resources Group, Inc., a Delaware corporation,
Xxxxx Fargo Bank, National Association, a national banking
association, as administrative agent hereunder, and the Lenders,
as defined below, agree as follows:
ARTICLE I
Definitions
Section 1.1 Definitions.
As used in this Agreement:
"Additional Lender" means a financial institution that
becomes a Lender pursuant to the procedures set forth in
Section 2.16 or 9.7(c).
"Advance" means an advance by a Lender to the Borrower
pursuant to Article II.
"Affiliate" of any Person means any other Person
directly or indirectly controlling, controlled by or under
the common control with such Person. A Person shall be
deemed to control another Person if the controlling Person
owns 10% or more of any class of voting securities (or other
ownership interests) of the controlled Person or possesses,
directly or indirectly, the power to direct or cause the
direction of the management or policies of the controlled
Person, whether through ownership of stock or other equity
interests, by contract or otherwise.
"Agent" means Xxxxx Fargo acting in its capacity as
administrative agent for itself and the other Lenders
hereunder.
"Aggregate Facility Amount" means $100,000,000, as such
amount may be reduced pursuant to Section 2.8 or increased
pursuant to Section 2.16.
"Agreement" means this Credit Agreement.
"Applicable Rating" means (i) with respect to S&P, the
rating designated by S&P as its corporate credit rating of
the Borrower, (ii) with respect to Xxxxx'x, the rating
designated by Xxxxx'x as its issuer rating of the Borrower,
and (iii) with respect to Fitch, the rating designated by
Fitch as its rating of the Borrower's senior unsecured debt.
"Assignment Certificate" has the meaning set forth in
Section 9.7(e).
"Authorizing Order" means any order of any public
utilities commission or any other regulatory body having
jurisdiction over the Borrower, authorizing and/or
restricting the indebtedness that may be created from time
to time hereunder (whether on account of Advances or
otherwise).
"Base LIBO Rate" means the rate per annum for United
States dollar deposits quoted by the Agent as the Interbank
Market Offered Rate, with the understanding that such rate
is quoted by the Agent for the purpose of calculating
effective rates of interest for loans making reference
thereto, on the first day of an Interest Period for delivery
of funds on said date for a period of time approximately
equal to the number of days in such Interest Period and in
an amount approximately equal to the principal amount to
which such Interest Period applies. The Borrower understands
and agrees that the Agent may base its quotation of the
Interbank Market Offered Rate upon such offers or other
market indicators of the Interbank Market as the Agent in
its discretion deems appropriate including, but not limited
to, the rate offered for U.S. dollar deposits on the London
Interbank Market.
"Borrower" means MDU Resources Group, Inc., a Delaware
corporation.
"Borrower Leverage Ratio" means the ratio of Funded
Debt to Capitalization, determined with respect to the
Borrower alone (excluding its Subsidiaries, but including
any divisions of the Borrower not constituting separate
Persons) as at the end of each fiscal quarter of the
Borrower.
"Borrowing" means a borrowing under Article II
consisting of Advances made to the Borrower at the same time
by each of the Lenders severally.
"Business Day" means a day other than a Saturday,
Sunday, United States national holiday or other day on which
banks in Minnesota are permitted or required by law to
close. Whenever the context relates to a LIBO Rate Funding
or the fixing of a LIBO Rate, "Business Day" means a day
(i) that meets the foregoing definition, and (ii) on which
dealings in U.S. dollar deposits are carried on in the
London interbank eurodollar market.
"Capitalization" means, with respect to any Person as
of any Covenant Compliance Date, (i) Funded Debt of that
Person, plus (ii) shareholders' equity of that Person
(excluding any non-cash gain or loss resulting from the
requirements of Financial Accounting Standards Board
Statement No. 133, "Accounting for Derivative Instruments
and Hedging Activities"), all determined in accordance with
GAAP. In determining Capitalization for purposes of
calculating the Borrower Leverage Ratio, Funded Debt and
equity attributable to any Subsidiary shall be excluded.
"Capitalized Lease" means any lease that in accordance
with GAAP should be capitalized on the balance sheet of the
lessee thereunder or for which the amount of the asset and
liability thereunder as if so capitalized should be
disclosed in a note to such balance sheet. All obligations
under any lease that is treated as an operating lease under
GAAP but pursuant to which the lessee thereunder retains tax
ownership of the leased property for federal income tax
purposes shall be treated as a Capitalized Lease for
purposes of this Agreement.
"Change of Control" means, with respect to any
corporation, either (i) the acquisition by any "person" or
"group" (as those terms are used in Sections 13(d) and 14(d)
of the Exchange Act) of beneficial ownership (as defined in
Rules 13d-3 and 13d-5 of the Securities and Exchange
Commission, except that a Person shall be deemed to have
beneficial ownership of all securities that such Person has
the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or
indirectly, of 25% or more of the then-outstanding voting
capital stock of such corporation; or (ii) a change in the
composition of the board of directors of such corporation or
any corporate parent of such corporation such that
continuing directors cease to constitute more than 50% of
such board of directors. As used in this definition,
"continuing directors" means, as of any date, (i) those
members of the board of directors of the applicable
corporation who assumed office prior to such date, and
(ii) those members of the board of directors of the
applicable corporation who assumed office after such date
and whose appointment or nomination for election by that
corporation's shareholders was approved by a vote of at
least 50% of the directors of such corporation in office
immediately prior to such appointment or nomination.
"Code" means the Internal Revenue Code of 1986, and the
regulations promulgated thereunder, as amended, reformed or
otherwise modified from time to time.
"Commitment" means, with respect to each Lender, that
Lender's commitment to make Advances pursuant to Article II.
"Compliance Certificate" means a certificate in
substantially the form of Exhibit C, or such other form as
the Borrower and the Required Lenders may from time to time
agree upon in writing, executed by the chief financial
officer of the Borrower, stating (i) that any financial
statements delivered therewith have been prepared in
accordance with GAAP (or, in the case of statements prepared
pursuant to Section 5.1(a)(iii), in accordance with FERC
Accounting Principles), subject to year-end adjustments,
(ii) whether or not such officer has knowledge of the
occurrence of any Default or Event of Default hereunder not
theretofore reported and remedied and, if so, stating in
reasonable detail the facts with respect thereto and
(iii) all relevant facts in reasonable detail to evidence,
and the computations as to, whether or not the Borrower is
in compliance with the Financial Covenants.
"Consolidated Net Worth" means, at any time, the excess
of total assets of the Borrower over total liabilities of
the Borrower as of the last day of the fiscal quarter most
recently then ended, determined on a consolidated basis in
accordance with GAAP.
"Consolidated Total Leverage Ratio" means, as of any
Covenant Compliance Date, the ratio of Funded Debt to
Capitalization, determined on a consolidated basis with
respect to the Borrower and all of its Subsidiaries.
"Covenant Compliance Date" means the last day of each
fiscal quarter of the Borrower.
"Credit Exposure" means, with respect to any Lender at
any time, (i) such Lender's Facility Amount (whether used or
unused) at such time, or (ii) if the Commitments have
terminated in their entirety, the aggregate outstanding
principal amount of its Note at such time.
"Default" means an event that, with the giving of
notice, the passage of time or both, would constitute an
Event of Default.
"Distribution" means any payment made by the Borrower
on account of any equity interest in the Borrower, including
but not limited to any dividend and any payment in purchase,
redemption or other retirement of any stock or membership
interest.
"EBITDA" means, with respect to any period:
(i) (A) the after-tax net income of the Borrower for
such period, determined on an unconsolidated basis
in accordance with GAAP, excluding (B) non-
operating gains and losses (including
extraordinary or unusual gains and losses, gains
and losses from discontinuance of operations,
gains and losses arising from the sale of assets
other than inventory, and other non-recurring
gains and losses),
plus
(ii) the sum of the following to the extent
deducted in arriving at the after-tax net income
determined in clause (i)(A) of this definition
(but without duplication for any item):
(A) Interest Expense,
(B) federal, state and local income taxes paid by
the Borrower, and
(C) depreciation and amortization.
"Eligible Lender" means (a) a financial institution
organized under the laws of the United States, or any state
thereof, and having a combined capital and surplus of at
least $100,000,000; (b) a commercial bank organized under
the laws of any other country which is a member of the
Organization for Economic Cooperation and Development, or a
political subdivision of any such country, and having a
combined capital and surplus of at least $100,000,000,
provided that such bank is acting through a branch or agency
located in the United States; and (c) a Person that is
primarily engaged in the business of commercial banking and
that is (i) a Subsidiary of a Lender, (ii) a Subsidiary of a
Person of which a Lender is a Subsidiary, or (iii) a Person
of which a Lender is a Subsidiary.
"Environmental Claim" means a material claim, however
asserted, by any governmental authority or other Person
alleging potential liability or responsibility for violation
of any Environmental Law, or for release or injury to the
environment.
"Environmental Law" means the Comprehensive
Environmental Response, Compensation and Liability Act, 42
U.S.C. Section 9601 et seq., the Resource Conservation and
Recovery Act, 42 U.S.C. Section 6901 et seq., the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1802 et seq., the
Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq., the
Federal Water Pollution Control Act, 33 U.S.C. Section 1252 et
seq., the Clean Water Act, 33 U.S.C. Section 1321 et seq., the
Clean Air Act, 42 U.S.C. Section 7401 et seq., and any other
federal, state, county, municipal, local or other statute,
law, ordinance or regulation which in each case relates to
human health or the environment, all as may be from time to
time amended.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
"ERISA Affiliate" means any trade or business (whether
or not incorporated) that is, along with the Borrower, a
member of a controlled group of corporations or a controlled
group of trades or businesses, as described in sections
414(b) and 414(c), respectively, of the Code.
"ERISA Event" means (a) a Reportable Event with respect
to a Pension Plan; (b) a withdrawal by the Borrower or any
ERISA Affiliate from a Pension Plan subject to Section 4063
of ERISA during a plan year in which it was a substantial
employer (as defined in Section 4001(a)(2) of ERISA) or a
cessation of operations which is treated as such a
withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by the Borrower or any ERISA Affiliate
from a Multiemployer Plan or notification that a
Multiemployer Plan is in reorganization; (d) the
commencement of proceedings by the PBGC to terminate a
Pension Plan; (e) a failure by the Borrower or any ERISA
Affiliate to make required contributions to a Pension Plan,
Multiemployer Plan or other Plan subject to Section 412 of
the Code; (f) an event or condition which might reasonably
be expected to constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan; (g) the imposition
of any liability under Title IV of ERISA, other than PBGC
premiums due but not delinquent under Section 4007 of ERISA,
upon the Borrower or any ERISA Affiliate; or (h) an
application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code with
respect to any Plan.
"ERISA Termination Event" means the filing of a notice
of intent to terminate a Pension Plan, or the treatment of a
plan amendment as the termination of a Pension Plan, under
Section 4041 or 4041A of ERISA.
"Event of Default" has the meaning specified in Section 7.1.
"Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Existing Credit Agreement" means the Credit Agreement
dated July 18, 2003 among the Borrower, Xxxxx Fargo Bank,
National Association, as Administrative Agent, and the
Lenders, as defined therein, together with all amendments,
modifications and restatements thereof.
"Existing Credit Facility" means the revolving credit
facility arising under the Existing Credit Agreement.
"Facility" means the revolving credit facility
established under Section 2.1.
"Facility Amount" means, (i) with respect to each
original Lender hereunder, the amount set forth opposite
that Lender's name in Exhibit A, (ii) with respect to each
Additional Lender, the amount so designated on the
applicable Assignment Certificate, or (iii) in the case of
any Incremental Lender, such Incremental Lender's Facility
Amount as determined pursuant to Section 2.16, in each case
as such amount may be adjusted pursuant to Section 2.8, 2.16
or any Assignment Certificate.
"Facility Fee Rate" means a percentage, determined as
set forth in Section 2.5.
"Federal Funds Rate" means at any time an interest rate
per annum equal to the weighted average of the rates for
overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as
published for such day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such
day for such transactions received by the Agent from three
federal funds brokers of recognized standing selected by it,
it being understood that the Federal Funds Rate for any day
which is not a Business Day shall be the Federal Funds Rate
for the next preceding Business Day.
"Fee Letters" means one or more separate agreements
between the Borrower and the Agent, setting forth the terms
of certain fees to be paid by the Borrower to the Agent for
the Agent's own behalf or for the benefit of the Lenders, as
more fully set forth therein.
"FERC Accounting Principles" means the accounting
requirements of the Federal Energy Regulatory Commission as
set forth in its applicable Uniform System of Accounts and
published accounting releases.
"Financial Covenant" means any of the Borrower's
obligations set forth in Sections 6.9, 6.10 and 6.11 of this
Agreement
"Fitch" means Fitch, Inc.
"Floating Rate" means, at any time, an annual rate
equal to the sum of the Floating Rate Margin and the greater
of:
(a) the Prime Rate,
or
(b) the Federal Funds Rate, plus 50 basis points
(0.50%).
The Floating Rate shall change when and as the Prime Rate or
Federal Funds Rate, as the case may be, or Floating Rate
Margin changes.
"Floating Rate Funding" means any Borrowing, or any
portion of the principal balance of the Notes, bearing
interest at the Floating Rate.
"Floating Rate Margin" means a percentage, determined
as set forth in Section 2.5.
"Funded Debt" of any Person means (without
duplication) (i) all indebtedness of such Person for
borrowed money (which shall, in the case of the Borrower,
include but not be limited to all indebtedness under this
Agreement, all indebtedness arising under the Mortgage
Indentures, and all Subordinated Debt); (ii) indebtedness
of such Person evidenced by bonds, notes or similar written
instruments, whether or not representing obligations for
borrowed money; (iii) all liabilities required to appear on
such Person's balance sheet with respect to Capitalized
Lease obligations of such Person; (iv) all indebtedness
secured by a Lien on any property owned by such Person,
whether or not such indebtedness has been assumed by such
Person or is nonrecourse to such Person; (v) the face amount
of all letters of credit and bankers' acceptances issued for
the account of such Person, and without duplication, all
drafts drawn thereunder; (vi) all obligations of such Person
with respect to leases constituting part of a sale and
leaseback arrangement; (vii) all net obligations of such
Person under interest rate agreements or currency
agreements; and (viii) guaranty obligations of such Person
with respect to indebtedness for borrowed money of another
Person (including affiliates).
"Funding" means a Floating Rate Funding or a LIBO Rate
Funding.
"GAAP" means generally accepted accounting principles
as in effect from time to time applied on a basis consistent
with the accounting practices applied in the financial
statements of the Borrower and its Subsidiaries referred to
in Section 4.5.
"Incremental Lender" has the meaning set forth in
Section 2.16(b).
"Insolvency Proceeding" means, with respect to a
Person, (a) any case, action or proceeding with respect to
such Person before any court or other governmental authority
relating to bankruptcy, reorganization, insolvency,
liquidation, receivership, dissolution, winding-up or relief
of debtors, or (b) any general assignment for the benefit to
creditors, composition, marshalling of assets for creditors,
or other similar arrangement in respect of its creditors
generally or any substantial portion of its creditors,
undertaken under U.S. federal, state or foreign law,
including the Federal Bankruptcy Reform Act of 1978 (11
U.S.C. Section 101, et seq.).
"Interest Coverage Ratio" means, as of any Covenant
Compliance Date, the ratio of (i) EBITDA during the period
of 12 months ending on that Covenant Compliance Date, to
(ii) Interest Expense during such period.
"Interest Expense" means, with respect to any period,
the aggregate interest expense (including capitalized
interest) of the Borrower alone (i.e., on an unconsolidated
basis) for such period, including but not limited to the
interest portion of any Capitalized Lease; provided,
however, that the foregoing shall be adjusted to reflect
only the net effect of any interest rate swap, interest
hedging transaction or other similar arrangement entered
into by the Borrower to reduce or eliminate variations in
its interest expenses.
"Interest Period" means, with respect to any LIBO Rate
Funding, a period of one, two, three or six months beginning
on a Business Day, as elected by the Borrower.
"Lenders" means Xxxxx Fargo, acting on its own behalf
and not as Agent, each of the undersigned lenders, and any
financial institution that becomes a Lender pursuant to
Section 2.16 or 9.7(c), collectively.
"Level Status" means Xxxxx X, Xxxxx XX, Xxxxx XXX,
Xxxxx XX or Level V, each as determined pursuant to Section 2.5.
"LIBO Rate" means the rate per annum (rounded upward,
if necessary, to the nearest whole 1/8 of 1%) and determined
pursuant to the following formula:
LIBO Rate Base LIBO Rate + LIBO Rate Margin
=
100% - LIBOR Reserve
Percentage
"LIBO Rate Funding" means any Borrowing, or any portion
of the principal balance of the Notes, bearing interest at a
LIBO Rate.
"LIBO Rate Margin" means a percentage, determined as
set forth in Section 2.5.
"LIBOR Reserve Percentage" means the reserve
percentage prescribed by the Board of Governors of the
Federal Reserve System (or any successor) for "Eurocurrency
Liabilities" (as defined in Regulation D of the Federal
Reserve Board, as amended), adjusted by the Agent for
expected changes in such reserve percentage during the
applicable Interest Period.
"Lien" means any mortgage, deed of trust, lien,
pledge, security interest or other charge or encumbrance, of
any kind whatsoever, including but not limited to the
interest of the lessor or titleholder under any Capitalized
Lease, title retention contract or similar agreement.
"Loan Documents" means this Agreement, the Notes and
the Fee Letters.
"Margin" means the Floating Rate Margin or the LIBO
Rate Margin, as the case may be.
"Material Adverse Effect" means a material adverse
effect on (i) the condition (financial or otherwise),
properties, or operations of the Borrower, (ii) the ability
of the Borrower to perform its obligations under the Loan
Documents, or (iii) the validity or enforceability of any of
the Loan Documents or the rights or remedies of the Agent or
any Lender thereunder.
"Maturity Date" means the Revolving Period Termination
Date.
"Maximum Aggregate Facility Amount" means $125,000,000,
unless said amount is reduced pursuant to Section 2.8, in
which event it means the amount to which said amount is
reduced.
"Xxxxx'x" means Xxxxx'x Investors Service, Inc.
"Mortgage Indentures" means (i) the Indenture of
Mortgage dated as of May 1, 1939 executed by the Borrower
and delivered to The New York Trust Company and X.X.
Xxxxxxx, as trustees thereunder, as heretofore amended and
supplemented and as hereafter amended and/or supplemented
from time to time, and (ii) the Indenture, dated as of
December 15, 2003, executed by the Borrower and delivered to
the Bank of New York, as trustee thereunder, as heretofore
amended and supplemented and as hereafter amended and/or
supplemented from time to time.
"Multiemployer Plan" means a "multiemployer plan"
(within the meaning of Section 4001(a)(3) of ERISA) to which
the Borrower or any ERISA Affiliate makes, is making, or is
obligated to make contributions or, during the preceding
three calendar years, has made, or been obligated to make,
contributions.
"Note" means a promissory note of the Borrower in the
form of Exhibit B.
"Obligations" means each and every debt, liability and
obligation of every type and description arising under or in
connection with any of the Loan Documents which the Borrower
may now or at any time hereafter owe to any Lender or the
Agent, whether such debt, liability or obligation now exists
or is hereafter created or incurred, whether it is direct or
indirect, due or to become due, absolute or contingent,
primary or secondary, liquidated or unliquidated, or sole,
joint, several or joint and several, and including but not
limited to principal of and interest on the Notes, all fees
due under this Agreement, any Fee Letter or any related
agreement, and any obligation of the Borrower to the Agent
or any Lender under any hedging arrangement entered into
with the Agent or any Lender with respect to the Borrower's
obligations arising under this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means a pension plan (as defined in
Section 3(2) of ERISA) subject to Title IV of ERISA which
the Borrower or any ERISA Affiliate sponsors, maintains, or
to which it makes, is making, or is obligated to make
contributions, or in the case of a multiple employer plan
(as described in Section 4064(a) of ERISA) has made
contributions at any time during the immediately preceding
five (5) plan years but excluding any Multiemployer Plan.
"Percentage" means, with respect to each Lender, the
ratio of (i) that Lender's Credit Exposure, to (ii) the
aggregate Credit Exposure of all of the Lenders.
"Person" means any individual, corporation,
partnership, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated
organization or government or any agency or political
subdivision thereof.
"Plan" means an employee benefit plan (as defined in
Section 3(3) of ERISA) which the Borrower or any ERISA
Affiliate sponsors or maintains or to which the Borrower or
any ERISA Affiliate makes, is making, or is obligated to
make contributions and includes any Pension Plan but
excluding any Multiemployer Plan.
"Prime Rate" means, at any time, the rate of interest
most recently announced within the Agent at its principal
office as its "prime rate" or, if the Agent ceases to
announce a rate so designated, any similar successor rate
designated by the Agent. Such rate is one of the Agent's
base rates and serves as the basis upon which effective
rates of interest are calculated for those loans making
reference thereto, and is evidenced by the recording thereof
in such internal publication or publications as the Agent
may designate.
"Principal Payment Date" means the first Business Day
preceding each anniversary hereof.
"Rating Agencies" means Fitch, Xxxxx'x and S&P,
collectively.
"Reportable Event" means any of the events set forth in
Section 4043(c) of ERISA or the regulations thereunder,
other than any such event for which the 30-day notice
requirement under ERISA has been waived in regulations
issued by the PBGC.
"Required Lenders" means one or more Lenders
(including, where relevant, Additional Lenders and
Incremental Lenders) having an aggregate Percentage in
excess of 50%.
"Revolving Period Termination Date" means June 21,
2010.
"S&P" means Standard & Poor's Ratings Group, a division
of XxXxxx-Xxxx Companies.
"Solvent" means as to any Person at any time (a) the
fair value of the property of such Person is greater than
the amount of such Person's liabilities (including the
probable liability of such Person on disputed, contingent
and unliquidated liabilities) as such value is established
and liabilities evaluated for purposes of Section 101(32) of
the Bankruptcy Code; (b) the present fair saleable value of
the property of such Person is not less than the amount that
will be required to pay the probable liability of such
Person on its debts as they become absolute and matured; (c)
such Person is able to realize upon its property and pay its
debts and other liabilities (including the probable
liability of such Person on disputed, contingent and
unliquidated liabilities) as they mature in the normal
course of business; (d) such Person does not intend to, and
does not believe that it will, incur debts or liabilities
beyond such Person's ability to pay as such debts and
liabilities mature; and (e) such Person is not engaged in
business or a transaction, and is not about to engage in
business or a transaction, for which such Person's property
would constitute unreasonably small capital.
"Subordinated Debt" means all indebtedness and other
obligations of the Borrower which are subordinated in right
of payment to all indebtedness of the Borrower to any
Lender, on terms that have been approved in writing by the
Required Lenders and that have been noted by appropriate
legend on all instruments evidencing the Subordinated Debt.
"Subsidiary" of a Person means any corporation,
association, partnership, limited liability company, joint
venture or other business entity of which more than 50% of
the voting stock, membership interests or other equity
interests (in the case of Persons other than corporations),
is owned or controlled directly or indirectly by the
Person, by one of more of the Subsidiaries of the Person, or
by a combination thereof. Unless the context otherwise
clearly requires, references herein to a "Subsidiary" refer
to a Subsidiary of the Borrower.
"Unfunded Pension Liability" means the excess of a
Pension Plan's benefit liabilities under Section 302(d)(7)
of ERISA over the current value of that Plan's assets,
determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code
for the applicable plan year.
"Utilization Fee Rate" means a percentage, determined
as set forth in Section 2.5.
"Xxxxx Fargo" means Xxxxx Fargo Bank, National
Association, a national banking association and a party to
this Agreement.
Section 1.2 Rules of Construction
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) The terms defined in this Article have the
meanings assigned to them in this Article, and include the
plural as well as the singular.
(b) All accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with GAAP.
(c) All references to times of day in this Agreement
shall be references to Minneapolis, Minnesota time unless
otherwise specifically provided.
ARTICLE II
Amount and Terms of the Credit Facilities
Section 2.1 The Facility.
Each Lender agrees, severally but not jointly, on the terms and
subject to the conditions hereinafter set forth, to make Advances
to the Borrower from time to time during the period from the date
hereof to and including the Revolving Period Termination Date in
an aggregate amount not to exceed at any time outstanding that
Lender's Facility Amount. Each Borrowing shall be in an amount
equal to an integral multiple of $500,000 and not less than
$1,000,000 (or such greater amount as may be required pursuant to
Section 2.3(b) if any part of such Borrowing will constitute a
LIBO Rate Funding). Through the Revolving Period Termination
Date, the facility established hereby shall be a revolving
facility; within the limits of the Aggregate Facility Amount, the
Borrower may borrow, prepay pursuant to Section 2.7 and reborrow
under this Section 2.1. The Advances made by each Lender shall be
evidenced by a Note, payable to the order of that Lender in the
face principal amount of that Lender's Facility Amount.
Notwithstanding any other provision of this Agreement to the
contrary, no Borrowing shall be effected on any Principal Payment
Date.
Section 2.2 Procedure for Borrowings.
Each Borrowing shall occur on prior written request from the
Borrower to the Agent or telephonic request from any person
purporting to be authorized to request Borrowings on behalf of
the Borrower, which request shall specify the date of the
requested Borrowing and the amount thereof. Except as set forth
in Section 2.3(b), each such request by the Borrower shall be
made not less than one Business Day before the date of the
requested Borrowing. Promptly upon receipt of such request, the
Agent shall advise each Lender of the proposed Borrowing. At or
before 2:00 p.m. on the date of the requested Borrowing, each
Lender shall provide the Agent at the principal office of the
Agent in Minneapolis, Minnesota with immediately available funds
covering such Lender's Percentage of such Borrowing. The Agent
shall disburse the amount of the requested Borrowing by crediting
the same to the Borrower's demand deposit account maintained with
the Agent or in such other manner as the Agent and the Borrower
may from time to time agree; provided, however, that the Agent
shall have no obligation to disburse the requested Borrowing if
any condition set forth in Article III has not been satisfied on
the day of the requested Borrowing or if any Lender has failed to
fund its Percentage of the requested Borrowing. The Borrower
shall promptly confirm each telephonic request for a Borrowing by
executing and delivering an appropriate confirmation certificate
to the Agent. The Borrower shall be obligated to repay all
Advances notwithstanding the failure of the Agent to receive such
confirmation and notwithstanding the fact that the person
requesting same was not in fact authorized to do so. Any request
for a Borrowing shall be deemed to be a representation that the
statements set forth in Section 3.2 are correct.
Section 2.3 Interest on Notes.
(a) Floating Rate Fundings. Unless the Borrower elects
a LIBO Rate pursuant to this Section, the principal balance
of the Notes shall bear interest at the Floating Rate.
(b) LIBO Rate Fundings. So long as no Default or Event
of Default exists, the Borrower may request that a portion
of any requested Borrowing constitute a LIBO Rate Funding,
or may convert all or any part of any outstanding Floating
Rate Funding into a LIBO Rate Funding, or may request that a
LIBO Rate Funding be converted at the end of the applicable
Interest Period to another LIBO Rate Funding, by giving
notice to the Agent of such request or conversion not later
than 10:30 a.m. on a Business Day which is at least three
Business Days prior to the date of the requested Borrowing
or conversion. Each such notice shall be effective upon
receipt by the Agent, shall be in writing or by telephone or
telecopy transmission, shall specify the date and amount of
such Borrowing or conversion, and the Interest Period
therefor. The Interest Period applicable to each LIBO Rate
Funding shall begin on a Business Day, and the amount of
each LIBO Rate Funding shall be an integral multiple of
$1,000,000 and not less than $5,000,000. Subject to the
terms and conditions hereof, the principal amount specified
by the Borrower in the applicable request for a LIBO Rate
Funding shall bear interest from and including the first day
of the Interest Period specified therein to but not
including the last day of such Interest Period, at the LIBO
Rate applicable thereto, determined as set forth herein,
(subject to fluctuations in the applicable Margin). Unless
the Borrower requests a new LIBO Rate Funding in accordance
with the procedures set forth above, or prepays the
principal of an outstanding LIBO Rate Funding at the
expiration of an Interest Period, the Lenders shall
automatically and without request of the Borrower convert
each LIBO Rate Funding to a Floating Rate Funding on the
last day of the relevant Interest Period.
(c) Setting of LIBO Rates. The applicable LIBO Rate
for each Interest Period shall be determined by the Agent
between the opening of business and 12:00 noon on the second
Business Day prior to the beginning of such Interest Period,
whereupon notice thereof (which may be by telephone) shall
be given by the Agent to the Borrower and each Lender. Each
such determination of the applicable LIBO Rate shall be
conclusive and binding upon the parties hereto, in the
absence of demonstrable error. The Agent, upon written
request of the Borrower, shall deliver to the Borrower a
statement showing the computations used by the Agent in
determining the applicable LIBO Rate hereunder.
(d) Limitations on LIBO Rate Fundings. In no event
shall more than 6 LIBO Rate Fundings be outstanding at any
one time. In no event may the Borrower request a LIBO Rate
Funding if, after giving effect to such LIBO Rate Funding,
the Borrower would be required to prepay a LIBO Rate Funding
in order to make any regularly scheduled principal payment.
Section 2.4 Principal and Interest Payment Dates.
(a) Interest. Interest accruing on Floating Rate
Fundings shall be due and payable on the last day of each
calendar quarter. Interest on any LIBO Rate Funding shall be
due and payable on the last day of the applicable Interest
Period or, if such Interest Period is in excess of three
months, on the last day of each three-month period during
such Interest Period and on the last day of such Interest
Period.
(b) Principal. The Borrower shall pay the principal
balance of all Borrowings then outstanding in full on each
Principal Payment Date.
Section 2.5 Level Status, Margins and Fee Rates.
(a) The Borrower's Level Status shall be determined on
the basis of the Applicable Ratings established by the
Rating Agencies, in accordance with the following table:
Xxxxx X Xxxxx XX Xxxxx XXX Xxxxx XX Level V
A or A- or BBB+ or BBB or Less
S&P better better, better, better, than BBB
but less but less but less
than A than A- than
BBB+
A2 or A3 or Baa1 or Baa2 or Less
Xxxxx'x better better, better, better, than
but less but less but less Baa2
than A2 than A3 than
Baa1
Fitch A or A- or BBB+ or BBB or Less
better better, better, better, than BBB
but less but less but less
than A than A- than
BBB+
If the Applicable Ratings established by the Rating Agencies
differ such that they do not fall within a single column in
the table set forth above, the Borrower's Level Status shall
be determined as follows:
(i) If the Applicable Ratings applied by any two of
the Rating Agencies are in the same column, the
Borrower's Level Status shall be determined by
that column.
(ii) If the Applicable Ratings are each in separate
columns, the highest and lowest columns shall be
excluded, and the Borrower's Level Status shall be
determined by the remaining Applicable Rating.
(b) In making the determinations under paragraph (a):
(i) If any of the Rating Agencies changes the meaning
or designation for its Applicable Ratings
referenced in paragraph (a), the criteria for
Level Status in the table in paragraph (a) shall
be adjusted in such manner as the Required Lenders
may reasonably determine to correspond with the
applicable rating designations used by the
applicable Rating Agency in effect on the date
hereof.
(ii) If one of the Rating Agencies ceases to rate the
Borrower's long-term unsecured debt such that only
two of the Rating Agencies are providing such
Applicable Ratings, the Borrower's Level Status
shall be determined as follows:
(A) If the Applicable Ratings provided by both of
the remaining Rating Agencies are in the same
column, the Borrower's Level Status shall be
determined by that column.
(B) If the Applicable Ratings provided by the
remaining Rating Agencies are in adjacent
columns, the Borrower's Level Status shall be
based on the leftmost of the columns.
(C) If the Applicable Ratings provided by the
remaining Rating Agencies are separated by
one or more columns, the Borrower's Level
Status shall be based on the column to the
immediate right of the leftmost applicable
column.
Notwithstanding the foregoing, if the Applicable
Rating established by either of the remaining
Rating Agencies is in the rightmost column above,
the Borrower shall be deemed to be at Level Status
V.
(iii)If any two of the Rating Agencies ceases to
establish its Applicable Rating, the Borrower
shall be deemed to be at Level Status V.
(c) The Floating Rate Margin, LIBO Rate Margin,
Facility Fee Rate and Utilization Fee Rate at any time shall
be determined from time to time on the basis of the
Borrower's Level Status, in accordance with the following
table:
Xxxxx X Xxxxx XX Xxxxx XXX Xxxxx XX Level V
Floating Rate
Margin 0% 0% 0% 0% 0%
LIBO Rate Margin
0.295% 0.400% 0.500% 0.600% 0.750%
Facility Fee Rate
0.080% 0.100% 0.125% 0.150% 0.200%
Utilization Fee
Rate 0.100% 0.100% 0.125% 0.125% 0.200%
(d) Upon the occurrence of any Default or Event of
Default, and so long as such Default or Event of Default
continues without written waiver thereof by the Lenders, a
default increment equal to 200 basis points (2.00%) shall be
added to the Floating Rate Margin and LIBO Rate Margin.
Inclusion of such default increment shall not be deemed a
waiver or excuse of any such Default or Event of Default.
Section 2.6 Fees.
(a) Facility Fee. The Borrower shall pay to the Agent,
for the ratable benefit of the Lenders, a facility fee
determined at an annual rate equal to the then-applicable
Facility Fee Rate applied to the average Aggregate Facility
Amount outstanding during such calendar quarter (or during
such shorter period ending on the Revolving Period
Termination Date). The facility fee shall be due and payable
quarterly in arrears on the last day of each calendar
quarter, and on the Maturity Date. The facility fee shall
accrue at all times, including at any time during which any
condition in Article III has not been satisfied.
(b) Utilization Fee. The Borrower shall pay to the
Agent, for the ratable benefit of the Lenders, a utilization
fee determined at an annual rate equal to the then-
applicable Utilization Fee Rate applied to the actual daily
aggregate principal balance of the Notes on each day that
such aggregate principal balance exceeds 50% of the
Aggregate Facility Amount in effect on such day. The
utilization fee shall be due and payable quarterly in
arrears on the last day of each calendar quarter, and on the
Maturity Date. The utilization fee shall accrue at all
times, including at any time during which any condition in
Article III has not been satisfied.
(c) Fee Letters. The Borrower shall pay to the Agent
all fees required to be paid pursuant to any Fee Letters.
(d) Audit Fees. Upon the occurrence of an Event of
Default or at any time thereafter until such Event of
Default is cured, the Borrower shall pay to the Agent, on
written demand, reasonable fees charged by the Agent in
connection with any audits or inspections by the Agent of
any collateral or the operations or businesses of the
Borrower, together with actual out-of-pocket costs and
expenses incurred in conducting any such audit or
inspection. All such audits and inspections shall be for the
sole benefit of the Agent and the Lenders.
Section 2.7 Prepayments.
(a) Voluntary Prepayments. The Borrower from time to
time may voluntarily prepay the Notes in whole or in part;
provided that (i) prepayment of any Lender's Note must be
accompanied by pro rata prepayment of each other Lender's
Note, (ii) any prepayment of the full amount of any Note
shall include accrued interest thereon, (iii) partial
prepayment of any Floating Rate Funding shall be in an
aggregate amount not less than $1,000,000, (iv) partial
prepayment of any LIBO Rate Funding shall be in an aggregate
amount not less than $5,000,000, and (v) any prepayment of
any LIBO Rate Funding shall be made only upon three Business
Days' notice to the Agent.
(b) Application of Prepayments. So long as no Default
or Event of Default has occurred and is continuing
hereunder, all prepayments hereunder shall be applied in
such order of application as the Borrower may direct in
writing. In all other cases, all prepayments hereunder shall
be applied in the following order:
(i) First, to the principal installments of the Notes
(and, if such Notes are payable in installments,
will be applied to such installments in inverse
order of their maturities).
(ii) Second, to accrued but unpaid interest on the
Notes.
(iii)Third, to any remaining Obligations, in such
order as the Agent may in its sole discretion
designate.
Notwithstanding the foregoing, interest on any LIBO Rate
Funding prepaid hereunder and any compensation due under
Section 2.11 on account of prepayment of a LIBO Rate Funding
shall be paid with the same priority as the related
principal prepayment.
Section 2.8 Termination of Facility or Reduction of the Aggregate
Facility Amount.
The Borrower may at any time and from time to time upon three
Business Days' prior notice to the Agent permanently terminate
the Facility in whole or permanently reduce the Aggregate
Facility Amount in part, provided that (i) the Facility may not
be terminated while any Borrowings remain outstanding, (ii) each
partial reduction shall be in the amount of $5,000,000 or a
multiple thereof, (iii) no reduction shall reduce the Aggregate
Facility Amount to an amount less than the aggregate principal
balance of the Notes outstanding at the time, (iv) any partial
reduction of the Aggregate Facility Amount shall be applied pro
rata as to each Lender's Facility Amount in accordance with that
Lender's Percentage, and (v) each reduction in the Aggregate
Facility Amount shall constitute a corresponding reduction in the
Maximum Aggregate Facility Amount.
Section 2.9 Payments.
(a) Making of Payments. All payments of principal of
and interest due under the Notes shall be made to the Agent
at its principal office in Minneapolis, Minnesota, not later
than 12:00 noon on the date due, in immediately available
funds, and funds received after that hour shall be deemed to
have been received by the Agent on the next following
Business Day. The Borrower hereby authorizes the Agent to
charge the Borrower's demand deposit account maintained with
the Agent for the amount of any such payment on its due
date, or (at the option of the Agent) to effect a Borrowing
in such amount, all without receipt of any request for such
charge or Borrowing, but the Lender's failure to so charge
such account or effect such Borrowing shall in no way affect
the obligation of the Borrower to make any such payment.
(b) Assumed Payments. Unless the Agent has been
notified by a Lender or the Borrower prior to the date on
which such Lender or the Borrower is scheduled to make
payment to the Agent of (in the case of a Lender) the
proceeds of an Advance to be made by it hereunder or (in the
case of the Borrower) a payment to the Agent for the account
of one or more of the Lenders hereunder (such payment by a
Lender or the Borrower (as the case may be) being herein
called a "Required Payment"), which notice shall be
effective upon receipt, that it does not intend to make the
Required Payment to the Agent, the Agent may assume that the
Required Payment has been made and may (but shall not be
required to), in reliance upon such assumption, make the
amount thereof available to the intended recipient on such
date and, if such Lender or the Borrower (as the case may
be) has not in fact made the Required Payment to the Agent,
the recipient of such payment shall, on demand, repay to the
Agent the amount so made available together with interest
thereon for each day during the period commencing on the
date such amount was so made available by the Agent until
the date the Agent recovers such amount at a rate (i) equal
to the Federal Funds Rate for such day, in the case of a
Required Payment owing by a Lender, or (ii) equal to the
applicable rate of interest as provided in this Agreement,
in the case of a Required Payment owing by the Borrower.
(c) Setoff. The Borrower agrees that each Lender shall
have all rights of setoff and bankers' lien provided by
applicable law, and in addition thereto, the Borrower agrees
that if at any time any amount is due and owing by the
Borrower under this Agreement to any Lender at a time when
an Event of Default has occurred and is continuing
hereunder, any Lender may apply any and all balances,
credits, and deposits, accounts or moneys of the Borrower
then or thereafter in the possession of that Lender
(excluding, however, any trust or escrow accounts held by
the Borrower for the benefit of any third party) to the
payment thereof.
(d) Due Date Extension. If any payment of principal of
or interest on any Floating Rate Funding or any fees payable
hereunder falls due on a day which is not a Business Day,
then such due date shall be extended to the next following
Business Day, and (in the case of principal) additional
interest shall accrue and be payable for the period of such
extension.
(e) Application of Payments. Except as otherwise
provided herein, so long as no Default or Event of Default
has occurred and is continuing hereunder, each payment
received from the Borrower shall be applied to such
obligation as the Borrower shall specify by notice received
by the Agent on or before the date of such payment, or in
the absence of such notice, as the Required Lenders shall
determine in their discretion. Except as otherwise provided
herein, after the occurrence of a Default or Event of
Default, the Lenders shall have the right to apply all
payments received by the Lender from the Borrower as the
Required Lenders may determine in their discretion. The
Borrower agrees that the amount shown on the books and
records of the Agent and the Lenders as being the principal
balance of and interest on the Notes shall be conclusive
absent demonstrable error.
Section 2.10 Increased Costs; Capital Adequacy; Funding
Exceptions.
(a) Increased Costs on LIBO Rate Fundings. If
Regulation D of the Board of Governors of the Federal
Reserve System or after the date of this Agreement the
adoption of any applicable law, rule or regulation, or any
change in any existing law, or any change in the
interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance
by any Lender with any request or directive (whether or not
having the force of law) of any such authority, central bank
or comparable agency, shall:
(i) subject that Lender to or cause the withdrawal or
termination of any exemption previously granted to
that Lender with respect to, any tax, duty or
other charge with respect to its LIBO Rate
Fundings or its obligation to make LIBO Rate
Fundings, or shall change the basis of taxation of
payments to that Lender of the principal of or
interest under this Agreement in respect of its
LIBO Rate Fundings or its obligation to make LIBO
Rate Fundings (except for changes in the rate of
tax on the overall net income of that Lender
imposed by the jurisdictions in which that
Lender's principal executive office is located);
or
(ii) impose, modify or deem applicable any reserve
(including, without limitation, any reserve
imposed by the Board of Governors of the Federal
Reserve System, but excluding any reserve included
in the determination of interest rates pursuant to
Section 2.3), special deposit or similar
requirement against assets of, deposits with or
for the account of, or credit extended by, that
Lender; or
(iii)impose on that Lender any other condition
affecting its making, maintaining or funding of
its LIBO Rate Fundings or its obligation to make
LIBO Rate Fundings;
and the result of any of the foregoing is to increase the
cost to that Lender of making or maintaining any LIBO Rate
Funding, or to reduce the amount of any sum received or
receivable by that Lender under this Agreement or under its
Notes with respect to a LIBO Rate Funding, then that Lender
will notify the Borrower of such increased cost and within
fifteen (15) days after demand by that Lender (which demand
shall be accompanied by a statement setting forth the basis
of such demand and representing that that Lender has made
similar demand on one or more other commercial borrowers
with revolving or term loans in excess of $1,000,000) the
Borrower shall pay to that Lender such additional amount or
amounts as will compensate that Lender for such increased
cost or such reduction; provided, however, that no such
increased cost or such reduction shall be payable by the
Borrower for any period longer than ninety (90) days prior
to the date on which notice thereof is delivered to the
Borrower. Each Lender will promptly notify the Borrower of
any event of which it has knowledge, occurring after the
date hereof, which will entitle that Lender to compensation
pursuant to this Section 2.10. If the Borrower receives
notice from any Lender of any event which will entitle that
Lender to compensation pursuant to this Section 2.10, the
Borrower may prepay any then outstanding LIBO Rate Fundings
or notify that Lender that any pending request for a LIBO
Rate Funding shall be deemed to be a request for a Floating
Rate Funding, in each case subject to the provisions of
Section 2.11.
(b) Capital Adequacy. If any Lender determines at any
time that its Return has been reduced as a result of any
Capital Adequacy Rule Change, that Lender may require the
Borrower to pay it the amount necessary to restore that
Lender's Return to what it would have been had there been no
Capital Adequacy Rule Change. For purposes of this 2.10, the
following definitions shall apply:
(i) "Return", for any calendar quarter or shorter
period, means the percentage determined by
dividing (A) the sum of interest and ongoing fees
earned by a Lender under this Agreement during
such period by (B) the average capital that Lender
is required to maintain during such period as a
result of its being a party to this Agreement, as
determined by that Lender based upon its total
capital requirements and a reasonable attribution
formula that takes account of the Capital Adequacy
Rules then in effect. Return may be calculated for
each calendar quarter and for the shorter period
between the end of a calendar quarter and the date
of termination in whole of this Agreement.
(ii) "Capital Adequacy Rule" means any law, rule,
regulation or guideline regarding capital adequacy
that applies to any Lender, or the interpretation
thereof by any governmental or regulatory
authority. Capital Adequacy Rules include rules
requiring financial institutions to maintain total
capital in amounts based upon percentages of
outstanding loans, binding loan commitments and
letters of credit.
(iii)"Capital Adequacy Rule Change" means any
change in any Capital Adequacy Rule occurring
after the date of this Agreement, but does not
include any changes in applicable requirements
that at the date hereof are scheduled to take
place under the existing Capital Adequacy Rules or
any increases in the capital that any Lender is
required to maintain to the extent that the
increases are required due to a regulatory
authority's assessment of that Lender's financial
condition.
(iv) "Lender" includes (but is not limited to) the
Agent, the Lenders, as defined elsewhere in this
Agreement, and any assignee of any interest of any
Lender hereunder and any participant in the loans
made hereunder.
The initial notice sent by a Lender shall be sent as
promptly as practicable after that Lender learns that its
Return has been reduced, shall include a demand for payment
of the amount necessary to restore that Lender's Return for
the quarter in which the notice is sent, shall state in
reasonable detail the cause for the reduction in that
Lender's Return and that Lender's calculation of the amount
of such reduction, and shall include that Lender's
representation that it has made similar demand on one or
more other commercial borrowers with revolving or term loans
in excess of $1,000,000. Thereafter, that Lender may send a
new notice during each calendar quarter setting forth the
calculation of the reduced Return for that quarter and
including a demand for payment of the amount necessary to
restore that Lender's Return for that quarter. A Lender's
calculation in any such notice shall be conclusive and
binding absent demonstrable error.
(c) Basis for Determining Interest Rate Inadequate or
Unfair. If with respect to any Interest Period:
(i) any Lender determines that deposits in U.S.
dollars (in the applicable amounts) are not being
offered in the London interbank eurodollar market
for such Interest Period; or
(ii) any Lender otherwise determines that by reason of
circumstances affecting the London interbank
eurodollar market adequate and reasonable means do
not exist for ascertaining the applicable LIBO
Rate; or
(iii)any Lender determines that the LIBO Rate as
determined by the Agent will not adequately and
fairly reflect the cost to that Lender of
maintaining or funding a LIBO Rate Funding for
such Interest Period, or that the making or
funding of LIBO Rate Fundings has become
impracticable as a result of an event occurring
after the date of this Agreement which in the
opinion of that Lender materially affects such
LIBO Rate Fundings;
then that Lender shall promptly notify the Borrower and (A)
upon the occurrence of any event described in the foregoing
clause (i) the Borrower shall enter into good faith
negotiations with that Lender in order to determine an
alternate method to determine the LIBO Rate for that Lender,
and during the pendency of such negotiations with that
Lender, the Lenders shall be under no obligation to make any
new LIBO Rate Fundings, and (B) upon the occurrence of any
event described in the foregoing clauses (ii) or (iii), for
so long as such circumstances shall continue, the Lenders
shall be under no obligation to make any new LIBO Rate
Fundings.
(d) Illegality. If any change in (including the
adoption of any new) applicable laws or regulations, or any
change in the interpretation of applicable laws or
regulations by any governmental authority, central bank,
comparable agency or any other regulatory body charged with
the interpretation, implementation or administration
thereof, or compliance by any Lender with any request or
directive (whether or not having the force of law) of any
such authority, central bank, comparable agency or other
regulatory body, should make it or, in the good faith
judgment of that Lender, shall raise a substantial question
as to whether it is unlawful for that Lender to make,
maintain or fund LIBO Rate Fundings, then (i) that Lender
shall promptly notify the Borrower and the Agent, (ii) the
obligation of the Lenders to make, maintain or convert into
LIBO Rate Fundings shall, upon the effectiveness of such
event, be suspended for the duration of such unlawfulness,
and (iii) for the duration of such unlawfulness, any notice
by the Borrower requesting the Lenders to make or convert
into LIBO Rate Fundings shall be construed as a request to
make or to continue making Floating Rate Fundings.
Section 2.11 Funding Losses.
Upon demand by any Lender (which demand shall be accompanied by a
statement setting forth the basis for the calculations of the
amount being claimed), the Borrower shall indemnify that Lender
against any loss or expense which that Lender may have sustained
or incurred (including, without limitation, any net loss or
expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by that Lender to fund or
maintain LIBO Rate Fundings) or which that Lender may be deemed
to have sustained or incurred, as reasonably determined by that
Lender, (i) as a consequence of any failure by the Borrower to
make any payment when due of any amount due hereunder in
connection with any LIBO Rate Fundings, (ii) due to any failure
of the Borrower to borrow or convert any LIBO Rate Fundings on a
date specified therefor in a notice thereof or (iii) due to any
payment or prepayment of any LIBO Rate Funding on a date other
than the last day of the applicable Interest Period for such LIBO
Rate Funding. For this purpose, all notices under Section 2.3(b)
shall be deemed to be irrevocable.
Section 2.12 Discretion of Lenders as to Manner of Funding.
Notwithstanding any provision of this Agreement to the contrary,
each Lender shall be entitled to fund and maintain all or any
part of its LIBO Rate Fundings in any manner it deems fit, it
being understood, however, that for the purposes of this
Agreement (specifically including, without limitation, Section
2.11 hereof) all determinations hereunder shall be made as if
that Lender had actually funded and maintained each LIBO Rate
Funding during each Interest Period for such LIBO Rate Funding
through the purchase of deposits having a maturity corresponding
to such Interest Period and bearing an interest rate equal to the
appropriate LIBO Rate for such Interest Period.
Section 2.13 Conclusiveness of Statements; Survival of
Provisions.
Determinations and statements of any Lender pursuant to Sections
2.10 and 2.11 shall be conclusive absent demonstrable error.
Without limiting the generality of the foregoing, the Borrower
shall have no right to review any records of any Lender or its
other customers to determine the accuracy of any statement by
that Lender under Section 2.10(a) or 2.10(b) regarding that
Lender's demands upon other customers of that Lender. Each
Lender may use reasonable averaging and attribution methods in
determining compensation pursuant to such Sections 2.10 and 2.11
and the provisions of Sections 2.10 and 2.11 shall survive
termination of this Agreement.
Section 2.14 Computation of Interest and Fees.
All interest determined at the Floating Rate will be calculated
based on the actual days elapsed in a year of 365 or 366 days, as
the case may be. All interest determined at the LIBO Rate and all
fees hereunder shall be computed on the basis of actual number of
days elapsed in a year of 360 days.
Section 2.15 Purpose of Borrowings.
The proceeds of the initial Borrowing hereunder shall be used to
pay in full all obligations of the Borrower outstanding under the
Existing Credit Facility, if any. The proceeds of each other
Borrowing (including the initial Borrowing, if no obligations
described in the preceding sentence are outstanding on the date
thereof) shall be used solely (i) to pay the Borrower's
obligations under (A) its commercial paper program, (B) other
short-term credit facilities, and (C) maturing long-term
obligations, and (ii) for the general corporate purposes of the
Borrower in the ordinary course of business.
Section 2.16 Increase of Aggregate Facility Amount.
(a) So long as no Default or Event of Default has
occurred and is continuing, the Borrower may, upon at least
25 days' written notice to the Agent, propose to increase
the Aggregate Facility Amount by a multiple of $5,000,000
that is not less than $15,000,000 and not greater than
$25,000,000 (the amount of any such increase, the
"Additional Facility Amount"). In no event shall any such
increase cause the Aggregate Facility Amount to exceed the
Maximum Aggregate Facility Amount. The Agent will promptly
provide a copy of any such notice to each Lender. Each
Lender may, not more than 20 days following such notice,
elect by written notice to the Borrower and the Agent to
increase its Facility Amount by a principal amount equal to
its Percentage of the Additional Facility Amount. No Lender
(or any successor thereto) shall have any obligation to
increase its Facility Amount or its other obligations under
this Agreement and the other Loan Documents, and any
decision by a Lender to increase its Facility Amount shall
be made in its sole discretion independently from any other
Lender.
(b) If any Lender elects not to increase its Facility
Amount pursuant to paragraph (a), the Borrower may designate
another Eligible Lender (which may be, but need not be, one
or more of the existing Lenders) that will, in the case of
any such Person that is an existing Lender, increase its
Facility Amount and in the case of any other such Person (an
"Incremental Lender"), become a party to this Agreement;
provided, however, that any Incremental Lender must in all
respects be acceptable to the Agent, which acceptance will
not be unreasonably withheld. The sum of the increases in
the Facility Amounts of the existing Lenders pursuant to
this paragraph (b) plus the Facility Amounts of the
Incremental Lenders shall not in the aggregate exceed the
unsubscribed amount of the Maximum Aggregate Facility
Amount.
(c) An increase in the Aggregate Facility Amount
pursuant to this Section 2.16 shall become effective upon
the receipt by the Agent of an agreement in form and
substance satisfactory to the Agent signed by the Borrower,
by each Incremental Lender and by each other Lender whose
Aggregate Facility Amount is to be increased, setting forth
the new Facility Amounts of such Lenders and setting forth
the agreement of each Incremental Lender to become a party
to this Agreement and to be bound by all the terms and
provisions hereof (a "Facility Increase Agreement"),
together with a replacement or additional Note, as
applicable, evidencing the new Facility Amount of each
affected Lender, duly executed and delivered by the Borrower
and such evidence of appropriate corporate authorization on
the part of the Borrower with respect to the increase in the
Aggregate Facility Amount and such opinions of counsel for
the Borrower with respect to the increase in the Aggregate
Facility Amount as the Agent may reasonably request.
(d) Upon the acceptance of the Facility Increase
Agreement by the Agent, the Aggregate Facility Amount shall
automatically be increased by the amount of the Facility
Amounts added through such Facility Increase Agreement.
(e) Upon any increase in the Aggregate Facility Amount
pursuant to this Section 2.16 that is not pro rata among all
Lenders, within 5 Business Days, the Borrower shall prepay
all Borrowings hereunder in their entirety and, to the
extent the Borrower elects to do so and subject to the
conditions specified in Section 3.2, the Borrower shall
effect new Borrowings from the Lenders in proportion to
their respective Facility Amounts after giving effect to
such increase.
ARTICLE III
Conditions Precedent
Section 3.1 Initial Conditions Precedent.
The obligation of the Lenders to effect any Borrowing is subject
to the condition precedent that each Lender shall have received
on or before the day of the first Borrowing all of the following,
each dated (unless otherwise indicated) as of the date hereof, in
form and substance satisfactory to each Lender:
(a) The Notes, properly executed on behalf of the
Borrower.
(b) A certificate of the secretary of the Borrower
(i) certifying that the execution, delivery and performance
of the Loan Documents and other documents contemplated
hereunder to which such corporation is a party have been
duly approved by all necessary action of the Board of
Directors of the Borrower, and attaching true and correct
copies of the applicable resolutions granting such approval,
(ii) certifying that attached to such certificate are true
and correct copies of the articles of incorporation and
bylaws of the Borrower and all Authorizing Orders, together
with such copies, and (iii) certifying the names of the
officers of the Borrower that are authorized to sign the
Loan Documents and other documents contemplated hereunder,
including requests for Borrowings, together with the true
signatures of such officers. The Lenders may conclusively
rely on such certificate until they shall receive a further
certificate of the Secretary or Assistant Secretary of the
Borrower canceling or amending the prior certificate and
submitting the signatures of the officers named in such
further certificate.
(c) Certificates of good standing of the Borrower,
dated not more than ten days before such date.
(d) A signed copies of an opinion of Xxxx X. Xxxxxxxx,
general counsel for the Borrower, substantially in the form
of Exhibit E-1, and the opinion of Xxxxxx Xxxx & Priest LLP,
special counsel to the Borrower, substantially in the form
of Exhibit E-2, each addressed to the Lenders.
(e) All fees required to be paid as of the date hereof
pursuant to this Agreement or any Fee Letter.
Section 3.2 Conditions Precedent to All Borrowings.
The obligation of the Lenders to effect any Borrowing shall be
subject to the further conditions precedent that on the date of
such Borrowing:
(a) the representations and warranties contained in
Article IV (other than Section 4.6) are correct on and as of
the date of such Borrowing as though made on and as of such
date, except to the extent that such representations and
warranties relate solely to an earlier date;
(b) the Borrower has delivered to the Agent an opinion
in the form of Exhibit F hereto, duly executed by the
general counsel or associate general counsel of the
Borrower; and
(c) no event has occurred and is continuing, or would
result from such Borrowing, which constitutes a Default or
an Event of Default.
ARTICLE IV
Representations and Warranties
The Borrower represents and warrants to the Lenders as follows:
Section 4.1 Existence and Power.
The Borrower is a corporation duly incorporated, validly existing
and in good standing under the laws of Delaware, and is duly
licensed or qualified to transact business in all jurisdictions
where the character of the property owned or leased or the nature
of the business transacted by it makes such licensing or
qualification necessary, except where the failure to be so
licensed or qualified (i) will not permanently preclude the
Borrower from maintaining any material action in any such
jurisdiction even though such action arose in whole or in part
during the period of such failure, and (ii) will not result in
any other Material Adverse Effect. The Borrower has all requisite
power and authority, corporate or otherwise, to conduct its
business, to own its properties and to execute and deliver, and
to perform all of its obligations under, the Loan Documents.
Section 4.2 Authorization of Borrowing; No Conflict as to Law or
Agreements.
The execution, delivery and performance by the Borrower of the
Loan Documents and the borrowings from time to time hereunder
have been duly authorized by all necessary corporate action and
by all necessary public utilities commissions and any other
regulatory bodies having jurisdiction over the Borrower (except
as noted in Schedule 4.2 to the Agreement with respect to
Borrowings made after December 31, 2006), and do not and will not
(i) require any consent or approval of the stockholders of the
Borrower, or any authorization, consent or approval by any
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, other than Authorizing
Orders set forth in Schedule 4.2 that (except as noted therein
with respect to Borrowings made after December 31, 2006) have
been obtained and copies of which have been delivered to the
Agent pursuant to Section 3.1, (ii) violate any provision of any
law, rule or regulation (including, without limitation,
Regulation X of the Board of Governors of the Federal Reserve
System) or of any order, writ, injunction or decree presently in
effect having applicability to the Borrower or of the articles of
incorporation or bylaws of the Borrower, (iii) result in a breach
of or constitute a default under any indenture or loan or credit
agreement or any other agreement, lease or instrument to which
the Borrower is a party or by which it or its properties may be
bound or affected, or (iv) result in, or require, the creation or
imposition of any Lien or other charge or encumbrance of any
nature (other than those in favor of the Agent to secure one or
more of the Obligations) upon or with respect to any of the
properties now owned or hereafter acquired by the Borrower.
Section 4.3 Legal Agreements.
This Agreement and the other Loan Documents constitute, the
legal, valid and binding obligations of the Borrower enforceable
against the Borrower in accordance with their respective terms,
except to the extent that such enforcement may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement
of creditors' rights generally or by general equitable
principles.
Section 4.4 Subsidiaries.
Schedule 4.4 hereto is a complete and correct list of all present
Subsidiaries and of the percentage of the ownership of the
Borrower or any other Subsidiary in each case as of the date of
this Agreement. Except as otherwise indicated in that Schedule,
all shares of each Subsidiary owned by the Borrower or by any
such other Subsidiary are validly issued and fully paid and
nonassessable.
Section 4.5 Financial Condition.
The Borrower has heretofore furnished to the Lenders its audited
consolidated financial statement as of December 31, 2004, and its
unaudited interim financial statement as of March 31, 2005. Those
financial statements fairly present the financial condition of
the Borrower and its Subsidiaries on the dates thereof and the
results of their operations and cash flows for the periods then
ended, and were prepared in accordance with GAAP, except as
expressly noted therein.
Section 4.6 Adverse Change.
There has been no material adverse change in the business,
properties or condition (financial or otherwise) of the Borrower
since the date of the latest financial statement referred to in
Section 4.5.
Section 4.7 Litigation.
Except as set forth in the Borrower's Annual Report on Form 10-K
for the year ended December 31, 2004, or in any document
subsequently filed pursuant to Section 13, 14 or 15(d) of the
Exchange Act, there are no actions, suits or proceedings pending
or, to the knowledge of the Borrower, threatened against or
affecting the Borrower or the properties of the Borrower, before
any court or governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, which, if
determined adversely to the Borrower, would have a Material
Adverse Effect.
Section 4.8 Environmental Matters.
The Borrower conducts in the ordinary course of business a review
of the effect of existing Environmental Laws and existing
Environmental Claims on its business, operations and properties
and, as a result thereof, the Borrower has reasonably concluded
that such Environmental Laws and Environmental Claims could not,
individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect, exclusive of Environmental Claims as
set forth in the Borrower's Annual Report on Form 10-K for the
year ended December 31, 2004, or in any document subsequently
filed pursuant to Section 13, 14 or 15(d) of the Exchange Act.
Section 4.9 Regulation U.
The Borrower is not engaged in the business of extending credit
for the purpose of purchasing or carrying margin stock (within
the meaning of Regulation U of the Board of Governors of the
Federal Reserve System), and no part of the proceeds of any
Borrowing will be used to purchase or carry any margin stock or
to extend credit to others for the purpose of purchasing or
carrying any margin stock.
Section 4.10 Taxes.
The Borrower has filed all federal and other tax returns and
reports required to be filed, and has paid all federal and other
taxes, assessments, fees and other governmental charges levied or
imposed upon it or its properties, income or assets otherwise due
and payable, except those which are being contested in good faith
by appropriate proceedings and for which adequate reserves have
been provided in accordance with GAAP and except those the
failure to file or pay which would not have a Material Adverse
Effect. There is no proposed tax assessment against the Borrower
that would, if made, have a Material Adverse Effect.
Section 4.11 Titles and Liens.
To the Borrower's knowledge, without having undertaken any search
of real property records for this purpose, the Borrower has good
and sufficient title to, or valid leasehold interests in, all
real property necessary or used in the ordinary conduct of its
business, and good title to all other property and assets
reflected in the Borrower's most recent consolidated financial
statements provided to the Lenders as owned by the Borrower,
except for such defects in title as could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse
Effect and other than any sold, as permitted by Section 6.4. As
of the date of this Agreement, the property of the Borrower is
subject to no Liens other than a permitted pursuant to Section 6.1.
Section 4.12 Intellectual Property.
The Borrower owns or is licensed or otherwise has the right to
use all of the patents, trademarks, service marks, trade names,
copyrights, contractual franchises, authorizations and other
rights that are reasonably necessary for the operation of its
business, without conflict with the rights of any other Person,
except to the extent that noncompliance would not have a Material
Adverse Effect. To the knowledge of the Borrower, no slogan or
other advertising device, product, process, method, substance,
part or other material now employed, or now contemplated to be
employed, by the Borrower infringes upon any rights held by any
other Person, except to the extent that noncompliance would not
have a Material Adverse Effect. No claim or litigation regarding
any of the foregoing is pending or threatened, and no patent,
invention, device, application, principle or any statute, law,
rule, regulation, standard or code is pending or, to the
knowledge of the Borrower, proposed, which, in either case, could
reasonably be expected to have a Material Adverse Effect.
Section 4.13 ERISA.
(a) Each Plan is in compliance in all material
respects with ERISA, the Code and other applicable federal
or state law. Each Plan which is intended to qualify under
Section 401(a) of the Code has received a favorable
determination letter from the Internal Revenue Service and,
to the best knowledge of the Borrower, nothing has occurred
which would or could reasonably be expected to cause the
loss of such qualification of any such Plan or related
trust.
(b) There are no pending or, to the best knowledge of
the Borrower, threatened claims (other than routine claims
for benefits in the ordinary course), actions or lawsuits,
or action by any governmental authority, with respect to any
Plan which has resulted or could reasonably be expected to
result in a Material Adverse Effect. To the best knowledge
of the Borrower, there has been no prohibited transaction
within the meaning of Section 4975 of the Code or Section
406 ERISA or other material violation of the fiduciary
responsibility rules with respect to any Plan which has
resulted or could reasonably be expected to result in a
Material Adverse Effect.
(c) No Reportable Event has occurred or is reasonably
expected to occur with respect to any Pension Plan.
(d) The aggregate Unfunded Pension Liability for all
Pension Plans (calculated based on the most recent actuarial
report for each Pension Plan) does not exceed $15,000,000.
(e) Neither the Borrower nor any ERISA Affiliate has
incurred nor does it reasonably expect to incur, any
liability under Title IV of ERISA with respect to any
Pension Plan (other than premiums due and not delinquent
under Section 4007 of ERISA).
(f) Neither the Borrower nor any ERISA Affiliate has
transferred any Unfunded Pension Liability to any Person or
otherwise engaged in a transaction that could be subject to
Section 4069 of ERISA.
(g) Neither the Borrower nor any ERISA Affiliate has
incurred nor reasonably expects to incur any liability,
other than Acquisition Liability (and no event has occurred
which, with the giving of notice under Section 4219 of
ERISA, would result in such liability), under Section 4201
or 4243 of ERISA with respect to a Multiemployer Plan. As
used in this paragraph, "Acquisition Liability" means
liability immaterial to the Borrower, its business and
operations when taken as a whole that is incurred in
connection with an acquisition by the Borrower or any ERISA
Affiliate.
ARTICLE V
Affirmative Covenants
So long as any Note shall remain unpaid or the Facility shall be
outstanding, the Borrower will comply with the following
requirements, unless the Required Lenders shall otherwise consent
in writing:
Section 5.1 Reporting.
The Borrower will deliver to each Lender:
(a) As soon as available, and in any event within 120
days after the end of each fiscal year of the Borrower:
(i) A copy of the annual audit report of the Borrower
and its Subsidiaries prepared on a consolidated
basis with an unqualified opinion of independent
certified public accountants selected by the
Borrower and acceptable to the Required Lenders,
which annual report shall include the consolidated
balance sheets of the Borrower and its
Subsidiaries as of the end of such fiscal year and
the related consolidated statements of income,
common stockholders' equity and cash flows of the
Borrower and its Subsidiaries for the fiscal year
then ended, all in reasonable detail and all
prepared in accordance with GAAP.
(ii) A copy of the unaudited nonconsolidated balance
sheets of the Borrower at the end of such fiscal
year and the related unaudited nonconsolidated
statements of income, retained earnings and cash
flows of the Borrower for such fiscal year, in
reasonable detail, all prepared in accordance with
GAAP.
(iii)A copy of the annual audit report-regulatory
basis of the Borrower with an unqualified opinion
of independent certified public accountants
selected by the Borrower and acceptable to the
Required Lenders, which annual report shall
include a copy of the balance sheet-regulatory
basis of the Borrower as the end of such fiscal
year and the related statements of income-
regulatory basis, retained earnings-regulatory
basis and cash flows-regulatory basis of the
Borrower for the fiscal year then ended, all
prepared in accordance with FERC Accounting
Principles.
(b) As soon as available and in any event within 60
days after the end of each fiscal quarter of the Borrower:
(i) A copy of (A) the unaudited consolidated balance
sheets of the Borrower and its Subsidiaries as of
the end of such quarter, (B) the related unaudited
consolidated statements of income for such
quarter, and (C) the related unaudited
consolidated statements of income and cash flows
of the Borrower and its Subsidiaries for the year
to date, all in reasonable detail and prepared in
accordance with GAAP, subject to year-end audit
adjustments.
(ii) A copy of (A) the unaudited nonconsolidated
balance sheets of the Borrower at the end of such
quarter, (B) the related unaudited nonconsolidated
statements of income for such quarter, and (C) the
related unaudited nonconsolidated statements of
income, retained earnings and cash flows of the
Borrower for the year to date, all in reasonable
detail and prepared in accordance with GAAP,
subject to year-end adjustments.
(c) Concurrently with the delivery of any financial
statements under paragraph (a) or (b), a Compliance
Certificate, duly executed by the chief financial officer of
the Borrower.
(d) Promptly following the issuance thereof, a copy of
any Authorizing Order not previously delivered to the Agent.
(e) Promptly upon their distribution, copies of all
financial statements, reports and proxy statements which the
Borrower shall have sent to its stockholders.
(f) Promptly after the sending or filing thereof,
copies of all regular and periodic financial reports which
the Borrower shall file with the Securities and Exchange
Commission or any national securities exchange.
(g) Promptly upon becoming available, copies of any
reports or applications filed by the Borrower with any
governmental body if such reports indicate any material
change in the business, operations, affairs or condition of
the Borrower, or if copies thereof are requested by any
Lender.
(h) Immediately after the commencement thereof, notice
in writing of all litigation and of all proceedings before
any governmental or regulatory agency affecting the Borrower
of the type described in Section 4.7 or which seek a
monetary recovery against the Borrower in excess of
$1,000,000.
(i) As promptly as practicable (but in any event not
later than five business days) after an officer of the
Borrower obtains knowledge of the occurrence of any Default
or Event of Default, notice of such occurrence, together
with a detailed statement by a responsible officer of the
Borrower of the steps being taken by the Borrower to cure
the effect of such event.
(j) Promptly upon becoming aware of an ERISA Event
(other than an event described in clause (c) of the
definition of "ERISA Event" which has not resulted and would
not reasonably be expected to result in a Material Adverse
Effect), a written notice specifying the nature thereof,
what action the Borrower has taken, is taking or proposes to
take with respect thereto, and, when known, any action taken
or threatened by the Internal Revenue Service, the PBGC or
the Department of Labor with respect thereto.
(k) Promptly upon (i) the adoption of any Plan subject
to Section 412 of the Code, or (ii) the adoption of any
amendment to a Pension Plan or other Plan subject to Section
412 of the Code, if such amendment results in a material
increase in contributions or Unfunded Pension Liability,
written notice specifying the nature thereof.
(l) Upon request of any Lender, copies of the most
recent annual report (Form 5500 Series), including any
supporting schedules, filed by the Borrower or any ERISA
Affiliate with the Internal Revenue Service with respect to
any Plan.
(m) Such information (in addition to that specified
elsewhere in this Section) respecting the financial
condition and results of operations of the Borrower as any
Lender may from time to time reasonably request.
Section 5.2 Books and Records; Inspection and Examination.
The Borrower will keep accurate books of record and account for
itself in which true and complete entries will be made in
accordance with GAAP and, upon request of any Lender, will give
any representative of that Lender access to, and permit such
representative to examine, copy or make extracts from, any and
all books, records and documents in its possession, to inspect
any of its properties and to discuss its affairs, finances and
accounts with any of its principal officers, all at such times
during normal business hours and as often as any Lender may
reasonably request.
Section 5.3 Compliance with Laws.
The Borrower will comply with the requirements of applicable laws
and regulations, except any law and regulation (i) the compliance
with which is contested in good faith or the subject of a bona
fide dispute, and (ii) the noncompliance with which would not
have a Material Adverse Effect.
Section 5.4 Payment of Taxes and Other Claims.
The Borrower will pay or discharge, when due, (a) all taxes,
assessments and governmental charges levied or imposed upon it or
upon its income or profits, or upon any properties belonging to
it, prior to the date on which penalties attach thereto, (b) all
federal, state and local taxes required to be withheld by it, and
(c) all lawful claims for labor, materials and supplies which, if
unpaid, might by law become a Lien or charge upon any properties
of the Borrower; provided, that the Borrower shall not be
required to pay any such tax, assessment, charge or claim so long
as (x) the amount, applicability or validity of such tax,
assessment, charge or claim is being contested in good faith by
appropriate proceedings or is the subject of a bona fide dispute,
and (y) the Borrower has provided adequate reserves therefor in
accordance with GAAP, except (with respect to any of the
foregoing) to the extent that the failure to do so could not
reasonably be expected to have a Material Adverse Effect.
Section 5.5 Maintenance of Properties.
Subject to transactions permitted by Sections 6.4, the Borrower
shall maintain and preserve all its property which is used or
useful in its business in good working order and condition,
ordinary wear and tear excepted, except to the extent that
noncompliance would not have a Material Adverse Effect.
Section 5.6 Insurance.
The Borrower shall maintain with financially sound and reputable
independent insurers, insurance with respect to its properties
and business against loss or damage of the kinds customarily
insured against by Persons engaged in the same or similar
business, of such types and in such amounts (including
deductibles, co-insurance and self-insurance, if adequate
reserves are maintained with respect thereto) as are customarily
carried under similar circumstances by such other Persons, except
to the extent that noncompliance would not have a Material
Adverse Effect, and the Borrower will furnish any Lender upon
request full information as to the insurance carried within 15
Business Days.
Section 5.7 Preservation of Corporate Existence.
Subject to transactions permitted by Section 6.4, the Borrower
shall (i) preserve and maintain in full force and effect its
corporate existence and good standing under the laws of its state
or jurisdiction of incorporation; (ii) preserve and maintain in
full force and effect all governmental rights, privileges,
qualifications, permits, licenses and franchises necessary or
desirable in the normal conduct of its business; and
(iii) preserve its business organization and goodwill; and
(iv) preserve or renew all of its registered patents, trademarks,
trade names and service marks; except, in each case, to the
extent that failure to do so does not have a Material Adverse
Effect.
ARTICLE VI
Negative Covenants
So long as any Note shall remain unpaid or the Facility shall be
outstanding, the Borrower agrees that, without the prior written
consent of the Required Lenders:
Section 6.1 Liens.
The Borrower will not create, incur or suffer to exist any Lien
in, of or on the property of the Borrower, except:
(a) Liens for taxes, assessments of governmental
charges or levies on its property if the same shall not at
the time be delinquent or thereafter can be paid without
penalty, or are being contested in good faith and by
appropriate proceedings.
(b) Liens imposed by law, such as carriers',
warehousemen's and mechanics' liens and other similar liens
arising in the ordinary course of business which secure
payment of obligations not yet due and payable or remaining
payable without penalty or which are being contested in good
faith by appropriate proceedings.
(c) Liens arising out of pledges or deposits under
worker's compensation laws, unemployment insurance, old age
pensions, or other social security or retirement benefits,
or similar legislation.
(d) Utility easements, buildings restrictions and such
other encumbrances or charges against real property as are
of a nature generally existing with respect to properties of
a similar character and which do not in any material way
affect the marketability of the same or interference with
the use thereof in the business of the Borrower.
(e) Purchase money Liens upon or in any property
acquired or held by the Borrower in the ordinary course of
business, provided that (i) no such Lien is created later
than the 90th day following the acquisition or completion of
construction of such property by the Borrower, and (ii) no
such Lien extends or shall extend to or cover any property
of the Borrower other than the property then being acquired,
fixed improvements then or thereafter erected thereon and
improvements and modifications thereto necessary to maintain
such properties in working order.
(f) Liens incurred or deposits made in the ordinary
course of business to secure (or to obtain letters of credit
that secure) the performance of tenders, statutory
obligations, surety bonds, appeal bonds, bids, leases (other
than Capitalized Leases), performance bonds, purchase,
construction or sales contracts and other similar
obligations, in each case not incurred or made in connection
with the incurrence of any Obligation.
(g) Liens resulting from judgments, unless such
judgments are not discharged within 45 days; are not stayed
pending appeal or otherwise being appropriately contested in
good faith; or are not discharged within 45 days after
expiration of any such stay.
(h) Liens created under or in connection with the
Mortgage Indentures as such Mortgage Indentures exist on the
date hereof, without regard to any waiver, amendment,
modification or restatement thereof.
(i) Liens permitted under the Mortgage Indentures as
such Mortgage Indentures exist on the date hereof, without
regard to any waiver, amendment, modification or restatement
thereof.
(j) Liens on any property of the Borrower (other than
those described in subsection (e)) securing any indebtedness
for borrowed money in existence on the date hereof and
listed in Schedule 6.1 hereto.
Section 6.2 Investments.
The Borrower will not purchase or hold beneficially any stock or
other securities or evidence of indebtedness of, make or permit
to exist any loans or advances to, or make any investment or
acquire any interest whatsoever in, any other Person, except:
(a) Investments in cash equivalents and short-term
marketable securities pursuant to and in accordance with the
terms of the Borrower's then-current investment policy duly
adopted by the Board of Directors of the Borrower.
(b) Investments in the MDU Resources Group, Inc.
Benefits Protection Trust in accordance with the Borrower's
historical practices.
(c) Any existing investment by the Borrower in the
voting stock, membership interests or other equity interests
of any Subsidiary.
(d) Any investment by the Borrower in any Subsidiary
after the date hereof, so long as (i) the entire amount of
such investment is obtained from (A) the issuance of equity
interests by the Borrower and/or (B) dividends or similar
distributions paid to the Borrower by any other Subsidiary
of the Borrower, in each case concurrent with the Borrower's
investment in such Subsidiary, and (ii) no Default or Event
of Default has occurred and is continuing when such
investment is actually made. In the case of any investment
funded as described in clause (i)(B), the applicable
dividend or distribution and the corresponding investment
shall be accurately and completely reflected on the books
and records of the Borrower and the applicable Subsidiaries.
(e) Consolidations, mergers and acquisitions not
prohibited by Section 6.6.
(f) Travel, relocation and similar advances made to
officers and employees of the Borrower in anticipation of
expenses to be incurred by such officers and employees, in
each case in the ordinary course of the Borrower's business
consistent with the Borrower's past practices.
(g) Advances in the form of progress payments, prepaid
rent or security deposits.
(h) Evidences of indebtedness in the nature of
accounts receivable or notes receivable arising from the
sale or lease of goods or services in the ordinary course of
business.
(i) Investments made for the purpose of economic
development, so long as the aggregate value of the
investments permitted by this clause (i) does not exceed
$10,000,000.
Section 6.3 Distributions.
The Borrower will not make any Distribution at any time following
and during the continuance of any Default or Event of Default
arising under paragraph (a), (b), (g) or (h) of Section 7.1.
Section 6.4 Sale of Assets.
The Borrower will not lease, sell or otherwise dispose of all, or
a substantial portion of, its property, assets or business
(whether in one transaction or in a series of transactions) to
any other Person except for sales of inventory in the ordinary
course of business. For purposes of this Section, "substantial
portion" means assets (including other Persons) (i) representing
more than 20% of the consolidated assets of the Borrower as
reflected in the most recent consolidating financial statement of
the Borrower referred to in Section 4.5, or (ii) responsible for
more than 10% of the consolidated net sales or the consolidated
net income of the Borrower as reflected in the financial
statement referred to in clause (i) above.
Section 6.5 Transactions with Affiliates.
The Borrower shall not enter into any material transaction or
arrangement or series of related transactions or arrangements
that in the aggregate would be material with any Affiliate of the
Borrower, except (i) transactions upon terms no less favorable to
the Borrower than would obtain, taking into account all facts and
circumstances, in a comparable arm's-length transaction with a
Person not an Affiliate of the Borrower, (ii) investments in
Subsidiaries to the extent not prohibited by Section 6.2,
(iii) Distributions to the extent not prohibited by Section 6.3,
and (iv) payments required by regulatory rule or order; in the
case of clauses (i), (ii) and (iii), to the extent that such
payments are (x) made in the ordinary course of the Borrower's
business, (y) consistent with the Borrower's past practices, and
(z) fair and reasonable.
Section 6.6 Consolidation and Merger.
The Borrower will not consolidate with or merge into any Person,
or permit any other Person to merge into it, or acquire (in a
transaction analogous in purpose or effect to a consolidation or
merger) all or substantially all of the assets of any other
Person or any existing business (whether existing as a separate
entity, subsidiary, division, unit, line of business or
otherwise) of any Person; provided, however, that the
restrictions contained in this Section shall not apply to or
prevent the consolidation or merger of any Person with, or a
conveyance or transfer of its assets to, the Borrower so long as
(i) no Default or Event of Default exists at the time of, or will
be caused by, such consolidation, merger, conveyance or transfer,
(ii) the Borrower shall be the continuing or surviving
corporation, and (iii) the prior, effective written consent or
approval of the board of directors or equivalent governing body
of the other party to such consolidation, merger, conveyance or
transfer is obtained.
Section 6.7 Environmental Laws.
The Borrower will not cause or permit the conduct of its
operations or the maintenance of any of its property to violate
any Environmental Law, except to the extent that noncompliance
would not have a Material Adverse Effect.
Section 6.8 Restrictions on Nature of Business.
The Borrower will not engage in any material line of business
that is significantly different from that presently engaged in by
the Borrower.
Section 6.9 Consolidated Total Leverage Ratio.
The Borrower will not at any time permit its Consolidated Total
Leverage Ratio, determined as of any Covenant Compliance Date, to
be greater than 0.65 to 1.
Section 6.10 Borrower Leverage Ratio.
The Borrower will not at any time permit the Borrower Leverage
Ratio, determined as of any Covenant Compliance Date, to be
greater than 0.65 to 1.
Section 6.11 Interest Coverage Ratio.
The Borrower will not at any time permit its Interest Coverage
Ratio, determined as of any Covenant Compliance Date, to be less
than 2.50 to 1.
ARTICLE VII
Events of Default, Rights and Remedies
Section 7.1 Events of Default.
"Event of Default", wherever used herein, means any one of the
following events:
(a) Default in the payment of any principal of any
Note when it becomes due and payable.
(b) Default in the payment of any interest on any Note
when the same becomes due and payable and the continuance of
such default for a period of two calendar days; or default
in the payment of any fees required under Section 2.6 when
the same become due and payable and the continuance of such
default for a period of five calendar days.
(c) Default in the performance, or breach, of any
covenant or agreement on the part of the Borrower contained
in Article VI.
(d) Default in the performance, or breach, of any
covenant or agreement of the Borrower in this Agreement
(other than a covenant or agreement a default in whose
performance or whose breach is elsewhere in this Section
specifically dealt with), and the continuance of such
default or breach for a period of 30 days after the Lenders
have given notice to the Borrower specifying such default or
breach and requiring it to be remedied.
(e) Any representation or warranty made by the
Borrower in this Agreement or by the Borrower (or any of its
officers) in any certificate, instrument, or statement
contemplated by or made or delivered pursuant to or in
connection with this Agreement, shall prove to have been
incorrect or misleading in any material respect when made.
(f) A default under either Mortgage Indenture or with
respect to any other Funded Debt (other than any default
dealt with elsewhere in this Section) and the expiration of
the applicable period of grace, if any, specified in the
applicable evidence of indebtedness, indenture or other
instrument; provided, however, that no Event of Default
shall be deemed to have occurred under this paragraph if the
aggregate amount owing as to all such indebtedness as to
which such defaults have occurred and are continuing is less
than $15,000,000; provided further that if such default
shall be cured by the Borrower, or waived by the holders of
such indebtedness, in each case prior to the commencement of
any action under Section 7.2 and as may be permitted by such
evidence of indebtedness, indenture or other instrument,
then the Event of Default hereunder by reason of such
default shall be deemed likewise to have been thereupon
cured or waived.
(g) The Borrower (i) ceases or fails to be Solvent, or
generally fails to pay, or admits in writing its inability
to pay, its debts as they become due, subject to applicable
grace periods, if any, whether at stated maturity or
otherwise; (ii) voluntarily ceases to conduct its business
in the ordinary course; (iii) commences any Insolvency
Proceeding with respect to itself; or (iv) takes any action
to effectuate or authorize any of the foregoing.
(h) (i) Any involuntary Insolvency Proceeding is
commenced or filed against the Borrower, or any writ,
judgment, warrant of attachment, execution or similar
process is issued or levied against a substantial part of
the Borrower's properties, and any such proceeding or
petition shall not be dismissed, or such writ, judgment,
warrant of attachment, execution or similar process shall
not be released, vacated or fully bonded within 60 days
after commencement, filing or levy; or (ii) the Borrower
admits the material allegations of a petition against it in
any Insolvency Proceeding, or an order for relief (or
similar order under non-U.S. law) is ordered in any
Insolvency Proceeding; or (iii) the Borrower acquiesces in
the appointment of a receiver, trustee, custodian,
conservator, liquidator, mortgagee in possession (or agent
therefor), or similar Person for itself or a substantial
portion of its property or business.
(i) A Change of Control shall occur with respect to
the Borrower.
(j) The Borrower shall fail within 45 days to pay,
bond or otherwise discharge any judgment or order for the
payment of money in excess of $10,000,000, which is not
stayed on appeal or otherwise being appropriately contested
in good faith.
(k) (i) An ERISA Event or ERISA Termination Event
which has resulted or would reasonably be expected to result
in liability of the Borrower under Title IV of ERISA to the
Pension Plan, Multiemployer Plan or the PBGC in an aggregate
amount in excess of 10% of Consolidated Net Worth; (ii) the
commencement or increase of contributions to, or the
adoption of or the amendment of, a Pension Plan by the
Borrower or an ERISA Affiliate which has resulted or could
reasonably be expected to result in an increase in Unfunded
Pension Liability among all Pension Plans in an aggregate
amount in excess of 10% of Consolidated Net Worth; or (iii)
the Borrower's or an ERISA Affiliate's failure to pay when
due, after the expiration of any applicable grace period,
any installment payment with respect to its withdrawal
liability under Section 4201 of ERISA under a Multiemployer
Plan which has resulted or could reasonably be expected to
result in a Material Adverse Effect.
(l) Any governmental authority or other administrative
or legal authority having regulatory jurisdiction over the
Borrower takes any action which has a Material Adverse
Effect on the Borrower.
Section 7.2 Rights and Remedies.
Upon the occurrence of an Event of Default or at any time
thereafter until such Event of Default is cured to the written
satisfaction of the Required Lenders, the Agent may, with the
consent of the Required Lenders, and shall, at the request of the
Required Lenders, exercise any or all of the following rights and
remedies:
(a) The Agent may, by notice to the Borrower, declare
the Facility to be terminated, whereupon the same shall
forthwith terminate.
(b) The Agent may, by notice to the Borrower, declare
the entire unpaid principal amount of the Notes then
outstanding, all interest accrued and unpaid thereon, and
all other amounts payable under this Agreement to be
forthwith due and payable, whereupon the Notes, all such
accrued interest and all such amounts shall become and be
forthwith due and payable, without presentment, demand,
protest or further notice of any kind, all of which are
hereby expressly waived by the Borrower.
(c) The Lenders may exercise any other rights and
remedies available to them by law or agreement.
Notwithstanding the foregoing, upon the occurrence of an Event of
Default described in Section 7.1(g) or 7.1(h) hereof, the entire
unpaid principal amount of the Notes then outstanding, all
interest accrued and unpaid thereon, and all other amounts
payable under this Agreement shall be immediately due and payable
without presentment, demand, protest or notice of any kind.
ARTICLE VIII
The Agent
Section 8.1 Authorization.
Each Lender and the holder of each Note irrevocably appoints and
authorizes the Agent to act on behalf of such Lender or holder to
the extent provided herein or in any document or instrument
delivered hereunder or in connection herewith, and to take such
other action as may be reasonably incidental thereto. In
furtherance of the foregoing, and not in limitation thereof, each
Lender irrevocably (i) authorizes the Agent to execute and
deliver and perform its obligations under this Agreement and each
of the Loan Documents to which the Agent is a party, and to
exercise all rights, powers and remedies that the Agent may have
hereunder or thereunder, (ii) appoints the Agent as nominal
beneficiary or nominal secured party, as the case may be, under
the Loan Documents and all related UCC-1 financing statements,
and (iii) authorizes the Agent to act as agent of and for such
Lender for purposes of holding, perfecting and disposing of any
collateral under the Loan Documents. As to any matters not
expressly provided for by this Agreement or the Loan Documents,
the Agent shall not be required to exercise any discretion or
take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Required Lenders or, if
so required pursuant to Section 9.2, upon the instructions of all
Lenders; provided, however, that except for action expressly
required of the Agent hereunder, the Agent shall in all cases be
fully justified in failing or refusing to act hereunder unless it
shall be indemnified to its satisfaction by the Lenders against
any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action, and the
Agent shall not in any event be required to take any action which
is contrary to this Agreement, the Loan Documents or applicable
law. The Agent shall not have a fiduciary relationship in respect
of the Borrower or any Lender by reason of this Agreement.
Section 8.2 Distribution of Payments and Proceeds.
(a) After deduction of any costs of collection, as
provided in this Agreement and the other Loan Documents, and
any fee payable to the Agent in its capacity as such under
this Agreement, any Fee Letter or any other agreement, the
Agent shall remit to each Lender that Lender's Percentage of
all payments of principal and interest and of all fees and
other amounts payable hereunder for the benefit of the
Lenders that are received by the Agent under the Loan
Documents. Each Lender's interest in the Loan Documents
shall be payable solely from payments, collections and
proceeds actually received by the Agent under the Loan
Documents; and the Agent's only liability to the Lenders
hereunder shall be to account for each Lender's Percentage
of such payments, collections and proceeds in accordance
with this Agreement. If the Agent is ever required for any
reason to refund any such payments, collections or proceeds,
each Lender will refund to the Agent, upon demand, its
Percentage of such payments, collections or proceeds,
together with its Percentage of interest or penalties, if
any, payable by the Agent in connection with such refund.
(b) Notwithstanding the foregoing, if any Lender has
wrongfully refused to fund its Percentage of any Borrowing
or other Advance as required hereunder, or if the principal
balance of any Lender's Note is for any other reason less
than its Percentage of the aggregate principal balances of
the Notes then outstanding, the Agent may remit all payments
received by it to the other Lenders until such payments have
reduced the aggregate amounts owed by the Borrower to the
extent that the aggregate amount owing to such Lender
hereunder is equal to its Percentage of the aggregate amount
owing to all of the Lenders hereunder. The provisions of
this paragraph are intended only to set forth certain rules
for the application of payments, proceeds and collections in
the event that a Lender has breached its obligations
hereunder and shall not be deemed to excuse any Lender from
such obligations.
Section 8.3 Expenses.
All payments, collections and proceeds received or effected by
the Agent may be applied, first, to pay or reimburse the Agent
for all costs, expenses, damages and liabilities at any time
incurred by or imposed upon the Agent in connection with this
Agreement or any other Loan Document (including but not limited
to all reasonable attorney's fees, foreclosure expenses and
advances made to protect the security of any collateral). If the
Agent does not receive payments, collections or proceeds
sufficient to cover any such costs, expenses, damages or
liabilities within 30 days after their incurrence or imposition,
each Lender shall, upon demand, remit to the Agent its Percentage
of the difference between (i) such costs, expenses, damages and
liabilities, and (ii) such payments, collections and proceeds,
together with interest on such amount for each day following the
thirtieth day after demand therefor until so remitted at a rate
equal to the Federal Funds Rate for each such day.
Section 8.4 Payments Received Directly by Lenders.
If any Lender or other holder of a Note shall obtain any payment
or other recovery (whether voluntary, involuntary, by application
of offset or otherwise) on account of the Obligations other than
through distributions made in accordance with Section 8.2, such
Lender or holder shall promptly give notice of such fact to the
Agent and shall purchase from the other Lenders or holders such
participations in the Obligations held by them as shall be
necessary to cause the purchasing Lender or holder to share the
excess payment or other recovery ratably with each of them;
provided, however, that if all or any portion of the excess
payment or other recovery is thereafter recovered from such
purchasing Lender or holder, the purchase shall be rescinded and
the purchasing Lender restored to the extent of such recovery
(but without interest thereon).
Section 8.5 Indemnification.
Each Lender severally (but not jointly) hereby agrees to
indemnify and hold harmless the Agent, as well as the Agent's
agents, employees, officers and directors, ratably according to
their respective Percentages from and against any and all losses,
liabilities (including liabilities for penalties), actions,
suits, judgment, demands, damages, costs, disbursements, or
expenses (including attorneys' fees and expenses) of any kind or
nature whatsoever, which are imposed on, incurred by, or asserted
against the Agent or its agents, employees, officers or directors
in any way relating to or arising out of this Agreement or the
Loan Documents, or as a result of any action taken or omitted to
be taken by the Agent; provided, however, that no Lender shall be
liable for any portion of any such losses, liabilities (including
liabilities for penalties), actions, suits, judgments, demands,
damages, costs disbursements, or expenses resulting from the
gross negligence or willful misconduct of the Agent.
Notwithstanding any other provision of the Loan Documents, the
Agent shall in all cases be fully justified in failing or
refusing to act hereunder unless it shall be indemnified to its
satisfaction by the Lenders against any and all liability and
expense that may be incurred by it by reason of taking or
continuing to take any such action.
Section 8.6 Exculpation.
The Agent shall not be liable for any action taken or omitted to
be taken by the Agent in connection with this Agreement or the
Loan Documents, except for its own gross negligence or willful
misconduct. The Agent shall be entitled to rely upon advice of
counsel concerning legal matters, the advice of independent
public accountants with respect to accounting matters and advice
of other experts as to any other matters, and upon this
Agreement, any Loan Document and any schedule, certificate,
statement, report, notice or other writing which it believes to
be genuine or to have been presented by a proper person. Neither
the Agent nor any of its directors, officers, employees or agents
shall (a) be responsible for any recitals, representations or
warranties contained in, or for the execution, validity,
genuineness, effectiveness or enforceability of this Agreement,
any Loan Document, or any other instrument or document delivered
hereunder or in connection herewith, (b) be responsible for the
validity, genuineness, perfection, effectiveness, enforceability,
existence, value or enforcement of any collateral security, (c)
be under any duty to inquire into or pass upon any of the
foregoing matters, or to make any inquiry concerning the
performance by the Borrower or any other obligor of its
obligations, or (d) in any event, be liable as such for any
action taken or omitted by it or them, except for its or their
own gross negligence or willful misconduct. The agency hereby
created shall in no way impair or affect any of the rights and
powers of, or impose any duties or obligations upon, the Agent in
its individual capacity.
Section 8.7 Agent and Affiliates.
The Agent shall have the same rights and powers hereunder in its
individual capacity as any other Lender, and may exercise or
refrain from exercising the same as though it were not the Agent,
and the Agent and its affiliates may accept deposits from and
generally engage in any kind of business with the Borrower as
fully as if the Agent were not the Agent hereunder.
Section 8.8 Credit Investigation.
Each Lender acknowledges that it has made such inquiries and
taken such care on its own behalf as would have been the case had
its obligations hereunder been incurred and the Advances made
directly by such Lender to the Borrower without the intervention
of the Agent or any other Lender. Each Lender agrees and
acknowledges that the Agent makes no representations or
warranties about the creditworthiness of the Borrower or any
other party to this Agreement or with respect to the legality,
validity, sufficiency or enforceability of this Agreement, any
Loan Document, or any other instrument or document delivered
hereunder or in connection herewith.
Section 8.9 Resignation and Assignment of Agent.
(a) The Agent may resign as such at any time upon at
least 30 days' prior notice to the Borrower and the Lenders.
In the event of any resignation of the Agent, the Required
Lenders shall as promptly as practicable appoint a successor
Agent. If no such successor Agent shall have been so
appointed by the Required Lenders and shall have accepted
such appointment within 30 days after the resigning Agent's
giving of notice of resignation, then the resigning Agent
may, on behalf of the Lenders, appoint a successor Agent,
which shall be a commercial bank organized under the laws of
the United States of America or of any State thereof. Any
such successor Agent shall have capital and retained
earnings of at least $100,000,000.
(b) The Agent may, without the consent of the Borrower
or the other Lenders, assign its rights and obligations as
Agent hereunder and under the other Loan Documents to its
parent or to any wholly owned subsidiary of its parent, and
upon such assignment, the former Agent shall be deemed to
have retired, and such wholly owned subsidiary shall be
deemed to be a successor Agent. Any such successor Agent
shall have capital and retained earnings of at least
$100,000,000.
(c) Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall
thereupon be entitled to receive from the prior Agent such
documents of transfer and assignment as such successor Agent
may reasonably request and the resigning or assigning Agent
shall be discharged from its duties and obligations under
this Agreement. After any resignation or assignment pursuant
to this Section, the provisions of this Section shall inure
to the benefit of the retiring Agent as to any actions taken
or omitted to be taken by it while it was acting as Agent
hereunder.
Section 8.10 Defaults.
The Agent shall not be deemed to have knowledge of the occurrence
of a Default or an Event of Default unless the Agent has received
notice from a Lender or the Borrower specifying the occurrence of
such Default or Event of Default. In the event that the Agent
receives such a notice of the occurrence of a Default or an Event
of Default, the Agent shall give prompt notice thereof to the
Lenders. The Agent shall (subject to Section 8.5 hereof) take
such actions with respect to such Default as shall be directed by
the Required Lenders; provided that, unless and until the Agent
shall have received such directions, the Agent may take any
action, or refrain from taking any action, with respect to such
Default as it shall deem advisable in the best interest of the
Lenders.
Section 8.11 Obligations Several.
The obligations of each Lender hereunder are the several
obligations of such Lender, and neither any Lender nor the Agent
shall be responsible for the obligations of any other Lender
hereunder, nor will the failure by the Agent or any Lender to
perform any of its obligations hereunder relieve the Agent or any
other Lender from the performance of its respective obligations
hereunder. Nothing contained in this Agreement, and no action
taken by any Lender or the Agent pursuant hereto or in connection
herewith or pursuant to or in connection with the Loan Documents
shall be deemed to constitute the Lenders, together or with or
without the Agent, as a partnership, association, joint venture,
or other entity.
ARTICLE IX
Miscellaneous
Section 9.1 No Waiver; Cumulative Remedies.
No failure or delay on the part of the Lenders in exercising any
right, power or remedy under the Loan Documents shall operate as
a waiver thereof; nor shall any Lender's acceptance of payments
while any Default or Event of Default is outstanding operate as a
waiver of such Default or Event of Default, or any right, power
or remedy under the Loan Documents; nor shall any single or
partial exercise of any such right, power or remedy preclude any
other or further exercise thereof or the exercise of any other
right, power or remedy under the Loan Documents. The remedies
provided in the Loan Documents are cumulative and not exclusive
of any remedies provided by law.
Section 9.2 Amendments, Etc.
No amendment or waiver of any provision of any Loan Document or
consent to any departure by the Borrower therefrom shall be
effective unless the same shall be in writing and signed by the
Required Lenders (or by the Agent with the consent or at the
request of the Required Lenders), and any such waiver shall be
effective only in the specific instance and for the specific
purpose for which given. No notice to or demand on the Borrower
in any case shall entitle the Borrower to any other or further
notice or demand in similar or other circumstances.
Notwithstanding the foregoing:
(a) No such amendment or waiver shall be effective to
do any of the following unless signed by each of the Lenders
(or by the Agent with the consent or at the request of each
of the Lenders):
(i) Increase the Facility Amount of any Lender or
extend the Revolving Period Termination Date.
(ii) Permit the Borrower to assign its rights under
this Agreement.
(iii) Amend this Section, the definition of
"Required Lenders" in Section 1.1, or any
provision herein providing for consent or other
action by all Lenders.
(b) No such amendment or waiver shall be effective to
do any of the following unless signed by each of the Lenders
affected thereby (or by the Agent with the consent or at the
request of each of such Lenders):
(i) Forgive any indebtedness of the Borrower arising
under this Agreement or the Notes, or reduce the
rate of interest or any fees charged under this
Agreement or the Notes.
(ii) Postpone or delay any date fixed by this Agreement
or any other Loan Document for any payment of
principal, interest, facility fees or other
material amounts due to the Lenders (or any of
them) hereunder or under any other Loan Document.
(c) No amendment, waiver or consent shall affect the
rights or duties of the Agent under this Agreement or any
other Loan Document unless in writing and signed by the
Agent.
(d) No amendment, modification or (except as provided
elsewhere herein) termination of this Agreement or waiver of
any rights of the Borrower or obligations of any Lender or
the Agent hereunder shall be effective unless the Borrower
shall have consented thereto in writing.
Section 9.3 Notice.
Except as otherwise expressly provided herein, all notices and
other communications hereunder shall be in writing and shall be
(i) personally delivered, (ii) transmitted by registered mail,
postage prepaid, (iii) sent by Federal Express or similar
expedited delivery service, or (iv) transmitted by telecopy, in
each case addressed to the party to whom notice is being given at
its address or telecopier number (as the case may be) as set
forth in Exhibit A or in any applicable Assignment Certificate;
or, as to each party, at such other address or telecopier number
as may hereafter be designated in a notice by that party to the
other party complying with the terms of this Section. All such
notices or other communications shall be deemed to have been
given on (i) the date received if delivered personally or by
mail, (ii) the date of receipt, if delivered by Federal Express
or similar expedited delivery service, or (iii) the date of
transmission if delivered by telecopy, except that notices or
requests to the Agent or any Lender pursuant to any of the
provisions of Article II shall not be effective until received.
Section 9.4 Costs and Expenses.
The Borrower agrees to pay on demand all reasonable costs and
expenses incurred by the Agent in connection with the
negotiation, preparation, execution, administration, amendment or
enforcement of the Loan Documents and the other instruments and
documents to be delivered hereunder and thereunder, including the
reasonable fees and out-of-pocket expenses of counsel for any
Lender with respect thereto, whether paid to outside counsel or
allocated to the Agent by in-house counsel.
Section 9.5 Indemnification by Borrower.
The Borrower hereby agrees to indemnify the Agent and the Lenders
and each officer, director, employee and agent thereof (herein
individually each called an "Indemnitee" and collectively called
the "Indemnitees") from and against any and all losses, claims,
damages, reasonable expenses (including, without limitation,
reasonable attorneys' fees) and liabilities incurred by an
Indemnitee in connection with or arising out of the execution or
delivery of this Agreement or any agreement or instrument
contemplated hereby, the performance by the parties hereto of
their respective obligations hereunder or the use of the proceeds
of any Borrowing hereunder (including but not limited to any such
loss, claim, damage, expense or liability arising out of any
claim in which it is alleged that any Environmental Law has been
breached with respect to any activity or property of the
Borrower), except to the extent that such loss, claim, damage,
expense or liability was incurred as a result of the gross
negligence or willful misconduct of the applicable Indemnitee.
All obligations provided for in this Section shall survive any
termination of this Agreement.
Section 9.6 Execution in Counterparts.
This Agreement and the other Loan Documents may be executed in
any number of counterparts, each of which when so executed and
delivered shall be deemed to be an original and all of which
counterparts of this Agreement or such other Loan Document, as
the case may be, taken together, shall constitute but one and the
same instrument.
Section 9.7 Binding Effect; Assignment and Participations.
(a) Generally. The Loan Documents shall be binding
upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns, except
that (i) the Borrower shall not have the right to assign its
rights thereunder or any interest therein without the prior
written consent of each of the Lenders, and (ii) except as
set forth in this Section 9.7, no Lender may assign or grant
any participation in any of its rights or obligations under
any Loan Document.
(b) Participations. Any Lender may, at any time, grant
participations in a portion of its Note and Commitment to
any institutional investor on any date selected by such
Lender. Any Lender proposing a participation hereunder shall
give notice of such participation to the Agent at least ten
Business Days prior to such participation (unless the Agent
consents to a shorter period of time). Such notice shall
specify the identity of the proposed purchaser of the
participation and the amount of the proposed participation.
No such partial participation shall be permitted if the
principal amount thereof would be less than $5,000,000. No
holder of any such participation, other than an affiliate of
such Lender, shall be entitled to require such Lender to
take or omit to take any action hereunder, except that such
Lender may agree with such participant that such Lender will
not, without such participant's consent, (i) forgive any
indebtedness of the Borrower under this Agreement or the
Notes, (ii) agree to reduce the rate of interest charged
under this Agreement, or (iii) agree to extend the final
maturity of any indebtedness evidenced by the Notes, except
as expressly provided by the terms of the Loan Documents. No
Lender shall, as between the Borrower and such Lender, be
relieved of any of its obligations hereunder as a result of
any such granting of a participation. The Borrower hereby
acknowledges and agrees that any participant described in
this Section will, for purposes of Section 2.10(b), be
considered to be a Lender hereunder (provided that such
participant shall not be entitled to receive any more than
the Lender selling such participation would have received
had such sale not taken place) and may rely on, and possess
all rights under, any opinions, certificates, or other
instruments or documents delivered under or in connection
with any Loan Document (it being understood that each
opinion delivered hereunder speaks only as of the date
thereof).
(c) Assignments. Any Lender may, at any time, assign a
portion of its Note and Commitment to an Eligible Lender (an
"Applicant") on any date (the "Adjustment Date") selected by
such Lender. Any Lender proposing an assignment hereunder
shall give notice of such assignment to the Agent at least
ten Business Days prior to such assignment (unless the Agent
consents to a shorter period of time). Such notice shall
specify the identity of such Applicant and the Percentage
which it proposes that such Applicant acquire (which
Percentage shall be the same for the Commitment and the Note
held by the assigning Lender). No such partial assignment
shall be permitted if, immediately after giving effect to
such assignment, either the Credit Exposure of the Applicant
or the Credit Exposure of the assigning Lender would be less
than $5,000,000. The notice of assignment shall contain a
representation by the Applicant to the effect that none of
the consideration used to make the purchase of the Note and
Commitment under the applicable assignment agreement
constitutes "plan assets" as defined under ERISA and that
the rights and interests of the Applicant in and under the
Loan Documents will not be "plan assets" under ERISA. Any
Lender making an assignment under this Section shall pay the
Agent a transfer fee in the amount of $3,500 simultaneously
with such assignment.
(d) Consents. Any assignment hereunder may be made,
and any participation granted, only with the prior written
consent of the Agent and the Borrower; provided, however,
that (i) in no event shall such consent be unreasonably
withheld, (ii) the consent of the Borrower shall not be
required if any Default or Event of Default has occurred and
is continuing at the time of such assignment or grant of
participation, (iii) no such consent of the Borrower and the
Agent shall be required for the assignment by any Lender of,
or grant of a participation in, all or any part of its
Commitment and Note to one or more other Persons that are
Lenders immediately prior to such assignment, and (iv) no
such consent of the Borrower and the Agent shall be required
for the assignment by any Lender of, or grant of a
participation in, all or any part of its Commitment and Note
to one or more affiliates of such Lender, provided that,
unless consented to by the Borrower and the Agent (which
consent shall not be unreasonably withheld), no such
assignment under this clause (iv) shall relieve the
transferring Lender from its obligations hereunder.
(e) Assignment Certificate and Notes. To confirm the
status of each Additional Lender as a party to this
Agreement and to evidence the assignment in accordance
herewith:
(i) the Borrower, such Lender, such Applicant, and the
Agent shall, on or before the Adjustment Date,
execute and deliver to the Agent an Assignment
Certificate in substantially the form of Exhibit D
(an "Assignment Certificate") (provided that the
assignment will be effective without the signature
of the Borrower or the Agent to the extent that
the consent of the Borrower or the Agent, as the
case may be, is not required hereunder); and
(ii) the Borrower will, at its own expense, execute and
deliver to the Additional Lender a new Note,
payable to the order of the Additional Lender in
an amount corresponding to the applicable interest
in the assigning Lender's rights and obligations
acquired by such Applicant pursuant to such
assignment, and, if the assigning Lender has
retained interests in such rights and obligations,
a new Note, payable to the order of that Lender in
an amount corresponding to such retained
interests. Such new Notes shall be in an aggregate
principal amount equal to the aggregate principal
amount of the applicable Note to be replaced by
such new Notes, shall be dated the effective date
of such assignment and shall otherwise be in the
form of the Note to be replaced thereby. Such new
Notes shall be issued in substitution for, but not
in satisfaction or payment of, the Notes being
replaced thereby.
Upon the execution and delivery of such Assignment
Certificate and such Notes, (a) this Agreement shall be
deemed to be amended to the extent, and only to the extent,
necessary to reflect the addition of such Additional Lender
and the resulting adjustment of Percentages arising
therefrom, (b) the assigning Lender shall be relieved of all
obligations hereunder to the extent of the reduction of all
obligations hereunder and to the extent of the reduction of
such Lender's Percentage, and (c) the Additional Lender
shall become a party hereto and shall be entitled to all
rights, benefits and privileges accorded to a Lender herein
and in each other document or instrument executed pursuant
hereto and subject to all obligations of a Lender hereunder,
including the right to approve or disapprove actions which,
in accordance with the terms hereof, require the approval of
the Required Lenders or all Lenders, and the obligations to
make Advances hereunder.
(f) Federal Reserve Bank Security Interests.
Notwithstanding the foregoing, each Lender may at any time
grant a security interest in all or any portion of its
rights under this Agreement and that Lender's Note in favor
of any Federal Reserve Bank in accordance with Regulation A
of the Board of Governors of the Federal Reserve System.
(g) Borrower Cooperation. In order to facilitate the
addition of Additional Lenders hereto, the Borrower shall
cooperate fully with each Lender and the Agent in connection
therewith and shall provide all reasonable assistance
requested by each Lender and the Agent relating thereto,
including, without limitation, the furnishing of such
written materials and financial information regarding the
Borrower as any Lender or the Agent may reasonably request,
the execution of such documents as any Lender or the Agent
may reasonably request with respect thereto, and the
participation by officers of the Borrower in a meeting or
teleconference call with any Applicant upon the reasonable
request of any Lender or the Agent.
Section 9.8 Disclosure of Information.
The Agent and the Lenders shall keep confidential (and cause
their respective officers, directors, employees, agents and
representatives to keep confidential) all information, materials
and documents furnished by the Borrower, the Agent or the Lenders
(the "Disclosed Information"). Notwithstanding the foregoing, the
Agent and each Lender may disclose Disclosed Information (i) to
the Agent, any other Lender or any Affiliate of any Lender;
(ii) to legal counsel, accountants and other professional
advisors to the Agent or such Lender; (iii) to any regulatory
body having jurisdiction over any Lender or the Agent; (iv) to
the extent required by applicable laws and regulations or by any
subpoena or similar legal process, or requested by any
governmental agency or authority; (v) to the extent such
Disclosed Information (A) becomes publicly available other than
as a result of a breach of this Agreement, (B) becomes available
to the Agent or such Lender on a non-confidential basis from a
source other than the Borrower or a Subsidiary, or (C) was
available to the Agent or such Lender on a non-confidential basis
prior to its disclosure to the Agent or such Lender by the
Borrower or a Subsidiary; (vi) to the extent the Borrower or such
Subsidiary shall have consented to such disclosure in writing;
(vii) to the extent reasonably deemed necessary by the Agent or
any Lender in the enforcement of the remedies of the Agent and
the Lenders provided under the Loan Documents; or (viii) in
connection with any potential assignment or participation in the
interest granted hereunder, provided that any such potential
assignee or participant shall have executed a confidentiality
agreement imposing on such potential assignee or participant
substantially the same obligations as are imposed on the Agent
and the Lenders under this Section 9.8.
Section 9.9 Governing Law.
The Loan Documents shall be governed by, and construed in
accordance with, the laws of the State of New York.
Section 9.10 Consent to Jurisdiction.
Each of the Borrower, the Agent and the Lenders irrevocably
(i) agrees that any suit, action or other legal proceeding
arising out of or relating to this Agreement or any other Loan
Document shall be brought in a court of record in Hennepin County
in the State of Minnesota or in the courts of the United States
located in such State, (ii) consents to the jurisdiction of each
such court in any suit, action or proceeding, (iii) waives any
objection which it may have to the laying of venue of any such
suit, action or proceeding in any such courts and any claim that
any such suit, action or proceeding has been brought in an
inconvenient forum, and (iv) agrees that a final judgment in any
such suit, 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 after all appeals have been
exhausted.
Section 9.11 Waiver of Jury Trial.
THE BORROWER, THE AGENT AND THE LENDERS HEREBY WAIVE TRIAL BY
JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH THIS AGREEMENT AND THE NOTES OR THE RELATIONSHIPS
ESTABLISHED HEREUNDER.
Section 9.12 Severability of Provisions.
Any provision of this Agreement which is prohibited or
unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof.
Section 9.13 Prior Agreements.
This Agreement and the other Loan Documents and related documents
described herein restate and supersede in their entirety any and
all prior agreements and understandings, oral or written, between
the Lenders and the Borrower.
Section 9.14 Other Financing.
If at any time from and after the effective date of this
Agreement, the Borrower shall enter into any trust indenture,
credit agreement or other agreement for, relating to, or amending
any terms or conditions applicable to any unsecured indebtedness
in an amount not less than $15,000,000, the Borrower shall
promptly so advise the Agent. Thereupon, if the Required Lenders
shall determine that such trust indenture, credit agreement or
other agreement includes covenants or defaults reasonably
determined by the Required Lenders to be more restrictive than
those provided for in Articles V and VI and shall request by
notice to the Borrower, the Borrower shall enter into an
amendment to this Agreement providing for substantially the same
such covenants and defaults as those provided for in such trust
indenture, credit agreement or other agreement, to the extent
required and as may be selected by the Required Lenders, such
amendment to remain in effect for the entire duration of the term
to maturity of such indebtedness (to and including the date to
which the same may be extended); provided, however, that if any
such trust indenture, credit agreement or other agreement shall
be modified, supplemented, amended or terminated so as to modify,
amend or eliminate such trust indenture or other agreement or any
such covenant, term, condition or default so made a part of this
Agreement, then, the Borrower shall give the Agent and the
Lenders prompt notice thereof and such modification, supplement
or amendment shall operate to modify, amend or eliminate such
covenants, term, condition or default as so made a part of this
Agreement. Notwithstanding the foregoing, in no event shall this
Section 9.14 be construed so as to require the Borrower at any
time to grant any Lien in favor of the Agent or the Lenders
hereunder.
Section 9.15 Termination of Existing Credit Facility.
Upon execution and delivery of this Agreement by each of the
parties hereto and satisfaction of the conditions precedent set
forth in Section 3.1, (i) the Existing Credit Facility shall be
deemed terminated, and (ii) no Lender (as defined in the Existing
Credit Agreement) shall have any further obligation with respect
to the Existing Credit Facility. Notwithstanding the foregoing,
the Borrower shall continue to have the obligation to pay any
principal, interest, fees and other amounts remaining unpaid
under the Existing Credit Facility, and the Lenders shall have no
obligation to effect any Borrowing hereunder until such amounts
have been paid in full or unless such amounts are paid in full by
the proceeds of the first Borrowing hereunder.
Section 9.16 Headings.
Article and Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute
a part of this Agreement for any other purpose.
(The balance of this page is intentionally left blank.)
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto
duly authorized as of the date first above written.
MDU RESOURCES GROUP, INC.
By /s/XXXXXX X. XXXXXXXX
Its Executive Vice President
and Chief Financial Officer
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, as Agent and as
a Lender
By /s/XXXX X. XXXXXXXXXX
Its Vice President
And By /s/XXXXXXXX X. XXXXXXX
Its Vice President & Loan Team Manager
ABN AMRO BANK N.V.
By /s/R. XXXXX XXXXXXXXX
Its Vice President
By /s/XXXX X. XXXXXX
Its Assistant Vice President
U.S. BANK NATIONAL ASSOCIATION
By /s/XXXXXXXXX XXXX
Its Assistant Vice President
UNION BANK OF CALIFORNIA, N.A.
By /s/XXXXXX X. XXXX
Its Vice President
