Exhibit 10(a)
Execution Version
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CREDIT AGREEMENT
dated as of
March 25, 2004
among
TUCSON ELECTRIC POWER COMPANY,
The Lenders Party Hereto,
The Issuing Banks Party Hereto,
JPMORGAN CHASE BANK
CREDIT SUISSE FIRST BOSTON and
LEHMAN BROTHERS INC.,
as Co-Administrative Agents,
THE BANK OF NEW YORK and,
UNION BANK OF CALIFORNIA, N.A.,
as Documentation Agents,
and
CREDIT SUISSE FIRST BOSTON,
as Paying Agent
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JPMORGAN CHASE BANK
CREDIT SUISSE FIRST BOSTON and
LEHMAN BROTHERS INC.,
as Co-Lead Arrangers and Joint Bookrunners
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TABLE OF CONTENTS
ARTICLE I Definitions..........................................................1
SECTION 1.01. Defined Terms...........................................1
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SECTION 1.02. Classification of Loans and Borrowings.................19
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SECTION 1.03. Terms Generally........................................19
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SECTION 1.04. Accounting Terms; GAAP.................................19
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SECTION 1.05. Pro Forma Calculations.................................20
ARTICLE II The Credits........................................................20
SECTION 2.01. Revolving Commitments..................................20
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SECTION 2.02. Loans and Borrowings...................................20
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SECTION 2.03. Requests for Revolving Borrowings......................21
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SECTION 2.04. Letters of Credit......................................22
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SECTION 2.05. Credit-Linked Deposit Account..........................29
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SECTION 2.06. Funding of Borrowings..................................30
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SECTION 2.07. Interest Elections.....................................31
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SECTION 2.08. Termination and Reduction of Commitments; Return of
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Tranche B Credit-Linked Deposits.................32
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SECTION 2.09. Repayment of Loans; Evidence of Debt...................33
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SECTION 2.10. Prepayment of Loans....................................34
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SECTION 2.11. Fees 35
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SECTION 2.12. Interest...............................................36
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SECTION 2.13. Alternate Rate of Interest.............................37
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SECTION 2.14. Increased Costs........................................37
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SECTION 2.15. Break Funding Payments.................................39
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SECTION 2.16. Taxes 39
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SECTION 2.17. Payments Generally; Pro Rata Treatment; Sharing of
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Set-offs.........................................41
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SECTION 2.18. Mitigation Obligations; Replacement of Lenders.........42
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SECTION 2.19. Certain Regulatory Events..............................43
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ARTICLE III Representations and Warranties....................................44
SECTION 3.01. Organization; Powers...................................44
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SECTION 3.02. Authorization; Enforceability..........................44
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SECTION 3.03. Governmental Approvals; No Conflicts...................44
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SECTION 3.04. Financial Condition; No Material Adverse Change;
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Secured Indebtedness.............................45
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SECTION 3.05. Properties.............................................45
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SECTION 3.06. Litigation and Environmental Matters...................46
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SECTION 3.07. Compliance with Laws and Agreements....................46
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SECTION 3.08. Federal Regulations....................................46
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SECTION 3.09. Investment and Holding Company Status..................46
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SECTION 3.10. Taxes..................................................47
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SECTION 3.11. ERISA..................................................47
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SECTION 3.12. Security Documents.....................................47
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SECTION 3.13. Disclosure.............................................48
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SECTION 3.14. Solvency...............................................48
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SECTION 3.15. Labor Matters..........................................48
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SECTION 3.16. Anti-Terrorism Laws....................................49
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ARTICLE IV Conditions.........................................................50
SECTION 4.01. Effective Date.........................................50
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SECTION 4.02. Each Credit Event......................................52
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ARTICLE V Affirmative Covenants...............................................53
SECTION 5.01. Financial Statements and Other Information.............53
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SECTION 5.02. Notices of Material Events.............................55
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SECTION 5.03. Existence; Conduct of Business.........................56
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SECTION 5.04. Payment of Obligations.................................56
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SECTION 5.05. Maintenance of Properties; Insurance...................56
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SECTION 5.06. Books and Records; Inspection Rights...................56
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SECTION 5.07. Compliance with Laws...................................57
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SECTION 5.08. Use of Proceeds and Letters of Credit..................57
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SECTION 5.09. Environmental Laws.....................................57
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SECTION 5.10. Further Assurances.....................................57
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SECTION 5.11. Reference Ratings......................................58
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SECTION 5.12. Acquisition Closing Date...............................58
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ARTICLE VI Negative Covenants.................................................59
SECTION 6.01. Indebtedness...........................................59
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SECTION 6.02. Liens 59
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SECTION 6.03. Fundamental Changes....................................60
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SECTION 6.04. Sale of Assets.........................................61
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SECTION 6.05. Restricted Payments....................................62
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SECTION 6.06. Consolidated Tangible Net Worth........................63
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SECTION 6.07. Cash Coverage Ratio....................................63
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SECTION 6.08. Leverage Test..........................................64
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SECTION 6.09. Amendments to Documents................................64
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SECTION 6.10. Sale Leaseback Transactions............................65
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SECTION 6.11. Release of Collateral under the Second Indenture.......65
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SECTION 6.12. Transactions with Affiliates...........................65
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SECTION 6.13. Limitation on Hedge Agreements.........................65
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SECTION 6.14. Acquisition Transactions...............................65
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ARTICLE VII Events of Default.................................................66
ARTICLE VIII The Paying Agent.................................................68
ARTICLE IX Miscellaneous......................................................71
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SECTION 9.01. Notices................................................71
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SECTION 9.02. Waivers; Amendments....................................72
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SECTION 9.03. Expenses; Indemnity; Damage Waiver.....................73
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SECTION 9.04. Successors and Assigns.................................74
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SECTION 9.05. Survival...............................................78
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SECTION 9.06. Counterparts; Integration; Effectiveness...............78
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SECTION 9.07. Severability...........................................79
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SECTION 9.08. Right of Setoff........................................79
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SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of
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Process..........................................79
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SECTION 9.10. WAIVER OF JURY TRIAL...................................80
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SECTION 9.11. Headings...............................................80
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SECTION 9.12. Confidentiality........................................80
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SECTION 9.13. Interest Rate Limitation...............................81
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This CREDIT AGREEMENT dated as of March 25, 2004, among TUCSON
ELECTRIC POWER COMPANY, the LENDERS party hereto, the ISSUING BANKS party
hereto, JPMORGAN CHASE BANK, CREDIT SUISSE FIRST BOSTON, acting through its
Cayman Island Branch, and LEHMAN BROTHERS INC., as Co-Administrative Agents, THE
BANK OF NEW YORK, as Documentation Agent, and CREDIT SUISSE FIRST BOSTON, acting
through its Cayman Island Branch, as Paying Agent.
The parties hereto agree as follows:
ARTICLE I
Definitions
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SECTION 1.01 Defined Terms. As used in this Agreement, the following terms
have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate.
"ACC" means the Arizona Corporation Commission.
"Acquisition" means the indirect acquisition of all the
capital stock of UniSource Energy by Saguaro Utility Group pursuant to the
UniSource Merger Agreement.
"Acquisition Closing Date" means the date of the consummation
of the Acquisitions Transactions described in clauses (a), (b) and (c) in the
definition thereof in accordance with the provisions of the UniSource Merger
Agreement.
"Acquisition Transactions" means (a) the Acquisition, (b) the
repayment on the Acquisition Closing Date of all Indebtedness of UniSource
Energy owed to the Borrower, (c) the capital contribution made by UniSource
Energy to the Borrower on the Acquisition Closing Date, (d) the reduction in of
the Total Tranche B Credit-Linked Deposit pursuant to Section 2.08(d), and (e)
the repayment of Indebtedness pursuant to Section 5.12(c).
"Adjusted Consolidated Capital Expenditures" means, for any
fiscal period, Consolidated Capital Expenditures for such period minus any
amount of such Consolidated Capital Expenditures related to the construction of
the Borrower's Nogales transmission line.
"Adjusted LIBO Rate" means, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum equal to (a) the
LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Questionnaire" means an Administrative
Questionnaire in a form supplied by the Paying Agent.
"Affiliate" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
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"Agents" means the Co-Administrative Agents, the Documentation
Agent and the Paying Agent.
"Agreement" means this Credit Agreement, dated as of March 25,
2004, by and among the Borrower, the Lenders party hereto, the Issuing Banks
party hereto, Co-Administrative Agents, the Documentation Agent and the Paying
Agent.
"Alternate Base Rate" means, for any day, a rate per annum
equal to the greatest of (a) the Prime Rate in effect on such day, and (b) the
Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in
the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
"Amortization Date" has the meaning assigned to such term in
Section 2.19.
"Anti-Terrorism Laws" has the meaning provided in Section
3.16(a).
"Applicable Facing Fee" means (a) for the period from the
Effective Date through the Flexibility Date, 0.250%, and (b) thereafter 0.125%.
"Applicable Percentage" means (a) with respect to any
Revolving Lender, the percentage of the total Revolving Commitments represented
by such Lender's Revolving Commitment, and (b) with respect to any Tranche B
Lender, the percentage of the Total Tranche B Credit-Linked Deposit represented
by such Lender's Tranche B Credit-Linked Deposit. If the Revolving Commitments
have terminated or expired, the Applicable Percentages shall be determined based
upon the Revolving Commitments most recently in effect, giving effect to any
assignments. If the Tranche B Credit-Linked Deposits shall have been applied in
full to reimburse Tranche B LC Disbursements, the Applicable Percentages of the
Tranche B Lenders shall be determined based upon the Tranche B Credit-Linked
Deposits most recently in effect, giving effect to any assignments.
"Applicable Rate" means, for any day, (a) for each Tranche B
Credit-Linked Deposit, a rate per annum equal to 2.25% and (b) for each Type of
Revolving Loan, the applicable rate per annum set forth below under the caption
"ABR Spread" or "Eurodollar Spread" based upon the ratio (the "Leverage Ratio")
of (i) Consolidated Total Indebtedness at the end of the fiscal quarter ending
on or immediately prior to such date to (ii) Consolidated EBITDA for the
twelve-month period ending at the end of the fiscal quarter ending on or
immediately prior to such date:
<table>
<caption>
- ------------------------------------------ ----------------- -----------------
ABR Eurodollar
Leverage Ratio: Spread Spread
- ------------------------------------------ ----------------- -----------------
Category 1
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Greater than 4.00 to 1.00 1.25% 2.25%
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Category 2
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Greater than 3.50 to 1.00 but less than
or equal to 4.00 to 1.00 1.00% 2.00%
- ------------------------------------------ ----------------- -----------------
</table>
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<table>
<caption>
- ------------------------------------------ ----------------- -----------------
ABR Eurodollar
Leverage Ratio: Spread Spread
- ------------------------------------------ ----------------- -----------------
Category 3
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Greater than 3.00 to 1.00 but less than
or equal to 3.50 to 1.00 0.75% 1.75%
- ------------------------------------------ ----------------- -----------------
Category 4
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Less than or equal to 3.00 to 1.00 0.50% 1.50%
- ------------------------------------------ ----------------- -----------------
</table>
Each change in the Applicable Rate resulting from a change in
the Leverage Ratio shall be effective with respect to all Revolving Loans,
Revolving Commitments and Revolving Letters of Credit outstanding on or after
the date of delivery to the Paying Agent of the financial statements and
certificates required by Section 5.01(a) or (b) and Section 5.01(c),
respectively, indicating such change until the date immediately preceding the
next date of delivery of such financial statements and certificates indicating
another such change. Notwithstanding the foregoing, until the Borrower shall
have delivered the financial statements and certificates required by Section
5.01(b) and Section 5.01(c), respectively, for the period ended on December 31,
2004, the Leverage Ratio shall be deemed to be in Category 1 for purposes of
determining the Applicable Rate. In addition, at any time during which the
Borrower has failed to deliver the financial statements and certificates
required by Section 5.01(a) or (b) and Section 5.01(c), respectively, the
Leverage Ratio shall be deemed to be in Category 1 for purposes of determining
the Applicable Rate.
"Approved Fund" means, with respect to any Lender that is a
fund that invests in commercial loans, any other fund that invests in commercial
loans and is managed or advised by the same investment advisor as such Lender or
by an Affiliate of such investment advisor.
"Arrangers" means J.P. Morgan Securities Inc., Credit Suisse
First Boston, and Lehman Brothers Inc., as Co-Lead Arrangers and Joint
Bookrunners for the credit facilities established by this Agreement.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 9.04), and accepted by the Paying Agent, in the
form of Exhibit A or any other form approved by the Paying Agent.
"Board" means the Board of Governors of the Federal Reserve
System of the United States of America.
"Bond Delivery Agreement" means the Bond Delivery Agreement
between the Borrower and the Paying Agent, substantially in the form of Exhibit
B.
"Bonds" means the First Mortgage Bonds and the Second Mortgage
Bonds.
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"Borrower" means Tucson Electric Power Company, an Arizona
corporation.
"Borrowing" means Revolving Loans of the same Type, made,
converted or continued on the same date and, in the case of Eurodollar Loans, as
to which a single Interest Period is in effect.
"Borrowing Request" means a request by the Borrower for a
Revolving Borrowing in accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to remain closed; provided that, when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.
"Capital Lease Investment" of any Person means the aggregate
outstanding capitalized amount of Capital Lease Obligations of the Borrower and
the Consolidated Subsidiaries that are owned by such Person and in respect of
which such Person has the right to receive all future payments to be made.
"Capital Lease Obligations" of any Person means the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Capital Stock" means any and all shares, interests,
participations or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person (other than
a corporation) and any and all warrants, rights or options to purchase any of
the foregoing.
"Change in Law" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender or
any Issuing Bank (or, for purposes of Section 2.14(b), by any lending office of
such Lender or by such Lender's or such Issuing Bank's holding company, if any)
with any request, guideline or directive (whether or not having the force of
law) of any Governmental Authority made or issued after the date of this
Agreement.
"Change in Control" means the occurrence of any of the
following events: (a) other than 121 shares of common stock of the Borrower
owned by independent third parties other than UniSource Energy on the Effective
Date, UniSource Energy shall cease to own and control, of record and
beneficially, directly, Capital Stock of the Borrower representing 100% of the
aggregate ordinary voting power of the Borrower, free and clear of all Liens;
(b) (i) any "person" or "group" (as such terms are used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")),
excluding the Permitted Investors, shall become, or obtain rights (whether by
means or warrants, options or otherwise) to become,
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the "beneficial owner" (as defined in Rules 13(d)-3 and 13(d)-5 under the
Exchange Act), directly or indirectly, of (A) prior to the Acquisition Closing
Date, Capital Stock of UniSource Energy representing more than 35% of the
aggregate ordinary voting power of UniSource Energy and (B) on and after the
Acquisition Closing Date, a percentage of the aggregate ordinary voting power
represented by the issued and outstanding Capital Stock of UniSource Energy that
is greater than the percentage beneficially owned, in the aggregate, directly or
indirectly, by the Permitted Investors or (ii) on and after the Acquisition
Closing Date, the Permitted Investors shall fail to own directly or indirectly,
beneficially and of record, Capital Stock of UniSource Energy representing at
least 35% of the aggregate ordinary voting power of UniSource Energy (other than
as a result of one or more widely distributed offerings of common stock of
UniSource Energy, in each case whether by UniSource Energy or by any Permitted
Investor), unless, in the case of either clause (i) or (ii), the Permitted
Investors have, at such time, the right or ability by voting power, contract or
otherwise to elect or designate for election a majority of the board of
directors of UniSource Energy; or (c) the board of directors of UniSource Energy
shall cease to consist of a majority of Continuing Directors.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Collateral" means the Collateral Mortgage Bonds and any and
all "Collateral", as defined in any applicable Security Document.
"Collateral Mortgage Bonds" means Second Mortgage Bonds,
Collateral Series D, substantially in the form attached to the Fifth
Supplemental Indenture.
"Commitment" means, with respect to each Lender, each of such
Lender's Revolving Commitment and Tranche B Credit-Linked Deposit.
"Consolidated Capital Expenditures" means, for any fiscal
period, the aggregate of all expenditures by the Borrower and the Consolidated
Subsidiaries for such period that, in accordance with GAAP, are or should be
included in "construction expenditures" or similar items for additions to
property, plant or equipment reflected in the statement of cash flows for the
Borrower and the Consolidated Subsidiaries, as determined on a consolidated
basis in accordance with GAAP.
"Consolidated EBITDA" means, for any fiscal period, with
respect to the Borrower and the Consolidated Subsidiaries, Consolidated Net
Income for such period plus, to the extent deducted in computing such
Consolidated Net Income, without duplication, the sum of (a) income tax expense,
(b) interest expense, (c) depreciation and amortization expense, (d) any
extraordinary or non-recurring losses and (e) other noncash items reducing
Consolidated Net Income, minus, to the extent added in computing such
Consolidated Net Income, without duplication, the sum of (i) interest income,
(ii) any extraordinary or non-recurring gains and (iii) other noncash items
increasing Consolidated Net Income, all as determined on a consolidated basis in
accordance with GAAP.
"Consolidated Interest Expense" means, for any fiscal period,
the aggregate of all payments by the Borrower and the Consolidated Subsidiaries
for such period that, in accordance with GAAP, are or should be included in
"interest paid, net of amounts capitalized" and "capital
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lease interest paid" reflected in the statement of cash flows for the Borrower
and the Consolidated Subsidiaries, less the amount of capital lease interest
income paid to the Borrower or any Consolidated Subsidiary for such period that
is not reflected in Consolidated EBITDA for such period, all as determined on a
consolidated basis in accordance with GAAP.
"Consolidated Net Income" means, for any fiscal period, net
income of the Borrower and the Consolidated Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP.
"Consolidated Subsidiary" means, at any date, each Subsidiary
the accounts of which would be consolidated with those of the Borrower in the
Borrower's consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date.
"Consolidated Tangible Net Worth" means, as of the last day of
any fiscal quarter, (a) common stock equity of the Borrower as of such day minus
(b) the aggregate amount of all intangible assets (other than intangible assets
eligible for cost recovery through regulatory rates) on the consolidated balance
sheet of the Borrower and the Consolidated Subsidiaries as of such day, all as
determined on a consolidated basis in accordance with GAAP.
"Consolidated Total Indebtedness" means, as of the last day of
any fiscal quarter, (a) the sum for the Borrower and the Consolidated
Subsidiaries as of such day of (i) the aggregate outstanding principal amount of
the Loans and LC Disbursements, (ii) the aggregate outstanding principal amount
of other Indebtedness for borrowed money (including Guarantees thereof), (iii)
the principal amount of all obligations in respect of Hedging Agreements of the
Borrower and the Consolidated Subsidiaries (computed as set forth in the
penultimate sentence of the definition of "Material Indebtedness") and (iv) the
aggregate outstanding capitalized amount of Capital Lease Obligations, minus (b)
the aggregate outstanding capitalized amount of the Capital Lease Investments of
the Borrower and the Consolidated Subsidiaries as of such day, all as determined
on a consolidated basis in accordance with GAAP.
"Continuing Directors": the directors of UniSource Energy on
the Effective Date and each other director of UniSource Energy, if, in each
case, (a) such other director's nomination for election to the board of
directors of UniSource Energy is recommended by at least a majority of the then
Continuing Directors; (b) such other director receives the vote of the Permitted
Investors or Persons nominated by the Permitted Investors in his or her election
by the shareholders of UniSource Energy; or (c) such other director has been a
member of the board of directors of UniSource Energy for at least the preceding
twelve months.
"Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. "Controlling" and "Controlled" have meanings correlative thereto.
"Control Investment Affiliate" means, as to any Person, any
other Person that (a) directly or indirectly, is in Control of, is Controlled
by, or is under common Control with,
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such Person and (b) is organized by such Person primarily for the purpose of
making equity or debt investments in one or more companies.
"Credit Exposure" means, with respect to any Lender at any
time, the sum of such Lender's Revolving Credit Exposure and its Tranche B LC
Exposure at such time.
"Default" means any event or condition which constitutes an
Event of Default or which upon notice, lapse of time or both would, unless cured
or waived, become an Event of Default.
"Disclosure Documents" means the Borrower's Annual Report on
Form 10-K for the fiscal year ended December 31, 2003, as filed with the
Securities and Exchange Commission.
"Documentation Agent" means The Bank of New York in its
capacity as documentation agent for the Lenders.
"dollars" or "$" refers to lawful money of the United States
of America.
"Effective Date" means the date on which the conditions
specified in Section 4.01 are satisfied (or waived in accordance with Section
9.02).
"Environmental Laws" means all laws, rules, regulations,
codes, ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary
directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous Materials into
the environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of
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ERISA), whether or not waived; (c) the filing pursuant to Section 412(d) of the
Code or Section 303(d) of ERISA of an application for a waiver of the minimum
funding standard with respect to any Plan; (d) the incurrence by the Borrower or
any of its ERISA Affiliates of any liability under Title IV of ERISA with
respect to the termination of any Plan; (e) the receipt by the Borrower or any
ERISA Affiliate from the PBGC of any notice of its intent to institute
proceedings to terminate any Plan or to appoint a trustee to administer any Plan
or the receipt by the Borrower or any ERISA Affiliate from a plan administrator
of any notice relating to the administrator's intent to terminate any Plan; (f)
the incurrence by the Borrower or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from the Borrower or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in
Article VII.
"Excluded Taxes" means, with respect to the Paying Agent, any
Lender, any Issuing Bank or any other recipient of any payment to be made by or
on account of any obligation of the Borrower hereunder or, for purposes of
Section 2.16 only, by or on account of any obligation of the Paying Agent
pursuant to Section 2.05(b), (a) income or franchise taxes imposed on (or
measured by) its net income by the United States of America, or by the
jurisdiction under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable lending office is located, (b) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any other
jurisdiction in which such recipient is located and (c) in the case of a Foreign
Lender (other than an assignee pursuant to a request by the Borrower under
Section 2.18(b)), any withholding tax that is imposed by the United States of
America on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement (or designates a new lending office) or
is attributable to such Foreign Lender's failure to comply with Section 2.16(e).
"Executive Order" has the meaning provided in Section 3.16(a).
"Existing Agreement" means, the Credit Agreement dated as of
November 14, 2002, among the Borrower, the lenders party thereto, the issuing
banks party thereto, The Bank of New York and Union Bank of California, as
co-syndication agents, Credit Suisse First Boston, as documentation agent and
Toronto Dominion (Texas), Inc., as administrative agent.
"Existing Letters of Credit" means the Letters of Credit set
forth on Schedule 2.04.
"Fair Value" means, with respect to any assets or property
owned by the Borrower or any of the Consolidated Subsidiaries, the fair market
value thereof as determined
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from time to time by the Board of Directors (or a duly constituted committee
thereof) of the Borrower or such Consolidated Subsidiary in good faith.
"Federal Funds Effective Rate" means, for any day, the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day that is a Business Day,
the average of the quotations for such day for such transactions received by the
Paying Agent from three Federal funds brokers of recognized standing selected by
it.
"Fifth Supplemental Indenture" means Supplemental Indenture
No. 5 under the Second Indenture, substantially in the form of Exhibit D.
"Financial Officer" means the chief financial officer,
principal accounting officer, treasurer or controller of the Borrower.
"First Indenture" means the Indenture dated as of April 1,
1941, of the Tucson Gas, Electric Light and Power Company, a predecessor to the
Borrower, to The Chase National Bank of the City of New York, as trustee, a
predecessor to JPMorgan Chase Bank, as amended, supplemented or otherwise
modified from time to time.
"First Mortgage Bonds" means the Borrower's First Mortgage
Bonds issued under the First Indenture.
"Flexibility Date" means the earlier of (i) the Acquisition
Closing Date and (ii) the date after the Effective Date that the Borrower has
the ability under all Requirements of Law (including pursuant to orders of the
ACC) to distribute 100% of its income to its shareholders.
"Foreign Lender" means any Lender that is organized under the
laws of a jurisdiction other than the United States of America.
"GAAP" means generally accepted accounting principles in the
United States of America.
"Governmental Authority" means the government of the United
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or
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services for the purpose of assuring the owner of such Indebtedness or other
obligation of the payment thereof, (c) to maintain working capital, equity
capital or any other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Indebtedness or other
obligation or (d) as an account party in respect of any letter of credit or
letter of guaranty issued to support such Indebtedness or obligation; provided,
that the term Guarantee shall not include endorsements for collection or deposit
in the ordinary course of business.
"Hazardous Materials" means all explosive or radioactive
substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or asbestos
containing materials, polychlorinated biphenyls, radon gas, infectious or
medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.
"Hedging Agreement" means any interest rate protection
agreement, foreign currency exchange agreement, commodity price protection
agreement or other interest or currency exchange rate or commodity price hedging
arrangement.
"Indebtedness" of any Person means, without duplication, (a)
all obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current
accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty and (j) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Indentures" means the First Indenture and the Second
Indenture.
"Information Memorandum" means the Confidential Information
Memorandum dated January 2004 relating to the Borrower and the Transactions.
"Interest Election Request" means a request by the Borrower to
convert or continue a Revolving Borrowing in accordance with Section 2.07.
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"Interest Payment Date" means (a) with respect to any ABR
Loan, the last Business Day of each March, June, September and December,
commencing with June 30, 2004, and (b) with respect to any Eurodollar Loan, the
last day of the Interest Period applicable to the Borrowing of which such Loan
is a part and, in the case of a Eurodollar Borrowing with an Interest Period of
more than three months' duration, each day prior to the last day of such
Interest Period that occurs at intervals of three months' duration after the
first day of such Interest Period.
"Interest Period" means (a) with respect to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing (which initially
shall be the date on which such Borrowing is made and thereafter shall be the
effective date of the most recent conversion or continuation of such Borrowing)
and ending on the numerically corresponding day in the calendar month that is
one, two, three or six months thereafter, as the Borrower may elect, and (b)
with respect to the Tranche B Credit Linked Deposits, (x) during the period
prior to June 30, 2004, each period commencing on the date the Tranche B
Credit-Linked Deposits are initially funded by the Tranche B Lenders or on the
last day of the preceding Interest Period applicable thereto, as the case may
be, and ending on the numerically corresponding day in the calendar month that
is one month thereafter or, if earlier, June 30, 2004 and (y) at any time after
June 30, 2004, each period commencing on June 30, 2004 or on the last day of the
preceding Interest Period applicable thereto, as the case may be, and ending on
the numerically corresponding day in the calendar month that is three months
thereafter; provided, that (i) a single Interest Period shall at all times apply
to all the Tranche B Credit-Linked Deposits, (ii) if any Interest Period would
end on a day other than a Business Day, such Interest Period shall be extended
to the next succeeding Business Day unless such next succeeding Business Day
would fall in the next calendar month, in which case such Interest Period shall
end on the next preceding Business Day and (iii) any Interest Period that
commences on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the last calendar month of such
Interest Period) shall end on the last Business Day of the last calendar month
of such Interest Period.
"Issuing Bank" means each Lender executing this Agreement as
an Issuing Bank, in its capacity as issuer of Letters of Credit hereunder, and
each of their successors in such capacity as provided in Section 2.04(j).
"LC Disbursement" means either a Revolving LC Disbursement or
a Tranche B LC Disbursement. "LC Disbursements" means the Revolving LC
Disbursements and the Tranche B LC Disbursements.
"Lenders" means the Revolving Lenders and the Tranche B
Lenders whose names appear on the signature pages hereof and any other Person
that shall have become a party hereto pursuant to an Assignment and Acceptance,
other than any such Person that ceases to be a party hereto pursuant to an
Assignment and Acceptance.
"Letter of Credit" means any letter of credit issued pursuant
to this Agreement.
"LIBO Rate" means, with respect to any Eurodollar Borrowing or
the Tranche B Credit-Linked Deposits for any Interest Period, the rate per annum
determined by the Paying
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Agent at approximately 11:00 a.m., London time, on the
date that is two Business Days prior to the commencement of such Interest Period
by reference to the British Bankers' Association Interest Settlement Rates for
deposits in dollars (as set forth by the Bloomberg Information Service or any
successor thereto or any other service selected by the Paying Agent which has
been nominated by the British Bankers' Association as an authorized information
vendor for the purpose of displaying such rates) for a period equal to such
Interest Period; provided that, to the extent that an interest rate is not
ascertainable pursuant to the foregoing provisions of this definition, the "LIBO
Rate" shall be the interest rate per annum determined by the Paying Agent to be
the average of the rates per annum at which deposits in dollars are offered for
such relevant Interest Period to major banks in the London interbank market in
London, England by the Paying Agent at approximately 11:00 a.m., London time, on
the date that is two Business Days prior to the beginning of such Interest
Period
"Lien" means, with respect to any asset, (a) any mortgage,
deed of trust, lien, pledge, hypothecation, encumbrance, charge or security
interest in, on or of such asset, (b) the interest of a vendor or a lessor under
any conditional sale agreement, capital lease or title retention agreement (or
any financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Lien of the Second Indenture" has the meaning assigned to the
phrases "Lien of this Indenture" and "lien hereof" in the Second Indenture.
"Loan Documents" means this Agreement, the Bond Delivery
Agreement, the Fifth Supplemental Indenture, the Collateral Mortgage Bonds, the
Revenue Bond Pledge Agreements and the other Security Documents.
"Loans" means the loans made by the Lenders to the Borrower
pursuant to this Agreement.
"Management Group" means any existing director of UniSource
Energy and any executive officer of UniSource Energy and its subsidiaries.
"Material Adverse Effect" means a material adverse effect on
(a) the financial condition, results of operations, business or prospects of the
Borrower and the Subsidiaries taken as a whole, (b) the ability of the Borrower
to perform any of its obligations under any Loan Document or the Second
Indenture or (c) the rights of or benefits available to the Lenders under any
Loan Document or the Second Indenture.
"Material Indebtedness" means Indebtedness (other than the
Loans and Letters of Credit), or obligations in respect of one or more Hedging
Agreements, of any one or more of the Borrower and the Significant Subsidiaries
in an aggregate principal amount exceeding $15,000,000. For purposes of
determining Material Indebtedness, the "principal amount" of the obligations of
the Borrower or any Subsidiary in respect of any Hedging Agreement at any time
shall be the maximum aggregate amount (giving effect to any netting agreements)
that the Borrower or such Subsidiary would be required to pay if such Hedging
Agreement were
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terminated at such time. "Material Indebtedness" shall not
include at any time any Indebtedness that is non-recourse to the Borrower and
its Subsidiaries.
"Moody's" means Moody's Investors Service, Inc., and its
successors.
"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Obligations" means (a)(i) the principal of and premium, if
any, and interest (including interest accruing during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding) on the Loans and LC
Disbursements, when and as due, whether at maturity, by acceleration, upon one
or more dates set for prepayment or otherwise, (ii) each other payment required
to be made by the Borrower under this Agreement in respect of any Letter of
Credit, when and as due, and (iii) all other monetary obligations, including
fees, costs, expenses and indemnities, whether primary, secondary, direct,
contingent, fixed or otherwise (including monetary obligations incurred during
the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding), of
the Borrower under this Agreement and the other Loan Documents; and (b) the due
and punctual performance of all other covenants, agreements, obligations and
liabilities of the Borrower under or pursuant to this Agreement and the other
Loan Documents.
"Other Taxes" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made under any Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.
"Paying Agent" means Credit Suisse First Boston, in its
capacity as paying agent for the Lenders hereunder.
"PBGC" means the Pension Benefit Guaranty Corporation referred
to and defined in ERISA and any successor entity performing similar functions.
"Permitted Investors" means the collective reference to the
Sponsors, their Control Investment Affiliates and the Management Group.
"Person" means any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Prime Rate" means the rate of interest per annum adopted from
time to time by the Paying Agent at its principal office in New York City as its
prime commercial lending rate;
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each change in the Prime Rate shall be effective from and including the date
such change is announced as being effective.
"Proposed Modifications" has the meaning assigned to such term
in Section 2.19.
"Rating Agencies" means either of Moody's or S&P.
"Reference Ratings" means the ratings of the credit facilities
established by this Agreement by the Rating Agencies.
"Register" has the meaning set forth in Section 9.04.
"Regulatory Event" means any change in applicable law or any
adoption of or change in any rule, regulation or order of the ACC or any other
Governmental Authority having jurisdiction over the Borrower as a result of
which the Borrower is or will be required (a) to sell or transfer all or a
substantial portion of its generating assets (other than to a wholly owned
subsidiary of the Borrower if such assets remain subject at all times after such
sale or transfer to the Lien of the Second Indenture) or (b) to purchase in open
market transactions any substantial portion of its power requirements (other
than requirements that cannot be satisfied by the Borrower's own generating
assets).
"Related Parties" means, with respect to any specified Person,
such Person's Affiliates and the respective directors, trustees, officers,
employees, agents and advisors of such Person and such Person's Affiliates.
"Required Lenders" means, at any time, Lenders having Credit
Exposures and unused Revolving Commitments representing a majority of the sum of
the total Credit Exposures and the total unused Revolving Commitments at such
time.
"Requirement of Law" means, as to any Person, the Certificate
of Incorporation and By-Laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or assets or to which such
Person or any of its property or assets is subject.
"Restricted Payment" means any dividend or other distribution
(whether in cash, securities or other property) with respect to any shares of
any class of capital stock of the Borrower, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such shares of capital stock of the Borrower or any option,
warrant or other right to acquire any such shares of capital stock of the
Borrower.
"Revenue Bond Indenture" means, with respect to any Letter of
Credit, the Revenue Bond Indenture, as amended and supplemented from time to
time, in respect of the Revenue Bonds referenced on Schedule 2.04 for such
Letter of Credit.
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"Revenue Bond Loan Agreement" means, with respect to any
Letter of Credit, the Revenue Bond Loan Agreement in respect of the Revenue
Bonds referenced on Schedule 2.04 for such Letter of Credit, as applicable.
"Revenue Bonds" means, with respect to any Letter of Credit,
the Revenue Bonds referenced on Schedule 2.04 for such Letter of Credit.
"Revenue Bond Pledge Agreement" means, individually, any
pledge agreement in substantially the form of Exhibit C and otherwise
satisfactory to the applicable Issuing Bank and the Paying Agent. "Revenue Bond
Pledge Agreements" means, collectively, all Revenue Bond Pledge Agreements.
"Revenue Bond Trustee" means, with respect to any Letter of
Credit, the trustee and/or agent, as applicable, named in such Letter of
Credit's Revenue Bond Indenture, and any successor or assign thereof.
"Revolving Availability Period" means the period from and
including the Effective Date to but excluding the earlier of the Revolving
Maturity Date and the date of the termination of the Revolving Commitments.
"Revolving Commitment" means, with respect to each Revolving
Lender, the commitment of such Lender to make Revolving Loans hereunder,
expressed as an amount representing the maximum aggregate permitted amount of
such Lender's Revolving Credit Exposure hereunder, as such commitment may be (a)
reduced from time to time pursuant to Section 2.08 or 2.19 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 9.04. The initial amount of each Revolving Lender's
Revolving Commitment is set forth on Schedule 2.01, or in the Assignment and
Acceptance pursuant to which such Revolving Lender shall have assumed its
Revolving Commitment, as applicable. The initial aggregate amount of the
Revolving Commitments is $60,000,000.
"Revolving Credit Exposure" means, at any time, the sum of (a)
the aggregate outstanding principal amount of Revolving Loans at such time plus
(b) the Revolving LC Exposure at such time minus (c) the aggregate amount of
cash collateral held by the Paying Agent pursuant to Section 2.19 as security
for the Borrower's reimbursement obligations in respect of Revolving Letters of
Credit. The Revolving Credit Exposure of any Revolving Lender at any time shall
be its Applicable Percentage of the total Revolving Credit Exposure at such
time.
"Revolving LC Disbursement" means a payment made by an Issuing
Bank pursuant to a Revolving Letter of Credit.
"Revolving LC Exposure" means, at any time, the sum of (a) the
aggregate undrawn amount of all outstanding Revolving Letters of Credit at such
time plus (b) the aggregate amount of all Revolving LC Disbursements that have
not yet been reimbursed by or on behalf of the Borrower at such time. The
Revolving LC Exposure of any Revolving Lender at any time shall be its
Applicable Percentage of the total Revolving LC Exposure at such time.
"Revolving Lender" means a Lender having a Revolving
Commitment.
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"Revolving Letters of Credit" means the Revolving Letters of
Credit issued pursuant to Section 2.04(a)(i).
"Revolving Loan" means a Loan made pursuant to Sections 2.01
and 2.03.
"Revolving Maturity Date" means June 30, 2009.
"Saguaro Utility Group" means Saguaro Utility Group I Corp.,
an Arizona corporation formed by Saguaro Utility Group L.P. an Arizona limited
partnership, of which Sage Mountain, L.L.C., an Arizona limited liability
company, is the general partner.
"Sale Leaseback" means any transaction or series of related
transactions pursuant to which the Borrower or any of its Subsidiaries sells,
transfers or otherwise disposes of any property, real or personal, whether now
owned or hereafter acquired, and thereafter rents or leases such property or
other property that it intends to use for substantially the same purpose or
purposes as the property being sold, transferred or disposed of.
"San Carlos" means San Carlos Resources Inc., an Arizona
corporation.
"S&P" means Standard & Poor's Ratings Services, a division of
the McGraw-Hill Companies, Inc., and its successors.
"Second Indenture" means the Indenture of Mortgage and Deed of
Trust dated as of December 1, 1992, of the Borrower to The Bank of New York, as
trustee, as amended, supplemented or otherwise modified from time to time.
"Second Mortgage Bonds" means the Borrower's Second Mortgage
Bonds issued under the Second Indenture.
"Security Documents" means the Second Indenture, the Fifth
Supplemental Indenture, the Collateral Mortgage Bonds, the Bond Delivery
Agreement, the Revenue Bond Pledge Agreements, and each other security agreement
or other instrument or document executed and delivered pursuant to Section 5.10
or pursuant to any of the foregoing documents to secure any of the Obligations.
"Significant Subsidiary" means (a) San Carlos, (b) any
Subsidiary that directly or indirectly owns or Controls any other Significant
Subsidiary and (c) any other Subsidiary of the Borrower whose direct or indirect
proportionate share of consolidated total assets as of the end of the most
recent fiscal quarter for which financial statements have been delivered
pursuant to Section 5.01 was greater than or equal to 10% of the consolidated
total assets as of such date of the Borrower and the Consolidated Subsidiaries,
taken as a whole. For purposes of making the determinations required by this
definition, revenues and assets of foreign Subsidiaries shall be converted into
dollars at the rates used in preparing the consolidated balance sheet of the
Borrower included in the applicable financial statements.
"Solvent" means, with respect to any Person, as of any date of
determination, (a) the amount of the "present fair saleable value" of the assets
of such Person will, as of such date, exceed the amount of all "liabilities of
such Person, contingent or otherwise", as of such
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date, as such quoted terms are determined in accordance with applicable federal
and state laws governing determinations of the insolvency of debtors, (b) the
present fair saleable value of the assets of such Person will, as of such date,
be greater than the amount that will be required to pay the liability of such
Person on its debts as such debts become absolute and matured, (c) such Person
will not have, as of such date, an unreasonably small amount of capital with
which to conduct its business, and (d) such Person will be able to pay its debts
as they mature. For purposes of this definition, (i) "debt" means liability on a
"claim", and (ii) "claim" means any (x) right to payment, whether or not such a
right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured
or (y) right to an equitable remedy for breach of performance if such breach
gives rise to a right to payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured or unmatured,
disputed, undisputed, secured or unsecured.
"Sponsors" mean, collectively, Kohlberg Kravis Roberts & Co.,
L.P., JP Morgan Partners, LLC and Wachovia Capital Partners.
"Statutory Reserve Rate" means a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board with respect to the Adjusted LIBO Rate,
for eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board). Such reserve percentages shall include those imposed
pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute
eurocurrency funding and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to any Lender under such Regulation D or any comparable
regulation. The Statutory Reserve Rate shall be adjusted automatically on and as
of the effective date of any change in any reserve percentage.
"subsidiary" means, with respect to any Person (the "parent")
at any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership,
association or other entity (a) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power or, in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held, or (b) that is, as of
such date, otherwise Controlled, by the parent or one or more subsidiaries of
the parent.
"Subsidiary" means any subsidiary of the Borrower.
"Taxes" means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Total Tranche B Credit-Linked Deposit" means, at any time,
the sum of all the Tranche B Lenders' Tranche B Credit-Linked Deposits, as the
same may be reduced from time to time pursuant to Section 2.08.
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"Tranche B Credit-Linked Deposit" means, as to each Tranche B
Lender, the cash deposit made by such Lender pursuant to Section 2.04, as such
deposit may be (a) reduced from time to time pursuant to Section 2.08 and (b)
reduced or increased from time to time pursuant to assignments by or to such
Lender pursuant to Section 9.04. The initial amount of each Tranche B Lender's
Tranche B Credit-Linked Deposit is set forth on Schedule 2.01, or in the
Assignment and Acceptance pursuant to which such Lender shall have acquired its
Tranche B Credit-Linked Deposit, as applicable. The aggregate amount of the
Tranche B Credit-Linked Deposits on the Effective Date is $340,587,047.
"Tranche B Credit-Linked Deposit Account" means, collectively,
one or more operating and/or investment accounts of, and established by, the
Paying Agent under its sole and exclusive control and maintained at the office
of the Paying Agent located at Eleven Madison Avenue, New York, New York 10010
(or such other office as the Paying Agent shall from time to time designate with
notice to the Borrower), in any such case that shall be used for the purposes
set forth in Article II.
"Tranche B LC Disbursement" means a payment made by an Issuing
Bank pursuant to a Tranche B Letter of Credit.
"Tranche B LC Exposure" means, at any time, the sum of (a) the
aggregate undrawn amount of all outstanding Tranche B Letters of Credit at such
time plus (b) the aggregate amount of all Tranche B LC Disbursements that have
not yet been reimbursed by or on behalf of the Borrower at such time. The
Tranche B LC Exposure of any Tranche B Lender at any time shall be its
Applicable Percentage of the total Tranche B LC Exposure at such time.
"Tranche B Lender" means a Lender having a Tranche B
Credit-Linked Deposit.
"Tranche B Letters of Credit" means, the Tranche B Letters of
Credit issued pursuant to Section 2.04(a).
"Tranche B Maturity Date" means June 30, 2009.
"Transactions" means the execution, delivery and performance
by the Borrower of this Agreement and the other Loan Documents, the borrowing of
Loans, the use of the proceeds thereof, the issuance of Letters of Credit and
the issuance of the Collateral Mortgage Bonds to the Paying Agent under the
Fifth Supplemental Indenture and the Bond Delivery Agreement.
"Type", when used in reference to any Loan or Borrowing,
refers to whether the rate of interest on such Loan, or on the Loans comprising
such Borrowing, is determined by reference to the Adjusted LIBO Rate or the
Alternate Base Rate.
"UniSource Energy" means UniSource Energy Corporation, an
Arizona corporation.
"UniSource Merger Agreement" means that certain Agreement and
Plan of Merger, dated as of November 21, 2003, between UniSource Energy and
Saguaro Acquisition Corp., a Delaware corporation.
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"Utility Business" means the business of producing,
developing, generating, transmitting, distributing, selling or supplying
electrical energy for any purpose, or any business incidental thereto or
necessary in connection therewith, or any business reasonably desirable in
connection therewith which the ACC or other utility regulatory body shall have
authorized the Borrower to enter.
"Withdrawal Liability" means liability to a Multiemployer Plan
as a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02 Classification of Loans and Borrowings.
For purposes of this Agreement, Loans may be classified and referred to by Type
(e.g., a "Eurodollar Loan"). Borrowings also may be classified and referred to
by Type (e.g., a "Eurodollar Borrowing").
SECTION 1.03 Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
SECTION 1.04 Accounting Terms; GAAP. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Paying Agent that the Borrower requests an
amendment to any provision hereof (including the effects of the application or
discontinuance of the application of accounting for the effects of regulation to
all or any portion of the Borrower's operations) to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Paying Agent notifies the Borrower
that the Required Lenders request an amendment to any provision hereof for such
purpose), regardless of whether any such notice is given before or after such
change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
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SECTION 1.05 Pro Forma Calculations. All pro forma
calculations permitted or required to be made by the Borrower or any Subsidiary
pursuant to this Agreement shall (a) include only those adjustments that would
be permitted or required by Regulation S-X under the Securities Act of 1933, as
amended, and (b) be certified to by a Financial Officer of the Borrower as
having been prepared in good faith based upon assumptions believed to be
reasonable.
ARTICLE II
The Credits
SECTION 2.01 Revolving Commitments. Subject to the terms
and conditions set forth herein, each Revolving Lender agrees to make Revolving
Loans to the Borrower from time to time during the Revolving Availability Period
in an aggregate principal amount that will not result in (a) such Revolving
Lender's Revolving Credit Exposure exceeding its Revolving Commitment or (b) the
aggregate Revolving Credit Exposures exceeding the aggregate Revolving
Commitments. Within the foregoing limits and subject to the terms and conditions
set forth herein, the Borrower may borrow, prepay and reborrow Revolving Loans.
SECTION 2.02 Loans and Borrowings.
(a) Each Revolving Loan shall be made as part of a Borrowing
consisting of Revolving Loans made by the Revolving Lenders ratably in
accordance with their respective Revolving Commitments. The failure of any
Revolving Lender to make any Revolving Loan required to be made by it shall not
relieve any other Revolving Lender of its obligations hereunder; provided that
the Revolving Commitments of the Revolving Lenders are several and no Revolving
Lender shall be responsible for any other Revolving Lender's failure to make
Revolving Loans as required.
(b) Subject to Section 2.13, each Revolving Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request
in accordance herewith. Each Revolving Lender at its option may make any
Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such
Revolving Lender to make such Loan; provided that any exercise of such option
shall not affect the obligation of the Borrower to repay such Loan in accordance
with the terms of this Agreement.
(c) At the commencement of each Interest Period for any
Eurodollar Revolving Borrowing, such Borrowing shall be in an aggregate amount
that is not less than $5,000,000. At the time that each ABR Revolving Borrowing
is made, such Borrowing shall be in an aggregate amount that is not less than
$5,000,000 in increments of $1,000,000; provided that an ABR Revolving Borrowing
may be in an aggregate amount that is equal to the entire unused balance of the
total Revolving Commitments or that is required to finance the reimbursement of
a Revolving LC Disbursement as contemplated by Section 2.04(f)(i)(A). Borrowings
of more than one Type may be outstanding at the same time; provided that there
shall not at any time be more than a total of five Eurodollar Revolving
Borrowings outstanding.
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(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or continue,
any Eurodollar Revolving Borrowing if the Interest Period requested with respect
thereto would end after the Revolving Maturity Date.
SECTION 2.03 Requests for Revolving Borrowings. To
request a Revolving Borrowing, the Borrower shall notify the Paying Agent of
such request by telephone (a) in the case of a Eurodollar Borrowing, not later
than 12:00 noon, New York City time, three Business Days before the date of the
proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 12:00
noon, New York City time, one Business Day before the date of the proposed
Borrowing; provided that any such notice of an ABR Revolving Borrowing to
finance the reimbursement of an LC Disbursement as contemplated by Section
2.04(f) may be given not later than 11:00 a.m., New York City time, on the date
of the proposed Borrowing. Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Paying Agent of a written Borrowing Request in a form approved by the Paying
Agent and signed by the Borrower. Each such telephonic and written Borrowing
Request shall specify the following information in compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business
Day;
(iii)whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
(iv) in the case of a Eurodollar Borrowing, the initial
Interest Period to be applicable thereto, which shall be
a period contemplated by the definition of the term
"Interest Period"; and
(v) the location and number of the Borrower's account to
which funds are to be disbursed, which shall comply with
the requirements of Section 2.06.
If no election as to the Type of Revolving Borrowing is
specified, then the requested Revolving Borrowing shall be an ABR Revolving
Borrowing. If no Interest Period is specified with respect to any requested
Eurodollar Revolving Borrowing, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration. Promptly following receipt
of a Borrowing Request in accordance with this Section, the Paying Agent shall
advise each Revolving Lender of the details thereof and of the amount of such
Revolving Lender's Loan to be made as part of the requested Borrowing.
SECTION 2.04 Letters of Credit.
(a) General. (i) Subject to the terms and conditions set forth
herein, the Borrower may request the issuance of Revolving Letters of Credit for
its own account, in a form reasonably acceptable to the Paying Agent and the
applicable Issuing Bank, at any time and from time to time during the period
from the Effective Date through the date 30 days prior to the end of the
Revolving Availability Period. In the event of any inconsistency between the
terms and conditions of this Agreement and the terms and conditions of any form
of letter of credit application or other agreement submitted by the Borrower to,
or entered into by the Borrower
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with, any Issuing Bank relating to any Revolving Letter of Credit, the terms and
conditions of this Agreement shall control.
(ii) Subject to the terms and conditions set forth
herein, the Borrower may request the issuance of Tranche B Letters of Credit on
the Effective Date for its own account, in a form reasonably acceptable to the
Paying Agent and the applicable Issuing Bank. In the event of any inconsistency
between the terms and conditions of this Agreement and the terms and conditions
of any form of letter of credit application or other agreement submitted by the
Borrower to, or entered into by the Borrower with, any Issuing Bank relating to
any Tranche B Letter of Credit, the terms and conditions of this Agreement shall
control. In addition, as of the Effective Date, each of the Existing Letters of
Credit shall be deemed to be issued under this Agreement as a Tranche B Letter
of Credit.
(b) Issuance and Amendment. (i) To request the issuance of a
Revolving Letter of Credit (or the amendment, renewal or extension of an
outstanding Revolving Letter of Credit), the Borrower shall hand deliver or
telecopy (or transmit by electronic communication, if arrangements for doing so
have been approved by the applicable Issuing Bank) to the applicable Issuing
Bank and the Paying Agent (reasonably in advance of the requested date of
issuance, amendment, renewal or extension) a notice requesting the issuance of a
Revolving Letter of Credit, or identifying the Revolving Letter of Credit to be
amended, renewed or extended, and specifying the date of issuance, amendment,
renewal or extension (which shall be a Business Day), the date on which such
Revolving Letter of Credit is to expire (which shall comply with paragraph (d)
of this Section), the amount of such Revolving Letter of Credit, the name and
address of the beneficiary thereof and such other information as shall be
necessary to prepare, amend, renew or extend such Revolving Letter of Credit. If
requested by the Issuing Bank, the Borrower also shall submit a letter of credit
application on the Issuing Bank's standard form in connection with any request
for a Revolving Letter of Credit.
(ii) Any Tranche B Letter of Credit may be amended by
the applicable Issuing Bank at the request of the Borrower and with the consent
the Paying Agent; provided, that no such amendment shall increase the stated of
amount of a Tranche B Letter of Credit or extend the expiration date thereof
beyond the last permissible date referred to in paragraph (d) below. To request
an amendment to an outstanding Tranche B Letter of Credit, the Borrower shall
hand deliver or telecopy to the applicable Issuing Bank and the Paying Agent (no
less than three Business Days (or such shorter period of time as acceptable to
the applicable Issuing Bank and the Paying Agent) in advance of the requested
date of amendment) a notice identifying the Tranche B Letter of Credit to be
amended and specifying the date of amendment (which shall be a Business Day);
the amount of such Tranche B Letter of Credit, the name and address of the
beneficiary thereof and such other information as shall be necessary to amend
such Tranche B Letter of Credit.
(c) Limitation of Amount. A Letter of Credit shall be issued,
amended or extended only if (and upon issuance, amendment or extension of each
Letter of Credit the Borrower shall be deemed to represent and warrant that),
after giving effect to such issuance, amendment or extension (i) the Revolving
LC Exposure will not exceed $30,000,000; (ii) the Revolving Credit Exposure
shall not exceed the aggregate amount of the Revolving Commitments and (iii) the
Tranche B LC Exposure will not exceed the aggregate amount of the
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Total Tranche
B Credit-Linked Deposit (including any amount of such Tranche B Credit-Linked
Deposits that shall have been applied to reimburse outstanding Tranche B LC
Disbursements).
(d) Expiration Date. Each Revolving Letter of Credit shall
expire at or prior to the close of business on the earlier of (i) the date one
year after the date of the issuance of such Revolving Letter of Credit (or, in
the case of any renewal or extension thereof, one year after such renewal or
extension) and (ii) the date that is five Business Days prior to the Revolving
Maturity Date; provided that any Revolving Letter of Credit with a one-year term
may provide for the renewal thereof for additional one-year periods (which shall
in no event extend beyond the date referred to in clause (ii) above). Each
Tranche B Letter of Credit shall expire not later than the close of business on
the Tranche B Maturity Date.
(e) (i) Participations of Revolving Lenders. On the Effective
Date, without any further action on the part of any Issuing Bank or the
Revolving Lenders, each Issuing Bank issuing one or more Revolving Letters of
Credit hereby grants to each Revolving Lender, and each Revolving Lender hereby
acquires from such Issuing Bank, a participation in each such Revolving Letter
of Credit equal to such Revolving Lender's Applicable Percentage of the
aggregate amount available to be drawn under such Revolving Letter of Credit. In
consideration and in furtherance of the foregoing, each Revolving Lender hereby
absolutely and unconditionally agrees to pay to the Paying Agent, for the
account of the applicable Issuing Bank, such Revolving Lender's Applicable
Percentage of each Revolving LC Disbursement made by such Issuing Bank and not
reimbursed by the Borrower on the date due as provided in paragraph (f)(i)(A) of
this Section, or of any reimbursement payment in respect of a Revolving LC
Disbursement required to be refunded to the Borrower for any reason. Each
Revolving Lender acknowledges and agrees that its obligation to acquire and fund
participations in respect of Revolving Letters of Credit pursuant to this
subparagraph (i) is absolute, unconditional and irrevocable and shall not be
affected by any circumstance whatsoever, including any amendment, renewal or
extension of any Revolving Letter of Credit or the occurrence and continuance of
a Default or the reduction or termination of the Revolving Commitments, and that
each such payment shall be made without any offset, abatement, withholding or
reduction whatsoever.
(ii) Participations of Tranche B Lenders. On the
Effective Date, without any further action on the part of any Issuing Bank or
the Tranche B Lenders, each Issuing Bank issuing one or more Tranche B Letters
of Credit hereby grants to each Tranche B Lender, and each Tranche B Lender
hereby acquires from such Issuing Bank, a participation in each such Tranche B
Letter of Credit equal to such Tranche B Lender's Applicable Percentage of the
aggregate amount available to be drawn under such Tranche B Letter of Credit.
The aggregate purchase price for the participations of each Tranche B Lender in
Tranche B Letters of Credit shall equal the amount of the Tranche B
Credit-Linked Deposit of such Tranche B Lender. Each Tranche B Lender shall pay
to the Paying Agent its Tranche B Credit-Linked Deposit in full on the Effective
Date. Each Tranche B Lender hereby absolutely and unconditionally agrees that if
an Issuing Bank makes a Tranche B LC Disbursement which is not reimbursed by the
Borrower as provided in paragraph (f)(i)(B) of this Section or, with respect to
any Tranche B LC Disbursement referred to in paragraph (f)(ii) of this Section,
on the date reimbursement would have been due had such Tranche B LC Disbursement
been governed by paragraph (f)(i)(B), or is required to refund any reimbursement
payment in respect of a Tranche B LC Disbursement to the Borrower for any
reason, the Paying Agent shall reimburse the applicable Issuing Bank for
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the amount of such Tranche B LC Disbursement, ratably as among the Tranche B
Lenders in accordance with their Applicable Percentages of the Total Tranche B
Credit-Linked Deposit, from such Tranche B Lender's Tranche B Credit-Linked
Deposit on deposit in the Tranche B Credit-Linked Deposit Account. In the event
the Tranche B Credit-Linked Deposit Account is charged by the Paying Agent to
reimburse the applicable Issuing Bank for an unreimbursed Tranche B LC
Disbursement, the Borrower shall have the right, at any time prior to the
Tranche B Maturity Date, to pay over to the Paying Agent in reimbursement
thereof an amount equal to the amount so charged for deposit in the Tranche B
Credit-Linked Deposit Account. In the event that any reimbursement shall be due
to an Issuing Bank under the preceding provisions of this paragraph on a day
other than the last day of an Interest Period in effect for the Tranche B
Credit-Linked Deposits, the Paying Agent shall have the right, but not the
obligation, to advance its own funds to cover the amount due to such Issuing
Bank, in which case (i) title to an amount of each Tranche B Lender's Tranche B
Credit-Linked Deposit equal to its Applicable Percentage of the amount so
advanced by the Paying Agent (together with the interest accruing thereon) shall
automatically be transferred to the Paying Agent, which shall reimburse itself
for the amount advanced by it through the liquidation of such amounts of the
Tranche B Credit-Linked Deposits at the end of the applicable Interest Period,
and (ii) the Borrower shall pay to the Paying Agent, upon the Paying Agent's
request therefor, the amount, if any, by which the Paying Agent's cost of funds
for the period from the date of such reimbursement of the Issuing Bank through
the end of the applicable Interest Period, as determined by the Paying Agent
(such determination to be conclusive absent manifest error) and set forth in the
request for payment delivered to the Borrower, shall exceed the interest accrued
on a like amount of the Tranche B Credit-Linked Deposits at the LIBO Rate for
such Interest Period. In the event the Borrower shall fail to pay any amount due
under clause (ii) of the preceding sentence, the interest payable by the Paying
Agent to the Tranche B Lenders on their Tranche B Credit-Linked Deposits under
Section 2.05(b) shall be correspondingly reduced and the Tranche B Lenders shall
without further act succeed, ratably in accordance with their Applicable
Percentages, to the rights of the Paying Agent with respect to such amount. Each
Tranche B Lender acknowledges and agrees that its obligation to acquire and fund
participations in respect of Tranche B Letters of Credit pursuant to this
subparagraph (ii) is absolute, unconditional and irrevocable and shall not be
affected by any circumstance whatsoever, including any amendment, renewal or
extension of any Tranche B Letter of Credit or the occurrence and continuance of
a Default or the return of the Tranche B Credit-Linked Deposits, and that each
such payment shall be made without any offset, abatement, withholding or
reduction whatsoever. Without limiting the foregoing, each Tranche B Lender
irrevocably authorizes the Paying Agent to apply amounts of its Tranche B
Credit-Linked Deposit as provided in this subparagraph (ii). In addition, each
Tranche B Lender hereby grants to Paying Agent for the benefit of the Issuing
Banks a security interest in such Tranche B Lender's Tranche B Credit-Linked
Deposit to secure its obligations under this Section 2.04(e)(ii).
(f) Reimbursement. (i) (A) If any Issuing Bank shall make any
Revolving LC Disbursement, the Borrower shall, except as provided in paragraph
(ii) below, reimburse such Revolving LC Disbursement by paying to the Paying
Agent an amount equal to such Revolving LC Disbursement not later than 1:00
p.m., New York City time, on the date that such Revolving LC Disbursement is
made, if the Borrower shall have received notice of such Revolving LC
Disbursement prior to 11:00 a.m., New York City time, on such date, or, if such
notice has not been received by the Borrower prior to such time on such date,
then not later than 1:00 p.m.,
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New York City time, on the Business Day immediately following the day that the
Borrower receives such notice; provided that the Borrower may, subject to the
conditions to borrowing set forth herein, request in accordance with Sections
2.01 and 2.03, that such payment be financed with an ABR Revolving Borrowing in
an equivalent amount and, to the extent so financed, the Borrower's obligation
to make such payment shall be discharged and replaced by the resulting ABR
Revolving Borrowing.
(B) If any Issuing Bank shall make any Tranche
B LC Disbursement, the Borrower shall have the right (but not the obligation) to
pay or cause to be paid to the Paying Agent an amount equal to the entire amount
of such Tranche B LC Disbursement not later than 1:00 p.m., New York City time,
on the date that such Tranche B LC Disbursement is made, if the Borrower shall
have received notice of such Tranche B LC Disbursement prior to 11:00 a.m., New
York City time, on such date, or, if such notice has not been received by the
Borrower prior to such time on such date, then not later than 1:00 p.m., New
York City time, on the Business Day immediately following the day that the
Borrower receives such notice. If the Borrower does not so elect to reimburse
the Issuing Bank for any such Tranche B LC Disbursement, reimbursement of the
Issuing Bank shall be made in accordance with the provisions of Section
2.04(f)(ii) and (iv).
(ii) In the case of any Tranche B LC Disbursement to
fund the
payment of the purchase price (to the extent such purchase price is attributable
to the principal of a Revenue Bond) of any Revenue Bond that the Borrower is
unable to remarket prior to the day on which payment of the purchase price of
such Revenue Bond is due to the holder or owner thereof (a "Purchase Price
Disbursement"), the Borrower shall reimburse such Purchase Price Disbursement on
or prior to the Tranche B Maturity Date; provided that (x) such Revenue Bond
shall be promptly delivered and pledged to the applicable Issuing Bank under a
Revenue Bond Pledge Agreement, (y) any portion of such Purchase Price
Disbursement may be reimbursed at any time by or on behalf of the Borrower on
one Business Day's notice stating the amount to be reimbursed (which shall be
$100,000 or a whole multiple thereof) and directing such Issuing Bank to deliver
Revenue Bonds held by or for the account of such Issuing Bank to or upon the
order of the Borrower against repayment of the portion of such Purchase Price
Disbursement attributable to such Revenue Bonds with the proceeds of the
remarketing of such Revenue Bonds and specifying the principal amount of Revenue
Bonds to be so delivered, and (z) upon payment to the Paying Agent for the
account of such Issuing Bank of the amount of any such repayment, together with
accrued interest to the date of such repayment on the amount of the Purchase
Price Disbursement to be reimbursed, the outstanding obligations of the Borrower
in respect of such Purchase Price Disbursement shall be reduced by the amount of
such reimbursement, interest shall cease to accrue on the amount so reimbursed
and such Issuing Bank shall release to or upon the order of the Borrower from
the pledge and security interest created by the applicable pledge agreement a
principal amount of Revenue Bonds held under such pledge agreement equal to the
amount of such repayment; provided that, prior to the release of such Revenue
Bonds, the Borrower shall have paid to the Paying Agent the amount of any LC
Disbursement made in connection with the purchase of such Revenue Bonds to pay
the interest portion of the purchase price thereof. The provisions of paragraph
(i) above shall apply with respect to any portion of such an LC Disbursement on
the Tranche B Maturity Date, as if it were an LC Disbursement in respect of
which the Borrower received notice prior to 11:00 a.m., New York City time, on
the Tranche B Maturity Date. Whenever an Issuing Bank is holding Revenue Bonds
pursuant to a
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pledge agreement in respect of a Letter of Credit and accordingly receives a
payment of interest on such pledged Revenue Bonds, such Issuing Bank shall
promptly deliver such interest so received to the Paying Agent for application
to the payment of accrued and unpaid interest on all outstanding Purchase Price
Disbursements of such Issuing Bank in respect of such Letter of Credit. If the
amount of interest so received exceeds the amount of accrued and unpaid interest
on such Purchase Price Disbursements on the date of receipt, such Issuing Bank
shall hold the unused balance of such interest received and apply it on a daily
basis to interest accrued on such Purchase Price Disbursements.
(iii) If any Tranche B LC Disbursement that shall have been
funded from the Tranche B Credit-Linked Deposits shall be reimbursed pursuant to
paragraph (i) or (ii) above other than on the last day of an Interest Period
applicable to the Tranche B Credit-Linked Deposits, the Paying Agent shall
invest the amount so reimbursed in overnight or short-term cash equivalent
investments until the end of the Interest Period at the time in effect and the
Borrower shall pay to the Paying Agent, upon the Paying Agent's request
therefor, the amount, if any, by which the interest accrued on a like amount of
the Tranche B Credit-Linked Deposits at the LIBO Rate for the Interest Period in
effect therefor shall exceed the interest earned through the investment of the
amount so reimbursed for the period from the date of such reimbursement through
the end of the applicable Interest Period, as determined by the Paying Agent
(such determination to be conclusive absent manifest error) and set forth in the
request for payment delivered to the Borrower. In the event the Borrower shall
fail to pay any amount due under this paragraph, the interest payable by the
Paying Agent to the Tranche B Lenders on their Tranche B Credit-Linked Deposits
under Section 2.05(b) shall be correspondingly reduced and the Tranche B Lenders
shall without further act succeed, ratably in accordance with their Applicable
Percentages, to the rights of the Paying Agent with respect to such amount.
(iv) If the Borrower fails to make any payment due under
paragraph (i)(A) above with respect to a Revolving LC Disbursement, the Paying
Agent shall notify each Revolving Lender of the applicable Revolving LC
Disbursement and such Revolving Lender's Applicable Percentage thereof. Promptly
following receipt of such notice, each Revolving Lender shall pay to the Paying
Agent its Applicable Percentage of the payment then due from the Borrower, in
the same manner as provided in Section 2.06 with respect to Revolving Loans made
by Revolving Lenders, and the Paying Agent shall promptly pay to the applicable
Issuing Bank the amounts so received by it from the Revolving Lenders. If any
Issuing Bank shall not have received from the Borrower the payment that it may
make under paragraph (i)(B) above with respect to a Tranche B LC Disbursement,
or if any Purchase Price Disbursement shall be made under a Tranche B Letter of
Credit, the Paying Agent shall notify each Tranche B Lender of the applicable
Tranche B LC Disbursement and such Tranche B Lender's Applicable Percentage
thereof, and the Paying Agent shall promptly pay to the applicable Issuing Bank
each Tranche B Lender's Applicable Percentage of such Tranche B LC Disbursement
from such Tranche B Lender's Tranche B Credit-Linked Deposit (or from funds of
the Paying Agent as contemplated by the sixth sentence of paragraph (e)(ii)
above). Promptly following receipt by the Paying Agent of any payment pursuant
to paragraph (i) or (ii) above in respect of any LC Disbursement, the Paying
Agent shall distribute such payment to the applicable Issuing Bank or, (A) to
the extent that Revolving Lenders have made payments pursuant to this paragraph
to reimburse such Issuing Bank in connection with an unreimbursed Revolving LC
Disbursement, then to such Revolving Lenders as their interests may appear and
(B) to the extent payments have been made
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from the Tranche B Credit-Linked Deposits or from funds of the Paying Agent to
reimburse such Issuing Bank in connection with an unreimbursed Tranche B LC
Disbursement, to the Tranche B Credit-Linked Deposit Account to be added to the
Tranche B Credit-Linked Deposits of the Tranche B Lenders in accordance with
their respective Applicable Percentages or to reimburse the Paying Agent, as the
case may be. Any payment made by a Revolving Lender or from the Tranche B
Credit-Linked Deposit Account, or from funds of the Paying Agent, pursuant to
this paragraph to reimburse an Issuing Bank for any Revolving LC Disbursement or
Tranche B LC Disbursement shall not constitute a Loan and shall not relieve the
Borrower of its obligation, if any, to reimburse such LC Disbursement.
(g) Obligations Absolute. The Borrower's obligation to
reimburse LC Disbursements as provided in paragraph (f) above shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by an Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower's obligations hereunder. None of
the Paying Agent, the Revolving Lenders, the Tranche B Lenders, the Issuing
Banks or any of their Related Parties shall have any liability or responsibility
by reason of or in connection with the issuance or transfer of any Letter of
Credit or any payment or failure to make any payment thereunder (irrespective of
any of the circumstances referred to in the preceding sentence), or any error,
omission, interruption, loss or delay in transmission or delivery of any draft,
notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), any error in
interpretation of technical terms or any consequence arising from causes beyond
the control of the applicable Issuing Bank; provided that the foregoing shall
not be construed to excuse such Issuing Bank from liability to the Borrower to
the extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Borrower to the extent permitted by
applicable law) suffered by the Borrower that are caused by such Issuing Bank's
failure to exercise care when determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof. The parties
hereto expressly agree that, in the absence of gross negligence or wilful
misconduct on the part of an Issuing Bank (as finally determined by a court of
competent jurisdiction), such Issuing Bank shall be deemed to have exercised
care in each such determination. In furtherance of the foregoing and without
limiting the generality thereof, the parties agree that, with respect to
documents presented which appear on their face to be in substantial compliance
with the terms of a Letter of Credit, the applicable Issuing Bank may, in its
sole discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.
(h) Disbursement Procedures. Each Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a
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Letter of Credit. Such Issuing Bank shall promptly notify the Paying Agent and
the Borrower by telephone (confirmed by telecopy) of such demand for payment and
whether such Issuing Bank has made or will make an LC Disbursement thereunder;
provided that any failure to give or delay in giving such notice shall not
relieve the Borrower of its obligation to reimburse such Issuing Bank and the
Revolving Lenders or Tranche B Lenders with respect to any such LC Disbursement.
(i) Interim Interest. If an Issuing Bank shall make any LC
Disbursement, then, (i) in the case of any Revolving LC Disbursements, unless
the Borrower shall reimburse such Revolving LC Disbursement in full on the date
such Revolving LC Disbursement is made or (ii) in the case of any Tranche B LC
Disbursements, unless the Borrower shall reimburse such Tranche B LC
Disbursement in full on the date such Tranche B LC Disbursement is made, in each
case the unpaid amount thereof shall bear interest, for each day from and
including the date such LC Disbursement is made to but excluding the date that
the Borrower reimburses such LC Disbursement or the Paying Agent reimburses such
Tranche B LC Disbursement with funds held in the Tranche B Credit-Linked Deposit
Account, at (i) in the case of a Revolving LC Disbursement, the rate per annum
then applicable to ABR Revolving Loans, and (ii) in the case of a Tranche B LC
Disbursement, at the LIBO Rate for the Interest Period at the time in effect for
the Credit-Linked Deposits plus 2.25% per annum; provided that, if the Borrower
fails to reimburse such LC Disbursement when due pursuant to paragraph (f) of
this Section, then Section 2.12(c) shall apply. Interest accrued pursuant to
this paragraph shall be for the account of the applicable Issuing Bank, except
that interest accrued on and after the date of payment by any Revolving Lender
or from the Tranche B Credit-Linked Deposit of any Tranche B Lender (or with
funds of the Paying Agent pending the application of such Tranche B
Credit-Linked Deposit) to reimburse an Issuing Bank shall be for the account of
such Revolving Lender or Tranche B Lender, as applicable, to the extent of such
payment.
(j) Replacement of an Issuing Bank. Any Issuing Bank may be
replaced at any time by written agreement among the Borrower and the Paying
Agent; provided, however, that (i) each Issuing Bank shall be a Lender, and (ii)
the Paying Agent shall review any such proposed agreement for form only and not
with respect to the identity of any successor Issuing Bank or the identity of
the Issuing Bank to be replaced (subject in the case of any replacement of any
Affiliate of the Paying Agent to the provisions of the first paragraph of
Article VIII). The Paying Agent shall notify the Revolving Lenders and Tranche B
Lenders of any such replacement of an Issuing Bank. At the time any such
replacement shall become effective, the Borrower shall pay all unpaid fees
accrued for the account of the replaced Issuing Bank pursuant to Section 2.11(b)
and shall return to such Issuing Bank each Letter of Credit issued by such
Issuing Bank. From and after the effective date of any such replacement, (i) the
successor Issuing Bank shall have all the rights and obligations of an Issuing
Bank under this Agreement with respect to Letters of Credit to be issued by it
on such effective date or thereafter and (ii) references herein to the term
"Issuing Bank" shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Bank under this Agreement with respect
to Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.
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(k) Acceleration of Revenue Bonds. If any Event of Default
shall occur and be continuing, the Paying Agent may, and at the request of the
Required Lenders shall, direct the applicable Issuing Bank to take such steps as
are required and available to it under any Revenue Bond Indenture to cause the
Revenue Bond Trustee thereunder to declare the principal amount of all Revenue
Bonds then outstanding thereunder to be immediately due and payable and, to the
extent necessary to make all payments then due and payable on the Revenue Bonds,
require all necessary drawings under the applicable Letter of Credit to be made
in respect thereof, whereupon such Issuing Bank shall pay from its general funds
(or, in the case of a Tranche B Letter of Credit, from the Tranche B
Credit-Linked Deposits) the amounts so drawn and such amounts, all interest
thereon and all other amounts payable by the Borrower hereunder in respect
thereof shall automatically be forthwith due and payable.
SECTION 2.05 Credit-Linked Deposit Account.
(a) The Tranche B Credit-Linked Deposits shall be held by the
Paying Agent in the Tranche B Credit-Linked Deposit Account, and no party other
than the Paying Agent shall have a right of withdrawal from the Tranche B
Credit-Linked Deposit Account or any other right or power with respect to the
Tranche B Credit-Linked Deposits. Notwithstanding anything herein to the
contrary, the funding obligation of each Tranche B Lender in respect of its
participation in Tranche B Letters of Credit shall be satisfied in full upon the
funding of its Tranche B Credit-Linked Deposit.
(b) Each of the Paying Agent, each Issuing Bank issuing any
Tranche B Letter of Credit and each Tranche B Lender hereby acknowledges and
agrees that each Tranche B Lender is funding its Tranche B Credit-Linked Deposit
to the Paying Agent for application in the manner contemplated by Section
2.04(e) and that the Paying Agent has agreed to invest the Tranche B
Credit-Linked Deposits so as to earn a return (except during periods when such
Tranche B Credit-Linked Deposits, or funds advanced by the Paying Agent against
such Tranche B Credit-Linked Deposits, are used to cover unreimbursed Tranche B
LC Disbursements, and subject to Section 2.13) for the Tranche B Lenders equal
at any time to (i) the LIBO Rate for the Interest Period in effect for the
Tranche B Credit-Linked Deposits at such time minus (ii) 10 basis points;
provided that, in the event that the Borrower shall revoke any notice of
prepayment pursuant to Sections 2.08 and 2.10, the Paying Agent shall use
commercially reasonable efforts to invest the Tranche B Credit-Linked Deposits
that are affected thereby in a manner that is consistent with its policies
relating to such deposits. Such interest will be paid to the Tranche B Lenders
by the Paying Agent in arrears on the last day of each Interest Period
applicable to the Tranche B Credit-Linked Deposits.
(c) The Borrower shall have no right, title or interest in or
to the Tranche B Credit-Linked Deposits and no obligations with respect thereto
(except to refund portions thereof used to fund Tranche B LC Disbursements as
provided in Section 2.04(f)), it being acknowledged and agreed by the parties
hereto that the making of the Tranche B Credit-Linked Deposits by the Tranche B
Lenders, the provisions of this Section 2.05 and the application of the Tranche
B Credit-Linked Deposits in the manner contemplated by Section 2.04(e)
constitute agreements among the Paying Agent, each Issuing Bank issuing any
Tranche B Letter of Credit and each Tranche B Lender with respect to the funding
obligations of each Tranche B Lender in
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respect of its participation in Tranche B Letters of Credit and do not
constitute any loan or extension of credit to the Borrower.
SECTION 2.06 Funding of Borrowings.
(a) Each Revolving Lender shall make each Revolving Loan to be
made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 1:00 p.m., New York City time, to the account of
the Paying Agent most recently designated by it for such purpose by notice to
the Lenders. The Paying Agent will make such Loans available to the Borrower by
promptly crediting the amounts so received, in like funds, to an account of the
Borrower designated by the Borrower in the applicable Borrowing Request;
provided that ABR Revolving Loans made to finance the reimbursement of an LC
Disbursement as provided in Section 2.04(f) shall be remitted by the Paying
Agent to the applicable Issuing Bank.
(b) Unless the Paying Agent shall have received notice from a
Revolving Lender prior to the proposed date of any Borrowing that such Revolving
Lender will not make available to the Paying Agent such Revolving Lender's share
of such Borrowing, the Paying Agent may in its sole discretion assume that such
Revolving Lender has made such share available on such date in accordance with
paragraph (a) of this Section and may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. In such event, if a Revolving
Lender has not in fact made its share of the applicable Borrowing available to
the Paying Agent, then the applicable Revolving Lender and the Borrower
severally agree to pay to the Paying Agent forthwith on demand such
corresponding amount with interest thereon, for each day from and including the
date such amount is made available to the Borrower to but excluding the date of
payment to the Paying Agent, at (i) in the case of such Revolving Lender, the
greater of the Federal Funds Effective Rate and a rate determined by the Paying
Agent in accordance with banking industry rules on interbank compensation or
(ii) in the case of the Borrower, the interest rate applicable to ABR Loans. If
such Revolving Lender pays such amount to the Paying Agent, then such amount
shall constitute such Revolving Lender's Loan included in such Borrowing.
SECTION 2.07 Interest Elections.
(a) Each Borrowing initially shall be of the Type specified in
the applicable Borrowing Request and, in the case of a Eurodollar Revolving
Borrowing, shall have an initial Interest Period as specified in such Borrowing
Request. Thereafter, the Borrower may elect to convert such Borrowing to a
different Type or to continue such Borrowing and, in the case of a Eurodollar
Revolving Borrowing, may elect Interest Periods therefor, all as provided in
this Section. The Borrower may elect different options with respect to different
portions of the affected Borrowing, in which case each such portion shall be
allocated ratably among the Revolving Lenders holding the Revolving Loans
comprising such Borrowing, and the Revolving Loans comprising each such portion
shall be considered a separate Borrowing.
(b) To make an election pursuant to this Section, the Borrower
shall notify the Paying Agent of such election by telephone by the time that a
Borrowing Request would be required under Section 2.03 if the Borrower were
requesting a Borrowing of the Type resulting from such election to be made on
the effective date of such election. Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery
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or telecopy to the Paying Agent of a written Interest Election Request in a form
approved by the Paying Agent and signed by the Borrower.
(c) Each telephonic and written Interest Election Request
shall specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each resulting
Borrowing (in which case the information to be specified pursuant to clauses
(iii) and (iv) below shall be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such election,
which shall be a period contemplated by the definition of the term "Interest
Period".
If any such Interest Election Request requests a Eurodollar
Borrowing but does not specify an Interest Period, then the Borrower shall be
deemed to have selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election
Request, the Paying Agent shall advise each Revolving Lender of the details
thereof and of such Revolving Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest
Election Request with respect to a Eurodollar Revolving Borrowing prior to the
end of the Interest Period applicable thereto, then, unless such Borrowing is
repaid as provided herein, at the end of such Interest Period such Borrowing
shall be converted to an ABR Borrowing. Notwithstanding any contrary provision
hereof, (i) if an Event of Default has occurred and is continuing (A) no
outstanding Revolving Borrowing may be converted to or continued as a Eurodollar
Borrowing and (ii) unless repaid, each Eurodollar Revolving Borrowing shall be
converted to an ABR Borrowing at the end of the Interest Period applicable
thereto.
SECTION 2.08 Termination and Reduction of Commitments;
Return of Tranche B Credit-Linked Deposits.
(a) Unless previously terminated, the Revolving Commitments
shall terminate on the Revolving Maturity Date. If any Revolving Letter of
Credit remains outstanding on the Revolving Maturity Date, or if any Tranche B
Letter of Credit remains outstanding on the Tranche B Maturity Date, the
Borrower will deposit with the Paying Agent an amount in cash equal to 105% of
the aggregate undrawn amount of such Letter of Credit to secure the Borrower's
reimbursement obligations with respect to any drawings that may occur
thereunder. Subject only to the Borrower's compliance with its obligations under
the preceding sentence, any
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amount of the Tranche B Credit-Linked Deposits held in the Tranche B
Credit-Linked Deposit Account will be returned to the Tranche B Lenders on the
Tranche B Maturity Date ratably in accordance with their Applicable Percentages
of the Total Tranche B Credit-Linked Deposit.
(b) The Borrower may at any time terminate, or from time to
time reduce, the Revolving Commitments; provided that (i) each reduction of the
Revolving Commitments shall be in an amount that is an integral multiple of
$1,000,000 and not less than $5,000,000 and (ii) the Borrower shall not
terminate or reduce any Revolving Commitments if, after giving effect to such
reduction and any concurrent prepayment of the Loans in accordance with Section
2.10, the aggregate Revolving Credit Exposures would exceed the aggregate
Revolving Commitments. The Borrower may at any time or from time to time direct
the Paying Agent to reduce the Total Tranche B Credit-Linked Deposit; provided
that (i) each reduction of the Total Tranche B Credit-Linked Deposit shall be in
an amount that is an integral multiple of $1,000,000 and not less than
$5,000,000 and (ii) the Borrower shall not direct the Paying Agent to reduce the
Total Tranche B Credit-Linked Deposit if, after giving effect to such reduction,
the aggregate Tranche B LC Exposure would exceed the Total Tranche B
Credit-Linked Deposit. In the event the Total Tranche B Credit-Linked Deposit
shall be reduced as provided in the preceding sentence, the Paying Agent will
return all amounts in the Tranche B Credit-Linked Deposit Account in excess of
the reduced Total Tranche B Credit-Linked Deposit to the Tranche B Lenders,
ratably in accordance with their Applicable Percentages of the Total Tranche B
Credit-Linked Deposit. Any such reduction of the Total Tranche B Credit-Linked
Deposit shall be subject to the provisions of Section 2.15.
(c) In the event that any Revenue Bonds shall be redeemed,
repaid or otherwise retired, the Borrower shall, to the extent permitted under
the documentation for such Revenue Bonds, and after reimbursement of any LC
Disbursement made in connection with such redemption, repayment or retirement,
permanently reduce the stated amount of the applicable Letter of Credit and, if
such reduction is with respect to a Tranche B Letter of Credit, the Total
Tranche B Credit-Linked Deposit hereunder shall be automatically and permanently
reduced by an amount equal to the amount of such reduction as of the date such
reduction becomes effective. In the event the Tranche B Credit-Linked Deposits
shall be reduced as provided in the preceding sentence, the Paying Agent will
return all amounts in the Tranche B Credit-Linked Deposit Account in excess of
the reduced Tranche B Credit-Linked Deposits to the Tranche B Lenders, ratably
in accordance with their Applicable Percentages of the Total Tranche B
Credit-Linked Deposit.
(d) The Borrower shall (i) on the Acquisition Closing Date,
make arrangements reasonably satisfactory to the Paying Agent to reduce the
Total Tranche B Credit Linked Deposit in an amount not less than $100,000,000
(including, without limitation, by delivery of irrevocable notices of redemption
with respect to those tax exempt bonds for which credit support is provided by
Tranche B Letters of Credit which are to be redeemed in connection with such
reduction); and (ii) not later than thirty-five (35) days after the Acquisition
Closing Date, reduce the Total Tranche B Credit Linked Deposit by an amount not
less than $100,000,000.
(e) The Borrower shall notify the Paying Agent of any election
or requirement to terminate or reduce the Revolving Commitments or the Total
Tranche B Credit-Linked Deposit under paragraph (b), (c) or (d) of this Section
at least three Business Days prior to the effective
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date of such termination or reduction (or as soon as practicable but in any
event no later than such effective date, in the case of a reduction under
paragraph (c)), specifying such election and the effective date thereof.
Promptly following receipt of any notice, the Paying Agent shall advise the
Lenders of the contents thereof. Each notice delivered by the Borrower pursuant
to this Section shall be irrevocable; provided that a notice of termination of
the Revolving Commitments or the Total Tranche B Credit-Linked Deposit delivered
by the Borrower may state that such notice is conditioned upon the effectiveness
of other credit facilities, in which case such notice may be revoked by the
Borrower (by notice to the Paying Agent on or prior to the specified effective
date) if such condition is not satisfied. Any termination or reduction of the
Revolving Commitments or the Total Tranche B Credit-Linked Deposit shall be
permanent. Each reduction of the Revolving Commitments or the Total Tranche B
Credit-Linked Deposit shall be made ratably among the Revolving Lenders or
Tranche B Lenders, as the case may be, ratably in accordance with their
Applicable Percentages.
SECTION 2.09 Repayment of Loans; Evidence of Debt.
(a) The Borrower hereby unconditionally promises to pay to the
Paying Agent for the account of each Revolving Lender the then unpaid principal
amount of each Revolving Loan on the Revolving Maturity Date.
(b) Each Revolving Lender shall maintain in accordance with
its usual practice an account or accounts evidencing the indebtedness of the
Borrower to such Revolving Lender resulting from each Revolving Loan made by
such Revolving Lender, including the amounts of principal and interest payable
and paid to such Revolving Lender from time to time hereunder.
(c) The Paying Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Revolving
Lender hereunder and (iii) the amount of any sum received by the Paying Agent
hereunder for the account of the Revolving Lenders and each Revolving Lender's
share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Revolving Lender or the Paying Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Revolving Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Revolving Loans made by it be
evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to such Lender a promissory note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in a form approved by the Paying Agent. Thereafter, the Revolving
Loans evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 9.04) be represented by one or
more promissory notes in such form payable to the order of the payee named
therein (or, if such promissory note is a registered note, to such payee and its
registered assigns).
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SECTION 2.10 Prepayment of Loans.
(a) The Borrower shall have the right at any time and from
time to time to prepay any Borrowing in whole or in part, subject to prior
notice in accordance with paragraph (b) of this Section.
(b) The Borrower shall notify the Paying Agent by telephone
(confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Revolving Borrowing, not later than 12:00 noon, New
York City time, three Business Days before the date of prepayment or (ii) in the
case of prepayment of an ABR Revolving Borrowing, not later than 12:00 noon, New
York City time, one Business Day before the date of prepayment. Each such notice
shall be irrevocable and shall specify the prepayment date and the principal
amount of each Borrowing or portion thereof to be prepaid; provided that, if a
notice of prepayment is given in connection with a conditional notice of
termination of the Revolving Commitments as contemplated by Section 2.08, then
such notice of prepayment may be revoked if such notice of termination is
revoked in accordance with Section 2.08. Promptly following receipt of any such
notice, the Paying Agent shall advise the Revolving Lenders of the contents
thereof. Each partial prepayment of any Revolving Borrowing shall be in an
amount that would be permitted in the case of an advance of a Revolving
Borrowing of the same Type as provided in Section 2.02. Each prepayment of a
Revolving Borrowing shall be applied ratably to the Loans included in the
prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the
extent required by Section 2.12 and by any amounts required to be paid pursuant
to Section 2.15 in connection with such prepayment.
SECTION 2.11 Fees.
(a) The Borrower agrees to pay to the Paying Agent for the
account of each Revolving Lender a commitment fee, which shall accrue at a rate
equal to 0.50% per annum on the daily unused amount of the Revolving Commitment
of such Revolving Lender during the period from and including the Effective Date
to but excluding the date on which such Revolving Commitment terminates. Accrued
commitment fees shall be payable in arrears on the last Business Day of March,
June, September and December of each year, commencing with June 30, 2004, and on
the date on which the Revolving Commitments terminate, commencing on the first
such date to occur after the date hereof. All commitment fees shall be computed
on the basis of a year of 360 days and shall be payable for the actual number of
days elapsed (including the first day but excluding the last day).
(b) The Borrower agrees to pay (i) to the Paying Agent for the
account of each Revolving Lender a participation fee with respect to its
participations in Revolving Letters of Credit, which participation fee shall
accrue at the Applicable Rate used to compute interest on Eurodollar Revolving
Loans, on the average daily amount of such Revolving Lender's Revolving LC
Exposure (excluding any portion thereof attributable to unreimbursed Revolving
LC Disbursements) during the period from and including the Effective Date to but
excluding the later of the date on which such Revolving Lender's Revolving
Commitment terminates and the date on which such Revolving Lender ceases to have
any Revolving LC Exposure, and (ii) to each Issuing Bank a fronting fee, which
shall accrue at a rate per annum equal to the Applicable Facing Fee on the
average daily aggregate face amount of the outstanding Revolving Letters of
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Credit of such Issuing Bank during the period from and including the Effective
Date to but excluding the later of the date of termination of the Revolving
Commitments and the date on which there ceases to be any Revolving LC Exposure,
as well as such Issuing Bank's standard fees with respect to the issuance,
amendment, renewal or extension of any Revolving Letter of Credit or processing
of drawings thereunder. Accrued participation fees and fronting fees in respect
of Revolving Letters of Credit shall be due and payable on the last Business Day
of March, June, September and December of each year, commencing with June 30,
2004; provided that all such fees shall be payable on the date on which the
Revolving Commitments terminate and any such fees accruing after the date on
which the Revolving Commitments terminate shall be payable on demand. Any other
fees payable to any Issuing Bank pursuant to this paragraph shall be payable
within 10 days after demand. All participation fees and fronting fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).
(c) The Borrower agrees to pay (i) to the Paying Agent for the
account of each Tranche B Lender a participation fee with respect to its
participations in Tranche B Letters of Credit, which such participation fee
shall accrue at a rate equal to the sum of (A) the Applicable Rate for Tranche B
Credit-Linked Deposits and (B) 0.10% on the average daily amount of such Tranche
B Lender's Tranche B LC Exposure (excluding any portion thereof attributable to
unreimbursed Tranche B LC Disbursements) during the period from and including
the Effective Date to but excluding the later of the date on which such Lender's
Tranche B Credit-Linked Deposit is returned to it and the date on which such
Tranche B Lender ceases to have any Tranche B LC Exposure and (ii) to each
Issuing Bank a fronting fee, which shall accrue at a rate per annum equal to the
Applicable Facing Fee on the average daily aggregate face amount of the
outstanding Tranche B Letters of Credit of such Issuing Bank during the period
from and including the Effective Date to but excluding the later of the date on
which the Tranche B Credit-Linked Deposits are returned to the Tranche B Lenders
and the date on which there ceases to be any Tranche B LC Exposure, as well as
such Issuing Bank's standard fees with respect to the issuance, amendment,
renewal or extension of any Tranche B Letter of Credit or processing of drawings
thereunder. Accrued participation fees and fronting fees in respect of Tranche B
Letters of Credit shall be due and payable on the last Business Day of March,
June, September and December of each year, commencing with June 30, 2004;
provided that all such fees shall be payable on the date on which the Tranche B
Credit-Linked Deposits are returned to the Tranche B Lenders and any such fees
accruing after the date on which the Tranche B Credit-Linked Deposits are
returned to the Tranche B Lenders shall be payable on demand. Any other fees
payable to any Issuing Bank pursuant to this paragraph shall be payable within
10 days after demand. All participation fees and fronting fees shall be computed
on the basis of a year of 360 days and shall be payable for the actual number of
days elapsed (including the first day but excluding the last day).
(d) The Borrower agrees to pay to the Paying Agent, the
Co-Administrative Agents and the Documentation Agent, each for its own account,
fees payable in the amounts and at the times separately agreed upon by the
Borrower and such Persons.
(e) All fees payable hereunder shall be paid on the dates due,
in immediately available funds, to the Paying Agent (or to the applicable
Issuing Bank, in the case of fees
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payable to any Issuing Bank) for distribution,
in the case of commitment fees and participation fees, to the Lenders. Fees paid
shall not be refundable under any circumstances.
SECTION 2.12 Interest.
(a) The Loans comprising each ABR Borrowing shall bear
interest at the Alternate Base Rate plus the Applicable Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest at the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Rate.
(c) Notwithstanding the foregoing, if any principal of or
interest on any Loan or LC Disbursement or any fee or other amount payable by
the Borrower hereunder is not paid when due, whether at stated maturity, upon
acceleration or otherwise, such overdue amount shall bear interest, after as
well as before judgment, at a rate per annum equal to (i) in the case of overdue
principal of any Loan or any LC Disbursement, 2% per annum plus the rate
otherwise applicable to such Loan or LC Disbursement as provided in the
preceding paragraphs of this Section or (ii) in the case of any other amount, 2%
per annum plus the rate applicable to ABR Loans as provided in paragraph (a) of
this Section.
(d) Accrued interest on each Loan shall be payable in arrears
on each Interest Payment Date for such Loan and upon termination of the
Revolving Commitments; provided that (i) interest accrued pursuant to paragraph
(c) of this Section shall be payable on demand, (ii) in the event of any
repayment or prepayment of any Loan, accrued interest on the principal amount
repaid or prepaid shall be payable on the date of such repayment or prepayment
and (iii) in the event of any conversion of any Eurodollar Revolving Loan prior
to the end of the current Interest Period therefor, accrued interest on such
Loan shall be payable on the effective date of such conversion.
(e) All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall
be computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). The applicable Alternate Base Rate or
Adjusted LIBO Rate shall be determined by the Paying Agent, and such
determination shall be conclusive absent manifest error.
SECTION 2.13 Alternate Rate of Interest. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing or the Tranche B
Credit-Linked Deposit:
(a) the Paying Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate or LIBO Rate, as applicable, for
such Interest Period; or
(b) the Paying Agent is advised by the Required Lenders that
the Adjusted LIBO Rate or LIBO Rate, as applicable, for such Interest Period
will not adequately and fairly reflect
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the cost to such Lenders of making or maintaining their Loans included in such
Borrowing or the Tranche B Credit-Linked Deposits, as applicable, for such
Interest Period;
then the Paying Agent shall give notice thereof to the Borrower and the Lenders
by telephone or telecopy as promptly as practicable thereafter and, until the
Paying Agent notifies the Borrower and the Lenders that the circumstances giving
rise to such notice no longer exist, (i) any Interest Election Request that
requests the conversion of any Revolving Borrowing to, or continuation of any
Revolving Borrowing as, a Eurodollar Borrowing shall be ineffective, (ii) if any
Borrowing Request requests a Eurodollar Revolving Borrowing, such Borrowing
shall be made as an ABR Borrowing and (iii) the Tranche B Credit-Linked Deposits
shall be invested so as to earn a return equal to the greater of the Federal
Funds Effective Rate and a rate determined by the Paying Agent in accordance
with banking industry rules on interbank compensation.
SECTION 2.14 Increased Costs.
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve,
special deposit or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, any Lender or the Paying Agent (except any such reserve requirement
reflected in the Adjusted LIBO Rate, where applicable) or any Issuing Bank; or
(ii) impose on any Lender or any Issuing Bank or the
Paying Agent or the London
interbank market any other condition affecting this Agreement or Eurodollar
Loans made by such Lender or any Letter of Credit or participation therein or
the Tranche B Credit-Linked Deposit;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or such
Issuing Bank or the Paying Agent of participating in, issuing or maintaining any
Letter of Credit or the Tranche B Credit-Linked Deposits or to reduce the amount
of any sum received or receivable by such Lender or such Issuing Bank or the
Paying Agent hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or such Issuing Bank or the Paying Agent, as
the case may be, such additional amount or amounts as will compensate such
Lender or such Issuing Bank or the Paying Agent, as the case may be, for such
additional costs incurred or reduction suffered.
(b) If any Lender or any Issuing Bank determines that any
Change in Law regarding capital requirements has or would have the effect of
reducing the rate of return on such Lender's or such Issuing Bank's capital or
on the capital of such Lender's or such Issuing Bank's holding company, if any,
as a consequence of this Agreement or the Loans made by, or participations in
Letters of Credit held by, such Lender, or the Letters of Credit issued by such
Issuing Bank, to a level below that which such Lender or such Issuing Bank or
such Lender's or such Issuing Bank's holding company could have achieved but for
such Change in Law (taking into consideration such Lender's or such Issuing
Bank's policies and the policies of such Lender's or such Issuing Bank's holding
company with respect to capital adequacy), then from time to time the Borrower
will pay to such Lender or such Issuing Bank, as the case may be,
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such additional amount or amounts as will compensate such Lender or such Issuing
Bank or such Lender's or such Issuing Bank's holding company for any such
reduction suffered.
(c) A certificate of a Lender or an Issuing Bank setting forth
the amount or amounts necessary to compensate such Lender or such Issuing Bank
or its holding company, as the case may be, as specified in paragraph (a) or (b)
of this Section shall be delivered to the Borrower and shall be conclusive
absent manifest error. The Borrower shall pay such Lender or such Issuing Bank,
as the case may be, the amount shown as due on any such certificate within 10
days after receipt thereof.
(d) Failure or delay on the part of any Lender or any Issuing
Bank to demand compensation pursuant to this Section shall not constitute a
waiver of such Lender's or such Issuing Bank's right to demand such
compensation; provided that the Borrower shall not be required to compensate a
Lender or an Issuing Bank pursuant to this Section for any increased costs or
reductions incurred more than 270 days prior to the date that such Lender or
such Issuing Bank, as the case may be, notifies the Borrower of the Change in
Law giving rise to such increased costs or reductions and of such Lender's or
such Issuing Bank's intention to claim compensation therefor; provided further
that, if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the 270-day period referred to above shall be extended to
include the period of retroactive effect thereof.
SECTION 2.15 Break Funding Payments. In the event of (a)
the payment of any principal of any Eurodollar Loan or LC Disbursement or the
reduction of any Tranche B Credit-Linked Deposit other than in connection with
the funding of a Tranche B LC Disbursement, in each case other than on the last
day of an Interest Period applicable thereto (including as a result of an Event
of Default), (b) the conversion of any Eurodollar Loan or LC Disbursement other
than on the last day of the Interest Period applicable thereto, (c) the failure
to borrow, convert, continue or prepay any Revolving Loan or LC Disbursement on
the date specified in any notice delivered pursuant hereto (regardless of
whether such notice may be revoked under Section 2.10(b) and is revoked in
accordance therewith), (d) the assignment of any Eurodollar Loan other than on
the last day of the Interest Period applicable thereto as a result of a request
by the Borrower pursuant to Section 2.18, or (e) the revocation of any notice of
prepayment pursuant to Sections 2.08 and 2.10, then, in any such event, the
Borrower shall compensate each applicable Lender or the Paying Agent, as
applicable, for the loss, cost and expense attributable to such event. In the
case of a Eurodollar Loan, an LC Disbursement bearing interest by reference to
the LIBO Rate or a Tranche B Credit-Linked Deposit, such loss, cost or expense
to any applicable Lender or the Paying Agent shall be deemed to include an
amount determined by such Lender or the Paying Agent, as the case may be, to be
the excess, if any, of (i) the amount of interest which would have accrued on
the principal amount of such Loan, LC Disbursement or on the Tranche B
Credit-Linked Deposit had such event not occurred, at the Adjusted LIBO Rate
that would have been applicable to such Loan, LC Disbursement or the Tranche B
Credit-Linked Deposit, for the period from the date of such event to the last
day of the then current Interest Period therefor (or, in the case of a failure
to borrow, convert or continue, for the period that would have been the Interest
Period for such Loan or LC Disbursement), over (ii) the amount of interest which
would accrue on such principal amount for such period at the interest rate which
such Lender would bid were it to bid, at the commencement of such period, for
dollar deposits of a comparable amount and period from other banks in the
Eurodollar market. A certificate of any
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Lender setting forth any amount or
amounts that such Lender is entitled to receive pursuant to this Section shall
be delivered to the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay such Lender the amount shown as due on any such certificate
within 10 days after receipt thereof.
SECTION 2.16 Taxes.
(a) Any and all payments by or on account of any obligation of
the Borrower hereunder or under any other Loan Document shall be made free and
clear of and without deduction for any Indemnified Taxes or Other Taxes;
provided that if the Borrower shall be required to deduct any Indemnified Taxes
or Other Taxes from such payments, then (i) the sum payable shall be increased
as necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) the Paying Agent,
Lender or Issuing Bank (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 pay the full amount deducted
to the relevant Governmental Authority in accordance with applicable law.
(b) Any and all payments by or on account of any obligation of
the Paying Agent pursuant to Section 2.05(b) hereunder shall be made free and
clear of and without deduction for any Indemnified Taxes or Other Taxes;
provided that if the Paying Agent shall be required to deduct any Indemnified
Taxes or Other Taxes from such payments, then (i) the Paying Agent shall so
notify the Borrower and advise it of the additional amount required to be paid
by the Borrower so that the sum payable pursuant to Section 2.05(b) shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section) the Tranche
B Lenders receive an amount equal to the sum they would have received had no
deductions been made, (ii) the Borrower shall pay such additional amount to the
Paying Agent, (iii) the Paying Agent shall make such deductions, (iv) the Paying
Agent shall pay the full amount deducted to the relevant Governmental Authority
in accordance with applicable law and (v) the Borrower shall indemnify, within
10 days after written demand therefor, the Paying Agent for the full amount of
any deductions paid by the Paying Agent with respect to any payments made on
account of any obligation of the Paying Agent pursuant to Section 2.05(b).
(c) The Borrower shall indemnify the Paying Agent, each Lender
and each Issuing Bank, within 10 days after written demand therefor, for the
full amount of any Indemnified Taxes or Other Taxes paid by the Paying Agent,
such Lender or such Issuing Bank, as the case may be, on or with respect to any
payment by or on account of any obligation of the Borrower hereunder or under
any other Loan Document (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section) and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to the
Borrower by a Lender or an Issuing Bank, or by the Paying Agent on its own
behalf or on behalf of a Lender or an Issuing Bank, shall be conclusive absent
manifest error.
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(d) As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower
shall deliver to the Paying Agent the original or a certified copy of a receipt
issued by such Governmental Authority evidencing such payment, a copy of the
return reporting such payment or other evidence of such payment reasonably
satisfactory to the Paying Agent.
(e) Any Foreign Lender shall deliver to the Borrower (with a
copy to the Paying Agent), at the time or times prescribed by applicable law,
such properly completed and executed documentation prescribed by the law of the
jurisdiction in which the Borrower is located, or any treaty to which such
jurisdiction is a party, or reasonably requested by the Borrower as will permit
such payments to be made without withholding.
(f) In addition, the Borrower or the Paying Agent shall pay any Other Taxes to
the relevant Governmental Authority in accordance with applicable law.
SECTION 2.17 Payments Generally; Pro Rata Treatment;
Sharing of Set-offs.
(a) The Borrower shall make each payment required to be made
by it hereunder or under any other Loan Document (whether of principal,
interest, fees or reimbursement of LC Disbursements, or of amounts payable under
Section 2.14, 2.15 or 2.16, or otherwise) prior to 1:00 p.m., New York City
time, on the date when due, in immediately available funds, without set-off,
counterclaim, recoupment or deduction of any kind. Any amounts received after
such time on any date may, in the discretion of the Paying Agent, be deemed to
have been received on the next succeeding Business Day for purposes of
calculating interest thereon. All such payments shall be made to the Paying
Agent at its offices located at Eleven Madison Avenue, New York, New York 10010
(or such other office as the Paying Agent shall from time to time designate to
the Borrower), except payments to be made directly to an Issuing Bank as
expressly provided herein and except that payments pursuant to Sections 2.14,
2.15, 2.16 and 9.03 shall be made directly to the Persons entitled thereto and
payments pursuant to other Loan Documents shall be made to the Persons specified
therein. The Paying Agent shall distribute any such payments received by it for
the account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment hereunder or under any other Loan Document shall
be due on a day that is not a Business Day, the date for payment shall be
extended to the next succeeding Business Day, and, in the case of any payment
accruing interest, interest thereon shall be payable for the period of such
extension. All payments under each Loan Document shall be made in dollars.
(b) If at any time insufficient funds are received by and
available to the Paying Agent to pay fully all amounts of principal,
unreimbursed LC Disbursements, interest and fees then due hereunder, such funds
shall be applied (i) first, towards payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second, towards
payment of principal and unreimbursed LC Disbursements then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
principal and unreimbursed LC Disbursements then due to such parties.
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(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans or participations in LC Disbursements
resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its Revolving Loans and participations in LC Disbursements
and accrued interest thereon than the proportion received by any other Lender,
then the Lender receiving such greater proportion shall purchase (for cash at
face value) participations in the Revolving Loans and participations in LC
Disbursements of other Lenders to the extent necessary so that the benefit of
all such payments shall be shared by the Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective
Revolving Loans and participations in LC Disbursements; provided that (i) if any
such participations are purchased and all or any portion of the payment giving
rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans or
participations in LC Disbursements to any assignee or participant, other than to
the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions
of this paragraph shall apply). The Borrower consents to the foregoing and
agrees, to the extent it may effectively do so under applicable law, that any
Lender acquiring a participation pursuant to the foregoing arrangements may
exercise against the Borrower rights of set-off and counterclaim with respect to
such participation as fully as if such Lender were a direct creditor of the
Borrower in the amount of such participation.
(d) Unless the Paying Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Paying Agent
for the account of the Lenders or any Issuing Bank hereunder that the Borrower
will not make such payment, the Paying Agent may assume that the Borrower has
made such payment on such date in accordance herewith and may, in reliance upon
such assumption, distribute to the Lenders or such Issuing Bank, as the case may
be, the amount due. In such event, if the Borrower has not in fact made such
payment, then each of the Lenders and each of the Issuing Banks, as the case may
be, severally agrees to repay to the Paying Agent forthwith on demand the amount
so distributed to such Lender or such Issuing Bank with interest thereon, for
each day from and including the date such amount is distributed to it to but
excluding the date of payment to the Paying Agent, at the greater of the Federal
Funds Effective Rate and a rate determined by the Paying Agent in accordance
with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to
be made by it pursuant to Section 2.04(d) or (e), 2.06(b) or 2.17(d), then the
Paying Agent may, in its discretion (notwithstanding any contrary provision
hereof), apply any amounts thereafter received by the Paying Agent for the
account of such Lender to satisfy such Lender's obligations under such Sections
until all such unsatisfied obligations are fully paid.
SECTION 2.18 Mitigation Obligations; Replacement of Lenders.
(a) If any Lender requests compensation under Section 2.14, or
if the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.16,
then such Lender shall use reasonable efforts to
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designate a different lending office for funding or booking its Loans hereunder
or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to Section
2.14 or 2.16, as the case maybe, in the future and (ii) would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.
(b) If (i) any Lender requests compensation under Section
2.14, (ii) the Borrower is required to pay any additional amount to any Lender
or any Governmental Authority for the account of any Lender pursuant to Section
2.16, (iii) any Revolving Lender defaults in its obligation to fund Loans
hereunder, or (iv) any Lender has not consented to a proposed amendment, waiver
or modification under this Agreement that requires the consent of all Lenders
and which has been approved by Required Lenders, then the Borrower may, at its
sole expense and effort, upon notice to such Lender and the Paying Agent,
require such Lender to assign and delegate, without recourse (in accordance with
and subject to the restrictions contained in Section 9.04), all its interests,
rights and obligations under this Agreement to an assignee that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) the Borrower shall have received the prior
written consent of the Paying Agent and, if applicable, the applicable Issuing
Bank, which consent shall not unreasonably be withheld, (ii) such Lender shall
have received payment of an amount equal to the outstanding principal of its
Loans and participations in LC Disbursements, accrued interest thereon, accrued
fees and all other amounts payable to it hereunder, from the assignee (to the
extent of such outstanding principal and accrued interest and fees) or the
Borrower (in the case of all other amounts) and (iii) in the case of any such
assignment resulting from a claim for compensation under Section 2.14 or
payments required to be made pursuant to Section 2.16, such assignment will
result in a reduction in such compensation or payments. A Lender shall not be
required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Borrower to require such assignment and delegation cease to apply.
SECTION 2.19 Certain Regulatory Events. Upon the
occurrence of a Regulatory Event, the Borrower will promptly notify the Paying
Agent and the Lenders and will, within 60 days, deliver to the Paying Agent and
the Lenders an analysis satisfactory to the Paying Agent including (a) a summary
in reasonable detail of the actions anticipated to be taken by the Borrower in
response to such Regulatory Event and the anticipated timing thereof and (b)
quarterly financial projections for the period prior to the maturity of the
Facilities taking into account the impact of such Regulatory Event and of such
actions. Following the receipt of such analysis, if the Paying Agent and the
Required Lenders shall determine that such Regulatory Event, after taking into
account the actions anticipated to be taken by the Borrower in response thereto,
is likely to result in a Material Adverse Effect, the Lenders may propose
modifications (the "Proposed Modifications") to the structure of the credit
facilities established by this Agreement and the pricing and other terms set
forth herein and in the other Loan Documents that in their judgment are
appropriate to reduce credit risks related to such Regulatory Event and/or to
provide appropriate compensation for such risks. The Borrower and the Lenders
will, following the occurrence of a Regulatory Event and the determination by
the Paying Agent and the Required Lenders referred to in the preceding sentence,
negotiate in good faith to agree upon
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the Proposed Modifications or alternative modifications. If the Loan Documents
shall not have been amended in a manner satisfactory to the Borrower and the
Required Lenders by the 120th day after the delivery of the Proposed
Modifications to the Borrower (the "Amortization Date"), then, notwithstanding
any other provision of this Agreement, on the last Business Day of each calendar
quarter ending after the Amortization Date (i) the Revolving Commitments will be
automatically reduced by an amount equal to 1/8th of the aggregate amount of
such Commitments on the Amortization Date and the Borrower shall prepay
Revolving Loans, together with the interest accrued thereon to the date of
prepayment, to the extent necessary in order that the aggregate Revolving Credit
Exposures shall at no time exceed the aggregate Revolving Commitments, and (ii)
the Borrower will cause the Tranche B LC Exposure to be reduced by an amount
equal to 1/8th of the amount of such Tranche B LC Exposure on the Amortization
Date by causing the undrawn amounts of Tranche B Letters of Credit to be reduced
or by depositing cash with the Paying Agent on terms and under documentation
approved by the Paying Agent as security for the Borrower's reimbursement
obligations in respect of Tranche B Letters of Credit. It is expressly
understood that nothing in this Section shall postpone the Revolving Maturity
Date or the Tranche B Maturity Date or any other date for the payment of any
amount due under this Agreement.
ARTICLE III Representations and Warranties
The Borrower represents and warrants to the Lenders that:
SECTION 3.01 Organization; Powers. The Borrower and each of
its Consolidated Subsidiaries is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, has all
requisite corporate, partnership, limited liability company or other applicable
organizational power and authority to carry on its business as now conducted
and, except where the failure to do so, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect, is qualified
to do business, in and is in good standing, in every jurisdiction where such
qualification is required.
SECTION 3.02 Authorization; Enforceability. The Transactions
are within the Borrower's corporate powers and have been duly authorized by all
necessary corporate and, if required, stockholder action. This Agreement has
been duly executed and delivered by the Borrower and constitutes, the Second
Indenture constitutes, and each other Loan Document to which the Borrower is to
be a party, when executed and delivered by the Borrower (and, in the case of the
Collateral Mortgage Bonds, authenticated by the trustee therefor), will
constitute, a legal, valid and binding obligation of the Borrower, enforceable
in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights generally
and subject to general principles of equity, regardless of whether considered in
a proceeding in equity or at law.
SECTION 3.03 Governmental Approvals; No Conflicts. The
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority, except for the
approval of the ACC, which has been obtained and is in full force and effect,
and except filings necessary to perfect Liens created under the Loan Documents
(other than the Lien of the Second Indenture, in respect of which all requisite
filings
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have been made), (b) will not violate any Requirement of Law, (c) will not
violate or result in a default under any indenture, agreement or other
instrument binding upon the Borrower or any of its Consolidated Subsidiaries or
its assets, or give rise to a right thereunder to require any payment to be made
by the Borrower or any of its Consolidated Subsidiaries, and (d) will not result
in the creation or imposition of any Lien on any asset of the Borrower or any of
its Consolidated Subsidiaries, except Liens created under the Loan Documents or
under the Second Indenture.
SECTION 3.04 Financial Condition; No Material Adverse Change;
Secured Indebtedness.
(a) The most recent financial statements delivered by the
Borrower pursuant to Section 4.01(k) or Section 5.01(a) or (b) present fairly,
in all material respects, the financial position and results of operations and
cash flows of the Borrower and its Consolidated Subsidiaries as of such dates
and for such periods in accordance with GAAP, subject to year-end audit
adjustments and the absence of footnotes in the case of the statements delivered
pursuant to Section 4.01(k)(ii) or Section 5.01(b). Neither the Borrower nor any
of its Consolidated Subsidiaries had, at the date of the most recent balance
sheet referred to above, any Guarantee, contingent liability or liability for
taxes, or any long-term lease or unusual forward or long-term commitment,
including any interest rate or foreign currency swap or exchange transaction,
which, in any case, is material to the Borrower and its Consolidated
Subsidiaries, taken as a whole, and which is not reflected in the foregoing
statements or in the notes thereto. During the period from December 31, 2003, to
and including the Effective Date there has been no sale, transfer or other
disposition by the Borrower or any of its Consolidated Subsidiaries of any part
of its business or property, and no purchase or other acquisition of any
business or property (including any capital stock of any other Person), which,
in either case, is material in relation to the consolidated financial condition
of the Borrower and its Consolidated Subsidiaries taken as a whole at December
31, 2003.
(b) Except to the extent that any specific change explicitly
disclosed in the Disclosure Documents may be so considered, since December 31,
2003, there has been no material adverse change in the financial condition,
results of operations, business or prospects of the Borrower and its
Consolidated Subsidiaries, taken as a whole.
(c) As of the Effective Date, there is $218,950,000 in
aggregate principal amount of First Mortgage Bonds outstanding and $619,537,047
in aggregate principal amount of First Mortgage Bonds and Second Mortgage Bonds
outstanding.
SECTION 3.05 Properties.
(a) Other than as explicitly disclosed in the Disclosure
Documents, each of the Borrower and its Consolidated Subsidiaries has good title
to, or valid leasehold interests in, and enjoys peaceful and undisturbed
possession of, all its real and personal property material to its business,
except for minor defects in title that do not interfere with its ability to
conduct its business as currently conducted or to utilize such properties for
their intended purposes.
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(b) Each of the Borrower and its Consolidated Subsidiaries
owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and
other intellectual property material to its business, and the use thereof by the
Borrower and its Subsidiaries does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 3.06 Litigation and Environmental Matters.
(a) Except as explicitly disclosed in the Disclosure
Documents, there are no actions, suits or proceedings by or before any
arbitrator or Governmental Authority pending against or, to the knowledge of the
Borrower, threatened against or affecting the Borrower or any of its
Consolidated Subsidiaries (i) as to which there is a reasonable possibility of
an adverse determination and that, if adversely determined, would, individually
or in the aggregate, result in a Material Adverse Effect or (ii) that involve
any of the Loan Documents, the Second Indenture or the Transactions.
(b) Except as explicitly disclosed in the Disclosure
Documents, and except with respect to any other matters that, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect, neither the Borrower nor any of its Consolidated Subsidiaries (i) has
failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any Environmental Law,
(ii) has become subject to any Environmental Liability, (iii) has received
notice of any claim with respect to any Environmental Liability or (iv) knows of
any basis for any Environmental Liability.
(c) Since the date of this Agreement, there has been no change
in the status of any matter disclosed in the Disclosure Documents that,
individually or in the aggregate, has resulted in, or materially increased the
likelihood of, a Material Adverse Effect.
SECTION 3.07 Compliance with Laws and Agreements. Except as
explicitly disclosed in the Disclosure Documents, each of the Borrower and its
Consolidated Subsidiaries is in compliance with all Requirements of Law,
including the Fair Labor Standards Act, Environmental Laws, the Americans with
Disabilities Act, the Foreign Corrupt Practices Act and Anti-Terrorism Laws,
applicable to it or its property and all indentures, agreements and other
instruments binding upon it or its property, except where the failure to be in
compliance, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect. No Default has occurred and is
continuing.
SECTION 3.08 Federal Regulations. No part of the proceeds of
any Loans will be used for "purchasing" or "carrying" any "margin stock" within
the respective meanings of each of the quoted terms under Regulation U as now
and from time to time hereafter in effect or for any purpose that violates the
provisions of the Regulations of the Board. If requested by any Lender or the
Paying Agent, the Borrower will furnish to the Paying Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
G-3 or FR Form U-1 referred to in Regulation U.
SECTION 3.09 Investment and Holding Company Status.
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(a) Neither the Borrower nor any of its Consolidated
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940.
(b) The Borrower and its Consolidated Subsidiaries are exempt
from all provisions of the Public Utility Holding Company Act of 1935, as
amended, except Section 9(a)(2) thereof; and no order, consent, approval or
authorization is required under such Act in connection with the making of the
Loans hereunder or the consummation of any of the other Transactions. The
Borrower is not subject to regulation under any Requirement of Law (other than
Regulation X of the Board and Requirements of Law pertaining to utility
regulation) which limits its ability to incur Indebtedness.
SECTION 3.10 Taxes. Each of the Borrower and its Consolidated
Subsidiaries has timely filed or caused to be filed all Tax returns and reports
required to have been filed and has paid or caused to be paid all Taxes required
to have been paid by it, except (a) Taxes that are being contested in good faith
by appropriate proceedings and for which the Borrower or such Subsidiary, as
applicable, has set aside on its books adequate reserves or (b) to the extent
that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 3.11 ERISA. No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with all other ERISA
Events for which liability is reasonably expected to occur, would result in a
Material Adverse Effect. The present value of all accumulated benefit
obligations under each Plan (based on the assumptions used for purposes of
Statement of Financial Accounting Standards No. 87) did not, as of the date of
the most recent financial statements reflecting such amounts, exceed by more
than $25,000,000 the fair market value of the assets of such Plan, and the
present value of all accumulated benefit obligations of all underfunded Plans
(based on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $25,000,000 the fair
market value of the assets of all such underfunded Plans.
SECTION 3.12 Security Documents.
(a) The Collateral Mortgage Bonds are entitled to the benefits
of the Second Indenture and secured by the Lien of the Second Indenture. Upon
delivery of the Collateral Mortgage Bonds to the Paying Agent under the Bond
Delivery Agreement and at all times thereafter, the Collateral Mortgage Bonds
will be "Outstanding" and the Paying Agent will be the "Holder" of the
Collateral Mortgage Bonds for all purposes of the Second Indenture. The Second
Indenture constitutes a valid mortgage lien on and a valid and perfected
security interest in the properties or franchises described therein as being
subject to the Lien of the Second Indenture. As of the Effective Date no
material properties or franchises subject to the Lien of the Second Indenture
have been released from such Lien, and, as of any subsequent date, no such
properties or franchises shall have been released from the Lien of the Second
Indenture except in accordance with the terms thereof and hereof.
(b) The provisions of the Security Documents not covered by
paragraph (a) above are effective to create, in favor of the Paying Agent for
the benefit of the secured parties
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thereunder, legal, valid and enforceable Liens on or in all of the Collateral
subject thereto, and all necessary deliveries of property to the Paying Agent
and all necessary and appropriate recordings and filings have been made in all
necessary and appropriate public offices so that the Liens created by such
Security Documents constitute perfected Liens on or in all rights, titles,
estates and interests of the Borrower and any applicable Subsidiaries in the
Collateral covered thereby, prior and superior to all other Liens and all
necessary and appropriate consents to the creation and perfection of such Liens
have been obtained. No mortgage or financing statement or other instrument or
recordation covering all or any part of the Collateral is on file in any
recording office which has not been terminated or released, except as may have
been filed in favor of the Paying Agent.
SECTION 3.13 Disclosure. The Borrower has disclosed to the
Lenders all agreements, instruments and corporate or other restrictions to which
it or any of its Subsidiaries is subject, and all other matters known to it,
that, individually or in the aggregate, would result in a Material Adverse
Effect. Neither the Information Memorandum nor any of the other reports,
financial statements, certificates or other information furnished by or on
behalf of the Borrower to the Paying Agent or any Lender in connection with the
negotiation of this Agreement or any other Loan Document or delivered hereunder
(as modified or supplemented by, and taken together with other information so
furnished) contains any misstatement of a material fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to forward looking statements, the Borrower represents only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time and notes that there can be no assurance that such
expectations, beliefs or projections will be achieved or accomplished and that
such projections are subject to an increasing degree of uncertainty as they
relate to later periods of time.
SECTION 3.14 Solvency. On the Effective Date, the Borrower is
Solvent.
SECTION 3.15 Labor Matters. There are no strikes or other
labor disputes against the Borrower or any of its Subsidiaries pending or, to
the knowledge of the Borrower, threatened that (individually or in the
aggregate) would have a Material Adverse Effect. Hours worked by and payment
made to employees of the Borrower and its Subsidiaries have not been in
violation of the Fair Labor Standards Act or any other applicable Requirement of
Law dealing with such matters that (individually or in the aggregate) would have
a Material Adverse Effect. All payments due from the Borrower or any of its
Subsidiaries on account of employee health and welfare insurance that
(individually or in the aggregate) would have a Material Adverse Effect if not
paid have been paid or accrued as a liability on the books of the Borrower or
the relevant Subsidiary.
SECTION 3.16 Anti-Terrorism Laws.
(a) Neither the Borrower nor, to the knowledge of the
Borrower, any of its Affiliates is in violation of any Requirement of Law
relating to terrorism or money laundering ("Anti-Terrorism Laws"), including
Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001
(the "Executive Order") and the Uniting and Strengthening America by
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Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001,
Public Law 107-56.
(b) Neither the Borrower nor, to the knowledge of the
Borrower, any of its Affiliates is any of the following:
(i) a Person that is listed in the annex to, or is
otherwise subject to the provisions of, the Executive Order;
(ii) a Person owned or controlled by, or acting for or
on behalf of, any Person that is listed on the Annex to, or is otherwise subject
to the provisions of, the Executive Order;
(iii) a Person with whom the Borrower is prohibited from
dealing or otherwise engaging in any transaction by any Anti-Terrorism Law;
(iv) a Person who commits, threatens or conspires to
commit or supports "terrorism" as defined in the Executive Order; or
(v) a Person that is named as a "specially designated
national or blocked person" on the most current list published by the U.S.
Treasury Department Office of Foreign Asst Control at its official website or
any replacement website or other replacement official publication of such list.
(c) Neither the Borrower nor, to the knowledge of the
Borrower, any of its Affiliates (i) conducts any business or engages in making
or receiving any contribution of funds, goods or services to or for the benefit
of any Person described in clause (b)(i), (ii), (iii) or (v) above or, to the
knowledge of the Borrower, clause (b)(iv) above; (ii) deals in, or otherwise
engages in any transaction relating to, any property or interest in property
blocked pursuant to the Executive Order, or (iii) engages in or conspires to
engage in any transaction that evades or avoids, or has the purposes of evading
or avoiding, or attempts to violate, any of the prohibitions set forth in any
Anti-Terrorism Law.
(d) No broker or other agent (other than the Arrangers) is
acting for the benefit of the Borrower or any of its Affiliates, or benefiting
in any capacity, in each case in connection with the Loan Documents.
ARTICLE IV
Conditions
----------
SECTION 4.01 Effective Date. The obligations of the Revolving
Lenders to make Loans and acquire participations in Letters of Credit, the
obligations of the Tranche B Lenders to fund their Tranche B Credit-Linked
Deposits and the obligations of the Issuing Banks to issue Letters of Credit
hereunder shall not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section 9.02):
(a) The Paying Agent (or its counsel) shall have received from
each party hereto either (i) a counterpart of this Agreement signed on behalf of
such party or (ii) evidence
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satisfactory to the Paying Agent (which may include
telecopy transmission of a signed signature page of this Agreement) that such
party has signed a counterpart of this Agreement.
(b) The Paying Agent shall have received a favorable written
opinion (addressed to the Paying Agent, the Issuing Banks and the Lenders and
dated the Effective Date) of each of (i) Vincent Nitido, General Counsel for the
Borrower, substantially in the form of Exhibit E-1, (ii) Thelen Reid & Priest
LLP, New York, counsel for the Borrower, substantially in the form of Exhibit
E-2, and (iii) Rodey, Dickason, Sloan, Akin & Robb, PA, special New Mexico
counsel for the Borrower, substantially in the form of Exhibit E-3, and covering
such other matters relating to the Borrower, the Loan Documents, the Second
Indenture, the Lien of the Second Indenture or the Transactions as the Required
Lenders shall reasonably request. The Borrower hereby requests such counsel to
deliver such opinions.
(c) The Paying Agent shall have received such documents and
certificates as the Paying Agent or its counsel may reasonably request relating
to the organization, existence and good standing of the Borrower, the
authorization of the Transactions and any other legal matters relating to the
Borrower, the Loan Documents, the Second Indenture, the Lien of the Second
Indenture or the Transactions, all in form and substance satisfactory to the
Paying Agent and its counsel.
(d) The conditions set forth in paragraphs (a) and (b) of
Section 4.02 shall be satisfied, and the Paying Agent shall have received a
certificate, dated the Effective Date and signed by the President, a Vice
President or a Financial Officer of the Borrower, confirming compliance with
such conditions as of the Effective Date.
(e) The Paying Agent, the Co-Administrative Agents and the
Documentation Agent shall have received all fees and other amounts due and
payable on or prior to the Effective Date, including all up-front fees and, to
the extent invoiced, reimbursement or payment of all out-of-pocket expenses
required to be reimbursed or paid by the Borrower hereunder or under any other
Loan Document.
(f) The Paying Agent shall have received a counterpart of the
Bond Delivery Agreement signed on behalf of the Borrower, together with (i)
Collateral Mortgage Bonds in an aggregate principal amount not less than
$400,587,047, duly issued and authenticated under the Second Indenture; (ii) a
duly executed copy of the Fifth Supplemental Indenture and all other documents,
instruments and filings relating to the issuance and authentication of the
Collateral Mortgage Bonds under the Second Indenture; (iii) all documents
instruments and filings creating or perfecting the Lien of the Second Indenture;
and (iv) all other documents and instruments required by law or reasonably
requested by the Paying Agent to be filed, registered or recorded to create or
perfect the Liens intended to be created under the Security Documents.
(g) The Paying Agent shall have received copies of the ACC
order authorizing the Transactions certified by an officer of the Borrower as
being a true and complete copy thereof and as being in full force and effect.
(h) On the Effective Date, (i) the Borrower shall have repaid
in full the principal of all loans outstanding, interest thereon and other
amounts due under the Existing Agreement;
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(ii) all commitments of the lenders and issuing banks under
the Existing Agreement shall have been terminated; (iii) all letters of credit
outstanding under the Existing Agreement (other than the Existing Letters of
Credit) shall have been returned and canceled (or the Paying Agent shall be
satisfied with the arrangements made for such cancellation); (iv) the Second
Mortgage Bonds, Collateral Series C, securing the obligations under the Existing
Agreement shall have been canceled (or the Paying Agent shall be satisfied with
the arrangements made for such cancelation); and (v) the Paying Agent shall have
received a certificate, dated the Effective Date and signed by the President, a
Vice President or a Financial Officer of the Borrower, confirming compliance
with the conditions set forth in clauses (i) through (iv) of this paragraph.
(i) Any change to the capitalization, structure and equity
ownership of the Borrower from that disclosed to the Co-Lead Arrangers prior to
November 21, 2003 shall be reasonably acceptable to the Co-Lead Arrangers, the
Issuing Banks and the Lenders.
(j) The Borrower and its Subsidiaries shall have outstanding
no indebtedness or preferred stock other than (a) the Obligations, and (b) the
Indebtedness described in the most recent financial statements delivered
pursuant to Section 4.01(k).
(k) The Paying Agent, the Issuing Banks and the Lenders shall
have received (i) U.S. GAAP audited consolidated balance sheets and related
statements of income, stockholders' equity and cash flows of the Borrower for
the three most recent fiscal years ending more than 90 days prior to the
Effective Date; and (ii) U.S. GAAP unaudited consolidated balance sheets and
related statements of income, stockholders' equity and cash flows of the
Borrower for each of the first three subsequent fiscal quarters ended after
December 31, 2003 and more than 45 days before the Effective Date, which
financial statements shall not be materially and adversely inconsistent with the
financial statements or forecasts presented in the Information Memorandum.
(l) Any material and adverse change in the amount and nature
of any environmental and employee health and safety exposures to which the
Borrower and its Subsidiaries may be subject or the plans of the Borrower or
such Subsidiaries with respect thereto from that disclosed to the Joint
Co-Arrangers prior to November 21, 2003 shall be reasonably acceptable to the
Paying Agent, the Issuing Banks and the Arrangers.
(m) All requisite governmental authorities (including, without
limitation, the ACC and all other regulatory authorities) and third parties
shall have approved or consented to this Agreement and the other Loan Documents
and the other transactions contemplated hereby and thereby (other than the
Acquisition Transactions) to the extent required, no stay of any applicable
regulatory approval shall have been issued and there shall be no litigation,
governmental, administrative or judicial action, actual or threatened, that
could reasonably be expected to restrain, prevent or impose burdensome
conditions on this Agreement and the other Loan Documents or the other
transactions contemplated hereby and thereby (other than the Acquisition
Transactions).
(n) The Paying Agent, the Issuing Banks and the Lenders shall
have received all documentation and other information required by bank
regulatory authorities under applicable
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"know your customer" and anti-money laundering rules and regulations, including
without limitation the U.S.A. Patriot Act.
(o) The Capital Stock of the Borrower (to the extent owned by
UniSource Energy, which owns all Capital Stock of the Borrower except 121 shares
of Capital Stock owned by independent third parties) shall all be free and clear
of any liens or encumbrances.
Notwithstanding the foregoing, the obligations of the Lenders
to make Loans and of the Issuing Banks to issue Letters of Credit hereunder
shall not become effective unless each of the foregoing conditions is satisfied
(or waived pursuant to Section 9.02) at or prior to 3:00 p.m., New York City
time, on March 31, 2004 (and in the event such conditions are not so satisfied
or waived, the Commitments and the obligations of the Lenders and Issuing Banks
hereunder shall terminate at such time).
SECTION 4.02 Each Credit Event. The obligation of each
Revolving Lender to make a Loan on the occasion of any Borrowing that increases
the amount of the Loans of any Revolving Lender outstanding is subject to the
satisfaction of the following conditions:
(a) The representations and warranties of the Borrower set
forth in the Loan Documents shall be true and correct in all material respects
on and as of the date of such Borrowing (except where such representations and
warranties expressly relate to an earlier date, in which case such
representations and warranties shall have been true and correct in all material
respects as of such earlier date).
(b) At the time of and immediately after giving effect to such
Borrowing, no Default shall have occurred and be continuing.
Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrower on the date thereof as to the matters specified in paragraphs (a)
and (b) of this Section.
ARTICLE V
Affirmative Covenants
----------------------
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder have been
paid in full and all Letters of Credit have expired or terminated and all LC
Disbursements have been reimbursed, the Borrower covenants and agrees with the
Lenders that:
SECTION 5.01 Financial Statements and Other Information. The
Borrower will furnish to the Paying Agent (and the Paying Agent will forward
such copies to the Lenders):
(a) as soon as available and in any event within 60 days after
the end of each of the first three fiscal quarterly periods of each fiscal year
of the Borrower, or 15 days after the date on which its quarterly report for
such fiscal quarterly period is required to be filed with the Securities and
Exchange Commission, whichever is later, consolidated statements of income of
the Borrower and its Consolidated Subsidiaries for such period and for the
period from the beginning of the respective fiscal year to the end of such
period, consolidated statements of cash flows of the Borrower and its
Consolidated Subsidiaries from the beginning of the applicable
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fiscal year to the end of such period and the related consolidated balance
sheets as of the end of such period, setting forth in each case in comparative
form the corresponding consolidated figures for the corresponding period in the
preceding fiscal year, accompanied by a certificate of a Financial Officer of
the Borrower, which certificate shall state that the financial statements fairly
present in all material respects the consolidated financial condition and
results of operations, as the case may be, of the Borrower and its Consolidated
Subsidiaries in accordance with GAAP, consistently applied (except where noted),
as of the end of, and for, such period (subject to normal year-end audit
adjustments and the absence of footnotes);
(b) as soon as available and in any event within 105 days
after the end of each fiscal year of the Borrower, or 15 days after the date on
which its annual report for such fiscal year is required to be filed with the
Securities and Exchange Commission, whichever is later, consolidated statements
of income and cash flows of the Borrower and its Consolidated Subsidiaries for
such year and the related consolidated balance sheets as of the end of such
year, setting forth in each case in comparative form the corresponding
consolidated figures for the preceding fiscal year, and accompanied by an
opinion of independent public accountants of recognized national standing
selected by the Borrower, which opinion shall not contain any qualification or
exception as to the scope of such audit and shall state that the consolidated
financial statements fairly present in all material respects the consolidated
financial condition and results of operations of the Borrower and its
consolidated Subsidiaries as of the end of, and for, such fiscal year and have
been prepared with GAAP, consistently applied (except where noted);
(c) concurrently with any delivery of financial statements
under clause (a) or (b) above, a certificate of a Financial Officer of the
Borrower (i) certifying as to whether a Default has occurred and, if a Default
has occurred, specifying the details thereof and any action taken or proposed to
be taken with respect thereto, (ii) setting forth reasonably detailed
calculations demonstrating compliance with Sections 6.06, 6.07 and 6.08 and
(iii) stating whether any change in GAAP or in the application thereof not
disclosed in any prior such certificate has occurred since the date of the
audited financial statements referred to in Section 4.01(k) and, if any such
change has occurred, specifying the effect of such change on the financial
statements accompanying such certificate;
(d) concurrently with any delivery of financial statements
under clause (b) above, a certificate of the accounting firm that reported on
such financial statements stating whether they obtained knowledge during the
course of their examination of such financial statements of any Default (which
certificate may be limited to the extent required by accounting rules or
guidelines);
(e) promptly upon their becoming available, copies of all
registration statements (other than on Form S-8 or any successor form) and
regular periodic reports, if any, that the Borrower shall have filed pursuant to
Section 13(a) or 15 of the Securities Exchange Act of 1934, as amended, with the
Securities and Exchange Commission (or any governmental agency substituted
therefor) or filed with any national securities exchange;
(f) promptly upon the mailing thereof to the shareholders of
the Borrower generally, copies of all financial statements, reports and proxy
statements so mailed;
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(g) promptly upon their becoming available, copies of all
current reports on Form 8-K filed by the Borrower with the Securities and
Exchange Commission, and all similar reports filed with any national securities
exchange;
(h) promptly upon their becoming available, copies of (i) any
certified resolutions of the Board of Directors of the Borrower and net earnings
certificates delivered under the Second Indenture in connection with the
issuance of Bonds upon the basis of net property additions or deposits of cash;
any certificates of a Financial Officer under either Indenture with respect to
amounts charged to replacement reserve, detailing insurance on the Borrower's
property or showing compliance by the Borrower with the covenants contained in
such Indenture; any supplemental indentures to either Indenture; any redemption
notices under either Indenture; and any notices of defaults under either
Indenture or accelerations of Bonds; (ii) any notices of default under the
documentation for any Sale Leaseback of the Borrower or any Consolidated
Subsidiary, any notices of non-payment of rent or any other material amounts
owing under any such Sale Leaseback documentation and any notices of
acceleration of any amounts due under any such Sale Leaseback documentation; and
(iii) any written notices from the ACC of non-compliance by the Borrower or any
of its Consolidated Subsidiaries with any material ACC decision or with any
other rules, regulations or orders of the ACC, and any written notices of any
extraordinary audit or investigation by the ACC into the business, affairs or
operations of the Borrower or any of its Consolidated Subsidiaries;
(i) as soon as practicable and in any event within five
Business Days after the Borrower receives written notice of an upgrading or a
downgrading of the First Mortgage Bonds or the Second Mortgage Bonds by any
Rating Agency, a notice of such upgrading or downgrading;
(j) if requested by the Paying Agent, concurrently with any
delivery of financial statements under clause (a) or (b) above, consolidating
statements of income and cash flows for the applicable periods and the
consolidating balance sheets as of the end of such periods, accompanied (i) in
the case of a delivery of financial statements under clause (a) above, by a
certificate of a Financial Officer of the Borrower, which certificate shall
state that such financial statements fairly present in all material respects the
consolidating financial condition and results of operations, as the case may be,
of the Borrower and its Consolidated Subsidiaries in accordance with GAAP,
consistently applied (except where noted), as of the end of, and for, the
applicable period (subject to normal year-end audit adjustments), and (ii) in
the case of a delivery of financial statements under clause (b) above, by (A) a
certificate of a Financial Officer of the Borrower, which certificate shall
state that such consolidating financial statements fairly present in all
material respects the financial condition and results of operations of the
Borrower and its Consolidated Subsidiaries as of the end of, and for, the
applicable fiscal year and have been prepared in accordance with GAAP,
consistently applied (except where noted), and (B) a certificate of the
independent public accountants referred to in clause (i) of paragraph (b) above,
which certificate should state that such consolidating financial statements are
the consolidating financial statements that served as the basis for the audited
consolidated financial statements in respect of which such accountants delivered
the opinion referred to in such clause (i); and
(k) promptly following any request therefor, such other
information regarding the operations, business affairs and financial condition
of the Borrower or any Subsidiary, or
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compliance with the terms of any Loan Document or the Second Indenture, as the
Paying Agent or any Lender may reasonably request.
So long as the Borrower is subject to the financial reporting
requirements of the Securities Exchange Act of 1934, as amended, and the
financial statements contained in any quarterly or annual reports filed with the
Securities and Exchange Commission in accordance with such Act and the rules and
regulations promulgated thereunder, such financial statements may be delivered
by the Borrower in satisfaction of its obligations to deliver consolidated
financial statements pursuant to clauses (a) or (b), as the case may be, of this
Section 5.01.
SECTION 5.02 Notices of Material Events. The Borrower
will furnish to the Paying Agent and each Lender prompt written notice of the
following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority against or
affecting the Borrower or any Affiliate thereof as to which there is a
reasonable possibility of an adverse determination and that, if adversely
determined, would reasonably be expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together
with any other ERISA Events that have occurred, would result in liability of the
Borrower and its Subsidiaries in an aggregate amount exceeding $25,000,000; and
(d) any other development that results in, or would reasonably
be expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 5.03 Existence; Conduct of Business. The Borrower
will, and will cause each of its Consolidated Subsidiaries to, do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence and the rights, licenses, permits, privileges and franchises
material to the conduct of its business, except to the extent the failure to do
so would not reasonably be expected to result in a Material Adverse Effect;
provided that the foregoing shall not prohibit any merger, consolidation,
liquidation or dissolution permitted under Section 6.03.
SECTION 5.04 Payment of Obligations. The Borrower will, and
will cause each of its Consolidated Subsidiaries to, pay its obligations,
including Tax liabilities and assessments (including water assessments by the
Arizona State Land Department), that, if not paid, could reasonably be expected
to result in a Material Adverse Effect before the same shall become delinquent
or in default, except where (a) the validity or amount thereof is being
contested in good faith by appropriate proceedings, (b) the Borrower or such
Subsidiary has set aside on its books adequate reserves with respect thereto to
the extent required by and otherwise in
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accordance with GAAP and (c) the failure to make payment pending such contest
could not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.05 Maintenance of Properties; Insurance. The
Borrower will, and will cause each of its Consolidated Subsidiaries to, (a) keep
and maintain all property material to the conduct of its business in good
working order and condition, ordinary wear and tear excepted; provided that the
Borrower or any of its Consolidated Subsidiaries may discontinue the operation
of any of its properties to the extent, in the judgment of the Borrower, it is
no longer advisable to operate such property, or to the extent the Borrower or
such Subsidiary intends to sell or otherwise dispose of such property, which
disposition is not prohibited by Section 6.04; and (b) maintain, with
financially sound and reputable insurance companies, or through its own program
of self-insurance, insurance in such amounts and against such risks as are
customarily maintained by companies engaged in the same or similar businesses
operating in the same or similar locations.
SECTION 5.06 Books and Records; Inspection Rights. The
Borrower will, and will cause each of its Consolidated Subsidiaries to, keep
proper books of record and account in which entries are made of all dealings and
transactions in relation to its business and activities, all in accordance with
customary and prudent business practices, The Borrower will, and will cause each
of its Consolidated Subsidiaries to, permit any representatives designated by
the Paying Agent or any Lender, upon reasonable prior notice, to visit and
inspect its properties, and, subject to contractual or statutory limitations
regarding confidential or proprietary information, to examine and make extracts
from its books and records, and to discuss its affairs, finances and condition
with its officers, all at such reasonable times and as often as reasonably
requested.
SECTION 5.07 Compliance with Laws. The Borrower will, and will
cause each of its Consolidated Subsidiaries to, comply with all laws, rules,
regulations and orders of any Governmental Authority applicable to it or its
property, except where the failure to do so, individually or in the aggregate,
would not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.08 Use of Proceeds and Letters of Credit. The
proceeds of the Loans and the Revolving Letters of Credit will be used only for
general corporate purposes. No part of the proceeds of any Loan or of any
Revolving Letter of Credit will be used, whether directly or indirectly, for any
purpose that entails a violation of any of the Regulations of the Board,
including Regulations U and X. The Tranche B Letters of Credit will be issued
only to support the Revenue Bonds set forth on Schedule 2.04 for the Tranche B
Letters of Credit.
SECTION 5.09 Environmental Laws.
(a) The Borrower will, and will cause each of its Consolidated
Subsidiaries to, comply with, and use commercially reasonable efforts to insure
compliance by all tenants and subtenants, if any, with, all Environmental Laws
and obtain and will, and will cause each of its Consolidated Subsidiaries to,
comply with and maintain, and use commercially reasonable efforts to insure that
all tenants and subtenants obtain and comply with and maintain, any and all
licenses, approvals, registrations or permits required by Environmental Laws,
except to the extent that failure to do so would not reasonably be expected to
have a Material Adverse Effect;
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(b) The Borrower will, and will cause each of its Consolidated
Subsidiaries to, conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws, except to the extent that the failure to take such actions
would not reasonably be expected to have a Material Adverse Effect and promptly
comply with all lawful orders and directives of all Governmental Authorities
respecting Environmental Laws, except to the extent that the same are being
contested in good faith by appropriate proceedings and the pendency of such
proceedings would not reasonably be expected to have a Material Adverse Effect.
SECTION 5.10 Further Assurances. The Borrower will, and will
cause each of its Consolidated Subsidiaries to, execute any and all further
documents, financing statements, agreements and instruments, and take all such
further actions (including the filing and recording of financing statements,
fixture filings, mortgages, deeds of trust and other documents), which may be
required under any applicable law, or which the Paying Agent or the Required
Lenders may reasonably request, to effectuate the transactions contemplated by
the Loan Documents or under the Second Indenture or to grant, preserve, protect
or perfect the Liens created or intended to be created by the Second Indenture
or the Security Documents or the validity or priority of any such Lien, all at
the expense of the Borrower. The Borrower also agrees to provide to the Paying
Agent, from time to time upon request, evidence reasonably satisfactory to the
Paying Agent as to the perfection and priority of the Liens created or intended
to be created by the Security Documents or by or under the Second Indenture.
SECTION 5.11 Reference Ratings. The Borrower shall use
commercially reasonable efforts to obtain, not later than 90 days after the
Effective Date, Reference Ratings for the credit facilities established by this
Agreement from each of S&P and Moody's, and deliver, or cause to be delivered,
to the Paying Agent evidence satisfactory to the Paying Agent of such Reference
Ratings. At all times thereafter, the Borrower shall use commercially reasonable
efforts to maintain such Reference Ratings.
SECTION 5.12 Acquisition Closing Date. The Borrower shall:
(a) on the Acquisition Closing Date, cause UniSource Energy
(i) to repay all Indebtedness of UniSource Energy owed to the Borrower (such
debt payment, the "UniSource Debt Payment"); and (ii) to contribute to the
Borrower as common equity (such equity contribution, the "UniSource Equity
Contribution") an aggregate amount in cash of not less than the amount necessary
to result, after giving pro forma effect to (x) the UniSource Debt Payment, and
(y) any application of proceeds of the UniSource Debt Payment and the UniSource
Equity Contribution to repayment of Indebtedness of the Borrower, in the
Borrower having the ability under all Requirements of Law (including all orders
of the ACC) to distribute 100% of its net income to its shareholders;
(b) on the Acquisition Closing Date, make arrangements
satisfactory to the Paying Agent to reduce Indebtedness of the Borrower in an
amount not less than $180,000,000 minus (i) the amount of the reduction in the
Tranche B Credit-Linked Deposit to be made pursuant to Section 2.08(d)
(including, without limitation, delivery of an irrevocable notice of redemption
with respect to any such Indebtedness which is to be redeemed) and (ii) the
amount
56
LA/1174693.12
of any reductions in Indebtedness of the Borrower between the Effective
Date and the Acquisition Closing Date; and
(c) during the period commencing on the Acquisition Closing
Date and ending thirty-five (35) days after the Acquisition Closing Date, reduce
Indebtedness of the Borrower (treating for purposes of this Section 5.12(c) any
reduction in the Tranche B Credit Linked Deposit pursuant to Section 2.08(d) as
a reduction in Indebtedness of the Borrower) in an amount not less than the
amount required under Section 2.08(d) and Section 5.12(b).
ARTICLE VI
Negative Covenants
-------------------
Until the Commitments have expired or terminated and the
principal of and interest on each Loan and all fees payable hereunder have been
paid in full and all Letters of Credit have expired or terminated and all LC
Disbursements have been reimbursed, the Borrower covenants and agrees with the
Lenders that:
SECTION 6.01 Indebtedness. The Borrower will not permit:
(a) the aggregate principal amount of (i) First Mortgage Bonds
outstanding at any time to exceed $222,265,000 less the aggregate amount of all
repayments, optional or mandatory, of the principal amount thereof made on or
after the date hereof and (ii) First Mortgage Bonds and Second Mortgage Bonds
outstanding at any time taken together to exceed (x) prior to the Flexibility
Date, $650,000,000 and (y) after the Flexibility Date, an amount equal to
$650,000,000 minus 60% of the amount of secured Indebtedness of the Borrower
that is reduced during the period beginning on the Effective Date and ending
thirty-five (35) days after the Acquisition Closing Date; provided that there
shall be disregarded for purposes of any determination under this paragraph the
principal amount of any outstanding First Mortgage Bonds or Second Mortgage
Bonds (collectively, "Mortgage Bonds") which (A) are to be redeemed or paid at
maturity within 90 days after the date of such determination or (ii) evidence or
secure the Borrower's obligations in respect of industrial development revenue
bonds of the same principal amount (or related reimbursement obligations) which
are to be redeemed or paid at maturity within 90 days after the date of such
determination; provided, however, that (1) in the case of any such redemption,
either irrevocable and unconditional notice of redemption shall have been given
or irrevocable and unconditional instructions shall have been given to the
related trustee to give such notice of redemption and (2) in the case of any
such redemption or payment, cash in an amount sufficient to redeem or repay the
Mortgage Bonds to be disregarded (or the obligations evidenced or secured
thereby) shall have been deposited with the applicable trustee for the
redemption or payment thereof; or
(b) the aggregate amount of Guarantees by the Borrower and the
Consolidated Subsidiaries (other than Guarantees of the Obligations and other
than Guarantees by the Borrower or any Consolidated Subsidiary of Indebtedness
or obligations of the Borrower or a Consolidated Subsidiary) outstanding at any
time to exceed $30,000,000.
SECTION 6.02 Liens. The Borrower will not, and will not
permit any Consolidated Subsidiary to, create, incur, assume or permit to exist
any Lien on any property or asset now owned or hereafter acquired by it, or
assign or sell any income or revenues or rights in respect of any thereof,
except:
(a) Liens created or existing on the date hereof; provided
that no such Lien is spread to cover any additional property and the amount of
the Indebtedness secured thereby is not increased;
(b) Liens created pursuant to the Loan Documents;
(c) Liens created pursuant to the Indentures;
(d) any "permitted encumbrances", "prepaid liens" or permitted
"prior liens" (as such terms are defined in the Indentures);
(e) Liens on property not subject to the Lien of the Second
Indenture;
(f) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other similar Liens arising by operation of law in the ordinary
course of business that are not overdue for a period of more than 90 days;
(g) Liens on property of San Carlos, provided that in the
event any Lien is placed on property of San Carlos, the Indebtedness secured by
such Lien shall be deemed to be Indebtedness of the Borrower for purposes of all
calculations under Sections 6.06, 6.07 and 6.08;
(h) any Lien on any property or asset which Lien existed prior
to the acquisition thereof by the Borrower or any Consolidated Subsidiary;
provided that such Lien is not created in contemplation of or in connection with
such acquisition, such Lien is not spread to cover any other property of the
Borrower and its Consolidated Subsidiaries, and the amount of Indebtedness
secured thereby is not increased; and
(i) any Liens created to secure Indebtedness (i) which
refinances Indebtedness outstanding on the date of this Agreement, so long as
such Liens apply to no more property, have no greater priority and secure
Indebtedness in a principal amount no greater than the Liens in effect on the
date hereof securing the Indebtedness being refinanced; (ii) in the form of
industrial development revenue bonds, the Borrower's Indebtedness to the issuer
thereon and any Indebtedness incurred to provide security or credit support
therefor; or (iii) created pursuant to a Sale Leaseback in effect on the date
hereof or pursuant to a Sale Leaseback entered into under Section 6.10.
SECTION 6.03 Fundamental Changes.
(a) The Borrower will not, and will not permit any of its
Consolidated Subsidiaries to, merge into or consolidate with any other Person,
or permit any other Person to merge into or consolidate with it, or sell,
transfer, lease or otherwise dispose of (in one transaction or in a series of
transactions) its assets as an entirety or substantially as an entirety, or all
or substantially all of the stock of any of its Consolidated Subsidiaries (in
each case, whether now owned or hereafter acquired), or liquidate or dissolve,
except that, if at the time thereof and immediately after giving effect thereto
no Default shall have occurred and be continuing (i) any Person may merge into
the Borrower in a transaction in which the Borrower is the surviving
corporation, (ii) any Consolidated Subsidiary may merge with any other
Consolidated Subsidiary, and (iii) the Borrower may merge with or into or
consolidate with or transfer its assets as an entirety or substantially as an
entirety to any Person, so long as (A) immediately prior to and immediately
after giving effect to such merger, consolidation or transfer, the Person with
or into which the Borrower shall ultimately merge or consolidate or to whom the
Borrower shall ultimately transfer its assets as an entirety or substantially as
an entirety is in the Utility Business; (B) the Required Lenders shall have
determined (so long as such determination is exercised in good faith and after
consultation with the Borrower) that the rating of the first mortgage bonds (or
bonds otherwise denominated that benefit from a first Lien on such Person's
utility assets, or, if such Person has no first mortgage bonds, the rating of
the senior unsecured long-term Indebtedness of such Person that is not
guaranteed and does not benefit from any other credit enhancement) of the
surviving Person of any such merger, consolidation, acquisition or transfer of
assets shall be at least BBB- or higher by S&P and Baa3 or higher by Moody's
(unless the requirements of this clause (B) shall have been waived by the
Required Lenders); provided that the requirement of this clause (B) shall be
deemed to have been satisfied if, prior to the consummation of any such merger,
consolidation or transfer, the Borrower shall have delivered written evidence
from each such rating agency to the effect that, upon such merger, consolidation
or transfer, the applicable rating of such surviving Person would be equal to or
higher than the ratings specified in this clause (B); (C) in the case of any
merger or consolidation or transfer of assets in which the Borrower is not the
surviving corporation, the Person formed by any such consolidation or transfer
of assets or into which the Borrower shall be merged or consolidated or to which
such assets are transferred shall have executed an agreement in form reasonably
satisfactory to the Paying Agent containing an assumption by the surviving
Person of the due and punctual performance of each obligation, agreement,
covenant and condition of each of the Loan Documents and the Second Indenture to
be performed or complied with by the Borrower; and (D) the Paying Agent shall
have received an opinion of counsel, in form and substance reasonably
satisfactory to the Paying Agent and its counsel, with respect to the due
authorization, execution, delivery, validity and enforceability of the
assumption agreement referred to in clause (C) of this Section 6.03, of the
enforceability and continuation of the Liens created pursuant to the Security
Documents and such other matters as the Required Lenders may reasonably require.
(b) The Borrower will not, and will not permit any of its
Consolidated Subsidiaries to, engage to any material extent in any business
other than the Utility Business.
SECTION 6.04 Sale of Assets.
(a) The Borrower will not, and will not permit any of its
Consolidated Subsidiaries to, convey, sell, lease, assign, transfer or otherwise
dispose of any of its property, business or assets (including leasehold
interests), whether now owned or hereafter acquired, except:
(i) inventory and other property in the ordinary course
of business;
(ii) sales of accounts receivable;
(iii) property, businesses or assets (including
receivables and leasehold interests) with an aggregate Fair Value not in excess
of $250,000,000; provided that the aggregate Fair Value of such property,
businesses or assets permitted to be disposed of pursuant to this clause (iii)
shall be increased on a dollar for dollar basis by the aggregate amount of each
reduction of the Commitments in respect of which the Borrower shall have given
the Paying Agent, for the benefit of the Lenders, written evidence of the
Borrower's agreement not to issue Indebtedness under the Second Indenture based
upon the Second Mortgage Bonds retired in connection with such reduction;
(iv) property in connection with any securitization
(e.g., stranded costs) or
sale of assets required by law; provided that not less than 80% of the proceeds
of such securitization or sale are applied to reduce outstanding Indebtedness of
the Borrower; and
(v) any sale of the Borrower's assets as an entirety or
substantially as an entirety in accordance with Section 6.03, provided that any
assets of the Borrower not included in such sale shall be deemed to have been
disposed of in a transaction subject to the limitations of this Section 6.04,
including the dollar limit set forth in clause (iii) above.
provided, that any Consolidated Subsidiary may convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets to the
Borrower or any other Consolidated Subsidiary. Investments by the Borrower and
the Consolidated Subsidiaries in, and contributions by the Borrower and the
Consolidated Subsidiaries to, Consolidated Subsidiaries shall be deemed not to
constitute transfers of assets subject to the limitations of this Section 6.04
to the extent such investments or contributions are made in cash.
(b) The Borrower will not, and will not permit any
Consolidated Subsidiary to, convey, sell, lease, assign, transfer or otherwise
dispose of all or any substantial part of its generating assets (including
leasehold interests), whether now owned or hereafter acquired, except as
required by applicable law.
SECTION 6.05 Restricted Payments.
(a) The Borrower will not declare or make, or agree to pay or
make, directly or indirectly, any Restricted Payment at any time that any
Default has occurred and is continuing or would occur as a result of such
action, except that (i) the Borrower may declare and pay dividends with respect
to its capital stock payable solely in additional shares of its common stock and
(ii) the Borrower may make Restricted Payments pursuant to and in accordance
with stock option plans or other benefit plans for management or employees of
the Borrower and its Subsidiaries.
(b) The Borrower will not, and will not permit any
Consolidated Subsidiary to, purchase 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 any loans or advances to, Guarantee
any obligations of, or make any investment or any other interest in, any
Affiliate of the Borrower that is not a Consolidated Subsidiary (each of the
foregoing, an "Affiliate Investment"), at any time that any Default has occurred
and is continuing or as a result of the making of such Affiliate Investment
would occur or would be deemed to occur pursuant to the next sentence. For
purposes of determining whether a Default would be deemed to occur under Section
6.06, 6.07 or 6.08 as a result of an Affiliate Investment, the applicable
computations shall be made as if the Affiliate Investment were a dividend and
did not result in the creation of any asset.
(c) The Borrower will not, and will not permit any
Consolidated Subsidiary to, purchase, acquire or make any Affiliate Investment,
if any Tranche B Credit-Linked Deposit or any unreimbursed Tranche B LC
Disbursement is outstanding on the date thereof and after giving effect thereto
the aggregate amount of Affiliate Investments at any time outstanding would
exceed an amount equal to the sum of (i) $25,000,000 plus (ii) 15% of
Consolidated Net Income for the period (taken as one accounting period) from the
beginning of the fiscal quarter ending March 31, 2005 to the end of the most
recently ended fiscal quarter for which financial statements have been delivered
to the Paying Agent pursuant to Section 5.01(a) or (b), as the case may be.
SECTION 6.06 Consolidated Tangible Net Worth. The
Borrower will not permit Consolidated Tangible Net Worth to be less at the end
of any fiscal quarter than the sum of (a) $350,000,000 plus (b) 75% of the net
proceeds of any issuance by the Borrower or any of its Subsidiaries of common
stock or the net proceeds of any capital contribution made to the Borrower or
any of its Subsidiaries (except for proceeds from the Borrower or any of its
Subsidiaries).
SECTION 6.07 Cash Coverage Ratio.
(a) The Borrower will not permit the ratio of (i) Consolidated
EBITDA plus interest income minus Adjusted Consolidated Capital Expenditures to
(ii) Consolidated Interest Expense, in each case for the twelve-month period
ended on the last day of any fiscal quarter commencing with the fiscal quarter
ended March 31, 2004, to be less than the amount specified in the chart below
for the period in which such fiscal quarter ends:
<table>
<caption>
- ------------------------------------------------------ ----------------------------------
Period Minimum Ratio
- ------------------------------------------------------ ----------------------------------
From the Effective Date through and including 1.75
September 30, 2005
- ------------------------------------------------------ ----------------------------------
From October 1, 2005 through and including 1.90
September 30, 2006
- ------------------------------------------------------ ----------------------------------
From October 1, 2006 through and including 2.00
September 30, 2007
- ------------------------------------------------------ ----------------------------------
From October 1, 2007 through and including 2.25
September 30, 2008
- ------------------------------------------------------ ----------------------------------
After September 30, 2008 2.25
- ------------------------------------------------------ ----------------------------------
</table>
September 30, 2006(b) The Borrower will not permit the ratio
of (i) Consolidated EBITDA plus interest income minus Consolidated Capital
Expenditures to (ii) Consolidated Interest Expense, in each case for the
twelve-month period ended on the last day of any fiscal quarter commencing with
the fiscal quarter ended March 31, 2004, to be less than 1.40.
September 30, 2006SECTION 6.08 Leverage Test. The Borrower
will not permit the ratio of (a) Consolidated Total Indebtedness at the end of
any fiscal quarter to (b) Consolidated EBITDA for the twelve-month period ended
on such date to be greater than the amount specified in the chart below for the
period in which such date shall occur:
<table>
<caption>
- --------------------------------------------- ------------------------------ ------------------------------
Period Maximum Ratio (prior to Maximum Ratio (after
Flexibility Date) Flexibility Date)
- --------------------------------------------- ------------------------------ ------------------------------
From the Effective Date through and 5.25 4.75
including September 30, 2005
- --------------------------------------------- ------------------------------ ------------------------------
- --------------------------------------------- ------------------------------ ------------------------------
From October 1, 2005 through and including 5.00 4.50
September 30, 2006
- --------------------------------------------- ------------------------------ ------------------------------
- --------------------------------------------- ------------------------------ ------------------------------
From October 1, 2006 through and including 4.75 4.25
September 30, 2007
- --------------------------------------------- ------------------------------ ------------------------------
- --------------------------------------------- ------------------------------ ------------------------------
From October 1, 2007 through and including 4.50 4.00
September 30, 2008
- --------------------------------------------- ------------------------------ ------------------------------
- --------------------------------------------- ------------------------------ ------------------------------
After September 30, 2008 4.50 4.00
- --------------------------------------------- ------------------------------ ------------------------------
</table>
SECTION 6.09 Amendments to Documents.
(a) The Borrower will not, and will not permit any
Consolidated Subsidiary to, amend, modify or change, or consent or agree to any
amendment, modification or change to, the Second Indenture, the Fifth
Supplemental Indenture, any Revenue Bond Indenture, any Revenue Bond Loan
Agreement or any Revenue Bonds without the prior written consent of the Required
Lenders and any Issuing Bank affected thereby, provided that (i) such consent
shall not be required in connection with any amendment of the Second Indenture
for which the Second Indenture does not require the consent of any bondholder,
(ii) such consent shall not be unreasonably withheld with respect to any
amendment of the Second Indenture that has been approved by bondholders entitled
to vote under the Second Indenture who hold bonds in an aggregate principal
amount greater than the principal amount of the Collateral Mortgage Bonds and
(iii) such consent shall not be required in connection with any amendment of any
Revenue Bond Indenture, any Revenue Bond Loan Agreement or any Revenue Bonds to
provide for a mandatory tender of Revenue Bonds at any time when such Revenue
Bonds are currently subject to mandatory redemption at a purchase price which
does not exceed the applicable redemption price.
(b) Without the prior written consent of the Required Lenders,
the Merger Agreement will not be amended, modified or supplemented in a manner
that could reasonably be expected to have a Material Adverse Effect.
SECTION 6.10 Sale Leaseback Transactions. The Borrower
will not, and will not permit any of its Subsidiaries to, enter into any Sale
Leaseback if the aggregate annual basic rent payments under all Sale Leasebacks
entered into by the Borrower and its Subsidiaries after the date hereof would
exceed $20,000,000 in any fiscal year after giving effect to such Sale
Leaseback.
SECTION 6.11 Release of Collateral under the Second
Indenture The Borrower will not, and will not permit any of its Subsidiaries to,
permit any asset (including any cash) to be released from the Lien of the Second
Indenture other than in accordance with the terms and provisions of the Second
Indenture.
SECTION 6.12 Transactions with Affiliates. The Borrower
will not, and will not permit any of the Consolidated Subsidiaries to, sell,
lease or otherwise transfer any property or assets to, or purchase, lease or
otherwise acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates which are not Consolidated
Subsidiaries, except (a) at prices and on terms and conditions not less
favorable to the Borrower or such Subsidiary than could be obtained on an
arm's-length basis from unrelated third parties, (b) transactions between or
among the Borrower and the Consolidated Subsidiaries not involving any other
Affiliate, (c) any Restricted Payment permitted by Section 6.05(a), (d) shared
corporate or administrative services and staffing with Affiliates, including
accounting, legal, human resources and treasury operations, provided on
customary terms for similarly situated companies, (e) tax sharing arrangements
on customary terms for similarly situated companies, (f) (i) the payment of
customary annual fees to the Sponsors and/or their respective Control Investment
Affiliates for management, consulting and financial services rendered to the
Borrower and its Consolidated Subsidiaries and (ii) the payment of customary
investment banking fees to the Sponsors and their respective Affiliates for
services rendered to the Borrower and its Consolidated Subsidiaries in
connection with divestitures, acquisitions, financings and other transactions,
(g) customary fees paid to members of the board of directors of the Borrower and
the Consolidated Subsidiaries who are not officers of the Borrower or any
Subsidiary and (h) transactions to acquire, either through asset purchases,
mergers or purchases of Capital Stock, the business and operations or Southwest
Energy Solutions, Inc. or Millennium Environmental Group, Inc.
SECTION 6.13 Limitation on Hedge Agreements. The
Borrower will not, and will not permit any of the Consolidated Subsidiaries to,
enter into any Hedge Agreement other than Hedge Agreements entered into in the
ordinary course of business.
SECTION 6.14 Acquisition Transactions. Notwithstanding
any other provision of this Agreement or the other Loan Documents to the
contrary, the Acquisition Transactions shall be permitted hereunder and
thereunder.
ARTICLE VII
Events of Default
-----------------
If any of the following events ("Events of Default") shall
occur:
(a) the Borrower shall fail to pay any principal of any Loan
or any reimbursement obligation in respect of any LC Disbursement when and as
the same shall become due and payable, whether at the due date thereof or at a
date fixed for prepayment thereof or otherwise, subject in the case of any such
reimbursement obligation to a grace period of two days, or the Borrower shall
fail to make any required deposit of cash collateral under Section 2.19;
(b) the Borrower shall fail to pay any interest on any Loan or
any fee or any other amount (other than an amount referred to in clause (a) of
this Article) payable under this Agreement or any other Loan Document, when and
as the same shall become due and payable, and such failure shall continue
unremedied for a period of five days;
(c) any representation or warranty made or deemed made by or
on behalf of the Borrower or any Consolidated Subsidiary in or in connection
with any Loan Document or any amendment or modification hereof or waiver
hereunder, or in any report, certificate, financial statement or other document
furnished pursuant to or in connection with any Loan Document or any amendment
or modification hereof or waiver hereunder, shall prove to have been incorrect
in any material respect when made or deemed made;
(d) the Borrower shall fail to observe or perform any
covenant, condition or agreement contained in Section 2.19, 5.02, 5.03 (with
respect to the Borrower's existence) or 5.08 or in Article VI;
(e) the Borrower shall fail to observe or perform any
covenant, condition or agreement contained in any Loan Document (other than
those specified in clause (a), (b) or (d) of this Article), and such failure
shall continue unremedied for a period of 30 days after notice thereof from the
Paying Agent to the Borrower (which notice will be given at the request of any
Lender);
(f) the Borrower or any Significant Subsidiary shall fail to
make any payment of principal (regardless of amount) in respect of any Material
Indebtedness, when and as the same shall become due and payable;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables or
permits (with or without the giving of notice, the lapse of time or both) the
holder or holders of any Material Indebtedness or any trustee or agent on its or
their behalf to cause any Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption (other than pursuant to provisions permitting
the tendering of such Indebtedness from time to time for repurchase or
redemption without regard to the occurrence or non-occurrence of any event or
condition) or defeasance thereof, prior to its scheduled maturity; provided that
this clause (g) shall not apply to secured Indebtedness that becomes due as a
result of the voluntary sale or transfer of the property or assets securing such
Indebtedness;
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation, reorganization or
other relief in respect of the Borrower or any Consolidated Subsidiary or its
debts, or of a substantial part of its assets, under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or hereafter in
effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Consolidated Subsidiary
or for a substantial part of its assets, and, in any such case, such proceeding
or petition shall continue undismissed for 60 days or an order or decree
approving or ordering any of the foregoing shall be entered;
(i) the Borrower or any Consolidated Subsidiary shall (i)
voluntarily commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect, (ii) consent
to the institution of, or fail to contest in a timely and appropriate manner,
any proceeding or petition described in clause (h) of this Article, (iii) apply
for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or any
Consolidated Subsidiary or for a substantial part of its assets, (iv) file an
answer admitting the material allegations of a petition filed against it in any
such proceeding, (v) make a general assignment for the benefit of creditors or
(vi) take any action for the purpose of effecting any of the foregoing;
(j) the Borrower or any Consolidated Subsidiary shall become
unable, admit in writing its inability or fail generally to pay its debts as
they become due;
(k) one or more judgments for the payment of money in an
aggregate amount in excess of $15,000,000 shall be rendered against the
Borrower, any Consolidated Subsidiary or any combination thereof and the same
shall remain undischarged for a period of 30 consecutive days during which
execution shall not be effectively stayed, or any action shall be legally taken
by a judgment creditor to attach or levy upon any assets of the Borrower or any
Consolidated Subsidiary to enforce any such judgment;
(l) an ERISA Event shall have occurred that, when taken
together with all other ERISA Events that have occurred, would result in a
Material Adverse Effect;
(m) (i) any Lien purported to be created under any Security
Document or the Second Indenture shall cease to be, or shall be asserted by the
Borrower or any Consolidated Subsidiary not to be, a valid and perfected Lien on
any collateral subject thereto, with the priority required by the applicable
Security Document or the Second Indenture, as applicable, except (A) as a result
of the sale or other disposition of the applicable Collateral in a transaction
permitted under the Loan Documents or (B) as a result of the Paying Agent's
failure to maintain possession of any stock certificates, promissory notes or
other instruments delivered to it under any Security Document or (ii) any
Collateral Mortgage Bond shall for any reason (x) cease to be entitled to the
benefits of the Second Indenture or to be secured by the Lien of the Second
Indenture equally and ratably with all other bonds, if any, outstanding under
the Second Indenture or (y) cease to be a legal, valid and binding obligation of
the Borrower; or
(n) any Change in Control shall occur;
then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Paying Agent may, and at the request
of the Required Lenders shall, by notice to the Borrower, take any or all of the
following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, (ii)
declare the Loans and LC Disbursements then outstanding to be due and payable in
whole (or in part, in which case any principal not so declared to be due and
payable may thereafter be declared to be due and payable), and thereupon the
principal of the Loans and LC Disbursements so declared to be due and payable,
together with accrued interest thereon and all fees and other obligations of the
Borrower accrued hereunder, shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower, (iii) take any action under Section 2.04(j) and
(iv) deliver a notice of redemption under the Fifth Supplemental Indenture
stating that such notice is being delivered pursuant to this Article VII; and in
case of any event with respect to the Borrower described in clause (h) or (i) of
this Article, the Commitments shall automatically terminate and the principal of
the Loans and LC Disbursements then outstanding, together with accrued interest
thereon and all fees and other obligations of the Borrower accrued hereunder,
shall automatically become due and payable, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrower.
ARTICLE VIII
The Paying Agent
----------------
Each of the Lenders and the Issuing Banks hereby irrevocably
appoints the Paying Agent as its agent and authorizes the Paying Agent to take
such actions on its behalf and to exercise such powers as are delegated to the
Paying Agent by the terms of the Loan Documents, together with such actions and
powers as are reasonably incidental thereto. The Required Lenders or the
Borrower (a) may at any time, with the consent of the Borrower (provided that
such consent shall not be required if an Event of Default under clause (a), (b),
(h), (i) or (j) of Article VII shall have occurred and is continuing ) or the
Required Lenders, as the case may be, replace the Paying Agent and (b)
simultaneously with the replacement of any Affiliate of the Paying Agent as
Issuing Bank under Section 2.04(i), shall replace the Paying Agent (it being
understood that any such replacement Paying Agent shall be a Person that serves
as Paying Agent for other credit facilities of a comparable size), provided that
the Required Lenders or the Borrower may not replace such Paying Agent or
Issuing Bank unless, after giving effect to such replacement and each
contemporaneous assignment the Required Lenders or the Borrower shall have
arranged in connection with such replacement (i) neither the Paying Agent nor
any of its Affiliates shall have outstanding any Letter of Credit, Loan, LC
Disbursement, Commitment or other obligation of any kind under this Agreement or
any other Loan Document and (ii) each of the Paying Agent and its Affiliates
shall have received payment in full of all amounts owing to it under or in
respect of this Agreement and each other Loan Document. In addition, (i) any
replacement of the Paying Agent pursuant to this paragraph shall be subject to
the approval of each Issuing Bank with an outstanding Tranche B Letter of Credit
(such approval not to be unreasonably withheld or delayed) and (ii) the credit
rating of the senior unsecured long-term Indebtedness of the successor Paying
Agent shall be A- or better by S&P or A3 or better by Moody's.
The bank serving as the Paying Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Paying Agent, and such bank and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with the Borrower or any Subsidiary or other Affiliate thereof
as if it were not the Paying Agent hereunder.
The Paying Agent shall not have any duties or obligations
except those expressly set forth in the Loan Documents. Without limiting the
generality of the foregoing, (a) the Paying Agent shall not be subject to any
fiduciary or other implied duties, regardless of whether a Default has occurred
and is continuing, (b) the Paying Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated by the Loan Documents that the Paying
Agent is required to exercise in writing by the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02), and (c) except as expressly set
forth in the Loan Documents, the Paying Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to the Borrower or any of its Subsidiaries that is communicated to or
obtained by the bank serving as Paying Agent or any of its Affiliates in any
capacity. The Paying Agent shall not be liable for any action taken or not taken
by it with the consent or at the request of the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02) or in the absence of its own gross
negligence or willful misconduct. The Paying Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Paying Agent by the Borrower or a Lender, and the Paying Agent shall not be
responsible for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with any Loan Document, (ii)
the contents of any certificate, report or other document delivered hereunder or
in connection herewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth in any Loan
Document, (iv) the validity, enforceability, effectiveness or genuineness of any
Loan Document or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere in any Loan
Document, other than to confirm receipt of items expressly required to be
delivered to the Paying Agent. Notwithstanding anything herein to the contrary,
no Lender identified as Co-Administrative Agent or Documentation Agent shall
have any separate duties, responsibilities, obligations or authority as
Co-Administrative Agent or Documentation Agent.
The Paying Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Paying Agent also may
rely upon any statement made to it orally or by telephone and believed by it to
be made by the proper Person, and shall not incur any liability for relying
thereon. The Paying Agent may consult with legal counsel (who may be counsel for
the Borrower), independent accountants and other experts selected by it, and
shall not be liable for any action taken or not taken by it in accordance with
the advice of any such counsel, accountants or experts.
The Paying Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Paying Agent. The Paying Agent and any such sub-agent may
perform any and all its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions of the preceding
paragraphs shall apply to any such sub-agent and to the Related Parties of the
Paying Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Paying Agent.
Subject to the appointment and acceptance of a successor
Paying Agent as provided in this paragraph, the Paying Agent may resign at any
time by notifying the Lenders, the Issuing Banks and the Borrower. Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Borrower, to appoint a successor. In addition, (i) any successor Paying Agent
shall be subject to the approval of each Issuing Bank with an outstanding
Tranche B Letter of Credit (such approval not to be unreasonably withheld or
delayed) and (ii) the credit rating of the senior unsecured long-term
Indebtedness of the successor Paying Agent shall be A- or better by S&P or A3 or
better by Moody's. If no successor shall have been so appointed by the Required
Lenders (and approved by the Issuing Banks with outstanding Tranche B Letters of
Credit) and shall have accepted such appointment within 30 days after the
retiring Paying Agent gives notice of its resignation, then the retiring Paying
Agent may, on behalf of the Lenders and the Issuing Banks, appoint a successor
Paying Agent which shall be a bank with an office in New York, New York, or an
Affiliate of any such bank; provided that the credit rating of the senior
unsecured long-term Indebtedness of the successor Paying Agent shall be A- or
better by S&P or A3 or better by Moody's.
If the credit rating of the senior unsecured long-term
Indebtedness of the Paying Agent shall be less than A- by S&P and less than A3
Moody's, then, subject to the appointment and acceptance of a successor Paying
Agent as provided in this paragraph, any Issuing Bank that has issued an
outstanding Tranche B Letter of Credit may request the replacement of the Paying
Agent by notice to the Paying Agent, the Lenders, the Issuing Banks and the
Borrower. Upon any such request for replacement, the Required Lenders shall (a)
have the right, in consultation with the Borrower and the Issuing Banks with
outstanding Tranche B Letters of Credit, to appoint a successor so long as the
credit rating of the senior unsecured long-term Indebtedness of such successor
shall be A- or better by S&P or A3 or better by Moody's; and (b) simultaneously
with the replacement of the Paying Agent, if requested by the replaced Paying
Agent, replace any Affiliate of the Paying Agent which is an Issuing Bank
hereunder. If no replacement shall have been so appointed by the Required
Lenders (and approved by the Issuing Banks with outstanding Tranche B Letters of
Credit) and shall have accepted such appointment as replacement Paying Agent
within 30 days after the request of any Issuing Bank with any outstanding
Tranche B Letter or Letters of Credit, then the Issuing Bank requesting such
replacement may, on behalf of the Lenders and the Issuing Banks, appoint a
successor Paying Agent which shall be a bank with an office in New York, New
York, or an Affiliate of any such bank; provided that the credit rating of the
senior unsecured long-term Indebtedness of the replacement Paying Agent shall be
A- or better by S&P or A3 or better by Moody's. Notwithstanding the proviso to
the second sentence of the first paragraph of this Article VII, it shall not be
a condition to the replacement of the Paying Agent pursuant to this paragraph
that (i) the Paying Agent and each of its Affiliates not have outstanding any
Loan or Commitment or any other obligation of any kind (other than as Issuing
Bank) under this Agreement or any other Loan Document or (ii) each of the Paying
Agent and its Affiliates have received payment in full of all amounts owing to
it under or in respect of this Agreement and each other Loan Document.
Upon the acceptance of its appointment as Paying Agent
hereunder by a successor or replacement, such successor or replacement shall
succeed to and become vested with all the rights, powers, privileges and, duties
of the retiring or replaced Paying Agent, and the retiring or replaced Paying
Agent shall be discharged from its duties and obligations hereunder, including,
without limitation, that the Tranche B Credit Linked Deposits will be
transferred to the successor or replacement Paying Agent. The fees payable by
the Borrower to a successor Paying Agent shall be the same as those payable to
its predecessor unless otherwise agreed between the Borrower and such successor.
After the Paying Agent's resignation or replacement hereunder, the provisions of
this Article and Section 9.03 shall continue in effect for the benefit of such
retiring Paying Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while it was
acting as Paying Agent.
Each Lender acknowledges that it has, independently and
without reliance upon the Paying Agent or any other Lender and based on such
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 Paying
Agent or any other Lender and based on such documents and information as it
shall from time to time deem appropriate, continue to make its own decisions in
taking or not taking action under or based upon this Agreement, any other Loan
Document or related agreement or any document furnished hereunder or thereunder.
ARTICLE IX
Miscellaneous
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SECTION 9.01 Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrower, to it at One South Church Avenue,
Tucson, Arizona 85701, Attention of Chief Financial Officer (Telecopy No. (520)
884-3612);
(b) if to the Paying Agent, to Credit Suisse First Boston,
Eleven Madison Avenue, OMA-2, New York, New York 10010, Attention of Loan
Services (Telecopy No. (212) 325-8304); and
(c) if to any other Agent, any Issuing Bank, or any Lender, to
it at its address (or telecopy number) set forth in its Administrative
Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.02 Waivers; Amendments.
(a) No failure or delay by the Paying Agent, any Issuing Bank
or any Lender in exercising any right or power hereunder or under any other Loan
Document or the Second Indenture shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Paying Agent, the Issuing Banks and the Lenders hereunder
and under the other Loan Documents and the Second Indenture are cumulative and
are not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of any Loan Document or consent to any departure by the
Borrower therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the Paying Agent, any Lender or any Issuing Bank
may have had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof maybe waived, amended or modified except, in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders or by the Borrower and the
Paying Agent with the consent of the Required Lenders or, in the case of any
other Loan Document, pursuant to an agreement or agreements in writing entered
into by the Paying Agent and the Borrower, in each case with the consent of the
Required Lenders or, in the case of the Fifth Supplemental Indenture or the
Collateral Mortgage Bonds, in each case with the consent of the Required Lenders
and as provided by the Second Indenture with the Paying Agent exercising the
rights of the holder of the Collateral Mortgage Bonds and acting at the
direction of the Required Lenders; provided that no such agreement shall (i)
increase any Commitment of any Lender without the written consent of such
Lender, (ii) reduce the principal amount of any Loan or LC Disbursement or
reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby, (iii) postpone the
scheduled date of payment of the principal amount of any Loan or LC
Disbursement, or any interest thereon, or any fees payable hereunder, or reduce
the amount of, waive or excuse any such payment, or postpone the scheduled date
of expiration of any Commitment, without the written consent of each Lender
affected thereby, (iv) change Section 2.17(b) or (c) in a manner that would
alter the pro rata sharing of payments required thereby, without the written
consent of each Lender, (v) change any of the provisions of this Section or the
definition of "Required Lenders" or any other provision of any Loan Document
specifying the number or percentage of Lenders required to waive, amend or
modify any rights hereunder or make any determination or grant any consent
hereunder, without the written consent of each Lender, (vi) change any
provisions of any Loan Document in a manner that by its terms adversely affects
the rights in respect of payments or Collateral of the Revolving Lenders or the
Tranche B Lenders differently from the rights of Lenders of any other class
without the written consent of Lenders holding a majority in interest of the
Commitments of such adversely affected class, (vii) provide for the release of
any Tranche B Credit-Linked Deposit (other than as provided in this Agreement)
without the consent of each Tranche B Lender affected thereby, (viii) release
all or substantially all the Collateral Mortgage Bonds or release all or
substantially all of any other Collateral from the Liens of the Security
Documents without the consent of each Lender or (ix) amend, modify or waive any
condition precedent set forth in Section 4.02 with respect to the making of
Revolving Loans, without the prior written consent of Revolving Lenders holding
a majority in interest of the Revolving Commitments; provided further that (A)
no such agreement shall amend, modify or otherwise affect the rights or duties
of any Agent or any Issuing Bank hereunder without the prior written consent of
such Agent or Issuing Bank, as the case may be, and (B) any waiver, amendment or
modification of this Agreement that by its terms affects the rights or duties
under this Agreement of the Revolving Lenders (but not the Tranche B Lenders) or
the Tranche B Lenders (but not the Revolving Lenders) may be effected by an
agreement or agreements in writing entered into by the Borrower and the
requisite percentage in interest of the affected class of Lenders, as the case
may be. In furtherance of clause (ix) of this Section 9.02(b), (x) any amendment
or modification to or waiver of Section 6.06, 6.07 or 6.08 of this Agreement and
(y) any amendment or modification to or waiver of any provision of this
Agreement or any other Loan Document at a time when any Default or Event of
Default has occurred and is continuing that would have the effect of eliminating
any such Default or Event of Default shall not be deemed to be effective for
purposes of determining whether the conditions precedent set forth in Section
4.02 to the making of any Revolving Loan have been satisfied unless the
Revolving Lenders holding a majority in interest of the Revolving Commitments
shall have consented to such amendment, modification or waiver, provided that
the foregoing shall not be construed to affect any amendment or modification to
any provision of this Agreement or any other Loan Document (other than any
amendment or modification to Section 6.06, 6.07 or 6.08 of this Agreement) if no
Default or Event of Default has occurred and is continuing at the time of such
amendment or modification.
SECTION 9.03 Expenses; Indemnity; Damage Waiver.
(a) The Borrower shall pay (i) all reasonable out-of-pocket
expenses incurred by the Paying Agent, the Arrangers and their Affiliates
(including due diligence expenses and the reasonable fees, charges and
disbursements of counsel for the Arrangers) in connection with the arrangement
and syndication of the credit facilities provided for herein, the preparation,
execution, delivery and administration of the Loan Documents or any amendments,
modifications or waivers of the provisions thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), (ii) all
out-of-pocket expenses and charges of the Arrangers in connection with any
evaluations of Collateral conducted by them, (iii) all reasonable out-of-pocket
expenses incurred by any Issuing Bank in connection with the issuance, amendment
or extension of any Letter of Credit or any demand for payment thereunder and
(iv) all out-of-pocket expenses incurred by the Paying Agent, any Issuing Bank
or any Lender, including the fees, charges and disbursements of any counsel for
the Paying Agent, any Issuing Bank or any Lender, in connection with the
enforcement or protection of its rights in connection with the Loan Documents,
including its rights under this Section, or in connection with the Loans made or
Letters of Credit issued hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such
Loans or Letters of Credit.
(b) The Borrower shall indemnify each Agent, each Arranger,
each Issuing Bank and each Lender, and each Related Party of any of the
foregoing Persons (each such Person being called an "Indemnitee") against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the fees, charges and disbursements
of any counsel for any Indemnitee, incurred by or asserted against any
Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of any Loan Document or any agreement or instrument
contemplated hereby, the performance by the parties to the Loan Documents of
their respective obligations thereunder or the consummation of the Transactions
or any other transactions contemplated thereby, (ii) any Loan or Letter of
Credit or the use of the proceeds therefrom (including any refusal by any
Issuing Bank to honor a demand for payment under a Letter of Credit if the
documents presented in connection with such demand do not strictly comply with
the terms of such Letter of Credit), (iii) any actual or alleged presence or
release of Hazardous Materials on or from any property owned or operated by the
Borrower or any of its Subsidiaries, or any Environmental Liability related in
any way to the Borrower or any of its Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted primarily from the gross negligence, willful misconduct or bad faith of
such Indemnitee.
(c) To the extent that the Borrower fails to pay any amount
required to be paid by it to any Agent, Arranger or Issuing Bank under paragraph
(a) or (b) of this Section, each Lender severally agrees to pay to such Agent,
Arranger or Issuing Bank, as the case may be, such Lender's Applicable
Percentages (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount; provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against such Agent,
Arranger or Issuing Bank in its capacity as such.
(d) To the extent permitted by applicable law, the Borrower
shall not assert, and hereby waives, any claim against any Indemnitee, on any
theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with, or
as a result of, this Agreement, any other Loan Document or any agreement or
instrument contemplated hereby or thereby, the Transactions, any Loan or Letter
of Credit or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable
promptly after written demand therefor.
SECTION 9.04 Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby (including any Affiliate of any Issuing Bank that
issues any Letter of Credit), except that the Borrower may not assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of each Lender (and any attempted assignment or transfer by the
Borrower without such consent shall be null and void). Nothing in this
Agreement, expressed or implied; shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby (including any Affiliate of any Issuing Bank that issues any
Letter of Credit) and, to the extent expressly contemplated hereby, the Related
Parties of each of the Agents, the Arrangers, the Issuing Banks and the Lenders)
any legal or equitable right, remedy or claim under or by reason of this
Agreement.
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Revolving Commitment and the Loans at the time owing to it or its
Tranche B Credit-Linked Deposit); provided that (i) except in the case of an
assignment of a Tranche B Credit-Linked Deposit to a Lender, an Affiliate of a
Lender or an Approved Fund of any Lender, the Paying Agent must give its prior
written consent to such assignment (which consent shall not be unreasonably
withheld), (ii) except in the case of an assignment to a Lender, an Affiliate of
a Lender or an Approved Fund of any Lender, the Borrower (and in the case of an
assignment of all or any portion of a Revolving Lender's Revolving Commitment,
the Issuing Banks that have issued Revolving Letters of Credit) must give their
prior written consent to such assignment (which consent shall not be
unreasonably withheld), (iii) except in the case of an assignment to a Lender,
an Affiliate of a Lender or an Approved Fund of any Lender or an assignment of
the entire remaining amount of the assigning Lender's Commitments, the aggregate
amount of the Commitments of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Acceptance with respect
to such assignment is delivered to the Paying Agent) shall be in an aggregate
amount of not less than $5,000,000 (or $1,000,000 in the case of an assignment
of a Tranche B Lender's Tranche B Credit-Linked Deposit) unless each of the
Borrower and the Paying Agent otherwise consent, (iv) each partial assignment by
a Lender of its Revolving Commitment and Revolving Credit Exposure or its
Tranche B Credit-Linked Deposit and Tranche B LC Exposure shall be made as an
assignment of a proportionate part of all the assigning Lender's rights and
obligations under this Agreement in respect of its Revolving Commitment and
Revolving Credit Exposure or its Tranche B Credit-Linked Deposit and Tranche B
LC Exposure, as the case may be, (v) the parties to each assignment shall
execute and deliver to the Paying Agent an Assignment and Acceptance (such
Assignment and Acceptance to be (x) electronically executed and delivered to the
Paying Agent via an electronic settlement system then acceptable to the Paying
Agent, which shall initially be the settlement system of ClearPar, LLC, or (y)
manually executed and delivered with a processing and recordation fee of $3,500)
and (vi) the assignee, if it shall not be a Lender, shall deliver to the Paying
Agent an Administrative Questionnaire; and provided further that any consent of
the Borrower otherwise required under this paragraph shall not be required (A)
if an Event of Default under clause (a), (b), (h), (i) or (j) of Article VII
shall have occurred and is continuing or (B) in connection with the initial
syndication of the Commitments and Loans. Subject to acceptance and recording
thereof pursuant to paragraph (d) of this Section, from and after the effective
date specified in each Assignment and Acceptance the assignee thereunder shall
be a party hereto and, to the extent of the interest assigned by such Assignment
and Acceptance, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.14, 2.15, 2.16 and 9.03). Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this paragraph shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with paragraph (e) of this Section. Without the
consent of the Paying Agent, the Tranche B Credit-Linked Deposit of any Tranche
B Lender shall not be released in connection with any assignment by such Tranche
B Lender, but shall instead be purchased by the relevant assignee and continue
to be held for application (to the extent not already applied) in accordance
with Section 2.04 to satisfy such assignee's obligations in respect of Tranche B
LC Disbursements.
(c) The Paying Agent, acting for this purpose as an agent of
the Borrower, shall maintain at one of its offices in New York, New York a copy
of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amount of the Loans and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive, and the Borrower, the Paying Agent, the
Issuing Banks and the Lenders may treat each Person whose name is recorded in
the Register pursuant to the terms hereof as a Lender hereunder for all purposes
of this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower, any Issuing Bank and any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section and any written consent to such assignment required by
paragraph (b) of this Section, the Paying Agent shall accept such Assignment and
Acceptance and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrower, the
Paying Agent or any Issuing Bank, sell participations to one or more banks or
other entities (a "Participant") in all or a portion of such Lender's rights and
obligations under this Agreement (including all or a portion of its Revolving
Commitments and the Loans owing to it or its Tranche B Credit-Linked Deposit);
provided that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrower, the
Paying Agent, the Issuing Banks and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce the Loan Documents and to approve any amendment,
modification or waiver of any provision of the Loan Documents; provided that
such agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 9.02(b) that affects such Participant.
Subject to paragraph (f) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.14, 2.15 and 2.16 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section. To the extent permitted by
law, each Participant also shall be entitled to the benefits of Section 9.08 as
though it were a Lender, provided such Participant agrees to be subject to
Section 2.17(c) as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.14 or 2.16 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent. A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 2.16 unless
the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section
2.16(e) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto. In the case of any Lender that is a fund that invests in bank
loans, such Lender may, without the consent of the Borrower or Paying Agent,
assign or pledge all or any portion of its rights under this Agreement,
including the Loans and notes or any other instrument evidencing its rights as a
Lender under this Agreement, to any holder of, trustee for, or any other
representative of holders of, obligations owed or securities issued, by such
fund, as security for such obligations or securities; provided that any
foreclosure or similar action by such trustee or representative shall be subject
to the provisions of this Section 9.04(b) concerning assignments.
(h) Notwithstanding anything to the contrary contained herein,
any Lender (a "Granting Lender") may grant to a special purpose funding vehicle
(an "SPC"), identified as such in writing from time to time by the Granting
Lender to the Paying Agent and the Borrower, the option to provide to the
Borrower all or any part of any Loan that such Granting Lender would otherwise
be obligated to make to the Borrower pursuant to this Agreement or the option to
pay to the Paying Agent for the account of the applicable Issuing Bank all or
any part of such Granting Lender's Applicable Percentage of any LC Disbursement
made by such Issuing Bank and not reimbursed by the Borrower that such Granting
Lender would otherwise be obligated to pay to the Paying Agent for the account
of the applicable Issuing Bank pursuant to this Agreement, as the case may be;
provided that (i) nothing herein shall constitute a commitment by any SPC to
make any Loan or to pay such Granting Lender's Applicable Percentage of any LC
Disbursement reimbursement obligation and (ii) if an SPC elects not to exercise
such option or otherwise fails to provide all or any part of such Loan or to pay
all or any part of such Granting Lender's Applicable Percentage of any LC
Disbursement reimbursement obligation, the Granting Lender shall be obligated to
make such Loan or to pay its Applicable Percentage of any LC Disbursement
reimbursement obligation, as the case may be, pursuant to the terms hereof. The
making of a Loan by an SPC or the payment by such SPC of such Granting Lender's
Applicable Percentage of any LC Disbursement reimbursement obligation hereunder
shall utilize the Commitment of the Granting Lender to the same extent, and as
if, such Loan were made by such Granting Lender or such LC Disbursement
reimbursement obligation were paid by such Granting Lender. Each party hereto
hereby agrees that no SPC shall be liable for any indemnity or similar payment
obligation under this Agreement (all liability for which shall remain with the
Granting Lender). In furtherance of the foregoing, each party hereto hereby
agrees (which agreement shall survive the termination of this Agreement ) that,
prior to the date that is one year and one day after the payment in full of all
outstanding commercial paper or other senior indebtedness of any SPC, it will
not institute against, or join any other person in instituting against, such SPC
in connection with its activities as an SPC hereunder any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under the
laws of the United States or any State thereof. In addition, notwithstanding
anything to the contrary in this Section 9.04, any SPC may (i) with notice to,
but without the prior written consent of, the Borrower and the Paying Agent and
without paying any processing fee therefor, assign all or a portion of its
interests in any Loans or LC Disbursement reimbursement obligations to the
Granting Lender or to any financial institutions (consented to by the Borrower
and the Paying Agent) providing liquidity and/or credit support to or for the
account of such SPC to support the funding or maintenance of Loans or payment of
LC Disbursement reimbursement obligations and (ii) disclose on a confidential
basis consistent with the provisions of Section 9.12 any non-public information
relating to its Loans or LC Disbursement reimbursement obligations to any rating
agency, commercial paper dealer or provider of any surety, guarantee or credit
or liquidity enhancement to such SPC. The provisions of this Section relating
any SPC may not be amended without the written consent of such SPC.
SECTION 9.05 Survival. All covenants, agreements,
representations and warranties made by the Borrower in the Loan Documents and in
the certificates or other instruments delivered in connection with or pursuant
to this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that any Agent, any Issuing Bank or any
Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as any Commitment has not expired or terminated. The provisions of
Sections 2.14, 2.15, 2.16 and 9.03 and Article VIII shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Letters of Credit and the Commitments or the termination of this
Agreement or any provision hereof.
SECTION 9.06 Counterparts; Integration; Effectiveness.
This Agreement may be executed in counterparts (and by different parties hereto
on different counterparts), each of which shall constitute an original, but all
of which when taken together shall constitute a single contract. This Agreement,
the other Loan Documents and any separate letter agreements with respect to fees
payable to the Agents and Arrangers constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Paying Agent and when the
Paying Agent shall have received counterparts hereof which, when taken together,
bear the signatures of each of the other parties hereto, and thereafter shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 9.07 Severability. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.
SECTION 9.08 Right of Setoff. If an Event of Default
shall have occurred and be continuing, each Lender and each of its Affiliates 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 obligations at
any time owing by such Lender or Affiliate to or for the credit or the account
of the Borrower against any of and all the obligations of the Borrower now or
hereafter existing under this Agreement held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement and
although such obligations may be unmatured. The rights of each Lender under this
Section are in addition to other rights and remedies (including other rights of
setoff) which such Lender may have.
SECTION 9.09 Governing Law; Jurisdiction; Consent to Service
of Process.
(a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(b) The Borrower hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the
United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to any Loan Document, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement or any other Loan Document shall affect any right that
the Paying Agent, any Issuing Bank or any Lender may otherwise have to bring any
action or proceeding relating to this Agreement or any other Loan Document
against the Borrower or its properties in the courts of any jurisdiction.
(c) The Borrower hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any other
Loan Document in any court referred to in paragraph (b) of this Section. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 9.01. Nothing
in this Agreement or any other Loan Document will affect the right of any party
to this Agreement to serve process in any other manner permitted by law.
SECTION 9.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO
HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT
MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT- BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
SECTION 9.11 Headings. Article and Section headings and
the Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
SECTION 9.12 Confidentiality. Each of the Paying Agent,
the Issuing Banks and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to
its and its Affiliates' directors, officers, employees and agents, including
accountants, auditors, legal counsel and other advisors (it being understood
that the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority, (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party to this Agreement, (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to (i) any assignee
of or Participant in, or any prospective assignee of or Participant in, any of
its rights or obligations under this Agreement or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Borrower and its obligations, (g) with the consent of the Borrower or (h) to
the extent such Information (i) becomes publicly available other than as a
result of a breach of this Section or (ii) becomes available to any Agent, any
Issuing Bank or any Lender on a nonconfidential basis from a source other than
the Borrower. For the purposes of this Section, "Information" means all
information received from the Borrower relating to the Borrower or its business,
other than any such information that is available to any Agent, any Issuing Bank
or any Lender on a nonconfidential basis prior to disclosure by the Borrower;
provided that, in the case of information received from the Borrower after the
date hereof, such information is clearly identified at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Information
as provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information.
SECTION 9.13 Interest Rate Limitation. Notwithstanding
anything herein to the contrary, if at any time the interest rate applicable to
any Loan or LC Disbursement, together with all fees, charges and other amounts
which are treated as interest on such Loan or LC Disbursement under applicable
law (collectively the "Charges"), shall exceed the maximum lawful rate (the
"Maximum Rate") which may be contracted for, charged, taken, received or
reserved by the Lender holding such Loan or LC Disbursement in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Revolving Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Effective Rate to the date
of repayment, shall have been received by such Revolving Lender.
S-1
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
TUCSON ELECTRIC POWER COMPANY
By:
Name:
Title:
JP MORGAN CHASE BANK, as a Co-Administrative Agent
and as a Lender
By:
Name:
Title:
CREDIT SUISSE FIRST BOSTON, Acting through its
CAYMAN ISLANDS BRANCH, as a Co-Administrative
Agent, as Paying Agent and as a Lender
By:
Name:
Title:
By:
Name:
Title:
LEHMAN COMMERCIAL PAPER INC. , as a
Co-Administrative Agent and as a Lender
By:
Name:
Title: