EXECUTION COPY
TERM LOAN AGREEMENT
Dated as of March 1, 2000
Among
NORTHEAST UTILITIES
as Borrower
THE BANKS NAMED HEREIN
FLEET NATIONAL BANK
as Syndication Agent
THE BANK OF NEW YORK
as Documentation Agent
and
CANADIAN IMPERIAL BANK OF COMMERCE,
NEW YORK AGENCY
as Administrative Agent
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms 1
SECTION 1.02. Computation of Time Periods 14
SECTION 1.03. Accounting Terms; Financial Statements 14
SECTION 1.04. Computations of Outstandings 14
ARTICLE II
COMMITMENTS
SECTION 2.01. The Commitments 15
SECTION 2.02. Fees 15
ARTICLE III
CONTRACT ADVANCES
SECTION 3.01. Contract Advances 15
SECTION 3.02. Terms Relating to the Making of Contract Advances 15
SECTION 3.03. Making of Advances 16
SECTION 3.04. Repayment of Advances 16
SECTION 3.05. Interest 17
i
TABLE OF CONTENTS
(continued)
Page
ARTICLE IV
PAYMENTS
SECTION 4.01. Payments and Computations 19
SECTION 4.02. Prepayments 20
SECTION 4.03. Yield Protection 21
SECTION 4.04. Sharing of Payments, Etc. 24
SECTION 4.05. Taxes 25
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.01. Conditions Precedent to Effectiveness 26
SECTION 5.02. Conditions Precedent to Advances on Funding Date. 28
SECTION 5.03. Reliance on Certificates 29
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. Representations and Warranties of the Borrower 29
ARTICLE VII
COVENANTS
SECTION 7.01. Affirmative Covenants 33
SECTION 7.02. Negative Covenants 36
SECTION 7.03. Financial Covenants 41
SECTION 7.04. Reporting Obligations 41
ii
TABLE OF CONTENTS
(continued)
Page
ARTICLE VIII
DEFAULTS
SECTION 8.01. Events of Default 44
SECTION 8.02. Remedies Upon Events of Default 46
ARTICLE IX
THE ADMINISTRATIVE AGENT
SECTION 9.01. Authorization and Action 46
SECTION 9.02. Administrative Agent's Reliance, Etc. 47
SECTION 9.03. CIBC and its Affiliates. 47
SECTION 9.04. Lender Credit Decision 48
SECTION 9.05. Indemnification 48
SECTION 9.06. Successor Administrative Agent 48
SECTION 9.07. Other Agents 49
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Amendments, Etc. 49
SECTION 10.02. Notices, Etc. 49
SECTION 10.03. No Waiver of Remedies 50
SECTION 10.04. Costs, Expenses and Indemnification 50
SECTION 10.05. Right of Set-off 51
SECTION 10.06. Binding Effect 52
SECTION 10.07. Assignments and Participation 52
SECTION 10.08. Confidentiality 55
SECTION 10.09. Waiver of Jury Trial 55
SECTION 10.10. Governing Law 55
SECTION 10.11. Relation of the Parties; No Beneficiary 56
SECTION 10.12. Execution in Counterparts 56
SECTION 10.13. Limitation of Liability 56
iii
TABLE OF CONTENTS
(continued)
Page
SCHEDULES
Schedule I - Applicable Lending Offices
Schedule II - Pending Actions
EXHIBITS
Exhibit 1.01A - Form of Contract Note
Exhibit 3.01 - Form of Notice of Contract Borrowing
Exhibit 5.01A - Form of Opinion of Day, Berry and Howard, Counsel to the
Borrower
Exhibit 5.01B - Form of Opinion of Jeffrey C. Miller, Assistant
General Counsel of NUSCO
Exhibit 5.01C - Form of Opinion of King and Spalding, Special New York
Counsel to the Administrative Agent
Exhibit 10.07 - Form of Lender Assignment
iv
TERM LOAN AGREEMENT
Dated as of March 1, 2000
THIS TERM LOAN AGREEMENT is made by and among:
(i) Northeast Utilities, an unincorporated voluntary business association
organized under the laws of the Commonwealth of Massachusetts ("NU" or
the "Borrower");
(ii) The financial institutions (the "Banks") listed on the signature pages
hereof and the other Lenders (as hereinafter defined) from time to time
party hereto;
(iii) Fleet National Bank, as Syndication Agent hereunder;
(iv) The Bank of New York, as Documentation Agent hereunder; and
(v) Canadian Imperial Bank of Commerce, a Canadian chartered bank ("CIBC")
acting through its New York Agency, as Administrative Agent for the
Lenders hereunder.
PRELIMINARY STATEMENT
The Borrower has requested the Banks to provide the credit facility
hereinafter described in the amounts and on the terms and conditions set forth
herein. The Banks have so agreed on the terms and conditions set forth herein,
and the Administrative Agent has agreed to act as agent for the Lenders on such
terms and conditions.
Based upon the foregoing and subject to the terms and conditions set
forth in this Agreement, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be
applicable to the singular and plural forms of the terms defined):
"ADMINISTRATIVE AGENT" means CIBC, in its capacity as
administrative agent hereunder, or any successor thereto as provided
herein.
"ADVANCE" means a Contract Advance.
"AFFILIATE" means, with respect to any Person, any other
Person directly or indirectly controlling (including, but not limited
to, all directors and officers of such Person), controlled by, or under
direct or indirect common control with such Person. A Person shall be
deemed to control another entity if such Person possesses, directly or
indirectly, the power to direct or cause the direction of the
management and policies of such entity, whether through the ownership
of voting securities, by contract or otherwise.
"AGREEMENT" means this Term Loan Agreement, as the same may be
modified, amended and/or supplemented pursuant to the terms hereof.
"APPLICABLE LENDING OFFICE" means, with respect to each
Lender:
(i) in the case of any Contract Advance, (A) such
Lender's "Eurodollar Lending Office" in the case of a
Eurodollar Rate Advance or (B) such Lender's "Domestic Lending
Office" in the case of a Base Rate Advance, in each case as
specified opposite such Lender's name on Schedule I hereto or
in the Lender Assignment pursuant to which it became a Lender;
or
(ii) in each case, such other office of such Lender
as such Lender may from time to time specify in writing to the
Borrower and the Administrative Agent.
"APPLICABLE MARGIN" means, for any day during the relevant
period indicated below for any outstanding Contract Advance, the
percentage per annum set forth below in effect on such day during such
period, determined on the basis of the Applicable Rating Level for the
Borrower:
APPLICABLE MARGIN (PERCENTAGE %)
APPLICABLE EURODOLLAR BASE RATE
RATING LEVEL RATE ADVANCES ADVANCES
FUNDING FUNDING
DATE 8-1-00 11-1-00 AND DATE 8-1-00 11-1-00 AND
7-31-00 10-31-00 7-31-00 10-31-00
THEREAFTER THEREAFTER
2
Level I 2.00 1.375 1.625 1.00 .375 .625
Level II 2.00 1.625 1.875 1.00 .625 .875
Level III 2.00 1.875 2.125 1.00 .875 1.125
Level IV 2.00 2.125 2.375 1.00 1.12 1.375
Level V 2.00 2.375 2.625 1.00 1.375 1.625
Level VI 2.00 2.625 2.875 1.00 1.625 1.875
Any change in the Applicable Margin caused by a change in the
Applicable Rating Level shall take effect at the time such change in the
Applicable Rating Level shall occur.
"APPLICABLE RATE" means, with respect to any Advance made to
the Borrower, either of (i) the Base Rate from time to time applicable
to such Advance plus the Applicable Margin, or (ii) the Eurodollar Rate
from time to time applicable to such Advance plus the Applicable
Margin.
"APPLICABLE RATING LEVEL" shall be determined at any time and
from time to time on the basis of the ratings assigned by S and P and
Moody's to the senior, unsecured, non-credit enhanced long-term Debt of
the Borrower (the "RATED DEBT") in accordance with the following:
APPLICABLE RATING LEVEL
S & P MOODY'S
Level I BBB+ or higher Baa3 or higher
Level II BBB Ba1
Level III BBB- Ba2
Level IV BB+ Ba3
Level V BB B1
Level VI BB- or lower B2 or lower
In the event that the rating assigned by S and P to the Rated Debt and
the rating assigned by Moody's to the Rated Debt do not correspond to the same
Applicable Rating Level, then the lower of the two ratings shall determine the
Applicable Rating Level. The Applicable Rating Level shall be redetermined as
and when any change in the ratings used in the determination thereof shall be
announced by S and P or Moody's, as the case may be.
If either Moody's or S and P shall cease to issue or maintain
a rating on the Rated Debt, then the Applicable Rating Level shall be
Level VI.
"BANKS" has the meaning assigned to that term in the caption
to this Agreement.
"BASE RATE" means, for any period, a fluctuating interest rate
per annum as shall be in effect from time to time which rate per annum
shall at all times be equal to the higher of:
(a) the rate of interest announced publicly by CIBC
in its principal place of business in the United States from
time to time as CIBC's base rate for loans made in United
States Dollars; and
(b) half of one percent per annum above the Federal
Funds Rate in effect from time to time.
3
If the Administrative Agent shall have determined (which
determination shall be conclusive absent manifest error) that it is
unable to ascertain the Federal Funds Rate for any reason, including
the inability or failure of the Administrative Agent to obtain
sufficient quotations in accordance with the terms thereof, the Base
Rate shall be determined without regard to clause (b) of the first
sentence of this definition until the circumstances giving rise to such
inability no longer exist. Any change in the Base Rate due to a change
in the Administrative Agent's base rate or the Federal Funds Rate shall
be effective on the effective date of such change in the Administrative
Agent's base rate or the Federal Funds Rate, respectively.
"BASE RATE ADVANCE" means a Contract Advance in respect of
which the Borrower has selected in accordance with Article III hereof,
or this Agreement provides for, interest to be computed on the basis of
the Base Rate.
"BORROWER" has the meaning assigned to that term in the
caption to this Agreement.
"BORROWING" means a Contract Borrowing.
"BUSINESS DAY" means a day of the year on which banks are not
required or authorized to close in New York City and, if the applicable
Business Day relates to any Eurodollar Rate Advances, on which dealings
are carried on in the London interbank market.
"CHANGE OF CONTROL" means (a) any Person or "group" (within
the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of
1934, as amended), other than Consolidated Edison, Inc., shall either
(1) acquire beneficial ownership of more than 50 percent of any
outstanding class of common stock of NU having ordinary voting power in
the election of directors of NU or (2) obtain the power (whether or not
exercised) to elect a majority of NU's directors or (b) except as a
result of the acquisition of NU by Consolidated Edison, Inc., the Board
of Directors of NU shall not consist of a majority of Continuing
Directors. For purposes of this definition, the term "Continuing
Directors" means directors of NU on the Closing Date and each other
director of NU, if such other director's nomination for election to the
Board of Directors of NU is recommended by a majority of the then
Continuing Directors.
"CIBC" means Canadian Imperial Bank of Commerce, a Canadian
chartered bank, acting through its New York Agency.
"CL & P" means The Connecticut Light and Power Company, a
corporation organized under the laws of the State of Connecticut.
"CL & P INDENTURE" has the meaning assigned to that term in
Section 7.02(a)(ii) hereof.
"CLOSING DATE" has the meaning assigned to that term in
Section 5.01 hereof.
"COMMITMENT" means, for each Lender, the aggregate amount set
forth opposite such Lender's name on the signature pages hereof or, if
such Lender has entered into one or more Lender Assignments, set forth
for such Lender in the Register maintained by the Administrative Agent
pursuant to Section 10.07(c). "COMMITMENTS" shall refer to the
aggregate of the Lenders' Commitments hereunder.
"COMMITMENT FEE" has the meaning assigned to that term in
Section 2.02(a) hereof.
4
"COMMON EQUITY" means, at any date for the Borrower, an amount
equal to the sum of the aggregate of the par value of, or stated
capital represented by, the outstanding common shares of the Borrower
and its Subsidiaries and the surplus, paid-in, earned and other
capital, if any, of the Borrower and its Subsidiaries, in each case as
determined on a consolidated basis in accordance with generally
accepted accounting principles.
"CONFIDENTIAL INFORMATION" has the meaning assigned to that
term in Section 10.08 hereof.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the
aggregate amount of any interest required to be paid during such period
by the Borrower and its Subsidiaries on Debt (including the current
portion thereof) (as determined on a consolidated basis in accordance
with generally accepted accounting principles), excluding interest
required to be paid on the stranded cost recovery bonds of any
Subsidiary of the Borrower.
"CONSOLIDATED OPERATING INCOME" means, for any period (as
determined on a consolidated basis in accordance with generally
accepted accounting principles), the Borrower's and its Subsidiaries'
operating income for such period, adjusted as follows:
(i) increased by the amount of income taxes accrued less
the amount of income taxes paid by the Borrower and
its Subsidiaries during such period, if and to the
extent deducted in the computation of the Borrower's
and/or its Subsidiaries' consolidated operating
income for such period;
(ii) increased by the amount of any depreciation and
amortization deducted in the computation of the
Borrower's and/or its Subsidiaries' consolidated
operating income for such period;
(iii) decreased by the amount of any capital expenditures
paid by the Borrower and/or its Subsidiaries to the
extent not deducted in the computation of the
Borrower's and its Subsidiaries' consolidated
operating income for such period;
(iv) decreased by the amount of revenues accrued by the
Borrower and/or its Subsidiaries related to the
interest and principal on stranded cost recovery
bonds issued by Subsidiaries of the Borrower, and
increased by the amount of operating expenses accrued
by the Borrower and/or its Subsidiaries related to
the interest and principal on stranded cost recovery
bonds issued by Subsidiaries of the Borrower, in each
case to the extent included in the computation of the
Borrower's and/or its Subsidiaries' consolidated
operating income for such period;
(v) decreased by the proceeds of stranded cost recovery
bonds issued by Subsidiaries of the Borrower to the
extent included in the computation of the Borrower's
and/or its Subsidiaries' consolidated operating
income for such period; and
5
(vi) decreased by the proceeds (including Extraordinary
Proceeds of the Borrower and/or its Subsidiaries) of
asset sales done outside the ordinary course of
business to the extent included in the computation of
the Borrower's and/or its Subsidiaries' consolidated
operating income for such period; and
(vii) increased or decreased, as the case may be, by the
amount of income taxes paid or refunded on gains or
losses related to the sale of assets or purchased
power contracts done outside the ordinary course of
business to the extent included in the computation of
the Borrower's and/or its Subsidiaries consolidated
operating income for such period.
"CONTRACT ADVANCE" means an advance by a Lender to the
Borrower pursuant to Article III hereof, and refers to a Eurodollar
Rate Advance or a Base Rate Advance (each of which shall be a "TYPE" of
Contract Advance). For purposes of this Agreement, all Contract
Advances of a Lender (or portions thereof) of the same Type and
Interest Period, if any, made or converted on the same day to the
Borrower shall be deemed to be a single Advance by such Lender until
repaid.
"CONTRACT BORROWING" means a borrowing consisting of one or
more Contract Advances of the same Type and Interest Period, if any,
made, continued or converted on the same Business Day. A Contract
Borrowing may be referred to herein as being a "TYPE" of Contract
Borrowing, corresponding to the Type of Contract Advances comprising
such Borrowing, whether such Advances were made on the Funding Date or
were continued or converted as Advances of a certain Type and for a
certain Interest Period. For purposes of this Agreement, all Contract
Advances of the same Type and Interest Period, if any, made, continued
or converted on the same day to the Borrower shall be deemed a single
Contract Borrowing hereunder until repaid.
"CONTRACT NOTE" means a promissory note of the Borrower
payable to the order of a Lender, in substantially the form of Exhibit
1.01A hereto, evidencing the aggregate indebtedness of the Borrower to
such Lender resulting from the Contract Advances made by such Lender to
the Borrower.
"DEBT" means, for any Person, without duplication, (i)
indebtedness of such Person for borrowed money, including but not
limited to obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments (excluding stranded cost recovery
bonds which are non-recourse to such Person), (ii) obligations of such
Person to pay the deferred purchase price of property or services
(excluding any obligation of such Person to the United States
Department of Energy or its successor with respect to disposition of
spent nuclear fuel burned prior to April 3, 1983), (iii) obligations of
such Person as lessee under leases which shall have been or should be,
in accordance with generally accepted accounting principles, recorded
as capital leases, (iv) obligations under direct or indirect guaranties
in respect of, and obligations (contingent or otherwise) to purchase or
otherwise acquire, or otherwise to assure a creditor against loss in
respect of, indebtedness or obligations of others of the kinds referred
to in clauses (i) through (iii), above, including
6
all Parent Support Obligations, (v) letters of credit, guaranties and
other forms of credit enhancement issued to support power sales and
trading activities, and (vi) liabilities in respect of unfunded vested
benefits under ERISA Plans.
"DISCLOSURE DOCUMENTS" means for the Borrower and each
Principal Subsidiary: (i) such Person's Annual Report on Form 10-K for
the fiscal year ended December 31, 1998; (ii) its Quarterly Reports on
Form 10-Q for the fiscal quarters ended March 31, June 30, and
September 30, 1999; and (iii) each Current Report on Form 8-K of such
Person filed after September 30, 1999 and on or prior to February 29,
2000.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA AFFILIATE" means, with respect to any Person, any trade
or business (whether or not incorporated) which is a "commonly
controlled entity" of such Person within the meaning of the regulations
under Section 414 of the Internal Revenue Code of 1986, as amended from
time to time.
"ERISA MULTIEMPLOYER PLAN" means a "multiemployer plan"
subject to Title IV of ERISA.
"ERISA PLAN" means an employee benefit plan (other than a
ERISA Multiemployer Plan) maintained for employees of the Borrower or
any ERISA Affiliate of the Borrower and covered by Title IV of ERISA.
"ERISA PLAN TERMINATION EVENT" means (i) a Reportable Event
described in Section 4043 of ERISA and the regulations issued
thereunder (other than a Reportable Event not subject to the provision
for 30-day notice to the PBGC under such regulations) with respect to
an ERISA Plan or an ERISA Multiemployer Plan, or (ii) the withdrawal of
the Borrower or any of its ERISA Affiliates from an ERISA Plan or an
ERISA Multiemployer Plan during a plan year in which it was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA, or
(iii) the filing of a notice of intent to terminate an ERISA Plan or an
ERISA Multiemployer Plan or the treatment of an ERISA Plan or an ERISA
Multiemployer Plan under Section 4041 of ERISA, or (iv) the institution
of proceedings to terminate an ERISA Plan or an ERISA Multiemployer
Plan by the PBGC, or (v) any other event or condition which might
constitute grounds under Section 4042 of ERISA for the termination of,
or the appointment of a trustee to administer, any ERISA Plan or ERISA
Multiemployer Plan.
"EUROCURRENCY LIABILITIES" has the meaning assigned to that
term in Regulation D of the Board of Governors of the Federal Reserve
System, as in effect from time to time.
"EURODOLLAR RATE" means, for each Interest Period for each
Eurodollar Rate Advance comprising part of the same Borrowing, an
interest rate per annum equal to (i) the rate for deposits in U.S.
Dollars for a period equal to such Interest Period appearing on Page
3750 of the Telerate Service at approximately 11:00 a.m. (London time)
two
7
Business Days before the first day of such Interest Period, or (ii) if
for any reason such rate is not available, the average (rounded upward
to the nearest whole multiple of 1 dash 16 of 1 percent per annum, if
such average is not such a multiple) of the rates per annum at which
deposits in U.S. dollars are offered by the principal office of each of
the Reference Banks in London, England to prime banks in the London
inter-bank market at 11:00 a.m. (London time) two Business Days before
the first day of such Interest Period in the amount of 1,000,000
dollars and for a period equal to such Interest Period. If determined
pursuant to clause (ii), above, the Eurodollar Rate for the Interest
Period for each Eurodollar Rate Advance comprising part of the same
Borrowing shall be determined by the Administrative Agent on the basis
of applicable rates furnished to and received by the Administrative
Agent from the Reference Banks two Business Days before the first day
of such Interest Period, subject, however, to the provisions of
Sections 3.05(d) and 4.03(g).
"EURODOLLAR RATE ADVANCE" means a Contract Advance in respect
of which the Borrower has selected in accordance with Article III
hereof, or this Agreement provides for, interest to be computed on the
basis of the Eurodollar Rate.
"EURODOLLAR RESERVE PERCENTAGE" of any Lender or its
subparticipant, for each Interest Period for each Eurodollar Rate
Advance, means the reserve percentage applicable during such Interest
Period (or if more than one such percentage shall be so applicable, the
daily average of such percentages for those days in such Interest
Period during which any such percentage shall be so applicable) under
Regulation D or other regulations issued from time to time by the Board
of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve
requirement, without benefit of or credit for proration, exemptions or
offsets) for such Lender or its subparticipant with respect to
liabilities or assets consisting of or including Eurocurrency
Liabilities having a term equal to such Interest Period.
"EVENT OF DEFAULT" has the meaning specified in Section 8.01
hereof.
"EXTRAORDINARY PROCEEDS" shall mean, for any Person for any
period, net proceeds received by such Person during such period from
(i) issuances of securitization bonds sold by such Person or any of its
Subsidiaries plus (ii) sales of assets by such Person or any of its
Subsidiaries not in the ordinary course of business plus (iii) the sale
or disposition (by way of merger, sale of capital stock, sale of assets
or otherwise) of any Subsidiary of such Person. For purposes of the
foregoing, all cash received by such Person from, or as a result of the
sale or disposition of, a Subsidiary shall be deemed to constitute
"Extraordinary Proceeds" up to the amount of proceeds received by, or
as a result of the sale or disposition of, such Subsidiary from such
issuances and sales during the relevant period, net of underwriting
discounts and commissions, costs of sale and other, similar transaction
costs.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating
interest rate per annum equal to, for each day during such period, the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by
8
Federal funds brokers, as published on the next succeeding Business Day
by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by the
Administrative Agent from three Federal funds brokers of recognized
standing selected by it.
"FEE LETTER" means that certain Fee Letter dated February 18,
2000 between NU and CIBC.
"FERC" means the Federal Energy Regulatory Commission.
"FINANCIAL STATEMENTS" means, with respect to the Borrower and
each Principal Subsidiary, (i) the audited consolidated balance sheet
of such Person as at December 31, 1998, (ii) the unaudited consolidated
balance sheet of such Person as at September 30, 1999, (iii) the
audited consolidated statements of income and cash flows of such Person
for the Fiscal Year ended December 31, 1998 and (iv) the unaudited
consolidated statements of income and cash flows of such Person for the
9-month period ended September 30, 1999, in each case as included in
such Person's Annual Report on Form 10-K for the Fiscal Year ended
December 31, 1998 or Quarterly Report on Form 10-Q for the Fiscal
Quarter ended September 30, 1999.
"FIRST MORTGAGE BONDS" means any bond, however designated,
entitled to the benefits of a First Mortgage Indenture.
"FIRST MORTGAGE INDENTURE" means, with respect to CL and P,
the CL and P Indenture or any successor thereto or replacement thereof;
and with respect to WMECO, the WMECO Indenture or any successor thereto
or replacement thereof.
"FISCAL QUARTER" means a period of three calendar months
ending on the last day of March, June, September or December, as the
case may be.
"FISCAL YEAR" means a period of twelve calendar months ending
on the last day of December.
"FIXED CHARGES" shall mean, for any period, the sum of the
following amounts: (a) dividends paid by NU to common and preferred
stockholders during such period; (b) interest expense for NU for such
period; and (c) income taxes paid by NU during such period.
"FUNDING DATE" has the meaning assigned to that term in
Section 2.01 hereof.
"GOVERNMENTAL APPROVAL" means any authorization, consent,
approval, license, permit, certificate, exemption of, or filing or
registration with, any governmental authority or other legal or
regulatory body (including, without limitation, the Securities and
Exchange Commission, the FERC, the Nuclear Regulatory Commission, the
Connecticut Department of Public Utility Control and the Massachusetts
Department of Telecommunications and Energy, required in connection
with either (i) the execution,
9
delivery or performance of any Loan Document, (ii) the nature of the
Borrower's or any Subsidiary's business as conducted or the nature of
the property owned or leased by it or (iii) the acquisition by the
Borrower of YES.
"HAZARDOUS SUBSTANCE" means any waste, substance or material
identified as hazardous, dangerous or toxic by any office, agency,
department, commission, board, bureau or instrumentality of the United
States of America or of the State or locality in which the same is
located having or exercising jurisdiction over such waste, substance or
material.
"HWP" means Holyoke Water Power Company, a corporation
organized under the laws of the Commonwealth of Massachusetts.
"INDEMNIFIED PERSON" has the meaning assigned to that term in
Section 10.04(b) hereof.
"INTEREST PERIOD" has the meaning assigned to that term in
Section 3.05(a) hereof.
"LENDER ASSIGNMENT" means an assignment and acceptance entered
into by a Lender and an assignee, and accepted by the Administrative
Agent, in substantially the form of Exhibit 10.07 hereto.
"LENDERS" means the financial institutions listed on the
signature pages hereof, and each assignee that shall become a party
hereto pursuant to Section 10.07.
"LIEN" means, with respect to any asset or property, any
mortgage, lien, pledge, charge, security interest or encumbrance of any
kind in respect of such asset or property. For the purposes of this
Agreement, a Person or any of its Subsidiaries shall be deemed to own
subject to a Lien any asset which it has acquired or holds subject to
the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to
such asset.
"LOAN DOCUMENTS" means this Agreement and the Notes.
"MAJORITY LENDERS" means on any date of determination, Lenders
who, collectively, on such date (i) have Percentages in the aggregate
of at least 66-2/3 percent and (ii) if the Advances shall have been
made on the Funding Date, hold at least 66-2/3 percent of the then
aggregate Outstanding Credits of the Lenders. Determination of those
Lenders satisfying the criteria specified above for action by the
Majority Lenders shall be made by the Administrative Agent and shall be
conclusive and binding on all parties absent manifest error.
"MOODY'S" means Moody's Investors Service, Inc., or any
successor thereto.
"NAEC" means North Atlantic Energy Corporation, a corporation
organized under the laws of the State of New Hampshire.
10
"NAMED DEBT" means Debt of HWP under (i) the Reimbursement and
Security Agreement (1988 Series), dated as of November 3, 1999, between
HWP and The Toronto-Dominion Bank and (ii) the Reimbursement and
Security Agreement (1990 Series), dated as of November 3, 1999, between
HWP and The Toronto-Dominion Bank.
"NGC EQUITY CONTRIBUTION" shall mean the proposed equity
investment by the Borrower of up to $475,000,000 in Northeast
Generation Company.
"NOTE" means a Contract Note, as may be amended, supplemented
or otherwise modified from time to time.
"NOTICE OF CONTRACT BORROWING" has the meaning assigned to
that term in Section 3.01 hereof.
"NU" has the meaning assigned to that term in the caption to
this Agreement.
"NU SYSTEM MONEY POOL" means the money pool described in the
application/declaration, as amended, of NU and certain of its
Subsidiaries, filed with the Securities and Exchange Commission in File
No. 70-8875, as amended from time to time.
"NUSCO" means Northeast Utilities Service Company, a
Connecticut corporation.
"OPERATING CASH FLOW" shall mean, for any period, the sum of
the following amounts: (1) dividends paid to the Borrower by a
Subsidiary thereof during such period; (2) consulting and management
fees paid to the Borrower for such period; (3) tax sharing payments
made to the Borrower during such period; (4) interest and other
distributions paid to the Borrower during such period with respect to
cash (e.g., NU System Money Pool) and other permitted investments of
the Borrower; and (5) other cash payments made to the Borrower by its
Subsidiaries other than (A) returns of invested capital, (B) payments
of the principal on Debt of any such Subsidiary to the Borrower (to the
extent permitted hereunder) and (C) Extraordinary Proceeds. If at any
time there shall exist an event or condition which permits any holder
to accelerate the maturity date of any Debt of, or terminate its
commitment to extend credit to any Subsidiary, then the contributions
of such Subsidiary to Operating Cash Flow for any period ending at or
prior to such time shall be eliminated and Operating Cash Flow shall be
calculated after giving effect to such elimination.
"OUTSTANDING CREDITS" mean, on any date of determination, an
amount equal to the aggregate principal amount of all Contract Advances
outstanding on such date. The "Outstanding Credits" of a Lender on any
date of determination shall be an amount equal to the outstanding
Advances made by such Lender.
"PARENT SUPPORT OBLIGATION" means, without duplication, any
obligation of the Borrower under direct or indirect guaranties in
respect of, and obligations (contingent or otherwise) to purchase or
otherwise acquire, or otherwise to assure a creditor against loss in
respect of, indebtedness or obligations of others of the kinds referred
to in clauses (i)
11
through (iii) of the definition of "Debt", including any reimbursement
obligation in respect of a letter of credit, any recourse obligation in
respect of a surety or similar bond or other, similar obligation of the
Borrower other than a construction completion or similar performance
guaranty as permitted hereunder issued on behalf of HEC Inc. The amount
of each Parent Support Obligation shall be computed in good faith in
accordance with the Borrower's then applicable mark-to-market and other
risk management methods.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor entity) established under ERISA.
"PERCENTAGE" means, in respect of any Lender on any date of
determination, the percentage obtained by dividing such Lender's
Commitment on such day (or, if the Commitments shall have been
terminated, the aggregate principal amount of outstanding Advances held
by such Lender on such day) by the total of the Commitments (or
outstanding Advances, as applicable) on such day, and multiplying the
quotient so obtained by 100%.
"PERMITTED INVESTMENTS" means (i) securities issued or
directly and fully guaranteed or insured by the United States or any
agency or instrumentality thereof (provided that the full faith and
credit of the United States is pledged in support thereof) having
maturities of not more than six (6) months from the date of acquisition
by such Person; (ii) time deposits and certificates of deposit, with
maturities of not more than six (6) months from the date of acquisition
by such Person, of any international commercial bank of recognized
standing having capital and surplus in excess of $500,000,000 and
having a rating on its commercial paper of at least A-1 or the
equivalent thereof by S&P or at least P-1 or the equivalent thereof by
Moody's; (iii) commercial paper issued by any Person, which commercial
paper is rated at least A-1 or the equivalent thereof by S&P or at
least P-1 or the equivalent thereof by Moody's and matures not more
than six (6) months after the date of acquisition by such Person; (iv)
investments in money market funds substantially all the assets of which
are comprised of securities of the types described in clauses (i) and
(ii) above and (v) United States Securities and Exchange Commission
registered money market mutual funds conforming to Rule 2a-7 of the
Investment Company Act of 1940 in effect in the United States, that
invest primarily in direct obligations issued by the United States
Treasury and repurchase obligations backed by those obligations, and
rated in the highest category by S&P and Moody's.
"PERSON" means an individual, partnership, corporation
(including a business trust), limited liability company, joint stock
company, trust, unincorporated association, joint venture or other
entity, or a government or any political subdivision or agency thereof.
"PRINCIPAL SUBSIDIARY" shall mean YES, CL&P, WMECO, PSNH, HWP,
NAEC, Select Energy, Inc., HEC Inc., Northeast Generation Company, Mode
One Communications, Inc., and any other Subsidiary, whether owned
directly or indirectly by the Borrower, which, with respect to the
Borrower and its Subsidiaries taken as a whole,
12
represents at least ten percent (10%) of such Borrower's consolidated
assets or such Borrower's consolidated net income (or loss).
"PSNH" means Public Service Company of New Hampshire, a
corporation duly organized under the laws of the State of New
Hampshire.
"RECIPIENT" has the meaning assigned to that term in Section
10.08 hereof.
"REFERENCE BANKS" means CIBC, Fleet Bank, N.A. and The Bank of
New York, and any other bank or financial institution designated by the
Borrower and the Administrative Agent with the approval of the Majority
Lenders to act as a Reference Bank hereunder.
"REGULATORY ASSET" means, with respect to CL&P or WMECO, an
intangible asset established by statute, regulation or regulatory order
or similar action of a utility regulatory agency having jurisdiction
over CL&P or WMECO, as the case may be, and included in the rate base
of CL&P or WMECO, as the case may be, with the intention that such
asset be amortized by rates over time.
"RESTRICTED PAYMENT" shall mean any dividend, payment or other
distribution of assets, properties, cash, rights, obligations or
securities on account of any share of any class of capital stock of NU
(other than as a result of a stock split and dividends payable solely
in equity securities of NU), or the purchase, redemption, retirement or
other acquisition for value of any shares of any class of capital stock
of NU or any warrants, rights, or options to acquire any such shares,
now or hereafter outstanding.
"REVOLVING CREDIT AGREEMENT" means the Credit Agreement, dated
as of November 19, 1999, among the Borrower, the lenders from time to
time parties thereto and Union Bank of California, N.A., as
Administrative Agent.
"S&P" means Standard and Poor's Ratings Services, a division
of The McGraw-Hill Companies, Inc., or any successor thereto.
"SUBSIDIARY" shall mean, with respect to any Person (the
"PARENT"), any corporation, association or other business entity of
which securities or other ownership interests representing 50% or more
of the ordinary voting power are, at the time as of which any
determination is being made, owned or controlled by the Parent or one
or more Subsidiaries of the Parent or by the Parent and one or more
Subsidiaries of the Parent.
"TERMINATION DATE" means the earliest to occur of (i) February
28, 2001, (ii) the date of termination of the Commitments pursuant to
Section 8.02 or (iii) the date of acceleration of all amounts payable
hereunder and under the Notes pursuant to Section 8.02.
"TOTAL CAPITALIZATION" means, at any date, the sum of (i) the
aggregate principal amount of all long-term and short-term Debt
(including the current portion thereof) of the Borrower and its
Subsidiaries, (ii) the aggregate of the par value of, or stated capital
13
represented by, the outstanding shares of all classes of common and
preferred shares of the Borrower and its Subsidiaries and (iii) the
consolidated surplus of the Borrower and its Subsidiaries, paid-in,
earned and other capital, if any, in each case as determined on a
consolidated basis in accordance with generally accepted accounting
principles consistent with those applied in the preparation of the
Borrower's Financial Statements.
"TOTAL COMMITMENT" means $266,000,000, or such lesser amount
from time to time as shall equal the sum of the Commitments.
"TYPE" has the meaning assigned to such term (i) in the
definition of "Contract Advance" when used in such context and (ii) in
the definition of "Contract Borrowing" when used in such context.
"UNMATURED DEFAULT" means the occurrence and continuance of an
event which, with the giving of notice or lapse of time or both, would
constitute an Event of Default.
"WMECO" means Western Massachusetts Electric Company, a
corporation organized under the laws of the Commonwealth of
Massachusetts.
"WMECO INDENTURE" has the meaning assigned to that term in
Section 7.02(a)(iii) hereof.
"YEAR 2000 ISSUE" means the failure of computer software,
hardware and firmware systems and equipment containing computer chips
to properly receive, transmit, process, manipulate, store, retrieve,
re-transmit or in any other way utilize data and information due to the
occurrence of the year 2000 or the inclusion of dates on or after
January 1, 2000.
"YES" means Yankee Energy System Inc.
SECTION 1.02. COMPUTATION OF TIME PERIODS. In the computation of
periods of time under this Agreement, any period of a specified number of days
or months shall be computed by including the first day or month occurring during
such period and excluding the last such day or month. In the case of a period of
time "from" a specified date "to" or "until" a later specified date, the word
"from" means "from and including" and the words "to" and "until" each means "to
but excluding".
SECTION 1.03. ACCOUNTING TERMS; FINANCIAL STATEMENTS. All accounting
terms not specifically defined herein shall be construed in accordance with
generally accepted accounting principles applied on a basis consistent with the
application employed in the preparation of the Financial Statements. All
references contained herein to the Borrower's or a Principal Subsidiary's Annual
Report on Form 10-K in respect of a Fiscal Year or Quarterly Report on Form 10-Q
in respect of a Fiscal Quarter shall be deemed to include any exhibits and
schedules thereto, including without limitation in the case of any Annual Report
on Form 10-K, any "Annual Report" of the Borrower or such Principal Subsidiary
referred to therein.
14
SECTION 1.04. COMPUTATIONS OF OUTSTANDINGS. Whenever reference is made
in this Agreement to the principal amount of Outstanding Credits under this
Agreement on any date, such reference shall refer to the aggregate principal
amount of all Outstanding Credits on such date after giving effect to (i) all
Advances to be made on such date and the application of the proceeds thereof and
(ii) any repayment or prepayment of Advances on such date by the Borrower.
ARTICLE II
COMMITMENTS
SECTION 2.01. THE COMMITMENTS. Each Lender severally agrees, on the
terms and conditions hereinafter set forth, to make a single Advance to the
Borrower on any Business Day (the "FUNDING DATE") during the period from the
Closing Date until March 15, 2000, in an amount not to exceed such Lender's
Commitment. If the Funding Date shall not have occurred on or prior to March 15,
2000, the Commitments shall terminate.
SECTION 2.02. FEES. The Borrower agrees to pay to the Administrative
Agent for the account of each Bank a commitment fee (the "COMMITMENT FEE") on
the amount of such Bank's Commitment at a rate per annum equal to one-half of
one percent (0.5%) for the period from the date of this Agreement to (but
excluding) the Funding Date or the earlier termination of the Commitments. The
Commitment Fee payable by the Borrower shall be calculated and accrued daily and
shall be payable on the Funding Date, or, if earlier, the date on which the
Commitments are terminated.
(b) The Borrower further agrees to pay the fees specified in the Fee
Letter to the parties entitled thereto.
ARTICLE III
CONTRACT ADVANCES
SECTION 3.01. CONTRACT ADVANCES. Subject to Section 2.01, more than one
Contract Borrowing may be made on the same Business Day. Each Contract Borrowing
shall consist of Contract Advances of the same Type and Interest Period made to
the Borrower on the Funding Date, or thereafter continued or converted as
Advances of the same Type and for the same Interest Period on the same Business
Day, by the Lenders ratably according to their respective Commitments. The
Contract Borrowing to be made on the Funding Date shall be made on notice in
substantially the form of Exhibit 3.01 hereto (the "NOTICE OF CONTRACT
BORROWING"), delivered by the Borrower to the Administrative Agent, by hand or
facsimile, not later than 11:00 a.m. (New York City time) (i) in the case of
Eurodollar Rate Advances, on the third Business Day
15
prior to the Funding Date and (ii) in the case of Base Rate Advances, on the
Funding Date. Upon receipt of the Notice of Contract Borrowing, the
Administrative Agent shall notify the Lenders thereof promptly on the day so
received. The Notice of Contract Borrowing shall specify therein the requested
(A) Funding Date, (B) principal amount and Type of Advances comprising such
Borrowing and (C) initial Interest Period for such Advances. The Borrowing to be
made on the Funding Date shall be subject to the satisfaction of the conditions
precedent thereto as set forth in Article V hereof.
SECTION 3.02. TERMS RELATING TO THE MAKING OF CONTRACT ADVANCES.
(a) Notwithstanding anything in Section 3.01 above to the contrary:
(i) at no time shall more than six different Contract
Borrowings be outstanding hereunder; and
(ii) each Contract Borrowing hereunder which is to be
comprised of Base Rate or Eurodollar Rate Advances shall be in an
aggregate principal amount of not less than $5,000,000 or an integral
multiple of $1,000,000 in excess thereof.
(b) The Notice of Borrowing shall be irrevocable and binding on the
Borrower.
SECTION 3.03. MAKING OF ADVANCES.
(a) Each Lender shall, before 1:00 p.m. (New York City time) on the
Funding Date, make available for the account of its Applicable Lending Office to
the Administrative Agent at the Administrative Agent's address referred to in
Section 10.02, in same day funds, such Lender's portion of the Borrowing to be
made on such date. Contract Advances shall be made by the Lenders ratably in
accordance with their several Commitments. After the Administrative Agent's
receipt of such funds and upon fulfillment of the applicable conditions set
forth in Article V, the Administrative Agent will make such funds available to
the Borrower at the Administrative Agent's aforesaid address.
(b) Unless the Administrative Agent shall have received notice from a
Lender prior to the time of the Borrowing to be made on the Funding Date that
such Lender will not make available to the Administrative Agent such Lender's
ratable portion of such Borrowing, the Administrative Agent may assume that such
Lender has made such portion available to the Administrative Agent on the
Funding Date in accordance with subsection (a) of this Section 3.03, and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount on such date. If and to the extent that any
such Lender (a "NON-PERFORMING LENDER") shall not have so made such ratable
portion available to the Administrative Agent, the non-performing Lender and the
Borrower severally agree to repay to the Administrative Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to the Borrower until the date such
amount is repaid to the Administrative Agent, at (i) in the case of the
Borrower, the interest rate applicable at the time to Advances comprising such
Borrowing and (ii) in the case of such
16
Lender, the Federal Funds Rate. Nothing herein shall in any way limit, waive or
otherwise reduce any claims that any party hereto may have against any
non-performing Lender.
(c) The failure of any Lender to make the Advance to be made by it as
part of the Borrowing on the Funding Date shall not relieve any other Lender of
its obligation, if any, hereunder to make its Advance on the Funding Date, but
no Lender shall be responsible for the failure of any other Lender to make the
Advance to be made by such other Lender on the Funding Date.
SECTION 3.04. REPAYMENT OF ADVANCES. The Borrower shall repay the
principal amount of each Advance made to it hereunder on the Termination Date.
SECTION 3.05. INTEREST.
(a) INTEREST PERIODS.
(i) The period commencing on the date of each Advance and
ending on the last day of the period selected by the Borrower with
respect to such Advance pursuant to the provisions of this Section 3.05
is referred to herein as an "INTEREST PERIOD". The duration of each
Interest Period shall be (i) in the case of any Eurodollar Rate
Advance, one, two, three or (subject to availability) more months, and
(ii) in the case of any Base Rate Advance, the period of time beginning
on the date of the making of, or the conversion of an outstanding
Advance into, such Advance and ending on the last day of March, June,
September or December next following the date on which such Advance was
made; provided, however, that no Interest Period may be selected by the
Borrower if such Interest Period would end after the Termination Date.
(ii) Subject to the terms and conditions of this Agreement,
the initial Interest Period for the Advances made to the Borrower on
the Funding Date shall be determined by the Borrower as set forth in
its Notice of Contract Borrowing. The Borrower may elect to continue or
convert (A) the Advances made on the Funding Date and (B) thereafter,
one or more Advances of any Type and having the same Interest Period,
to one or more Advances of the same or any other Type and having the
same or a different Interest Period, on the following terms and subject
to the following conditions:
(A) Each continuation or conversion shall be made as
to all Advances comprising a single Borrowing upon written
notice given by the Borrower to the Administrative Agent not
later than 11:00 a.m. (New York City time) on the third
Business Day prior to the date of the proposed continuation of
or conversion, in the case of a continuation or conversion to
a Eurodollar Rate Advance, or on the day of the proposed
continuation of or conversion to a Base Rate Advance. The
Administrative Agent shall notify each Lender of the contents
of such notice promptly after receipt thereof. Each such
notice shall specify therein the following information: (1)
the date of such proposed continuation or conversion (which in
the case of Eurodollar Rate Advances shall be the last day of
the Interest Period then applicable to such Advances to be
continued or converted), (2) the Type of,
17
and Interest Period applicable to the Advances proposed to be
continued or converted, (3) the aggregate principal amount of
Advances proposed to be continued or converted, and (4) the
Type of Advances to which such Advances are proposed to be
continued or converted and the Interest Period to be
applicable thereto.
(B) During the continuance of an Unmatured Default,
the right of the Borrower to continue or convert Advances to
Eurodollar Rate Advances shall be suspended, and all
Eurodollar Rate Advances then outstanding shall be converted
to Base Rate Advances on the last day of the Interest Period
then in effect, if, on such day, an Unmatured Default shall be
continuing.
(C) During the continuance of an Event of Default,
the right of the Borrower to continue or convert Advances to
Eurodollar Rate Advances shall be suspended, and upon the
occurrence of an Event of Default, all Eurodollar Rate
Advances then outstanding shall immediately, without further
act by the Borrower, be converted to Base Rate Advances.
(D) If no notice of continuation or conversion is
received by the Administrative Agent as provided in paragraph
(A), above, with respect to any outstanding Advances on or
before the third Business Day prior to the last day of the
Interest Period then in effect for such Advances, the
Administrative Agent shall treat such absence of notice as a
deemed notice of continuation or conversion providing for such
Advances to be continued as or converted to Base Rate Advances
with an Interest Period of three months commencing on the last
day of such Interest Period.
(b) INTEREST RATES. The Borrower shall pay interest on the unpaid
principal amount of each Advance owing by the Borrower from the date of such
Advance until such principal amount shall be paid in full, at the Applicable
Rate for such Advance (except as otherwise provided in this subsection (b)),
payable as follows:
(i) EURODOLLAR RATE ADVANCES. If such Advance is a Eurodollar
Rate Advance, interest thereon shall be payable on the last day of the
Interest Period applicable thereto and on the Termination Date;
provided that during the continuance of any Event of Default, such
Advance shall bear interest at a rate per annum equal at all times to
2% per annum above the Applicable Rate for such Advance for such
Interest Period.
(ii) BASE RATE ADVANCES. If such Advance is a Base Rate
Advance, interest thereon shall be payable quarterly on the last day of
each March, June, September and December and on the date such Base Rate
Advance shall be paid in full; provided that during the continuance of
any Event of Default, such Advance shall bear interest at a rate per
annum equal at all times to 2% per annum above the Applicable Rate for
such Advance for such Interest Period.
18
(c) OTHER AMOUNTS. Any other amounts payable hereunder that are not
paid when due shall (to the fullest extent permitted by law) bear interest, from
the date when due until paid in full, at a rate per annum equal at all times to
2.0% per annum above the Applicable Rate in effect from time to time for Base
Rate Advances, payable on demand.
(d) INTEREST RATE DETERMINATIONS. The Administrative Agent shall give
prompt notice to the Borrower and the Lenders of the Applicable Rate determined
from time to time by the Administrative Agent for each Contract Advance. Each
Reference Bank agrees to furnish to the Administrative Agent timely information
for the purpose of determining the Eurodollar Rate for any Interest Period. If
any one Reference Bank shall not furnish such timely information, the
Administrative Agent shall determine such interest rate on the basis of the
timely information furnished by the other two Reference Banks.
(e) MAXIMUM INTEREST RATE. Notwithstanding anything herein to the
contrary:
(i) If at any time the effective interest rate on any
Eurodollar Rate Advance or Base Rate Advance for any Interest Period
(including any additional interest payable upon the occurrence of an
Event of Default) exceeds 4.00% plus the Eurodollar Rate as determined
(or as it would have been determined) as of the first day of the then
applicable Interest Period for such Eurodollar Rate Advance or Base
Rate Advance (the "MAXIMUM RATE"), such rate of interest shall be
reduced to the Maximum Rate.
(ii) If the amount of interest payable for the account of any
Lender in respect of any Interest Period is reduced pursuant to
subparagraph (i), above, and the amount of interest payable for such
Lender's account in respect of any subsequent Interest Period would be
less than the amount of interest computed at the Maximum Rate, then the
amount of interest payable for such Lender's account in respect of such
subsequent Interest Period shall, to the extent permitted by applicable
law, be automatically increased to the amount of interest that would be
payable for such Interest Period if such interest were computed at the
Maximum Rate; provided that at no time shall the aggregate amount by
which interest paid for the account of any Lender is increased pursuant
to this subparagraph (ii) exceed the aggregate amount by which interest
paid for its account has theretofore been reduced pursuant to
subparagraph (i), above.
19
ARTICLE IV
PAYMENTS
SECTION 4.01. PAYMENTS AND COMPUTATIONS.
(a) The Borrower shall make each payment hereunder and under the Notes
not later than 12:00 noon (New York City time) on the day when due in U.S.
Dollars to the Administrative Agent at its address referred to in Section 10.02
hereof, in same day funds. The Administrative Agent will promptly thereafter
cause to be distributed like funds relating to the payment of principal,
interest, fees or other amounts payable to the Lenders, to the respective
Lenders to whom the same are payable, for the account of their respective
Applicable Lending Offices, in each case to be applied in accordance with the
terms of this Agreement. Upon its acceptance of a Lender Assignment and
recording of the information contained therein in the Register pursuant to
Section 10.07, from and after the effective date specified in such Lender
Assignment, the Administrative Agent shall make all payments hereunder and under
the Notes in respect of the interest assigned thereby to the Lender assignee
thereunder, and the parties to such Lender Assignment shall make all appropriate
adjustments in such payments for periods prior to such effective date directly
between themselves.
(b) The Borrower hereby authorizes the Administrative Agent and each
Lender, if and to the extent payment owed by the Borrower to the Administrative
Agent or such Lender, as the case may be, is not made when due hereunder (or, in
the case of a Lender, under the Note held by such Lender), to charge from time
to time against any or all of the Borrower's accounts with the Administrative
Agent or such Lender, as the case may be, any amount so due.
(c) All computations of interest based on the Base Rate (except when
determined on the basis of the Federal Funds Rate) shall be made on the basis of
a year of 365 or 366 days, as the case may be. All computations of interest and
other amounts payable pursuant to Section 4.03 shall be made by the Lender
claiming such interest or other amount on the basis of a year of 360 days. All
other computations of interest, including computations of interest based on the
Eurodollar Rate, the Base Rate (when and if determined on the basis of the
Federal Funds Rate), and all computations of fees and other amounts payable
hereunder, shall be made on the basis of a year of 360 days. In each such case,
such computation shall be made for the actual number of days (including the
first day but excluding the last day) occurring in the period for which such
interest, fees or other amounts are payable. Each such determination by the
Administrative Agent or a Lender shall be conclusive and binding for all
purposes, absent manifest error.
(d) Whenever any payment under any Loan Document shall be stated to be
due, or the last day of an Interest Period hereunder shall be stated to occur,
on a day other than a Business Day, such payment shall be made, and the last day
of such Interest Period shall occur, on the next succeeding Business Day, and
such extension of time shall in such case be included in the computation of
payment of interest and fees hereunder; provided, however, that if such
extension would cause payment of interest on or principal of Eurodollar Rate
Advances to be made, or the last day of an Interest Period for a Eurodollar Rate
Advance to occur, in the next following
20
calendar month, such payment shall be made on the next preceding Business Day
and such reduction of time shall in such case be included in the computation of
payment of interest hereunder.
(e) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Lenders hereunder
that the Borrower will not make such payment in full, the Administrative Agent
may assume that the Borrower has made such payment in full to the Administrative
Agent on such date and the Administrative Agent may, in reliance upon such
assumption, cause to be distributed to each Lender on such due date an amount
equal to the amount then due such Lender. If and to the extent the Borrower
shall not have so made such payment in full to the Administrative Agent, such
Lender shall repay to the Administrative Agent forthwith on demand such amount
distributed to such Lender, together with interest thereon, for each day from
the date such amount is distributed to such Lender until the date such Lender
repays such amount to the Administrative Agent, at the Federal Funds Rate.
SECTION 4.02. PREPAYMENTS.
(a) The Borrower shall not have any right to prepay any Contract
Advances except in accordance with subsection (b) below.
(b) The Borrower may, (i) in the case of Eurodollar Rate Advances, upon
at least three Business Day's written notice to the Administrative Agent (such
notice being irrevocable) and (ii) in the case of Base Rate Advances, upon
notice not later than 11:00 a.m. on the date of the proposed prepayment to the
Administrative Agent (such notice being irrevocable), stating the proposed date
and aggregate principal amount of the prepayment, and if such notice is given,
the Borrower shall, prepay Contract Advances comprising part of the same
Borrowing, in whole or ratably in part, together with accrued interest to the
date of such prepayment on the principal amount prepaid and any amounts owing in
connection therewith pursuant to Section 4.03(d); provided, however, that each
partial prepayment shall be in an aggregate principal amount not less than
$5,000,000 or an integral multiple of $1,000,000 in excess thereof. Once
prepaid, Advances may not be reborrowed.
SECTION 4.03. YIELD PROTECTION.
(a) CHANGE IN CIRCUMSTANCES. Notwithstanding any other provision
herein, if after the date hereof; the adoption of or any change in applicable
law or regulation or in the interpretation or administration thereof by any
governmental authority charged with the interpretation or administration thereof
(whether or not having the force of law) shall (i) change the basis of taxation
of payments to any Lender of the principal of or interest on any Eurodollar Rate
Advance made by such Lender or any fees or other amounts payable hereunder
(other than changes in respect of taxes imposed on the overall net income of
such Lender, or its Applicable Lending Office, by the jurisdiction in which such
Lender has its principal office or in which such Applicable Lending Office is
located or by any political subdivision or taxing authority therein), or (ii)
shall impose, modify or deem applicable any reserve, special deposit or similar
requirement against commitments or assets of, deposits with or for the account
of, or credit extended by, such Lender, or (iii) shall impose on such Lender any
other condition affecting this Agreement or Eurodollar
21
Rate Advances, and the result of any of the foregoing shall be (A) to increase
the cost to such Lender of issuing, maintaining or participating in this
Agreement or of agreeing to make, making or maintaining any Advance or (B) to
reduce the amount of any sum received or receivable by such Lender hereunder
(whether of principal, interest or otherwise), then the Borrower will pay to
such Lender, upon demand, such additional amount or amounts as will compensate
such Lender for such additional costs incurred or reduction suffered.
(b) CAPITAL. If any Lender shall have determined that any change after
the date hereof in any law, rule, regulation or guideline adopted pursuant to or
arising out of the July 1988 report of the Basle Committee on Banking
Regulations and Supervisory Practices entitled "International Convergence of
Capital Measurement and Capital Standards", or the adoption after the date
hereof of any law, rule, regulation or guideline regarding capital adequacy, or
any change in any of the foregoing or in the interpretation or administration of
any of the foregoing by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or any Applicable Lending Office of such Lender), or any holding
company of any such entity, with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect (i) of reducing the rate
of return on such entity's capital or on the capital of such entity's holding
company, if any, as a consequence of this Agreement, any Commitment hereunder or
the portion of the Advances made by such entity pursuant hereto to a level below
that which such entity or such entity's holding company could have achieved, but
for such applicability, adoption, change or compliance (taking into
consideration such entity's policies and the policies of such entity's holding
company with respect to capital adequacy), or (ii) of increasing or otherwise
determining the amount of capital required or expected to be maintained by such
entity or such entity's holding company based upon the existence of this
Agreement, any Commitment hereunder, the portion of the Advance made by such
entity pursuant hereto and other similar such credits, participations,
commitments, agreements or assets, then from time to time the Borrower shall pay
to such Lender, upon demand, such additional amount or amounts as will
compensate such entity or such entity's holding company for any such reduction
or allocable capital cost suffered.
(c) EURODOLLAR RESERVES. The Borrower shall pay to each Lender upon
demand, so long as such Lender shall be required under regulations of the Board
of Governors of the Federal Reserve System to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities,
additional interest on the unpaid principal amount of each Eurodollar Rate
Advance of such Lender to the Borrower, from the date of such Advance until such
principal amount is paid in full, at an interest rate per annum equal at all
times to the remainder obtained by subtracting (i) the Eurodollar Rate for the
Interest Period for such Advance from (ii) the rate obtained by dividing such
Eurodollar Rate by a percentage equal to 100% minus the Eurodollar Reserve
Percentage of such Lender for such Interest Period. Such additional interest
shall be determined by such Lender and notified to the Borrower and the
Administrative Agent.
(d) BREAKAGE INDEMNITY. The Borrower shall indemnify each Lender
against any loss, cost or reasonable expense which such Lender may sustain or
incur as a consequence of (i) any failure by the Borrower to fulfill on the
Funding Date or the date of any continuation or conversion of Advances hereunder
the applicable conditions precedent set forth in Articles III and
22
V, (ii) any failure by the Borrower to borrow or continue any, or convert any
outstanding Advance into a, Eurodollar Rate Advance hereunder after the Notice
of Contract Borrowing has been delivered pursuant to Section 3.01 hereof or
after delivery of a notice of continuation or conversion pursuant to Section
3.05(a)(ii) hereof, (iii) any payment, prepayment, continuation or conversion of
a Eurodollar Rate Advance required or permitted by any other provision of this
Agreement or otherwise made or deemed made on a date other than the last day of
the Interest Period applicable thereto, (iv) any default in payment or
prepayment of the principal amount of any Eurodollar Rate Advance made to the
Borrower or any part thereof or interest accrued thereon, as and when due and
payable (at the due date thereof, by irrevocable notice of prepayment or
otherwise) or (v) the occurrence of any Event of Default, including, in each
such case, any loss or reasonable expense sustained or incurred or to be
sustained or incurred in liquidating or employing deposits from third parties
acquired to effect or maintain such Advance or any part thereof as a Eurodollar
Rate Advance. Such loss, cost or reasonable expense shall include an amount
equal to the excess, if any, as reasonably determined by such Lender, of (A) its
cost of obtaining the funds for the Eurodollar Rate Advance being paid, prepaid,
converted, continued or not borrowed or continued for the period from the date
of such payment, prepayment, conversion, continuation or failure to borrow or
continue to the last day of the Interest Period for such Advance (or, in the
case of a failure to borrow or continue, the Interest Period for such Advance
which would have commenced on the date of such failure) over (B) the amount of
interest (as reasonably determined by such Lender) that would be realized by
such Lender in reemploying the funds so paid, prepaid, converted, continued or
not borrowed or continued for such period or Interest Period, as the case may
be. For purposes of this subsection (d), it shall be presumed that in the case
of any Eurodollar Rate Advance, each Lender shall have funded each such Advance
with a fixed-rate instrument bearing the rates and maturities designated in the
determination of the Applicable Rate for such Advance.
(e) NOTICES. A certificate of any Lender setting forth such entity's claim for
compensation hereunder and the amount necessary to compensate such entity or its
holding company pursuant to subsections (a) through (d) of this Section 4.03
shall be submitted to the Borrower and the Administrative Agent and shall be
conclusive and binding for all purposes, absent manifest error. The Borrower
shall pay such Lender directly the amount shown as due on any such certificate
within 10 days after its receipt of the same. The failure of any entity to
provide such notice or to make demand for payment under this Section 4.03 shall
not constitute a waiver of such entity's rights hereunder; provided that such
entity shall not be entitled to demand payment pursuant to subsections (a)
through (d) of this Section 4.03 in respect of any loss, cost, expense,
reduction or reserve, if such demand is made more than one year following the
later of such entity's incurrence or sufferance thereof or such entity's actual
knowledge of the event giving rise to such entity's rights pursuant to such
subsections. Each Lender shall use reasonable efforts to ensure the accuracy and
validity of any claim made by it hereunder, but the foregoing shall not obligate
any such entity to assert any possible invalidity or inapplicability of the law,
rule, regulation, guideline or other change or condition which shall have
occurred or been imposed.
(f) CHANGE IN LEGALITY. Notwithstanding any other provision herein, if the
adoption of or any change in any law or regulation or in the interpretation or
administration thereof by any governmental authority charged with the
administration or interpretation thereof shall make it unlawful for any Lender
to make or maintain any Eurodollar Rate Advance or to give effect to its
23
obligations as contemplated hereby with respect to any Eurodollar Rate Advance,
then, by written notice to the Borrower and the Administrative Agent, such
Lender may:
(i) declare that Eurodollar Rate Advances will not thereafter
be made by such Lender hereunder, whereupon the right of the Borrower
to select Eurodollar Rate Advances for any Borrowing or conversion
shall be forthwith suspended until such Lender shall withdraw such
notice as provided hereinbelow or shall cease to be a Lender hereunder
pursuant to Section 10.07(g) hereof; and
(ii) require that all outstanding Eurodollar Rate Advances be
converted to Base Rate Advances, in which event all Eurodollar Rate
Advances shall be automatically converted to Base Rate Advances as of
the effective date of such notice as provided herein below.
Upon receipt of any such notice, the Administrative Agent shall
promptly notify the other Lenders. Promptly upon becoming aware that the
circumstances that caused such Lender to deliver such notice no longer exist,
such Lender shall deliver notice thereof to the Borrower and the Administrative
Agent withdrawing such prior notice (but the failure to do so shall impose no
liability upon such Lender). Promptly upon receipt of such withdrawing notice
from such Lender (or upon such Lender assigning all of its Commitments, Advances
and other rights and obligations under the Loan Documents in accordance with
Section 10.07(g)), the Administrative Agent shall deliver notice thereof to the
Borrower and the Lenders and such suspension shall terminate. Prior to any
Lender giving notice to the Borrower under this subsection (f), such Lender
shall use reasonable efforts to change the jurisdiction of its Applicable
Lending Office, if such change would avoid such unlawfulness and would not, in
the sole determination of such Lender, be otherwise disadvantageous to such
Lender. Any notice to the Borrower by any Lender shall be effective as to each
Eurodollar Rate Advance on the last day of the Interest Period currently
applicable to such Eurodollar Rate Advance; provided that if such notice shall
state that the maintenance of such Advance until such last day would be
unlawful, such notice shall be effective on the date of receipt by the Borrower
and the Administrative Agent.
(g) MARKET RATE DISRUPTIONS. If (i) fewer than two Reference Banks
furnish timely information to the Administrative Agent for determining the
Eurodollar Rate for Eurodollar Rate Advances in connection with any proposed
Borrowing or (ii) if the Majority Lenders shall notify the Administrative Agent
that the Eurodollar Rate will not adequately reflect the cost to such Majority
Lenders of making, funding or maintaining their respective Eurodollar Rate
Advances, the right of the Borrower to select or receive Eurodollar Rate
Advances for any Borrowing shall be forthwith suspended until the Administrative
Agent shall notify the Borrower and the Lenders that the circumstances causing
such suspension no longer exist, and until such notification from the
Administrative Agent, each requested Borrowing of Eurodollar Rate Advances
hereunder shall be deemed to be a request for Base Rate Advances.
(h) RIGHTS OF PARTICIPANTS. Any participant in a Lender's interests
hereunder may assert any claim for yield protection under Section 4.03 that it
could have asserted if it were a Lender hereunder. If such a claim is asserted
by any such participant, it shall be entitled to receive such compensation from
the Borrower as a Lender would receive in like circumstances; provided,
24
however, that with respect to any such claim, the Borrower shall have no greater
liability to the Lender and its participant, in the aggregate, than it would
have had to the Lender alone had no such participation interest been created.
SECTION 4.04. SHARING OF PAYMENTS, ETC. If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise, but excluding any proceeds received by assignments or
sales of participation in accordance with Section 10.07 hereof to a Person that
is not an Affiliate of the Borrower) on account of the Advances owing to it
(other than pursuant to Section 4.03 hereof) in excess of its ratable share of
payments on account of the Advances obtained by all the Lenders, such Lender
shall forthwith purchase from the other Lenders such participation in the
Advances owing to them as shall be necessary to cause such purchasing Lender to
share the excess payment ratably with each of them; provided, however, that if
all or any portion of such excess payment is thereafter recovered from such
purchasing Lender, such purchase from each Lender shall be rescinded and such
Lender shall repay to the purchasing Lender the purchase price to the extent of
such recovery together with an amount equal to such Lender's ratable share
(according to the proportion of (i) the amount of such Lender's required
repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered. The Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section 4.04
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of the Borrower in the amount of such
participation. Notwithstanding the foregoing, if any Lender shall obtain any
such excess payment involuntarily, such Lender may, in lieu of purchasing
participation from the other Lenders in accordance with this Section 4.04, on
the date of receipt of such excess payment, return such excess payment to the
Administrative Agent for distribution in accordance with Section 4.01(a).
SECTION 4.05. TAXES.
(a) All payments by or on behalf of the Borrower under any Loan
Document shall be made in accordance with Section 4.01, free and clear of and
without deduction for all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding, in
the case of each Lender and the Administrative Agent, taxes imposed on its
overall net income, and franchise taxes imposed on it, by the jurisdiction under
the laws of which such Lender or the Administrative Agent (as the case may be)
is organized or any political subdivision thereof and, in the case of each
Lender, taxes imposed on its overall net income, and franchise taxes imposed on
it, by the jurisdiction of such Lender's Applicable Lending Office or any
political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "TAXES"). If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable under any Loan Document to any Lender or the
Administrative Agent, (i) the sum payable shall be increased as may be necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 4.05) such Lender or the
Administrative Agent (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrower shall
make such deductions and (iii) the Borrower shall
25
pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law.
(b) In addition, the Borrower agrees to pay any present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies that arise from any payment made by the Borrower under any Loan Document
or from the execution, delivery or registration of, or otherwise with respect
to, any Loan Document (hereinafter referred to as "OTHER TAXES").
(c) The Borrower hereby indemnifies each Lender and the Administrative
Agent for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes and any Other Taxes imposed by any jurisdiction on amounts
payable under this Section 4.05) paid by such Lender or the Administrative Agent
(as the case may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted. A claim for such
indemnification shall be set forth in a certificate of such Lender or the
Administrative Agent (as the case may be) setting forth in reasonable detail the
amount necessary to indemnify such Person pursuant to this subsection (c) and
shall be submitted to the Borrower and the Administrative Agent and shall be
conclusive and binding for all purposes, absent manifest error. The Borrower
shall pay such Lender or the Administrative Agent (as the case may be) directly
the amount shown as due on any such certificate within 30 days after the receipt
of same. If any Taxes or Other Taxes for which a Lender or the Administrative
Agent has received payments from the Borrower hereunder shall be finally
determined to have been incorrectly or illegally asserted and are refunded to
such Lender or the Administrative Agent, such Lender or the Administrative
Agent, as the case may be, shall promptly forward to the Borrower any such
refunded amount. The Borrower's, the Administrative Agent's and each Lender's
obligations under this Section 4.05 shall survive the payment in full of the
Outstanding Credits.
(d) Within 30 days after the date of any payment of Taxes, the Borrower
will furnish to the Administrative Agent, at its address referred to in Section
10.02, the original or a certified copy of a receipt evidencing payment thereof.
(e) Each Lender that is not incorporated under the laws of the United
States of America or any state thereof shall, on or prior to the date it becomes
a Lender hereunder, deliver to the Borrower and the Administrative Agent such
certificates, documents or other evidence, as required by the Internal Revenue
Code of 1986, as amended from time to time (the "CODE"), or treasury regulations
issued pursuant thereto, including Internal Revenue Service Form 4224, Form
1001, Form W-8 BEN or Form W-8 ECI and any other certificate or statement of
exemption required by Treasury Regulation Section 1.1441-1(a) or Section
1.1441-6(c) or any subsequent version thereof, properly completed and duly
executed by such Lender establishing that it is (i) not subject to withholding
under the Code or (ii) totally exempt from United States of America tax under a
provision of an applicable tax treaty. Each Lender shall promptly notify the
Borrower and the Administrative Agent of any change in its Applicable Lending
Office and shall deliver to the Borrower and the Administrative Agent together
with such notice such certificates, documents or other evidence referred to in
the immediately preceding sentence. Each Lender will use good faith efforts to
apprise the Borrower and the Administrative Agent as promptly as practicable of
any impending change in its tax status that would give rise to any obligation by
the
26
Borrower to pay any additional amounts pursuant to this Section 4.05. Unless the
Borrower and the Administrative Agent have received forms or other documents
satisfactory to them indicating that payments under the Loan Documents are not
subject to United States of America withholding tax or are subject to such tax
at a rate reduced by an applicable tax treaty, the Borrower or the
Administrative Agent shall withhold taxes from such payments at the applicable
statutory rate in the case of payments to or for any Lender organized under the
laws of a jurisdiction outside the United States of America. Each Lender
represents and warrants that each such form supplied by it to the Administrative
Agent and the Borrower pursuant to this Section 4.05, and not superseded by
another form supplied by it, is or will be, as the case may be, complete and
accurate.
(f) Any Lender claiming any additional amounts payable pursuant to this
Section 4.05 shall use reasonable efforts (consistent with legal and regulatory
restrictions) to file any certificate or document requested by the Borrower or
to change the jurisdiction of its Applicable Lending Office if the making of
such a filing or change would avoid the need for or reduce the amount of any
such additional amounts which may thereafter accrue and would not, in the sole
determination of such Lender, be otherwise disadvantageous to such Lender.
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.01. CONDITIONS PRECEDENT TO EFFECTIVENESS. The obligations of
the Lenders to make Advances to the Borrower on the Funding Date shall not
become effective until the date (the "CLOSING DATE") on which each of the
following conditions is satisfied:
(a) The Administrative Agent shall have received on or before the
Closing Date the following, each dated the Closing Date, in form and substance
satisfactory to the Administrative Agent and in sufficient copies for each
Lender (except for the Notes):
(i) Counterparts of this Agreement, duly executed by the
Borrower.
(ii) Contract Notes of the Borrower, duly made to the order of
each Lender in the amount of such Lender's Commitment.
(iii) A certificate of the Secretary or Assistant Secretary of
the Borrower certifying:
(A) the names and true signatures of the officers of
the Borrower authorized to sign the Loan Documents;
(B) that attached thereto are true and correct copies
of: (1) the Declaration of Trust of the Borrower, together
with all amendments thereto, as in effect on such date; (2)
the resolutions of the Borrower's Board of Trustees
27
approving the execution, delivery and performance by the
Borrower of the Loan Documents, the Borrowings hereunder and
the consummation by the Borrower of the acquisition of YES;
(3) all documents evidencing other necessary corporate or
other similar action, if any, with respect to the execution,
delivery and performance of the Loan Documents by the Borrower
and the consummation by the Borrower of the acquisition of
YES; and (4) true and correct copies of all Governmental
Approvals referred to in clauses (i) and (iii) of the
definition of "Governmental Approval" required to be obtained
by the Borrower in connection with the execution, delivery and
performance by the Borrower of the Loan Documents (including
the order of the Securities and Exchange Commission) and the
acquisition by the Borrower of YES; and
(C) that the resolutions referred to in the foregoing
clause (B)(2) have not been modified, revoked or rescinded and
are in full force and effect on such date.
(iv) A certificate signed by the Treasurer or Assistant
Treasurer of the Borrower, certifying as to:
(A) the delivery to each of the Lenders, prior to the
Closing Date, of true, correct and complete copies (other than
exhibits thereto) of all of the Disclosure Documents; and
(B) the absence of any material adverse change in the
financial condition, operations, properties or prospects of
the Borrower or the Borrower and its Principal Subsidiaries,
taken as a whole, since September 30, 1999, except as
disclosed in the Disclosure Documents.
(v) A certificate of a duly authorized officer of the Borrower
certifying that (i) the representations and warranties of the Borrower
contained in Section 6.01 are correct, in all material respects, on and
as of the Closing Date, (ii) no event has occurred and is continuing
which constitutes an Event of Default or Unmatured Default, and (iii)
attached thereto is the merger agreement with respect to the
acquisition of YES and all amendments and supplements, if any, thereto.
(vi) Such financial, business and other information regarding
the Borrower and its Principal Subsidiaries, as any Lender shall have
reasonably requested.
(vii) Favorable opinions of:
(A) Day, Berry & Howard, counsel to the Borrower, in
substantially the form of Exhibit 5.01A hereto and as to such
other matters as any Lender may reasonably request;
(B) Jeffrey C. Miller, Assistant General Counsel of
NUSCO, in substantially the form of Exhibit 5.01B hereto; and
as to such other matters as any Lender may reasonably request;
and
28
(C) King & Spalding, special New York counsel to the
Administrative Agent, in substantially the form of Exhibit
5.01C hereto and as to such other matters as any Lender may
reasonably request.
(b) The representations and warranties of the Borrower contained in
Section 6.01 shall be correct in all material respects on and as of the Closing
Date, and no event shall have occurred and be continuing which constitutes an
Event of Default or Unmatured Default.
(c) All fees and other amounts payable pursuant to the Fee Letter shall
have been paid (to the extent then due and payable).
(d) The Borrower shall have entered into a definitive merger agreement
with respect to the acquisition of YES; the Administrative Agent shall have
reviewed and shall be satisfied with all of the material terms thereof; no
default or failure in the satisfaction of a condition shall have occurred and be
continuing under such agreement that could reasonably be expected to threaten or
materially delay the consummation of such acquisition; and, from and after the
date hereof, the Borrower shall not have agreed to any modification of such
material terms if the effect thereof would be to increase the purchase price of
the shares of YES to be acquired thereunder or, without the consent of the
Administrative Agent, if the effect of such modification would be to decrease
the aggregate value of such shares.
(e) The Administrative Agent shall have received such other approvals,
opinions and documents as the Majority Lenders, through the Administrative
Agent, shall have reasonably requested as to the legality, validity, binding
effect or enforceability of this Agreement and the Notes or the financial
condition, operations, properties or prospects of the Borrower and its Principal
Subsidiaries.
SECTION 5.02. CONDITIONS PRECEDENT TO ADVANCES ON FUNDING DATE. The
obligation of any Lender to make an Advance on the Funding Date shall be subject
to the conditions precedent that, on such date and after giving effect to the
Advances to be made thereon:
(a) the following statements shall be true (and each of the giving of
the Notice of Contract Borrowing with respect to such Advances and the
acceptance of the proceeds of such Advances by the Borrower shall constitute a
representation and warranty by the Borrower that on the Funding Date such
statements are true):
(i) the representations and warranties of the Borrower
contained in Section 6.01 of this Agreement are correct, in all
material respects, on and as of the Funding Date, before and after
giving effect to the Advances to be made thereon and to the application
of the proceeds therefrom, as though made on and as of such date; and
(ii) no Event of Default or Unmatured Default has occurred and
is continuing on or as of the Funding Date or would result from the
Advances to be made thereon or from the application of the proceeds
thereof; and
29
(b) the Borrower shall have furnished to the Administrative Agent such
other approvals, opinions or documents as any Lender may reasonably request
through the Administrative Agent as to the legality, validity, binding effect or
enforceability of any Loan Document.
SECTION 5.03. RELIANCE ON CERTIFICATES. The Lenders and the
Administrative Agent shall be entitled to rely conclusively upon the
certificates delivered from time to time by officers of the Borrower as to the
names, incumbency, authority and signatures of the respective persons named
therein until such time as the Administrative Agent may receive a replacement
certificate, in form acceptable to the Administrative Agent, from an officer of
the Borrower identified to the Administrative Agent as having authority to
deliver such certificate, setting forth the names and true signatures of the
officers and other representatives of the Borrower thereafter authorized to act
on behalf of the Borrower and, in all cases, the Lenders and the Administrative
Agent may rely on the information set forth in any such certificate.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The
Borrower represents and warrants as follows:
(a) The Borrower is a voluntary association organized under a
Declaration of Trust, and each of its Principal Subsidiaries is a
corporation, in each case duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, has
the requisite corporate power (or in the case of the Borrower, power
under its Declaration of Trust) and authority to own its property and
assets and to carry on its business as now conducted and is qualified
to do business in every jurisdiction where, because of the nature of
its business or property, such qualification is required, except where
the failure so to qualify would not have a material adverse effect on
the financial condition, properties, prospects or operations of the
Borrower or of the Borrower and its Principal Subsidiaries taken as a
whole. The Borrower has the requisite power to execute, deliver and
perform its obligations under the Loan Documents, to borrow hereunder
and to execute and deliver its respective Notes, and to consummate the
acquisition of YES.
(b) The execution, delivery and performance of the Loan
Documents by the Borrower, and the consummation by the Borrower of the
acquisition of YES, are within the Borrower's powers under its
Declaration or Trust, have been duly authorized by all necessary action
under its Declaration of Trust and applicable law, and do not and will
not contravene (i) the Borrower's Declaration of Trust or any law or
legal restriction or (ii) any contractual restriction binding on or
affecting the Borrower or its properties or its Principal Subsidiaries
or their respective properties.
(c) Except as disclosed in the Disclosure Documents, none of
the Borrower or any of its Principal Subsidiaries is in violation of
any law or in default with respect to any
30
judgment, writ, injunction, decree, rule or regulation (including any
of the foregoing relating to environmental laws and regulations) of any
court or governmental agency or instrumentality where such violation or
default would reasonably be expected to have a material adverse effect
on the financial condition, properties, prospects or operations of the
Borrower or of the Borrower and its Principal Subsidiaries, taken as a
whole.
(d) There has been no material adverse development with
respect to (i) the proceedings of CL&P or WMECO to divest its
generating assets, or (ii) any orders, plans or authorizations for
recovery of the stranded assets of CL&P or WMECO, where any such
development results, or would reasonably be expected to result, in a
material adverse effect on the financial condition, properties,
prospects or operations of the Borrower or of the Borrower and its
Principal Subsidiaries, taken as a whole, other than as described in
the Disclosure Documents.
(e) All Governmental Approvals referred to in clauses (i) and
(iii) of the definition of "Governmental Approvals" have been duly
obtained or made, and all applicable periods of time for review,
rehearing or appeal with respect thereto have expired, except as
described below. If the period for appeal of the order of the
Securities and Exchange Commission approving the transactions
contemplated hereby (including the acquisition by the Borrower of YES)
has not expired, the filing of an appeal of such order will not affect
the validity of said transactions, unless such order has been otherwise
stayed or any of the parties hereto has actual knowledge that any of
such transactions constitutes a violation of the Public Utility Holding
Company Act of 1935 or any rule or regulation thereunder. No such stay
exists and the Borrower has no reason to believe that any of such
transactions constitutes any such violation. The Borrower and each
Subsidiary thereof has obtained or made all Governmental Approvals
referred to in clause (ii) of the definition of "Governmental
Approvals", except (A) those which are not yet required but which are
obtainable in the ordinary course of business as and when required, (B)
those the absence of which would not materially adversely affect the
financial condition, properties, prospects or operations of the
Borrower or of the Borrower and its Principal Subsidiaries, taken as a
whole, and (C) those which the Borrower or any such Subsidiary, as the
case may be, is diligently attempting in good faith to obtain, renew or
extend, or the requirement for which the Borrower or any such
Subsidiary, as the case may be, is contesting in good faith by
appropriate proceedings or by other appropriate means, in each case
described in the foregoing clause (C), except as is disclosed in the
Disclosure Documents, such attempt or contest, and any delay resulting
therefrom, is not reasonably expected to have a material adverse effect
on the financial condition, properties, prospects or operations of the
Borrower or of the Borrower and its Principal Subsidiaries, taken as a
whole, or to magnify to any significant degree any such material
adverse effect that would reasonably be expected to result from the
absence of such Governmental Approval.
(f) The Loan Documents are legal, valid and binding
obligations of the Borrower enforceable against the Borrower in
accordance with their respective terms; subject to the qualification,
however, that the enforcement of the rights and remedies herein and
therein is subject to bankruptcy and other similar laws of general
application affecting rights and
31
remedies of creditors and the application of general principles of
equity (regardless of whether considered in a proceeding in equity or
at law).
(g) The Financial Statements, copies of which have been
provided to the Administrative Agent and each of the Lenders, fairly
present in all material respects the consolidated financial condition
and results of operations of the Borrower and each of its Principal
Subsidiaries at and for the period ended on the dates thereof, and have
been prepared in accordance with generally accepted accounting
principles consistently applied. Since September 30, 1999, there has
been no material adverse change in the consolidated financial
condition, operations, properties or prospects of the Borrower or of
the Borrower and its Principal Subsidiaries, taken as a whole, except
as disclosed in the Disclosure Documents.
(h) There is no pending or known threatened action or
proceeding (including, without limitation, any action or proceeding
relating to any environmental protection laws or regulations) affecting
the Borrower, any Principal Subsidiary thereof or any of their
respective properties, before any court, governmental agency or
arbitrator (i) which affects or purports to affect the legality,
validity or enforceability of any Loan Document or of the consummation
by the Borrower of the acquisition of YES or (ii) as to which there is
a reasonable possibility of an adverse determination and which, if
adversely determined, would materially adversely affect (A) the
financial condition, properties, prospects or operations of the
Borrower or of the Borrower and its Principal Subsidiaries, taken as a
whole, or (B) the timing, cost or worth to the Borrower of the
consummation of the acquisition of YES, except, for purposes of this
clause (ii) only, such as is described in the Disclosure Documents or
in Schedule II hereto.
(i) No ERISA Plan Termination Event has occurred nor is
reasonably expected to occur with respect to any ERISA Plan which would
materially adversely affect the financial condition, properties,
prospects or operations of the Borrower or of the Borrower and its
Principal Subsidiaries, taken as a whole, except as disclosed to the
Lenders and consented to by the Majority Lenders in writing. Since the
date of the most recent Schedule B (Actuarial Information) to the
annual report of each such ERISA Plan (Form 5500 Series), there has
been no material adverse change in the funding status of the ERISA
Plans referred to therein, and no "prohibited transaction" has occurred
with respect thereto that, singly or in the aggregate with all other
"prohibited transactions" and after giving effect to all likely
consequences thereof, would be reasonably expected to have a material
adverse effect on the financial condition, properties, prospects or
operations of the Borrower or of the Borrower and its Principal
Subsidiaries, taken as a whole. Neither the Borrower nor any of its
ERISA Affiliates has incurred nor reasonably expects to incur any
material withdrawal liability under ERISA to any ERISA Multiemployer
Plan, except as disclosed to and consented by the Majority Lenders in
writing.
(j) The Borrower and each Principal Subsidiary thereof has
good and marketable title (or, in the case of personal property, valid
title) or valid leasehold interests in its assets, except for (i) minor
defects in title that do not materially interfere with the ability of
32
the Borrower or such Principal Subsidiary to conduct its business as
now conducted and (ii) other defects that, either individually or in
the aggregate, do not materially adversely affect the financial
condition, properties, prospects or operations of the Borrower or of
the Borrower and its Principal Subsidiaries, taken as a whole. All such
assets and properties are free and clear of any Lien, other than Liens
permitted under Section 7.02(a) hereof. No Liens exist on the stock of
CL&P, WMECO or PSNH.
(k) All outstanding shares of capital stock having ordinary
voting power for the election of directors of each Principal Subsidiary
have been validly issued and are fully paid and nonassessable and are
owned beneficially by NU, free and clear of any Lien. NU is a "holding
company" (as defined in the Public Utility Holding Company Act of 1935,
as amended).
(l) The Borrower and each of its Principal Subsidiaries has
filed all tax returns (Federal, state and local) required to be filed
and paid taxes shown thereon to be due, including interest and
penalties, or, to the extent the Borrower or such Principal Subsidiary
is contesting in good faith an assertion of liability based on such
returns, has provided adequate reserves in accordance with generally
accepted accounting principles for payment thereof.
(m) No exhibit, schedule, report or other written information
provided by or on behalf of the Borrower or its agents to the
Administrative Agent or the Lenders in connection with the negotiation,
execution and closing of the Loan Documents (including, without
limitation, the Financial Statements) knowingly contained when made any
material misstatement of fact or knowingly omitted to state any
material fact necessary to make the statements contained therein not
misleading in light of the circumstances under which they were made.
Except as has been disclosed to the Administrative Agent and each
Lender, nothing has come to the attention of the responsible officers
of the Borrower that would indicate that any of such assumptions, to
the extent material to such projections, has ceased to be reasonable in
light of subsequent developments or events.
(n) All proceeds of the Advances shall be used to finance the
acquisition by the Borrower of YES. No proceeds of any Advance will be
used in violation of, or in any manner that would result in a violation
by any party hereto of, Regulation T, U or X promulgated by the Board
of Governors of the Federal Reserve System or any successor
regulations. After giving effect to the acquisition of YES, the
aggregate value of all of the shares of YES acquired by the Borrower,
together with the aggregate value of all other Margin Stock (as defined
in Regulation U) owned of record or beneficially by the Borrower and
its consolidated subsidiaries will not exceed 25% of the total
consolidated assets of the Borrower and its consolidated Subsidiaries.
Neither the Borrower nor any Subsidiary thereof (A) is an "investment
company" within the meaning ascribed to that term in the Investment
Company Act of 1940 or (B) is engaged in the business of extending
credit for the purpose of buying or carrying Margin Stock.
(o) The Borrower and each Principal Subsidiary thereof has
obtained the insurance specified in Section 7.01(c) hereof and the same
is in full force and effect.
33
(p) The Borrower and each Principal Subsidiary thereof has
substantially completed reprogramming and/or remediation required as a
result of the potential Year 2000 Issue to permit the proper
functioning in all material respects of its computer software, hardware
and firmware systems and equipment containing computer chips and the
proper processing in all material respects of data, and the testing of
such reprogramming or remediation (as the case may be). The Borrower
has completed review of the reasonably foreseeable consequences of the
potential Year 2000 Issue to the Borrower and each of its Principal
Subsidiaries (including, without limitation, reprogramming errors and
the failure of systems or equipment supplied by others) and such
consequences are not reasonably expected to result in an Event of
Default, an Unmatured Default or a material adverse effect on the
financial condition, properties, prospects or operations of the
Borrower or of the Borrower and its Principal Subsidiaries, taken as a
whole.
ARTICLE VII
COVENANTS
SECTION 7.01. AFFIRMATIVE COVENANTS. On and after the Closing Date, so
long as any Note shall remain unpaid or any Lender shall have any Commitment
hereunder, the Borrower shall, unless the Majority Lenders shall otherwise
consent in writing:
(a) USE OF PROCEEDS. Apply the proceeds of each Advance solely
as specified in Section 6.01(n) hereof.
(b) PAYMENT OF TAXES, ETC. Pay and discharge, and cause each
of its Principal Subsidiaries to pay and discharge, before the same
shall become delinquent, all taxes, assessments and governmental
charges, royalties or levies imposed upon it or upon its property
except to the extent the Borrower or such Principal Subsidiary is
contesting the same in good faith by appropriate proceedings and has
set aside adequate reserves in accordance with generally accepted
accounting principles for the payment thereof.
(c) MAINTENANCE OF INSURANCE. Maintain or cause to be
maintained, and cause each of its Principal Subsidiaries to maintain or
cause to be maintained, insurance (including appropriate plans of
self-insurance) covering the Borrower, the Principal Subsidiaries and
their respective properties, in effect at all times in such amounts and
covering such risks as may be required by law and, in addition, as is
usually carried by companies engaged in similar businesses and owning
similar properties as the Borrower and such Principal Subsidiaries.
(d) PRESERVATION OF EXISTENCE, ETC.; DISAGGREGATION.
(i) Except as permitted by Section 7.02(b) hereof,
preserve and maintain, and cause each of its Principal
Subsidiaries to preserve and maintain, its existence,
34
corporate or otherwise, material rights (statutory and
otherwise) and franchises except where the failure to maintain
and preserve such rights and franchises would not materially
adversely affect the financial condition, properties,
prospects or operations of the Borrower or of the Borrower and
its Principal Subsidiaries, taken as a whole.
(ii) In furtherance of the foregoing, and
notwithstanding Section 7.02(b), the Borrower agrees that it
will not, and will cause each of its Principal Subsidiaries
not to, except in accordance with one or more restructuring
plans approved by the appropriate regulatory authorities,
sell, transfer or otherwise dispose of (by lease or otherwise,
and whether in one or a series of related transactions) any
portion of its generation, transmission or distribution assets
in excess of 10% of the net utility plant assets of the
Borrower and its Principal Subsidiaries, taken as a whole, in
each case as determined on a cumulative basis from the date of
this Agreement through the Termination Date by reference to
the published balance sheets of the Borrower and its Principal
Subsidiaries.
(e) COMPLIANCE WITH LAWS, ETC. Comply, and cause each of its
Principal Subsidiaries to comply, in all material respects with the
requirements of all applicable laws, rules, regulations and orders of
any governmental authority, including, without limitation, any such
laws, rules, regulations and orders issued by the Securities and
Exchange Commission or relating to zoning, environmental protection,
use and disposal of Hazardous Substances, land use, construction and
building restrictions, ERISA and employee safety and health matters
relating to business operations, except to the extent (i) that the
Borrower or any such Principal Subsidiary is contesting the same in
good faith by appropriate proceedings or (ii) that any such
non-compliance, and the enforcement or correction thereof, would not
materially adversely affect the financial condition, properties,
prospects or operations of the Borrower or of the Borrower and its
Principal Subsidiaries, taken as a whole.
(f) INSPECTION RIGHTS. At any time and from time to time upon
reasonable notice, permit, and cause each of its Principal Subsidiaries
to permit, the Administrative Agent, the Lenders and their respective
agents and representatives to examine and make copies of and abstracts
from the records and books of account of, and the properties of, the
Borrower and each Principal Subsidiary and to discuss the affairs,
finances and accounts of the Borrower and each Principal Subsidiary (i)
with the Borrower, each Principal Subsidiary and their respective
officers and directors and (ii) with the consent of the Borrower and/or
its Principal Subsidiaries, as the case may be (which consent shall not
be unreasonably withheld or delayed), with the accountants of the
Borrower or any such Principal Subsidiary.
(g) KEEPING OF BOOKS. Keep, and cause each Principal
Subsidiary to keep, proper records and books of account, in which full
and correct entries shall be made of all financial transactions of the
Borrower and each Principal Subsidiary and the assets and business of
the Borrower and each Principal Subsidiary, in accordance with
generally accepted accounting practices consistently applied.
35
(h) CONDUCT OF BUSINESS. Except as permitted by Section
7.02(b) but subject in all respects to Section 7.01(d)(ii), conduct,
and cause each Principal Subsidiary to conduct, its primary business in
substantially the same manner and in substantially the same fields as
such business is conducted on the Closing Date.
(i) MAINTENANCE OF PROPERTIES, ETC. (i) As to properties of
the type described in Section 6.01(j) hereof, maintain, and cause each
Principal Subsidiary to maintain, title of the quality described
therein and preserve, maintain, develop, and operate, and cause each
Principal Subsidiary to preserve, maintain, develop and operate, in
substantial conformity with all laws, material contractual obligations
and prudent practices prevailing in the industry, all of its properties
which are used or useful in the conduct of its businesses in good
working order and condition, ordinary wear and tear excepted, except
(A) as permitted by Section 7.02(b), but subject nevertheless to
Section 7.01(d)(ii), (B) as disclosed in the Disclosure Documents or
otherwise in writing to the Administrative Agent and the Lenders on or
prior to the date hereof, and (C) to the extent such non-conformity
would not materially adversely affect the financial condition,
properties, prospects or operations of the Borrower or of the Borrower
and its Principal Subsidiaries, taken as a whole; provided, however,
that neither the Borrower nor any Principal Subsidiary will be
prevented from discontinuing the operation and maintenance of any such
properties if such discontinuance is, in the judgment of the Borrower
or such Principal Subsidiary, desirable in the operation or maintenance
of its business and would not materially adversely affect the financial
condition, properties, prospects or operations of the Borrower or of
the Borrower and its Principal Subsidiaries, taken as a whole.
(j) GOVERNMENTAL APPROVALS. Duly obtain, and cause each
Principal Subsidiary to duly obtain, on or prior to such date as the
same may become legally required, and thereafter maintain, and cause
each Principal Subsidiary to maintain, in effect at all times, all
Governmental Approvals on its part to be obtained, except in the case
of those Governmental Approvals referred to in clause (ii) of the
definition of "Governmental Approvals", (i) those the absence of which
would not materially adversely affect the financial condition,
properties, prospects or operations of the Borrower or of the Borrower
and its Principal Subsidiaries, taken as a whole, and (ii) those which
the Borrower or such Principal Subsidiary is diligently attempting in
good faith to obtain, renew or extend, or the requirement for which the
Borrower or such Principal Subsidiary is contesting in good faith by
appropriate proceedings or by other appropriate means; provided,
however, that the exception afforded by clause (ii), above, shall be
available only if and for so long as such attempt or contest, and any
delay resulting therefrom, does not have a material adverse effect on
the financial condition, properties, prospects or operations of the
Borrower or of the Borrower and its Principal Subsidiaries, taken as a
whole, and does not magnify to any significant degree any such material
adverse effect that would reasonably be expected to result from the
absence of such Governmental Approval.
(k) FURTHER ASSURANCES. Promptly execute and deliver all
further instruments and documents, and take all further action, that
may be necessary or that any Lender
36
through the Administrative Agent may reasonably request in order to
fully give effect to the interests and properties purported to be
covered by the Loan Documents.
SECTION 7.02. NEGATIVE COVENANTS. On and after the Closing Date, and so
long as any Note shall remain unpaid or any Lender shall have any Commitment
hereunder, the Borrower shall not, or permit any Principal Subsidiary to,
without the written consent of the Majority Lenders:
(a) LIENS, ETC. Create incur, assume or suffer to exist any Lien upon
any of its properties or assets (including the stock of its Subsidiaries),
whether now owned or hereafter acquired, except:
(i) any Liens existing on the Closing Date;
(ii) in the case of CL&P, Liens created by the Indenture of
Mortgage and Deed of Trust dated as of May 1, 1921, from CL&P to
Bankers Trust Company, as trustee, as previously and hereafter amended
and supplemented (the "CL&P INDENTURE");
(iii) in the case of WMECO, Liens created by the First
Mortgage Indenture and Deed of Trust dated as of August 1, 1954, from
WMECO to State Street Bank and Trust Company, as successor trustee, as
previously and hereafter amended and supplemented (the "WMECO
INDENTURE");
(iv) in the case of PSNH, Liens created by the General and
Refunding Mortgage Indenture, dated as of August 15, 1978, between PSNH
and New England Merchants National Bank, as trustee, and to which First
Union National Bank is successor trustee, as previously and hereafter
amended and supplemented (the "PSNH INDENTURE");
(v) in the case of NAEC, Liens created by the First Mortgage
Indenture and Deed of Trust, dated as of June 1, 1992, between NAEC and
United States Trust Company of New York, as trustee, as previously and
hereafter amended and supplemented (the "NAEC INDENTURE");
(vi) Liens on the interests of CL&P and WMECO in (A) the
Millstone Unit No. 1 created by (1) the Open-End Mortgage and Trust
Agreement dated as of October 1, 1986, as previously and hereafter
amended, made by CL&P in favor of State Street Bank and Trust Company,
as successor trustee, and (2) the Open-End Mortgage and Trust Agreement
dated as of October 1, 1986, as previously and hereafter amended, made
by WMECO in favor of State Street Bank and Trust Company, as successor
trustee, to the extent of the Debt from time to time secured by such
Open-End Mortgages and Trust Agreements, and (B) Millstone Unit No. 2
and Millstone Unit No. 3 created by (1) the Open-End Mortgage, dated as
of November 19, 1999, made by CL&P in favor of Citibank, N.A., as
collateral agent, and (2) the Open-End Mortgage, dated as of November
19, 1999, made by WMECO in favor of Citibank, N.A., as collateral
agent, to the extent of the Debt secured by such Open-End Mortgages;
37
(vii) "Permitted Liens" or "Permitted Encumbrances" under the
CL&P Indenture (in the case of CL&P), the WMECO Indenture (in the case
of WMECO), the PSNH Indenture (in the case of PSNH) or the NAEC
Indenture (in the case of NAEC), in each case as such terms are defined
on the date hereof, to the extent such Liens do not secure Debt of the
Borrower or any Principal Subsidiary;
(viii) any purchase money Lien or construction mortgage on
assets hereafter acquired or constructed by the Borrower or any
Principal Subsidiary and any Lien on any assets existing at the time of
acquisition thereof by the Borrower or such Principal Subsidiary or
created within 180 days from the date of completion of such acquisition
or construction; provided that such Lien shall at all times be confined
solely to the assets so acquired or constructed and any additions
thereto;
(ix) any existing Liens on assets now owned by the Borrower or
any Principal Subsidiary and Liens existing on assets of a corporation
or other going concern when it is merged into or with the Borrower or
such Principal Subsidiary or when substantially all of its assets are
acquired by the Borrower or such Principal Subsidiary; provided that
such Liens shall at all times be confined solely to such assets, or if
such assets constitute a utility system, additions to or substitutions
for such assets;
(x) Liens resulting from legal proceedings being contested in
good faith by appropriate legal or administrative proceedings by the
Borrower or any Principal Subsidiary, and as to which the Borrower or
such Principal Subsidiary, to the extent required by generally accepted
accounting principles applied on a consistent basis, shall have set
aside on its books adequate reserves;
(xi) Liens created in favor of the other contracting party
in connection with advance or progress payments;
(xii) any Liens in favor of any state of the United States or
any political subdivision of any such state, or any agency of any such
state or political subdivisions, or trustee acting on behalf of holders
of obligations issued by any of the foregoing or any financial
institutions lending to or purchasing obligations of any of the
foregoing, which Lien is created or assumed for the purpose of
financing all or part of the cost of acquiring or constructing the
property subject thereto;
(xiii) Liens resulting from conditional sale agreements,
capital leases or other title retention agreements including, without
limitation, Liens arising under leases of nuclear fuel from the Niantic
Bay Fuel Trust;
(xiv) with respect to pollution control bond financings, Liens
on funds, accounts and other similar intangibles of the Borrower or any
Principal Subsidiary created or arising under the relevant indenture,
pledges of the related loan agreement with the relevant issuing
authority and pledges of the Borrower's or such Principal Subsidiary's
interest, if any, in any bonds issued pursuant to such financings to a
letter of credit bank or bond issuer or similar credit enhancer;
38
(xv) Liens granted on accounts receivable and Regulatory
Assets in connection with financing transactions, whether denominated
as sales or borrowings;
(xvi) Liens on the assets of, or the stock issued by,
Northeast Generation Company or any other Subsidiary of the Borrower
created to hold generating assets if such Liens are created to secure
nonrecourse Debt incurred to acquire, construct or otherwise develop
such generating assets;
(xvii) Liens on assets of HWP permitted to exist by the terms
of agreements governing the Named Debt;
(xviii) any other Liens incurred in the ordinary course of
business otherwise than to secure Debt; and
(xix) any extension, renewal or replacement of Liens permitted
by clauses (i), (vi) through (ix) and (xi) through (xvi); provided,
however, that the principal amount of Debt secured thereby shall not,
at the time of such extension, renewal or replacement, exceed the
principal amount of Debt so secured and that such extension, renewal or
replacement shall be limited to all or a part of the property which
secured the Lien so extended, renewed or replaced.
(b) MERGERS, ACQUISITIONS, SALES OF ASSETS, ETC. Merge with or into or
consolidate with or into, any Person, or purchase or otherwise acquire (whether
directly or indirectly) all or substantially all of the assets or stock of any
class of, or any partnership or joint venture interest in, any other Person, or
sell, transfer, convey, lease or otherwise dispose of all or any substantial
part of its assets; except for the following, and then only after receipt of all
necessary corporate and governmental or regulatory approvals and provided that,
before and after giving effect to any such merger, consolidation, purchase,
acquisition, sale, transfer, conveyance, lease or other disposition, no Event of
Default or Unmatured Default shall have occurred and be continuing:
(A) NU may merge with or into Consolidated Edison, Inc. or a
wholly owned Subsidiary thereof;
(B) any purchase or acquisition of a joint venture interest in
a mutual insurance company providing nuclear liability or nuclear
property or replacement power insurance;
(C) any sale of accounts receivable on reasonable commercial
terms (including a commercially reasonable discount) to obtain funding
for CL&P and WMECO, as the case may be;
(D) any sale or purchase of generating assets or Regulatory
Assets on an arms-length basis, subject to approval by the appropriate
regulatory authorities;
(E) the sale of the Borrower's or any Principal Subsidiary's
assets in the ordinary course of business on customary terms and
conditions;
39
(F) the acquisition of YES for consideration in an amount not
to exceed $495,000,000 (excluding the assumption of Debt); and
(G) the acquisition of substantially all of the assets of, or
substantially all of the ownership interests in, any other Person or
Persons, which acquisition or acquisitions are not otherwise permitted
by this subsection (b), so long as the aggregate consideration for all
such acquisitions (including the acquisition by HEC Inc. of the assets
of Energy Applications Inc.) does not exceed $5,000,000.
For purposes of this subsection (b), any sale of assets by the Borrower or any
Principal Subsidiary (in one or a series of transactions) will be deemed to be a
"substantial part" of its assets if (i) the book value of such assets exceeds
7.5% of the total book value of the assets (net of Regulatory Assets) of such
Person, as reflected in the most recent financial statements of the Borrower or
such Principal Subsidiary delivered to the Administrative Agent pursuant to
Section 7.04 hereof (or, if no such financial statements have been delivered to
the Administrative Agent as of the relevant date of determination, the Financial
Statements of such Person), or (ii) the gross revenue associated with such
assets accounts for more than 7.5% of the total gross revenue of the Borrower or
such Principal Subsidiary for the four proceeding fiscal quarters, as reflected
in the most recent financial statements of the Borrower or such Principal
Subsidiary delivered to the Administrative Agent pursuant to Section 7.04 hereof
(or, if no such financial statements have been delivered to the Administrative
Agent as of the relevant date of determination, the Financial Statements of such
Person).
(c) COMPLIANCE WITH ERISA. (i) Terminate, or permit any of its ERISA
Affiliates to terminate, any ERISA Plan so as to result in any liability of the
Borrower or any Principal Subsidiary to the PBGC in an amount greater than
$1,000,000, or (ii) permit to exist any occurrence of any Reportable Event (as
defined in Title IV of ERISA) which, alone or together with any other Reportable
Event with respect to the same or another ERISA Plan, has a reasonable
possibility of resulting in liability of the Borrower or any Principal
Subsidiary to the PBGC in an aggregate amount exceeding $1,000,000, or any other
event or condition which presents a material risk of such a termination by the
PBGC of any ERISA Plan or has a reasonable possibility of resulting in a
liability of the Borrower or any Principal Subsidiary to the PBGC or any
withdrawal liability to an ERISA Multiemployer Plan in an aggregate amount
exceeding $1,000,000.
(c) ACCOUNTING CHANGES. Make any change in its accounting policies or
reporting practices except as required or permitted by the Securities and
Exchange Commission, the Financial Accounting Standards Board or any other
generally recognized accounting authority.
(e) TRANSACTIONS WITH AFFILIATES. Engage in any transaction with any
Affiliate except (i) in accordance with the Public Utility Holding Company Act
of 1935, to the extent applicable thereto or (ii) on terms no less favorable to
the Borrower or the Principal Subsidiary party thereto than if the transaction
had been negotiated in good faith on an arms-length basis with a non-Affiliate
and on commercially reasonable terms or pursuant to a binding agreement in
effect on the Closing Date.
40
(f) ISSUANCE OF FIRST MORTGAGE BONDS. In the case of CL&P and WMECO
only, issue any First Mortgage Bonds on or after the Closing Date, whether in
addition to First Mortgage Bonds outstanding on the Closing Date or in
replacement of First Mortgage Bonds redeemed, retired, defeased, repaid or
prepaid on or after the Closing Date.
(g) INTERESTS IN NUCLEAR PLANTS. Acquire any nuclear plant or any
interest therein not held on the Closing Date, other than so-called "power
entitlements" acquired for use in the ordinary course of business.
(h) DEBT. Create, incur, assume or suffer to exist, any Debt of NU, NU
Enterprises, Inc. or any Subsidiary of NU Enterprises, Inc., other than (i) Debt
under the Loan Documents; (ii) other Debt in existence on the Closing Date,
excluding any extension, renewal or replacement thereof; (iii) Debt arising
under the Revolving Credit Agreement, (iv) Debt resulting from the issuance of
debt-like instruments by NU for stock redemptions and repurchases in connection
with the acquisition of YES in an amount not to exceed $215,000,000; (v)
non-recourse Debt of the Northeast Generation Company; (vi) Parent Support
Obligations in an amount not to exceed $350,000,000 at any one time outstanding;
(vii) Debt incurred by HEC Inc. in connection with the Portsmouth Naval Shipyard
Project, and other Debt of HEC Inc. in an aggregate principal amount not to
exceed $25,000,000; and (viii) in the case of NU Enterprises, Inc. and its
Subsidiaries, Debt owing to NU, NU Enterprises, Inc. or the NU System Money
Pool.
(i) INVESTMENTS. With respect to the Borrower only, purchase, hold or
acquire any capital stock, evidences of indebtedness or other securities
(including any option, warrant or other right to acquire any of the foregoing)
of, make or permit to exist any loans or advances to, guarantee any obligations
of, or make or permit to exist any investment or any other interest in, any
other Person, or purchase or otherwise acquire (in one transaction or a series
of transactions) any assets of any other Person constituting a business unit
(each of the foregoing, an "INVESTMENT"), except (i) the NGC Equity
Contribution; (ii) equity and debt investments in (including NU System Money
Pool advances to) Select Energy Inc. in an aggregate amount not to exceed
$100,000,000; (iii) NU System Money Pool advances (other than to Select Energy
Inc.) in an aggregate amount not to exceed $50,000,000 at any one time
outstanding; (iv) other debt and equity investments in Subsidiaries of the
Borrower (other than NU System Money Pool advances and other than in Select
Energy Inc.) in an aggregate amount not to exceed $50,000,000 from and after the
Closing Date; (v) the issuance of up to $25,000,000 in construction completion
and similar performance guaranties on behalf of HEC Inc. from and after the
Closing Date; (vi) Investments permitted by subsections (b) and (h) above; (vii)
Investments other than (A) those enumerated in clauses (i) through (vi) above
and (B) NU System Money Pool Advances, in each case, made prior to the Closing
Date; and (viii) Permitted Investments.
(j) RESTRICTED PAYMENTS. With respect to the Borrower only, declare or
make, or agree to pay or make, directly or indirectly, any Restricted Payment,
except that the Borrower may (i) pay dividends to its common stockholders in an
aggregate amount not to exceed $53,000,000 during any 12-month period beginning
or ending on the Closing Date or any day thereafter until and including the
Termination Date, and (ii) redeem or repurchase capital stock for an aggregate
amount not in excess of $215,000,000 in connection with the acquisition of YES
41
(k) FINANCING AGREEMENTS. With respect to the Borrower only, permit any
Principal Subsidiary to enter into any agreement, contract, indenture or similar
obligation, or issue any security (all of the foregoing being referred to as
"FINANCING AGREEMENTS"), that is not in effect on the Closing Date, or amend or
modify any existing Financing Agreement, if the effect of such Financing
Agreement (or amendment or modification thereof) is to impose any additional
restriction not in effect on the Closing Date on the ability of such Principal
Subsidiary to pay dividends to the Borrower; provided, that the foregoing shall
not restrict the right of Northeast Generation Company, or any other Subsidiary
of the Borrower created to hold generating assets, to enter into any such
Financing Agreement in connection with the incurrence of nonrecourse Debt to
acquire, construct or otherwise develop generating assets.
SECTION 7.03. FINANCIAL COVENANTS. On and after the Closing Date, so
long as any Note shall remain unpaid or any Lender shall have any Commitment
hereunder, the Borrower shall, unless the Majority Lenders shall otherwise
consent in writing:
(a) COMMON EQUITY RATIO. Maintain at all times a ratio of Common Equity
to Total Capitalization of at least 0.30:1:00.
(b) INTEREST COVERAGE RATIO. Maintain, as of the end of each Fiscal
Quarter, with respect to the four Fiscal Quarters then ended, a ratio of
Consolidated Operating Income to Consolidated Interest Expense of at least
2.00:1:00.
(c) CASH FLOW RATIO. Maintain, as of the end of each Fiscal Quarter
commencing with the Fiscal Quarter ending March 31, 2000, with respect to the
four Fiscal Quarters then ended (or such fewer number of quarterly periods that
shall have ended on or after March 31, 2000), a ratio of Operating Cash Flow to
Fixed Charges of at least 1.50:1.00.
SECTION 7.04. REPORTING OBLIGATIONS. So long as any Note shall remain
unpaid or any Lender shall have any Commitment hereunder, the Borrower shall,
unless the Majority Lenders shall otherwise consent in writing, furnish or cause
to be furnished to the Administrative Agent in sufficient copies for each
Lender, the following:
(i) as soon as possible and in any event within ten days after
the occurrence of each Event of Default or Unmatured Default continuing
on the date of such statement, a statement of the Chief Financial
Officer, Treasurer or Assistant Treasurer of the Borrower setting forth
details of such Event of Default or Unmatured Default and the action
which the Borrower proposes to take with respect thereto;
(ii) (A) as soon as available, and in any event within fifty
(50) days after the end of each of the first three Fiscal Quarters of
each Fiscal Year of the Borrower, a copy of the Borrower's and each of
its Principal Subsidiary's Quarterly Reports on Form 10-Q submitted to
the Securities and Exchange Commission with respect to such quarter,
or, if the Borrower or Select Energy, Inc. ceases to be required to
submit such report, consolidated and unconsolidated balance sheets of
the Borrower or Select Energy, Inc., as the case may be, as of the end
of such Fiscal Quarter and consolidated and unconsolidated statements
of income and retained earnings and of cash flows of the Borrower or
Select
42
Energy, Inc., as the case may be, for the period commencing at the end
of the previous Fiscal Year and ending with the end of such Fiscal
Quarter, all in reasonable detail and duly certified (subject to
year-end audit adjustments) by the Chief Financial Officer, Treasurer,
Assistant Treasurer or Comptroller of the Borrower or Select Energy,
Inc., as the case may be, as having been prepared in accordance with
generally accepted accounting principles consistent with those applied
in the preparation of the Financial Statements; and
(B) concurrently with the delivery of the financial
statements described in the foregoing clause (a), a
certificate of the Chief Financial Officer, Treasurer,
Assistant Treasurer or Comptroller of the Borrower:
(1) to the effect that such financial statements were prepared
in accordance with generally accepted accounting principles consistent with
those applied in the preparation of the Financial Statements,
(2) stating that no Event of Default or Unmatured Default has
occurred and is continuing or, if an Event of Default or Unmatured Default has
occurred and is continuing, describing the nature thereof and the action which
the Borrower proposes to take with respect thereto, and
(3) demonstrating the Borrower's compliance with the covenants
set forth in Section 7.03 hereof, for and as of the end of such Fiscal Quarter,
in each case such demonstrations to be in form satisfactory to the
Administrative Agent and to set forth in reasonable detail the computations used
in determining such compliance;
(iii) (A) as soon as available, and in any event within 105
days after the end of each Fiscal Year of the Borrower, a copy of the
Borrower's and each of its Principal Subsidiary's Annual Reports on
Form 10-K submitted to the Securities and Exchange Commission with
respect to such Fiscal Year, or, if the Borrower or Select Energy, Inc.
ceases to be required to submit such report, a copy of the annual audit
report for such year for the Borrower or Select Energy, Inc., as the
case may be, including therein consolidated and unconsolidated balance
sheets of the Borrower or Select Energy, Inc., as the case may be, as
of the end of such Fiscal Year and consolidated and unconsolidated
statements of income and retained earnings and of cash flows of the
Borrower or Select Energy, Inc., as the case may be, for such Fiscal
Year, all in reasonable detail and certified by a nationally-recognized
independent public accountant; and
(B) concurrently with the delivery of the financial
statements described in the foregoing clause (A), a
certificate of the Chief Financial Officer, Treasurer,
Assistant Treasurer or Comptroller of the Borrower:
(1) to the effect that such financial statements were prepared
in accordance with generally accepted accounting principles consistent with
those applied in the preparation of the Financial Statements, and
43
(2) stating that no Event of Default or Unmatured Default has
occurred and is continuing, or if an Event of Default or Unmatured Default has
occurred and is continuing, describing the nature thereof and the action which
the Borrower proposes to take with respect thereto, and
(3) demonstrating the Borrower's compliance with the covenants
set forth in Section 7.03 hereof, for and as of the end of such Fiscal Year, in
each case such demonstrations to be in form satisfactory to the Administrative
Agent and to set forth in reasonable detail the computations used in determining
such compliance;
(iv) upon the reasonable request of the Administrative Agent,
but not more than once per Fiscal Quarter, copies of any or all filings
or registrations with, or notices or reports to, any regulatory
authority by the Borrower or any Principal Subsidiary;
(v) promptly upon becoming aware that any of its or any of its
Principal Subsidiaries' material businesses and operations is
reasonably likely be affected by the Year 2000 Issue, a detailed
description of the nature of such circumstances and the actions which
the Borrower proposes to take with respect thereto, except where the
effect of the Year 2000 Issue would not be reasonably likely to have a
material adverse effect on the financial condition, properties,
prospects or operations of the Borrower or of the Borrower and the
Principal Subsidiaries, taken as a whole;
(vi) as soon as possible and in any event (A) within 30 days
after the Chief Financial Officer, Treasurer or any Assistant Treasurer
of the Borrower knows or has reason to know that any ERISA Plan
Termination Event described in clause (i) of the definition of ERISA
Plan Termination Event with respect to any ERISA Plan or ERISA
Multiemployer Plan has occurred and (B) within 10 days after the
Borrower knows or has reason to know that any other ERISA Plan
Termination Event with respect to any ERISA Plan or ERISA Multiemployer
Plan has occurred, a statement of the Chief Financial Officer,
Treasurer or Assistant Treasurer of the Borrower describing such ERISA
Plan Termination Event and the action, if any, which the Borrower
proposes to take with respect thereto;
(vii) promptly after receipt thereof by the Borrower or any of
its ERISA Affiliates from the PBGC, copies of each notice received by
the Borrower or any such ERISA Affiliate of the PBGC's intention to
terminate any ERISA Plan or ERISA Multiemployer Plan or to have a
trustee appointed to administer any ERISA Plan or ERISA Multiemployer
Plan;
(viii) promptly after receipt thereof by the Borrower or any
of its ERISA Affiliates from an ERISA Multiemployer Plan sponsor, a
copy of each notice received by the Borrower or any of its ERISA
Affiliates concerning the imposition or amount of withdrawal liability
in an aggregate principal amount of at least $10,000,000 pursuant to
Section 4202 of ERISA in respect of which the Borrower may be liable;
44
(ix) promptly after the Borrower becomes aware of the
commencement thereof, notice of all actions, suits, proceedings or
other events of the type described in Section 6.01(h) hereof
(including, without limitation, any action or proceeding relating to
any environmental protection laws or regulations);
(x) promptly after the filing thereof, copies of each
prospectus (excluding any prospectus contained in any Form S-8) and
Current Report on Form 8-K, if any, which the Borrower or any Principal
Subsidiary files with the Securities and Exchange Commission or any
successor governmental authority; and
(xi) promptly after requested, such other information
respecting the financial condition, operations, properties or prospects
of the Borrower or its Subsidiaries as the Administrative Agent, or the
Majority Lenders through the Administrative Agent, may from time to
time reasonably request in writing.
ARTICLE VIII
DEFAULTS
SECTION 8.01. EVENTS OF DEFAULT. The following events shall each
constitute an "EVENT OF Default":
(a) The Borrower shall fail to pay any principal of any Note
when due or shall fail to pay any interest on any Note or fees or other
amounts payable under the Loan Documents within two days after the same
becomes due; or
(c) Any representation or warranty made by the Borrower (or
any of its officers or agents) in any Loan Document, any certificate or
other writing delivered pursuant hereto or thereto shall prove to have
been incorrect in any material respect when made or deemed made; or
(c) The Borrower shall fail to perform or observe any term or
covenant on its part to be performed or observed contained in Section
7.01(d), Section 7.02, Section 7.03 or Section 7.04(i) hereof; or
(d) The Borrower shall fail to perform or observe any other
term or covenant on its part to be performed or observed contained in
any Loan Document and any such failure shall remain unremedied for a
period of 30 days after the earlier of (i) written notice of such
failure having been given to the Borrower by the Administrative Agent
or (ii) the Borrower having obtained actual knowledge of such failure;
or
(e) The Borrower or any Principal Subsidiary shall fail to pay
any of its Debt when due (including any interest or premium thereon but
excluding Debt evidenced by the Notes and excluding other Debt (except
for Named Debt) aggregating in no event more
45
than $10,000,000 in principal amount at any one time) whether by
scheduled maturity, required prepayment, acceleration, demand or
otherwise, and such failure shall continue after the applicable grace
period, if any, specified in any agreement or instrument relating to
such Debt; or any other default under any agreement or instrument
relating to any such Debt, or any other event, shall occur and shall
continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such default or event is to
accelerate, or to permit the acceleration of, the maturity of such
Debt; or any such Debt shall be declared to be due and payable, or
required to be prepaid (other than by a regularly scheduled required
prepayment or as a result of the Borrower's or such Principal
Subsidiary's exercise of a prepayment option) prior to the stated
maturity thereof; or
(f) The Borrower or any Principal Subsidiary shall generally
not pay its debts as such debts become due, or shall admit in writing
its inability to pay its debts generally, or shall make an assignment
for the benefit of creditors; or any proceeding shall be instituted by
or against the Borrower or any Principal Subsidiary seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding
up, reorganization, arrangement, adjustment, protection, relief, or
composition of its debts under any law relating to bankruptcy,
insolvency, or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee,
or other similar official for it or for any substantial part of its
property and, in the case of a proceeding instituted against the
Borrower or any Principal Subsidiary, the Borrower or such Principal
Subsidiary shall consent thereto or such proceeding shall remain
undismissed or unstayed for a period of 90 days or any of the actions
sought in such proceeding (including without limitation the entry of an
order for relief against the Borrower or such Principal Subsidiary or
the appointment of a receiver, trustee, custodian or other similar
official for the Borrower or such Principal Subsidiary or any of its
property) shall occur; or the Borrower or any Principal Subsidiary
shall take any corporate or other action to authorize any of the
actions set forth above in this subsection (f); or
(g) Any judgments or orders for the payment of money in excess
of $10,000,000 (or aggregating more than $10,000,000 at any one time)
shall be rendered against the Borrower or its properties or any
Principal Subsidiary or its properties, and either (A) enforcement
proceedings shall have been commenced by any creditor upon such
judgment or order and shall not have been stayed or (B) there shall be
any period of 15 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise,
shall not be in effect; or
(h) Any material provision of any Loan Document shall at any
time for any reason cease to be valid and binding on the Borrower, or
shall be determined to be invalid or unenforceable by any court,
governmental agency or authority having jurisdiction over the Borrower,
or the Borrower shall deny that it has any further liability or
obligation under any Loan Document; or
(i) A Change of Control shall have occurred; or
46
(j) The Borrower shall cease to own at least 85% of the
outstanding common stock of any Principal Subsidiary, free and clear of
all Liens except for Liens permitted by Section 7.02(a) hereof; or
(k) Any legal restriction that is not in existence on the
Closing Date shall materially adversely affect the ability of any
Principal Subsidiary to pay dividends or make other distributions to
the Borrower.
SECTION 8.02. REMEDIES UPON EVENTS OF DEFAULT. Upon the occurrence and
during the continuance of any Event of Default, the Administrative Agent shall
at the request, or may with the consent, of the Lenders entitled to make such
request, upon notice to the Borrower (i) declare the obligation of each Lender
to make Advances to the Borrower to be terminated, whereupon such obligations of
the Lenders shall forthwith terminate, provided, that any such request or
consent pursuant to this clause (i) shall be made solely by Lenders having
Percentages in the aggregate of not less 66-2/3%; (ii) declare the Notes of the
Borrower, all interest thereon and all other amounts payable by the Borrower
under this Agreement and the other Loan Documents to be forthwith due and
payable, whereupon such Notes, all such 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, provided, that any such request or consent pursuant to this clause
(ii) shall be made solely by the Lenders holding at least 66-2/3% of the then
aggregate Outstanding Credits; provided, however, that if such Event of Default
is an Event of Default pursuant to subsection (f) of Section 8.01, then (A) the
obligation of each Lender to make Advances to the Borrower shall automatically
be terminated and (B) the Notes of the Borrower, all interest thereon and all
other amounts payable by the Borrower under this Agreement and the other Loan
Documents shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower.
ARTICLE IX
THE ADMINISTRATIVE AGENT
SECTION 9.01. AUTHORIZATION AND ACTION. Each Lender hereby appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto. As to any matters not expressly provided for by
the Loan Documents (including, without limitation, enforcement or collection
thereof), the Administrative 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 Majority Lenders, and such instructions shall be
binding upon all Lenders; provided, however, that the Administrative Agent shall
not be required to take any action which exposes the Administrative Agent to
personal liability or which is contrary to the Loan Documents or applicable law.
The Administrative Agent
47
agrees to deliver promptly to each Lender notice of each notice given to it by
the Borrower pursuant to the terms of this Agreement.
SECTION 9.02. ADMINISTRATIVE AGENT'S RELIANCE, ETC. Neither the
Administrative Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it or them under
or in connection with any Loan Document, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of the
foregoing, the Administrative Agent: (i) may treat the payee of any Note as the
holder thereof until the Administrative Agent receives and accepts a Lender
Assignment entered into by the Lender which is the payee of such Note, as
assignor, and an assignee, as provided in Section 10.07; (ii) may consult with
legal counsel (including counsel for the Borrower), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (iii) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations made in or in connection with any Loan
Document; (iv) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of any
Loan Document on the part of the Borrower to be performed or observed, or to
inspect any property (including the books and records) of the Borrower; (v)
shall not be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of any Loan Document
or any other instrument or document furnished pursuant hereto; and (vi) shall
incur no liability under or in respect of any Loan Document by acting upon any
notice, consent, certificate or other instrument or writing (which may be by
facsimile) believed by it to be genuine and signed or sent by the proper party
or parties.
SECTION 9.03. CIBC AND ITS AFFILIATES. With respect to its Commitment
and the Note issued to it, CIBC shall have the same rights and powers under the
Loan Documents as any other Lender and may exercise the same as though it were
not the Administrative Agent, and the term "Lender" or "Lenders" shall, unless
otherwise expressly indicated, include CIBC in its individual capacity. CIBC and
its Affiliates may accept deposits from, lend money to, act as trustee under
indentures of, and generally engage in any kind of business with, the Borrower,
any of its Subsidiaries and any Person who may do business with or own
securities of the Borrower or any such Subsidiary, all as if CIBC were not the
Administrative Agent and without any duty to account therefore to the Lenders.
SECTION 9.04. LENDER CREDIT DECISION. Each Lender acknowledges that it
has, independently and without reliance upon the Administrative Agent or any
other Lender and based on the Financial Statements and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
SECTION 9.05. INDEMNIFICATION. The Lenders agree to indemnify the
Administrative Agent (to the extent not reimbursed by the Borrower), ratably
according to the respective
48
principal amounts of the Notes then held by each of them (or if no Notes are at
the time outstanding, ratably according to the respective Commitments of the
Lenders; if any Notes or Commitments are held by the Borrower or any Affiliate
thereof, any ratable apportionment hereunder shall exclude the principal amount
of the Notes held by the Borrower or such Affiliate or their respective
Commitments (if any) hereunder), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against the Administrative Agent in its capacity as
such in any way relating to or arising out of any Loan Document or any action
taken or omitted by the Administrative Agent in its capacity as such under any
Loan Document, provided that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Administrative Agent's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Lender agrees to reimburse the Administrative Agent promptly upon demand for
such Lender's ratable share of any out-of-pocket expenses (including counsel
fees) incurred by the Administrative Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, the Loan Documents to the
extent that the Administrative Agent is entitled to reimbursement for such
expenses pursuant to Section 10.04 but is not reimbursed for such expenses by
the Borrower.
SECTION 9.06. SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent
may resign at any time by giving written notice thereof to the Lenders and the
Borrower, with any such resignation to become effective only upon the
appointment of a successor Administrative Agent pursuant to this Section 9.06.
Upon any such resignation, the Majority Lenders shall have the right to appoint
a successor Administrative Agent, which shall be a Lender or another commercial
bank or trust company reasonably acceptable to the Borrower organized or
licensed under the laws of the United States, or of any State thereof. If no
successor Administrative Agent shall have been so appointed by the Majority
Lenders, and shall have accepted such appointment, within 30 days after the
retiring Administrative Agent's giving of notice of resignation, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be Lender or shall be another commercial bank
or trust company organized or licensed under the laws of the United States or of
any State thereof reasonably acceptable to the Borrower. In addition to the
foregoing right of the Administrative Agent to resign, the Majority Lenders may
remove the Administrative Agent at any time, with or without cause, concurrently
with the appointment by the Majority Lenders of a successor Administrative
Agent. Upon the acceptance of any appointment as Administrative Agent hereunder
by a successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations under this Agreement.
After any retiring Administrative Agent's resignation or removal hereunder as
Administrative Agent, the provisions of this Article IX shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under the Loan Documents.
SECTION 9.07. OTHER AGENTS. Neither The Bank of New York, by virtue of
its designation as "Documentation Agent", nor Fleet National Bank, by virtue of
its designation as
49
"Syndication Agent", shall have any duties, liabilities, obligations or
responsibilities under this Agreement other than as a Lender hereunder.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. AMENDMENTS, ETC. No amendment or waiver of any provision
of any Loan Document, nor consent to any departure by the Borrower therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Majority Lenders, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given; provided,
however, that no amendment, waiver or consent shall, unless in writing and
signed by all the Lenders, do any of the following: (a) waive, modify or
eliminate any of the conditions specified in Article V, (b) increase the
Commitment of any Lender hereunder or increase the Commitments of the Lenders
that may be maintained hereunder or subject the Lenders to any additional
obligations, (c) reduce the principal of, or interest on, the Notes, any
Applicable Margin or any fees or other amounts payable hereunder, (d) postpone
any date fixed for any payment of principal of, or interest on, the Notes or any
fees or other amounts payable under the Loan Documents, (e) change the
percentage of the Commitments or of the aggregate unpaid principal amount of the
Notes, or the number of Lenders which shall be required for the Lenders or any
of them to take any action under the Loan Documents, (f) amend any Loan Document
in a manner intended to prefer one or more Lenders over any other Lenders, or
(g) amend this Section 10.01; provided, that no amendment, waiver or consent
shall, unless in writing and signed by the Administrative Agent, in addition to
the Lenders required above to take such action, affect the rights or duties of
the Administrative Agent under any Loan Document.
SECTION 10.02. NOTICES, ETC. Except as otherwise expressly provided
herein, all notices and other communications provided for under the Loan
Documents shall be in writing (including facsimile communication) and mailed,
sent by facsimile or hand delivered:
(i) if to the Borrower, to it in care of NUSCO at 107
Selden Street, Berlin, Connecticut 06037, Attention:
Assistant Treasurer, facsimile number: (860)
665-5457, confirm number: (860) 665-3258;
(ii) if to any Bank, at its Domestic Lending Office
specified opposite its name on Schedule I hereto;
(iii) if to any Lender other than a Bank, at its Domestic
Lending Office specified in the Lender Assignment
pursuant to which it became a Lender; and
50
(iv) if to the Administrative Agent, at its address at 425
Lexington Avenue, New York, New York 10017,
Attention: Agency Services, facsimile number: (212)
856-3691, confirm number: (212) 856-3763.
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other parties. All such notices and communications
shall, when mailed, sent by facsimile or hand delivered, be effective five days
after when deposited in the mails, or when sent by facsimile, or when delivered,
respectively, except that notices and communications to the Administrative Agent
pursuant to Article II, III, IV or IX shall not be effective until received by
the Administrative Agent. With respect to any telephone notice given or received
by the Administrative Agent pursuant to Section 3.03 hereof, the records of the
Administrative Agent shall be conclusive for all purposes.
SECTION 10.03. NO WAIVER OF REMEDIES. No failure on the part of the
Administrative Agent or any Lender to exercise, and no delay in exercising, any
right under any Loan Document shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 10.04. COSTS, EXPENSES AND INDEMNIFICATION.
(a) The Borrower agrees to pay when due, in accordance with the terms
hereof: (i) all costs and expenses of the Administrative Agent in connection
with the preparation, negotiation, execution and delivery of the Loan Documents,
the administration of the Loan Documents, and any proposed modification,
amendment, or consent relating thereto (including, in each case, the reasonable
fees and expenses of counsel to the Administrative Agent); and (ii) all costs
and expenses of the Administrative Agent and each Lender (including all fees and
expenses of counsel) in connection with the enforcement, whether through
negotiations, legal proceedings or otherwise, of the Loan Documents.
(b) The Borrower hereby agrees to indemnify and hold the Administrative
Agent and each Lender, and its officers, directors, employees, professional
advisors and affiliates (each, an "INDEMNIFIED PERSON") harmless from and
against any and all claims, damages, losses, liabilities, costs or expenses
(including reasonable attorney's fees and expenses, whether or not such
Indemnified Person is named as a party to any proceeding or investigation or is
otherwise subjected to judicial or legal process arising from any such
proceeding or investigation) which any of them may incur or which may be claimed
against any of them by any person or entity (except to the extent such claims,
damages, losses, liabilities, costs or expenses arise from the gross negligence
or willful misconduct of the Indemnified Person):
(i) by reason of or in connection with the execution, delivery
or performance of the Loan Documents or any transaction contemplated
thereby, or the use by the Borrower of the proceeds of any Advance;
(ii) in connection with or resulting from the utilization,
storage, disposal, treatment, generation, transportation, release or
ownership of any Hazardous Substance
51
(A) at, upon or under any property of the Borrower or any of its
Affiliates or (B) by or on behalf of the Borrower or any of its
Affiliates at any time and in any place; or
(iii) in connection with any documentary taxes, assessments or
charges made by any governmental authority by reason of the execution
and delivery of the Loan Documents.
(c) The Borrower's obligations under this Section 10.04 shall survive
the assignment by any Lender pursuant to Section 10.07 hereof and shall survive
as well the repayment of all amounts owing to the Lenders under the Loan
Documents and the termination of the Commitments. If and to the extent that the
obligations of the Borrower under this Section 10.04 are unenforceable for any
reason, the Borrower agrees to make the maximum contribution to the payment and
satisfaction thereof which is permissible under applicable law.
(d) The Borrower's obligations under this Section 10.04 are in addition
to and shall not be deemed to supersede its indemnification and similar
obligations set forth in that certain Commitment Letter dated as of February 15,
2000 between the Borrower and CIBC.
SECTION 10.05. RIGHT OF SET-OFF.
(a) Upon (i) the occurrence and during the continuance of any Event of
Default, and (ii) the making of the request or the granting of the consent
specified by Section 8.02 to authorize the Administrative Agent to declare the
Notes due and payable pursuant to the provisions of Section 8.02, each Lender is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by such Lender to or for the credit or the account of the
Borrower against any and all of the obligations of the Borrower now or hereafter
existing under the Loan Documents held by such Lender, irrespective of whether
or not such Lender shall have made any demand under the Loan Documents or such
Notes and although such obligations may be Unmatured. Each Lender agrees
promptly to notify the Borrower after any such set-off and application made by
such Lender, provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which such Lender may have.
(b) The Borrower agrees that it shall have no right of off-set,
deduction or counterclaim in respect of its obligations under the Loan
Documents, and that the obligations of the Lenders hereunder are several and not
joint. Nothing contained herein shall constitute a relinquishment or waiver of
the Borrower's rights to any independent claim that the Borrower may have
against the Administrative Agent or any Lender, but no Lender shall be liable
for the conduct of the Administrative Agent or any other Lender, and the
Administrative Agent shall not be liable for the conduct of the other or any
Lender.
SECTION 10.06. BINDING EFFECT. This Agreement shall become effective
when it shall have been executed by the Borrower and the Administrative Agent
and when the Administrative Agent shall have been notified by each Bank that
such Bank has executed it and
52
thereafter shall be binding upon and inure to the benefit of the Borrower, the
Administrative Agent and each Lender and their respective successors and
assigns, except that the Borrower shall not have the right to assign its rights
under the Loan Documents or any interest herein without the prior written
consent of the Lenders.
SECTION 10.07. ASSIGNMENTS AND PARTICIPATION.
(a) Each Lender may assign to one or more banks or other entities all
or a portion of its rights and obligations under the Loan Documents, including,
without limitation, all or a portion of its Commitment, the Advances owing to
it, and the Note or Notes held by it (with the prior written consent of the
Borrower and the Administrative Agent if the assignee thereunder is not then a
Lender or an Affiliate of a Lender, which consent shall not be unreasonably
withheld); provided, however, that (i) each such assignment shall be of a
constant, and not a varying, percentage of all of the assigning Lender's rights
and obligations under the Loan Documents, (ii) if the assignee thereunder is not
then a Lender or an Affiliate of a Lender, the amount of the Commitment, Advance
or Note being assigned pursuant to each such assignment shall in no event be
less than the lesser of the amount of the assigning Lender's Commitment and
$5,000,000, and (iii) the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording in the
Register, an assignment and acceptance in substantially the form of Exhibit
10.07 hereto (the "LENDER ASSIGNMENT"), together with any Note or Notes subject
to such assignment and a processing and recordation fee of $3,500. Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in each Lender Assignment, which effective date shall be at least five
Business Days after the execution thereof, (x) the assignee thereunder shall be
a party hereto and, to the extent that rights and obligations under the Loan
Documents have been assigned to it pursuant to such Lender Assignment, have the
rights and obligations of a Lender under the Loan Documents and (y) the Lender
assignor thereunder shall, to the extent that rights and obligations under the
Loan Documents have been assigned by it to an assignee pursuant to such Lender
Assignment, relinquish its rights and be released from its obligations under the
Loan Documents (and, in the case of a Lender Assignment covering all or the
remaining portion of an assigning Lender's rights and obligations under the Loan
Documents, such Lender shall cease to be a party to the Loan Documents);
provided, however, if an Event of Default shall have occurred and be continuing
a Lender may assign all or a portion of its rights and obligations without the
prior written consent of the Borrower but otherwise in accordance with this
Section.
(b) By executing and delivering a Lender Assignment, the Lender
assignor thereunder and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Lender Assignment, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Loan Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Loan Documents or any other instrument or document furnished
pursuant thereto; (ii) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
Borrower or the performance or observance by the Borrower of any of its
obligations under the Loan Documents or any other instrument or document
furnished pursuant thereto; (iii) such assignee confirms that it has received a
copy of the Loan Documents,
53
together with copies of the Financial Statements, or the latest financial
statements delivered by the Borrower to the Administrative Agent pursuant to
Section 7.04 hereof, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Lender Assignment; (iv) such assignee will, independently and without reliance
upon the Administrative Agent, such assigning Lender or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents; (v) such assignee appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers under the Loan Documents as are delegated to the Administrative
Agent by the terms thereof, together with such powers as are reasonably
incidental thereto; and (vi) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.
(c) The Administrative Agent shall maintain at its address referred to
in Section 10.02 a copy of each Lender Assignment delivered to and accepted by
it and a register for the recordation of the names and addresses of the Lenders
and the Commitment of, and principal amount of the Advances owing to, each
Lender from time to time (the "REGISTER"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Register as a Lender hereunder for all purposes of the
Loan Documents. The Register shall be available for inspection by the Borrower
or any Lender at any reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of a Lender Assignment executed by an assigning
Lender and an assignee, together with any Note or Notes subject to such
assignment, the Administrative Agent shall, if such Lender Assignment has been
completed and is in substantially the form of Exhibit 10.07 hereto, (i) accept
such Lender Assignment, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Borrower. Within five
Business Days after its receipt of such notice, the Borrower, at its own
expense, shall execute and deliver to the Administrative Agent in exchange for
the surrendered Note or Notes a new Note or Notes to the order of such assignee
in an amount equal to the Commitment and/or Advances assumed by it pursuant to
such Lender Assignment and, if the assigning Lender has retained a Commitment
and/or Advances hereunder, a new Note or Notes to the order of the assigning
Lender in an amount equal to the Commitment and/or Advances retained by it
hereunder. Such new Note or Notes shall be in an aggregate principal amount
equal to the aggregate principal amount of such surrendered Note or Notes, shall
be dated the effective date of such Lender Assignment and shall otherwise be in
substantially the form of Exhibit 1.01A hereto.
(e) Each Lender may sell Participations to one or more banks or other
entities in or to all or a portion of its rights and obligations under the Loan
Documents (including, without limitation, all or a portion of its Commitment,
the Advances owing to it or the Note or Notes held by it); provided, however,
that (i) such Lender's obligations under the Loan Documents (including, without
limitation, its Commitment hereunder) shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations, (iii) such Lender shall remain the holder of any such Note
for all purposes of the Loan Documents, (iv) the Borrower, the Administrative
Agent and the other Lenders shall continue to deal solely
54
and directly with such Lender in connection with such Lender's rights and
obligations under the Loan Documents, and (v) the holder of any such
participation, other than an Affiliate of such Lender, shall not be entitled to
require such Lender to take or omit to take any action under the Loan Documents,
except action (A) reducing the principal of, or interest on, the Notes, any
Applicable Margin or any fees or other amounts payable under the Loan Documents,
or (B) postponing any date fixed for any payment of principal of, or interest
on, the Notes or any fees or other amounts payable under the Loan Documents.
(f) Any Lender may, in connection with any assignment or participation
or proposed assignment or proposed participation pursuant to this Section 10.07,
disclose to the assignee or participant or proposed assignee or proposed
participant, any information relating to the Borrower furnished to such Lender
by or on behalf of the Borrower; provided that, prior to any such disclosure,
the assignee or participant or proposed assignee or participant shall agree, in
accordance with the terms of Section 10.08, to preserve the confidentiality of
any Confidential Information received by it from such Lender.
(g) If any Lender shall have delivered a notice to the Administrative
Agent described in Section 4.03(a), (b), (c) or (f) hereof, or shall become a
non-performing Lender under Section 3.03(b) hereof, and if and so long as such
Lender shall not have withdrawn such notice or corrected such non-performance in
accordance with Section 3.03(b), the Borrower may demand that such Lender
assign, in accordance with Section 10.07 hereof, to one or more assignees
designated by the Borrower or the Administrative Agent (and reasonably
acceptable to the other), all (but not less than all) of such Lender's
Commitment, Advances, participatory and other rights and obligations under the
Loan Documents; provided that any such demand by the Borrower during the
continuance of an Event of Default or an Unmatured Default shall be ineffective
without the consent of the Majority Lenders. If, within 30 days following any
such demand by the Borrower, any such assignee so designated shall fail to
tender such assignment on terms reasonably satisfactory to the Borrower and the
Borrower and the Administrative Agent shall have failed to designate any such
assignee, then such demand by the Borrower shall become ineffective, it being
understood for purposes of this provision that such assignment shall be
conclusively deemed to be on terms reasonably satisfactory to such Lender, and
such Lender shall be compelled to tender such assignment forthwith, if (i) such
assignee (A) shall agree to such assignment in substantially the form of the
Lender Assignment and (B) shall tender payment to such Lender in an amount equal
to the full outstanding dollar amount accrued in favor of such Lender hereunder
(as computed in accordance with the records of the Administrative Agent) and
(ii) in the event the Borrower demanded such assignment, the Borrower shall
tender payment to the Administrative Agent of the processing and recording fee
specified in Section 10.07(a) for such assignment.
(h) Anything in this Section 10.07 to the contrary notwithstanding, any
Lender may assign and pledge all or any portion of its Commitment and the
Advances owing to it to any Federal Reserve Bank (and its transferees) as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal Reserve
Bank. No such assignment shall release the assigning Lender from its obligations
hereunder.
55
SECTION 10.08. CONFIDENTIALITY. In connection with the negotiation and
administration of the Loan Documents, the Borrower has furnished or caused to
have furnished and will from time to time furnish or cause to be furnished to
the Administrative Agent and the Lenders (each, a "RECIPIENT") written
information which when delivered to the Recipient will be deemed to be
confidential (such information, other than any such information which (i) was
publicly available, or otherwise known to the Recipient, at the time of
disclosure, (ii) subsequently becomes publicly available other than through any
act or omission by the Recipient or (iii) otherwise subsequently becomes known
to the Recipient other than through a Person whom the Recipient knows to be
acting in violation of his or its obligations to the Borrower, being hereinafter
referred to as "CONFIDENTIAL INFORMATION"). The Recipient will not knowingly
disclose any such Confidential Information to any third party (other than to
those Persons who have a confidential relationship with the Recipient), and will
take all reasonable steps to restrict access to such information in a manner
designed to maintain the confidential nature of such information, in each case
until such time as the same ceases to be Confidential Information or as the
Borrower may otherwise instruct. It is understood, however, that the foregoing
will not restrict the Recipient's ability to freely exchange such Confidential
Information with prospective participants in or assignees of the Recipient's
position herein, but the Recipient's ability to so exchange Confidential
Information shall be conditioned upon any such prospective participant's
entering into an understanding as to confidentiality similar to this provision.
It is further understood that the foregoing will not prohibit the disclosure of
any or all Confidential Information if and to the extent that such disclosure
may be required (i) by a regulatory agency or otherwise in connection with an
examination of the Recipient's records by appropriate authorities, (ii) pursuant
to court order, subpoena or other legal process or (iii) otherwise, as required
by law; in the event of any required disclosure under clause (ii) or (iii),
above, the Recipient agrees to use reasonable efforts to inform the Borrower as
promptly as practicable unless the Lender is prohibited from doing so by court
order, subpoena or other legal process.
SECTION 10.09. WAIVER OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE
AGENT AND EACH OF THE LENDERS HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THE
LOAN DOCUMENTS, OR ANY OTHER INSTRUMENT OR DOCUMENT DELIVERED HEREUNDER OR
THEREUNDER.
SECTION 10.10. GOVERNING LAW. THE LOAN DOCUMENTS SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. The
Borrower, each of the Lenders and the Administrative Agent: (i) irrevocably
submits to the jurisdiction of any New York State Court or Federal court sitting
in New York City in any action arising out of or relating to the Loan Documents,
(ii) agrees that all claims in such action may be decided in such court, (iii)
waives, to the fullest extent it may effectively do so, the defense of an
inconvenient forum and (iv) consents to the service of process by mail. A final
judgment in any such action shall be conclusive and may be enforced in other
jurisdictions. Nothing herein shall affect the right of any party to serve legal
process in any manner permitted by law or affect its right to bring any action
in any other court.
SECTION 10.11. RELATION OF THE PARTIES; NO BENEFICIARY. No term,
provision or requirement, whether express or implied, of any Loan Document, or
actions taken or to be taken by any party thereunder, shall be construed to
create a partnership, association, or joint venture
56
between such parties or any of them. No term or provision of any Loan Document
shall be construed to confer a benefit upon, or grant a right or privilege to,
any Person other than the parties hereto.
SECTION 10.12. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
SECTION 10.13. LIMITATION OF LIABILITY. No shareholder or trustee of NU
shall be held to any liability whatever for the payment of any sum of money or
for damages or otherwise under any Loan Document, and such Loan Documents shall
not be enforceable against any such trustee in their or his or her individual
capacities or capacity and such Loan Documents shall be enforceable against the
trustees of NU only as such, and every person, firm, association, trust or
corporation having any claim or demand arising under such Loan Documents and
relating to NU, its shareholders or trustees shall look solely to the trust
estate of NU for the payment or satisfaction thereof.
S-1
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.
NORTHEAST UTILITIES
By: /s/ RANDY A. SHOOP
-----------------------------------
Name: Randy A. Shoop
Title: Assistant Treasurer-Finance
57
S-2
Commitment: $66,500,000 CANADIAN IMPERIAL BANK OF
COMMERCE, NEW YORK AGENCY, as
Bank and as Administrative Agent
By: /s/ DENIS P. O'MEARA
-----------------------------------
Name: Denis P. O'Meara
Title: Executive Director
CIBC World Markets Corp. As Agent
S-3
Commitment: $66,500,000 BARCLAYS BANK PLC
By /s/ SYDNEY G. DENNIS
------------------------------------
Name: Sydney G. Dennis
Title: Director
S-4
Commitment: $66,500,000 THE BANK OF NEW YORK, as
Bank and as Documentation Agent
By: /s/ JOHN W. HALL
-----------------------------------
Name: John W. Hall
Title: Vice President
S-5
FLEET NATIONAL BANK,
as Syndication Agent
Commitment: $66,500,000 FLEET NATIONAL BANK,
as Trust Administrator for
LongLane Master Trust IV, as Bank
By: /s/
-----------------------------------
Name:
Title:
58
SCHEDULE I
APPLICABLE LENDING OFFICES
NAME OF BANK DOMESTIC LENDING OFFICE EURODOLLAR LENDING OFFICE
------------ ----------------------- -------------------------
Barclays Bank PLC 75 Wall Street, 11th Floor 75 Wall Street, 11th Floor
New York, NY 10265 New York, NY 10265
The Bank of New York One Wall Street One Wall Street
New York, NY 10286 New York, NY 10286
Fleet National Bank, 100 Federal Street 100 Federal Street
as Trust Administrator for Boston, MA 02110 Boston, MA 02110
LongLane Master Trust IV
Canadian Imperial Bank of 425 Lexington Avenue 425 Lexington Avenue
Commerce New York, NY 10017 New York, NY 10017
59
SCHEDULE II
PENDING ACTIONS
None.
60
EXHIBIT 1.01A
FORM OF
CONTRACT NOTE
$ New York, New York
March 1, 2000
FOR VALUE RECEIVED, the undersigned, NORTHEAST UTILITIES, an
unincorporated voluntary business association organized under the laws of the
Commonwealth of Massachusetts (the "BORROWER"), hereby promises to pay to the
order of [___________] (the "LENDER"), on the Termination Date (as defined in
the Credit Agreement referred to below), the lesser of the principal sum of
[_____________________] DOLLARS ($___________) and the aggregate unpaid
principal amount of all Contract Advances made by the Lender to the Borrower
pursuant to the Credit Agreement, in lawful money of the United States of
America in immediately available funds, and to pay interest on such principal
amount from time to time outstanding, in like funds, at a rate or rates per
annum and payable with respect to such periods and on such dates as determined
pursuant to the Credit Agreement.
The Borrower promises to pay interest, on demand, on any overdue
principal and overdue interest from their due dates at a rate or rates
determined as set forth in the Credit Agreement.
The Borrower hereby waives diligence, presentment, demand, protest and
notice of any kind whatsoever. The nonexercise by the holder of any of its
rights hereunder in any particular instance shall not constitute a waiver
thereof in that or any subsequent instance.
All borrowings evidenced by this Contract Note and all payments and
prepayments of the principal hereof and interest hereon and the respective dates
thereof shall be endorsed by the holder hereof on the schedule attached hereto
and made a part hereof, or on a continuation thereof which shall be attached
hereto and made a part hereof, or otherwise recorded by such holder in its
internal records; provided, however, that any failure of the holder hereof to
make such a notation or any error in such notation shall not in any manner
affect the obligation of the
61
Borrower to make payments of principal and interest in accordance with the terms
of this Contract Note and the Credit Agreement.
This Contract Note is one of the Contract Notes referred to in the Term
Loan Agreement, dated as of March 1, 2000 among the Borrower, the Lenders party
thereto, Canadian Imperial Bank of Commerce, New York Agency, as Administrative
Agent, The Bank of New York, as Documentation Agent, and Fleet National Bank, as
Syndication Agent (as amended from time to time in accordance with its terms,
the "CREDIT AGREEMENT") and is subject to the terms and conditions contained in
the Credit Agreement and is entitled to the benefits thereof. The Credit
Agreement, among other things, contains provisions for the acceleration of the
maturity hereof upon the happening of certain events, for prepayment of the
principal hereof prior to the maturity thereof and for the amendment or waiver
of certain provisions of the Credit Agreement, all upon the terms and conditions
therein specified. This Contract Note shall be construed in accordance with and
governed by the laws of the State of New York and any applicable laws of the
United States of America.
No shareholder or trustee of the Borrower shall be held to any
liability whatever for the payment of any sum of money or for damages or
otherwise under this Contract Note, and this Contract Note shall not be
enforceable against any such trustee in their or his or her individual
capacities or capacity; this Contract Note shall be enforceable against the
trustees of the Borrower only as such, and every, person, firm, association,
trust or corporation having any claim or demand arising under this Contract Note
relating to the Borrower, its shareholders or trustees shall look solely to the
trust estate of the Borrower for payment or satisfaction thereof.
NORTHEAST UTILITIES
By /s/
------------------------------------
Name:
Title:
GRID NOTE SCHEDULE
- --------------------------------------------------------------------------------
DATE OF AMOUNT OF INTEREST INTEREST NUMBER INTEREST AMOUNT NOTED
ADVANCE PRINCIPAL RATE PERIOD OF DAYS DUE PAID BY
PAID DATE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
62
EXHIBIT 3.01 (NU)
FORM OF NOTICE OF CONTRACT BORROWING
[Date]1 1 The
Notice of Contract Borrowing must be received by the Administrative Agent (i) in
the case of a proposed Contract Borrowing to consist of Eurodollar Rate
Advances, by hand or facsimile not later than 11:00 a.m. (New York City time),
three Business Days prior to the Funding Date and (ii) in the case of a proposed
Contract Borrowing to consist of Base Rate Advances, by hand or facsimile not
later than 11:00 a.m. (New York City time), on the Funding Date.
Canadian Imperial Bank of Commerce,
New York Agency
as Administrative
Agent for the Lenders party to
the Credit Agreement referred to below
425 Lexington Avenue
New York, NY 10017
Attention: ____________________
Ladies and Gentlemen:
The undersigned, Northeast Utilities (the "BORROWER"), refers to the
Term Loan Agreement, dated as of March 1, 2000 (as amended from time to time
in accordance with its terms, the "CREDIT AGREEMENT"), among the Borrower,
the Lenders party thereto, Canadian Imperial Bank of Commerce, New York
Agency, as Administrative Agent, The Bank of New York, as Documentation
Agent, and Fleet National Bank, as Syndication Agent. Capitalized terms used
herein and not otherwise defined herein shall have the meanings assigned to
such terms in the Credit Agreement. The undersigned hereby gives you notice
pursuant to Section 3.01 of the Credit Agreement that it requests a Contract
Borrowing under the Credit Agreement, and in that connection sets forth below
the terms on which such Borrowing is requested to be made:
(A) Date of proposed Contract Borrowing _____________________
(which is a Business Day)
(B) Principal Amount _____________________ of Contract Borrowing Not
less than $5,000,000 and in integral multiples of $1,000,000.
(C) Type of Advance Eurodollar Rate Advance or Base Rate Advance.
----------------------
(D) Initial Interest Period _____________________
Upon acceptance of any or all of the Contract Advances requested in
this Notice of Contract Borrowing, the undersigned shall be deemed to have
represented and warranted that the conditions precedent to each Contract
Advance applicable to it specified in Section 5.02(a) of the Credit Agreement
have been satisfied.
Very truly yours,
NORTHEAST UTILITIES
By________________________________
Name:
Title:
EXHIBIT 10.07
ASSIGNMENT AND ACCEPTANCE
Dated ,
Reference is made to the Term Loan Agreement, dated as of March 1,
2000 (as amended from time to time in accordance with its terms, the "CREDIT
AGREEMENT"), among Northeast Utilities (the "BORROWER"), the Lenders party
thereto, Canadian Imperial Bank of Commerce, New York Agency, as
Administrative Agent, The Bank of New York, as Documentation Agent, and Fleet
National Bank, as Syndication Agent. Capitalized terms used herein and not
defined shall have the meaning assigned to such terms in the Credit
Agreement. Pursuant to the Credit Agreement, ________________ (the
"ASSIGNOR") has committed to make advances ("ADVANCES") to the Borrower,
which Advances are evidenced by the Contract Note issued by the Borrower to
the Assignor.
The Assignor and (the "ASSIGNEE") agree as follows:
-----------------
1. The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor,
without recourse to the Assignor, a portion of the Assignor's rights and
obligations under the Loan Documents as of the Effective Date (as defined
below) which represents the percentage interest specified on Schedule 1 of
all outstanding rights and obligations of the Lenders under the Loan
Documents (the "ASSIGNED INTEREST"), including, without limitation, such
percentage interest in the Commitment as in effect on the Effective Date, the
Advances outstanding on the Effective Date and the Notes. After giving effect
to such sale and assignment, the Assignee's Commitment will be as set forth
in Section 2 of Schedule 1. The effective date of this sale and assignment
shall be the date specified on Schedule 1 hereto, which shall be no fewer
than five Business Days following the date first set forth above (the
"EFFECTIVE DATE").
2. On the Effective Date, the Assignee will pay to the Assignor, in
same day funds, at such address and account as the Assignor shall advise the
Assignee, the principal amount of the Advances outstanding under the Loan
Documents which are being assigned hereunder, and the sale and assignment
contemplated hereby shall thereupon become effective. From and after the
Effective Date, the Assignor agrees that the Assignee shall be entitled to
all rights, powers and privileges of the Assignor under the Loan Documents to
the extent of the Assigned Interest, including without limitation (i) the
right to receive all payments in respect of the Assigned Interest for the
period from and after the Effective Date, whether on account of principal,
interest, fees, indemnities in respect of claims arising after the Effective
Date (subject to Section 10.04 of the Credit Agreement), increased costs,
additional amounts or otherwise; (ii) the right to vote and to instruct the
Administrative Agent under the Credit Agreement based on the Assigned
Interest; (iii) the right to set-off and to appropriate and apply deposits of
the Borrower as set forth in the Credit Agreement; and (iv) the right to
receive notices, requests, demands and other communications. The Assignor
agrees that it will promptly remit to the Assignee any amount received by it
in respect of the Assigned Interest (whether from the Borrower, the
Administrative Agent or otherwise) in the same funds in which such amount is
received by the Assignor.
3. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) other than as provided
in this Assignment and Acceptance, makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Loan Documents or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Loan Documents or any other instrument or document furnished
pursuant thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations under the
Loan Documents or any other instrument or document furnished pursuant
thereto; (iv) makes no other representation or warranty with respect to the
Borrower, the Loan Documents or any other instrument or document furnished
pursuant thereto, except as expressly set forth in clause (i) of this Section
3; and (v) attaches its Notes which are subject to the assignment being made
hereby and requests that the Administrative Agent obtain new Notes from the
Borrower in accordance with the terms of subsection 10.07(d) of the Credit
Agreement.
4. The Assignee (i) confirms that it has received a copy of the
Credit Agreement, together with copies of the Financial Statements, or the
latest financial statements delivered by the Borrower to the Administrative
Agent pursuant to Section 7.04 of the Credit Agreement, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (ii)
agrees that it will, independently and without reliance upon the
Administrative Agent, the Assignor or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue
to make its own credit decisions in taking or not taking action under the
Loan Documents; (iii) appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers under the
Loan Documents as are delegated to the Administrative Agent by the terms
thereof, together with such powers as are reasonably incidental thereto; (iv)
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender; (v) specifies as its Domestic Lending Office
(and address for notices) and Eurodollar Lending Office the offices set forth
beneath its name on the signature pages hereof; and (vi) attaches the forms
prescribed by the Internal Revenue Service of the United States certifying as
to the Assignee's status for purposes of determining exemption from United
States withholding taxes with respect to all payments to be made to the
Assignee under the Loan Documents or such other documents as are necessary to
indicate that all such payments are subject to such rates at a rate reduced
by an applicable tax treaty.
5. Following the execution of this Assignment and Acceptance, it
will be delivered to the Administrative Agent for acceptance and recording by
the Administrative Agent. Upon such acceptance and recording and receipt of
any consent of the Borrower and the Administrative Agent required pursuant to
Section 10.07(a) of the Credit Agreement, as of the Effective Date, the
Assignee shall be a party to the Credit Agreement and, to the extent provided
in this Assignment and Acceptance, have the rights and obligations of a
Lender thereunder and under the Notes and the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement and the Notes.
6. Upon such acceptance, recording and consent, from and after the
Effective Date, the Administrative Agent shall make all payments under the
Credit Agreement and the Notes in respect of the interest assigned hereby
(including, without limitation, all payments of principal, interest and fees
with respect thereto) to the Assignee. The Assignor and Assignee shall make
all appropriate adjustments in payments under the Credit Agreement and the
Notes for periods prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of Schedule 1 to this Assignment and Acceptance by
telecopier shall be effective as delivery of a manually executed counterpart
of this Assignment and Acceptance.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
and Acceptance to be executed by their respective officers thereunto duly
authorized, as of the date first above written, such execution being made on
Schedule 1 hereto.
2
Schedule 1
to
Lender Assignment
Dated ,
SECTION 1.
---------
(a) Total Credit Agreement Commitments:$________
(b) Percentage Interest: Specify percentage to no more than 8
decimal points.
---------%
(c) Amount of Assigned Share: $________
SECTION 2.
---------
Assignee's Commitment: $________
SECTION 3.
---------
Effective Date: Such date shall be at least 5 Business Days after
the execution of this Lender Assignment. __________, ____
[NAME OF ASSIGNOR], as Assignor
By ______________________________
Name:
Title:
[NAME OF ASSIGNEE], as Assignee
By ______________________________
Name:
Title:
Domestic Lending Office (and address for
notices):
[Address]
Eurodollar Lending Office:
[Address]
Accepted and Consented to this day
----
of :
------------ -
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent
By ____________________________
Name:
Title:
Consented tothis day
----
of :
------------
NORTHEAST UTILITIES
By:
-----------------------------------------
Name:
Title: