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EXHIBIT 10.F
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$1,644,000,000
CREDIT AGREEMENT
Dated as of
August 6, 1997
Among
HOUSTON INDUSTRIES FINANCECO LP,
as Borrower,
HOUSTON INDUSTRIES INCORPORATED,
THE LENDERS PARTIES HERETO,
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
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CHASE SECURITIES INC.,
as Arranger
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS . . . . . . . . . 1
SECTION 1.1. Certain Defined Terms . . . . . . . . . . . . . . . 1
SECTION 1.2. Computation of Time Periods . . . . . . . . . . . . 23
SECTION 1.3. Accounting Terms . . . . . . . . . . . . . . . . . . 23
ARTICLE II
AMOUNTS AND TERMS OF THE
COMMITTED LOANS AND LETTERS OF CREDIT . . . . . . . . 23
SECTION 2.1. The Committed Loans . . . . . . . . . . . . . . . . 23
SECTION 2.2. Making the Loans . . . . . . . . . . . . . . . . . . 24
SECTION 2.3. Minimum Tranches . . . . . . . . . . . . . . . . . . 25
SECTION 2.4. Letters of Credit . . . . . . . . . . . . . . . . . 25
ARTICLE III
AMOUNTS AND TERMS OF THE CAF LOANS . . . . . . . . 29
SECTION 3.1. The CAF Loans . . . . . . . . . . . . . . . . . . . 29
SECTION 3.2. Competitive Bid Procedure . . . . . . . . . . . . . 29
ARTICLE IV
PROVISIONS RELATING TO ALL LOANS . . . . . . . . . 32
SECTION 4.1. Evidence of Loans . . . . . . . . . . . . . . . . . 32
SECTION 4.2. Fees . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 4.3. Optional and Mandatory Termination or Reduction
of the Commitments . . . . . . . . . . . . . . . . 33
(a) Optional . . . . . . . . . . . . . . . 33
(b) Mandatory . . . . . . . . . . . . . . . 34
SECTION 4.4. Interest . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 4.5. Reserve Requirements . . . . . . . . . . . . . . . . 36
SECTION 4.6. Interest Rate Determination and Protection . . . . . 37
SECTION 4.7. Voluntary Interest Conversion or Continuation of
Committed Loans . . . . . . . . . . . . . . . . . . 37
SECTION 4.8. Funding Losses Relating to LIBOR Rate Loans and
Fixed Rate Loans . . . . . . . . . . . . . . . . . . 38
SECTION 4.9. Change in Legality . . . . . . . . . . . . . . . . . 39
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ARTICLE V
INCREASED COSTS, TAXES, PAYMENTS
AND PREPAYMENTS . . . . . . . . . . . . . 40
SECTION 5.1. Increased Costs; Capital Adequacy . . . . . . . . . 40
SECTION 5.2. Payments and Computations . . . . . . . . . . . . . 41
SECTION 5.3. Taxes . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 5.4. Sharing of Payments, Etc . . . . . . . . . . . . . . 44
SECTION 5.5. Voluntary Prepayments . . . . . . . . . . . . . . . 44
SECTION 5.6. Mitigation of Losses and Costs; Replacement of
Bank . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 5.7. Determination and Notice of Additional Costs and
Other Amounts . . . . . . . . . . . . . . . . . . . 46
ARTICLE VI
CONDITIONS OF LENDING . . . . . . . . . . . . 46
SECTION 6.1. Conditions Precedent to Initial Loans . . . . . . . 46
SECTION 6.2. Conditions Precedent to Certain Borrowings . . . . . 47
ARTICLE VII
REPRESENTATIONS AND WARRANTIES . . . . . . . . . 48
SECTION 7.1. Corporate, Partnership or Other Status . . . . . . . 48
SECTION 7.2. Organizational Status of Subsidiaries . . . . . . . 49
SECTION 7.3. Corporate, Partnership or Other Powers . . . . . . . 49
SECTION 7.4. Authorization, No Conflict etc . . . . . . . . . . . 49
SECTION 7.5. Governmental Approvals and Consents . . . . . . . . 49
SECTION 7.6. Obligations Binding . . . . . . . . . . . . . . . . 50
SECTION 7.7. Use of Proceeds; Margin Stock . . . . . . . . . . . 50
SECTION 7.8. Title to Properties . . . . . . . . . . . . . . . . 50
SECTION 7.9. Investment Company Act; PUHC Act of 1935 . . . . . . 50
SECTION 7.10. No Material Adverse Change . . . . . . . . . . . . 51
SECTION 7.11. Litigation . . . . . . . . . . . . . . . . . . . . 51
SECTION 7.12. ERISA . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 7.13. Financial Statements . . . . . . . . . . . . . . . 51
SECTION 7.14. Accuracy of Information . . . . . . . . . . . . . . 51
SECTION 7.15. No Violation . . . . . . . . . . . . . . . . . . . 52
SECTION 7.16. Subsidiaries . . . . . . . . . . . . . . . . . . . 52
SECTION 7.17. Solvency . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE VIII
AFFIRMATIVE AND NEGATIVE COVENANTS . . . . . . . . 52
SECTION 8.1. Affirmative Covenants of the Borrower . . . . . . . 52
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SECTION 8.2. Affirmative Covenants of HII. . . . . . . . . . . . 55
SECTION 8.3. Negative Covenants of the Borrower. . . . . . . . . 58
SECTION 8.4. Negative Covenants of HII . . . . . . . . . . . . . 62
ARTICLE IX
EVENTS OF DEFAULT . . . . . . . . . . . . . 68
SECTION 9.1. Events of Default . . . . . . . . . . . . . . . . . 68
SECTION 9.2. Cancellation/Acceleration . . . . . . . . . . . . . 71
ARTICLE X
THE AGENT . . . . . . . . . . . . . . . 72
SECTION 10.1. Appointment . . . . . . . . . . . . . . . . . . . . 72
SECTION 10.2. Delegation of Duties . . . . . . . . . . . . . . . 73
SECTION 10.3. Exculpatory Provisions . . . . . . . . . . . . . . 73
SECTION 10.4. Reliance by Agent . . . . . . . . . . . . . . . . . 73
SECTION 10.5. Notice of Default . . . . . . . . . . . . . . . . . 74
SECTION 10.6. Non-Reliance on Agent and Other Banks . . . . . . . 74
SECTION 10.7. Indemnification . . . . . . . . . . . . . . . . . . 74
SECTION 10.8. Agent in Its Individual Capacity . . . . . . . . . 75
SECTION 10.9. Successor Agent . . . . . . . . . . . . . . . . . . 75
ARTICLE XI
MISCELLANEOUS . . . . . . . . . . . . . . 76
SECTION 11.1. Amendments and Waivers . . . . . . . . . . . . . . 76
SECTION 11.2. Notices . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 11.3. No Waiver, Cumulative Remedies . . . . . . . . . . 77
SECTION 11.4. Survival of Representations and Warranties . . . . 78
SECTION 11.5. Payment of Expenses and Taxes . . . . . . . . . . . 78
SECTION 11.6. Effectiveness; Successors and Assigns; Participations;
Assignments . . . . . . . . . . . . . . . . . . . 78
SECTION 11.7. Set-off . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 11.8. Counterparts . . . . . . . . . . . . . . . . . . . 83
SECTION 11.9. Severability . . . . . . . . . . . . . . . . . . . 83
SECTION 11.10. Integration . . . . . . . . . . . . . . . . . . . 83
SECTION 11.11. GOVERNING LAW . . . . . . . . . . . . . . . . . . 83
SECTION 11.12. Submission To Jurisdiction, Waivers . . . . . . . 84
SECTION 11.13. Acknowledgements . . . . . . . . . . . . . . . . . 85
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SECTION 11.14. Limitation on Agreements . . . . . . . . . . . . . 85
SECTION 11.15. Non-recourse to Limited Partner, General
Partner . . . . . . . . . . . . . . . . . . . . 86
EXHIBITS
Exhibit A Form of Notice of Borrowing
Exhibit B-1 Form of Competitive Bid Request
Exhibit B-2 Form of Competitive Bid
Exhibit B-3 Form of Competitive Bid Confirmation
Exhibit C Form of Note
Exhibit D Form of HII Pledge and Collateral Agency Agreement
Exhibit E Terms of HII Preference Stock
Exhibit F Form of Pledge and Collateral Agency Agreement
Exhibit G Form of Pledge, Guarantee and Collateral Agency Agreement
Exhibit H Form of Support Agreement
Exhibit I Form of Notice of Interest Conversion/Continuation
Exhibit J Form of Opinion of Baker & Botts, L.L.P.
Exhibit K Form of Committed Loan Assignment and Acceptance
Exhibit L Form of Intercompany Note
SCHEDULES
Schedule 1.1 Commitments and Addresses
Schedule 1.1A Excluded Subsidiaries
Schedule 6.1(b) Debt Refinanced on the Closing Date
Schedule 6.1(d) Ownership of Capital Stock of Subsidiaries
Schedule 7.16 Subsidiaries
Schedule 8.4(c) Certain Properties and Capital Stock of HI Energy
Schedule 8.4(f) Restrictive Agreements
Schedule 8.4(g) Certain NorAm Subsidiaries
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CREDIT AGREEMENT
Dated as of August 6, 1997
Each of:
(a) HOUSTON INDUSTRIES FINANCECO LP, a Delaware limited partnership (the
"Borrower");
(b) HOUSTON INDUSTRIES INCORPORATED, a Texas corporation;
(c) the banks listed on the signature pages hereof and any bank or other
financial institution that may hereafter become a party hereto in
accordance with the provisions hereof (collectively, the "Banks", and
each individually a "Bank");
(d) CHASE SECURITIES INC., as arranger (in such capacity, the "Arranger");
and
(e) THE CHASE MANHATTAN BANK, as Administrative Agent (in such capacity,
the "Agent") for the Banks hereunder;
hereby agrees as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Certain Defined Terms. As used in this Credit
Agreement (as amended, supplemented or otherwise modified from time to time,
this "Agreement"), the following terms shall have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of the
terms defined):
"ABR" means, for any day, an alternate base rate calculated as
a fluctuating rate per annum (rounded upwards to the nearest 1/64 of
1% if not already an integral multiple of 1/64 of 1%) as shall be in
effect from time to time, equal to the greater 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%. As used in this definition, the
term "Prime Rate" means the rate of interest per annum publicly
announced from time to time by the Agent as its prime rate in effect
at its principal office in New York City. If for any reason the Agent
shall have determined (which determination shall be conclusive absent
manifest error) that it is unable to ascertain the Federal Funds
Effective Rate for any reason, including the inability or failure of
the Agent to obtain sufficient quotations in accordance with the terms
hereof, the ABR shall be determined without regard to clause (b) above
until the circumstances giving rise to such inability no longer exist.
Any change in the ABR due to a change in the Prime Rate or the Federal
Funds Effective Rate shall be effective as of
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the effective day of such change in the Prime Rate or the Federal
Funds Effective Rate, respectively.
"ABR Loan" means a Loan that bears interest at the ABR as
provided in Section 4.4(a).
"ACES" means the 7% Automatic Common Exchange Securities due
July 1, 2000 issued by HII in an initial aggregate face amount of
$1,052,384,025 and the obligations at maturity of which may be
satisfied completely by the delivery of shares of TWX Stock.
"Affiliate" means any Person that, directly or indirectly,
Controls or is Controlled by or is under common Control with another
Person.
"Aggregate Outstanding Extensions of Credit" means, as to any
Bank at any time, an amount equal to the sum of (a) the aggregate
principal amount of all Loans made by such Bank then outstanding and
(b) such Bank's Pro Rata Percentage of the L/C Obligations then
outstanding.
"Agent" has the meaning specified in the introduction to this
Agreement.
"Applicable Margin" means the rate per annum set forth below
opposite the Designated Rating from time to time in effect during the
period for which payment is due:
Designated Rating Applicable Margin
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A-/A3 and higher .200%
BBB+/Baa1 .250%
BBB/Baa2 .275%
BBB-/Baa3 .375%
BB+/Ba1 or lower or Unrated .750%
In each row in the table set forth above, the first indicated rating
corresponds to that assigned by S&P, Fitch and Duff & Phelps, as the
case may be, and the second indicated rating corresponds to that
assigned by Moody's; the determination of which row of such table is
applicable at any time is set forth in the definition of "Designated
Rating".
"Application" means an application, in such form as the
Issuing Bank may specify from time to time, requesting the Issuing
Bank to issue a Letter of Credit.
"Arranger" has the meaning specified in the introduction to
this Agreement.
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"Available Dividend Amount" means, for any fiscal quarter, the
average per share amount of the quarterly dividends paid by HII on its
common stock during the four consecutive fiscal quarters immediately
preceding such fiscal quarter, multiplied by the number of shares of
common stock of HII outstanding as of the beginning of such quarter.
"Bank" and "Banks" have the meanings specified in the
introduction to this Agreement.
"Bank Affiliate" has the meaning specified in Section 11.6(c).
"Board" means the Board of Governors of the Federal Reserve
System of the United States (or any successor).
"Borrowed Money" of any Person means any Indebtedness of such
Person for or in respect of money borrowed or raised by whatever means
(including acceptances, deposits, lease obligations under Capital
Leases and Mandatory Payment Preferred Stock); provided, however, that
Borrowed Money shall not include (a) any guarantees that may be
incurred by endorsement of negotiable instruments for deposit or
collection in the ordinary course of business or similar transactions,
(b) any obligations or guarantees of performance of obligations under
a franchise, performance bonds, franchise bonds, obligations to
reimburse drawings under letters of credit issued in accordance with
the terms of any safe harbor lease or franchise or in lieu of
performance or franchise bonds or other obligations incurred in the
ordinary course of business that do not represent money borrowed or
raised, in each case to the extent that such reimbursement obligations
are payable (and are paid) in full within ten Business Days after the
date upon which such obligation arises, (c) trade payables or (d)
customer advance payments and deposits arising in the ordinary course
of business.
"Borrower" has the meaning specified in the introduction to
this Agreement.
"Borrowing" means either a Committed Borrowing or a CAF
Borrowing.
"Business Day" means a day other than a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or
required by law to close; provided, that when used in connection with
a LIBOR Rate Loan, the term "Business Day" shall also exclude any day
on which commercial banks are not open for dealings in Dollar deposits
in the London interbank market.
"CAF Borrowing" means a borrowing consisting of CAF Loans
under Section 3.1 made on the same day by the Bank or Banks whose
Competitive Bid or Bids have been accepted pursuant to Section 3.2(d).
"CAF Facility" has the meaning specified in Section 3.1(a).
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"CAF LIBOR Rate Loan" means any CAF Loan that bears interest
at the LIBOR Rate.
"CAF Loan" means a Loan made to the Borrower pursuant to
Section 3.1 by a Bank in response to a Competitive Bid Request.
"CAF Loan Assignee" has the meaning specified in Section
11.6(d).
"CAF Loan Assignment and Acceptance" means an assignment and
acceptance executed in connection with the assignment of any CAF Loan
to a CAF Loan Assignee in the manner set forth in Section 11.6(d).
Each CAF Loan Assignment and Acceptance to be registered in the
Register shall set forth (a) the full name of such CAF Loan Assignee;
(b) such CAF Loan Assignee's address for notices and its lending
office address (in each case to include telephone, telex and facsimile
transmission numbers); and (c) payment instructions for all payments
to such CAF Loan Assignee, and must contain an agreement by such CAF
Loan Assignee to comply with the provisions of Sections 11.6(d),
11.6(g) and 11.6(h) to the same extent as any Bank.
"CAF Margin" means, as to any Competitive Bid relating to a
CAF LIBOR Rate Loan, the margin (expressed as a percentage rate per
annum in the form of a decimal to no more than four decimal places) to
be added to or subtracted from the LIBOR Rate in order to determine
the interest rate acceptable to such Bank with respect to such CAF
LIBOR Rate Loan.
"CAF Rate" means, as to any Competitive Bid made by a Bank
pursuant to Section 3.2, (i) in the case of a CAF LIBOR Rate Loan, the
CAF Margin added to or subtracted from, as the case may be, the LIBOR
Rate, and (ii) in the case of a Fixed Rate Loan, the fixed rate of
interest, in each case, offered by such Bank.
"Capital Expenditure" means any expenditure in respect of the
purchase, construction or other acquisition of fixed or capital assets
(excluding any expenditure made in connection with normal replacement
and maintenance programs properly treated as an expense in the period
in which made according to GAAP).
"Capital Lease" means a lease that, in accordance with GAAP,
would be recorded as a capital lease on the balance sheet of the
lessee.
"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), including, without limitation,
partnership interests in partnerships and member interests in limited
liability companies, and any and all warrants or options to purchase
any of the foregoing or securities convertible into any of the
foregoing.
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"Change in Control" means, with respect to HII, the
acquisition by any Person or "group" (within the meaning of Rule 13d-5
of the Exchange Act) of beneficial ownership (determined in accordance
with Rule 13d-3 of the Exchange Act) of Capital Stock of HII, the
result of which is that such Person or group beneficially owns 30% or
more of the aggregate voting power of all then issued and outstanding
Capital Stock of HII; provided, however, that a Change in Control
shall be deemed not to have occurred solely by reason of any
acquisition of Capital Stock of HII by a new "holding" company if
Capital Stock of such holding company representing at least 70% of the
aggregate voting power of all issued and outstanding shares of Capital
Stock of such holding company is owned by holders who owned the
outstanding common stock of HII immediately prior to such acquisition.
For purposes of the foregoing, the phrase "voting power" means, with
respect to an issuer, the power under ordinary circumstances to vote
for the election of members of the board of directors of such issuer.
"Closing Date" has the meaning specified in Section 11.6(a).
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor statute.
"Committed Borrowing" means a borrowing consisting of Loans
under Section 2.1(a) of the same Type, and having, in the case of
Committed LIBOR Rate Loans, the same Interest Period, made on the same
day by the Banks. The term "Committed Borrowing" as used herein shall
not include any conversion or continuation of a Loan under Section
4.7.
"Committed LIBOR Rate Loan" means any Committed Loan that
bears interest at the LIBOR Rate.
"Committed Loan" has the meaning specified in Section 2.1(a).
"Committed Loan Assignment and Acceptance" has the meaning
specified in Section 11.6(c).
"Commitment" means, with respect to each Bank, the obligation
of such Bank to make Committed Loans to, and/or to issue or
participate in Letters of Credit issued on behalf of, the Borrower in
an aggregate principal amount at any one time outstanding not to
exceed the amount set forth under such Bank's name on Schedule 1.1
attached hereto under the caption "Commitment," as such amount may be
changed from time to time pursuant to Sections 4.3, 9.2 and 11.6; and
"Commitments" shall be the collective reference to the Commitments of
all of the Banks.
"Commonly Controlled Entity" means an entity, whether or not
incorporated, that is under common control with the Borrower within
the meaning of Section 4001 of
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ERISA or is part of a group that includes the Borrower and that is
treated as a single employer under Section 414 of the Code.
"Competitive Bid" has the meaning specified in Section 3.2(b).
"Competitive Bid Confirmation" has the meaning specified in
Section 3.2(d).
"Competitive Bid Request" has the meaning specified in Section
3.2(a).
"Consolidated Capitalization" means, as of any date of
determination, the sum of (a) Consolidated Shareholders Equity, (b)
Consolidated Indebtedness for Borrowed Money and, without duplication,
(c) Mandatory Payment Preferred Stock.
"Consolidated Indebtedness" means, as of any date of
determination, the sum of (i) the total Indebtedness as shown on the
consolidated balance sheet of HII and its Consolidated Subsidiaries,
determined without duplication of any Guarantee of Indebtedness of HII
by any of its Consolidated Subsidiaries or of any Guarantee of
Indebtedness of any such Consolidated Subsidiary by HII or any other
Consolidated Subsidiary of HII, and any Mandatory Payment Preferred
Stock, less (ii) such amount of Indebtedness attributable to amounts
then outstanding under receivables facilities or arrangements to the
extent that such amounts would not have been shown as Indebtedness on
a balance sheet prepared in accordance with GAAP prior to January 1,
1997, less (iii) in the case of any determination on or before June
30, 1998, the net amount of balances of HII and its Consolidated
Subsidiaries at such date constituting cash or Permitted Investments
less (iv) with respect to any Indexed Debt Securities that are Fully
Hedged and the liabilities in respect of which as shown on the
consolidated balance sheet of HII and its Consolidated Subsidiaries
have increased from the amount of liabilities in respect thereof at
the time of their issuance by reason of an increase in the price of
the Indexed Asset relating thereto, the excess of (a) the aggregate
amount of liabilities in respect of such Indexed Debt Securities at
the time of determination over (b) the initial amount of liabilities
in respect of such Indexed Debt Securities at the time of their
issuance, provided that at the time of determination such increase in
the price of the Indexed Asset relating to such Indexed Debt
Securities has not been recorded on such consolidated balance sheet.
"Consolidated Shareholders' Equity" means, as of any date of
determination, the total assets of HII and its Consolidated
Subsidiaries less all liabilities of HII and its Consolidated
Subsidiaries. (As used in this definition, "liabilities" means all
obligations that, in accordance with GAAP consistently applied, would
be classified on a balance sheet as liabilities, including, without
limitation, (a) Indebtedness; (b) deferred liabilities; and (c)
Indebtedness of HII or any of its Consolidated Subsidiaries that is
expressly subordinated in right and priority of payment to other
liabilities of HII or such Consolidated Subsidiary, but in any case
excluding as at such date of determination any Junior Subordinated
Debt owned by any Hybrid Preferred Securities Subsidiary).
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"Consolidated Subsidiary" means, with respect to a specified
Person at any date, any Subsidiary or any other Person, the accounts
of which under GAAP would be consolidated with those of such specified
Person in its consolidated financial statements as of such date.
"Consolidated Working Capital" means, as of any date of
determination, (i) the amount of all assets of HII and its
Consolidated Subsidiaries that would, in accordance with GAAP, be
classified on a consolidated balance sheet of HII as current assets of
HII at such date minus (ii) all liabilities of HII and its
Consolidated Subsidiaries that, in accordance with GAAP, would be
classified on a consolidated balance sheet of HII as current
liabilities at such date; provided, however, that no current
liabilities for any Junior Subordinated Debt of a Person shall be
included in the calculation of such Person's Consolidated Working
Capital when owned by any Hybrid Preferred Securities Subsidiary.
"Contractual Obligation" means, as to any Person, any
provision of any security issued by such Person or of any written
agreement, instrument or other written undertaking to which such
Person is a party or by which it or any of its property is bound.
"Controlled" means, with respect to any Person, the ability of
another Person (whether directly or indirectly and whether by the
ownership of voting securities, contract or otherwise) to appoint
and/or remove the majority of the members of the board of directors or
other governing body of that Person (and "Control" shall be similarly
construed).
"Default" means any event that, with the lapse of time or
giving of notice, or both, or any other condition, would constitute an
Event of Default.
"Default Rate" means with respect to any overdue amount owed
hereunder, a rate per annum equal to (a) in the case of overdue
principal with respect to any Loan, the sum of the interest rate in
effect at such time with respect to such Loan under Section 4.4 plus
2%; provided, that in the case of overdue principal with respect to
any Committed LIBOR Rate Loan, after the end of the Interest Period
with respect to such Loan, the Default Rate shall equal the rate set
forth in clause (b) below and (b) in the case of overdue interest with
respect to any Loan, Facility Fees or other amounts payable hereunder,
the sum of the ABR in effect at such time plus 2%.
"Designated Rating" means, at any time, (a) in the event that
Long Term Debt Ratings from two or more Rating Agencies are in effect
at such time and one of such Rating Agencies is either S&P or Moody's,
the lower of (i) the higher of such Long Term Debt Rating by S&P or
Moody's and (ii) the highest Long-Term Debt Rating then in effect by
any Rating Agency other than the Rating Agency referred to in clause
(i) above, or (b) in the event that Long Term Debt Ratings are not in
effect as described in clause (a) above, the Long Term Debt Rating
assigned by S&P if then in effect; otherwise, the
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Designated Rating of the Borrower shall be deemed to be "Unrated."
Any change in the calculation of the Facility Fees or the Applicable
Margin with respect to the Borrower that is caused by a change in the
Designated Rating for the Borrower will become effective on the date
of the change in the Designated Rating for the Borrower.
"Dollars" and the symbol "$" mean the lawful currency of the
United States of America.
"Duff & Phelps" means Duff & Phelps Credit Rating Co. and any
successor rating agency.
"Early Funding ABR Loan" has the meaning specified in Section
2.2(a).
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"Event of Default" has the meaning specified in Section 9.1.
"Excess Cash Flow" means, for any period and without
duplication of any item, (a) the sum of (i) consolidated net income of
HII for the period (excluding net income of Excluded Subsidiaries),
(ii) charges for depreciation and amortization and other non-cash
charges to consolidated income of HII (excluding the amount thereof
attributable to Excluded Subsidiaries), (iii) net cash proceeds from
financings at HII, NorAm and Consolidated Subsidiaries of NorAm, (iv)
the amount of cash dividends received by HII from Excluded
Subsidiaries during such period, (v) decreases in Consolidated Working
Capital for such period excluding any change in cash and cash
equivalents included in Consolidated Working Capital (excluding the
amount thereof attributable to Excluded Subsidiaries), and (vi) cash
receipts that reduce HII consolidated long-term assets or increase HII
consolidated long-term liabilities (excluding the amount thereof
attributable to Excluded Subsidiaries) minus (b) the sum (excluding,
in each applicable case, the amount thereof attributable to Excluded
Subsidiaries) of (i) non-cash increases to consolidated net income of
HII, (ii) net reductions in debt of HII and NorAm and its Consolidated
Subsidiaries (to the extent not deducted in computing consolidated
income of HII and, in the case of revolving facilities, to the extent
accompanied by permanent commitment reductions), (iii) HII
consolidated Capital Expenditures, (iv) the amount (A) of cash
dividends paid on HII common stock or on preferred stock (including
Mandatory Payment Preferred Stock and Hybrid Preferred Securities) or
preference stock (including the HII Preference Stock) of HII, NorAm or
any Consolidated Subsidiary of NorAm and (B) paid in cash in respect
of redemption of preferred stock (including Mandatory Payment
Preferred Stock and Hybrid Preferred Securities) or preference stock
(other than the HII Preference Stock) of HII, NorAm or any
Consolidated Subsidiary of NorAm, (v) cash payments by HII and its
Consolidated Subsidiaries that increase long-term assets or decrease
long-term liabilities, (vi) increases in Consolidated Working Capital
for such period, excluding any change in cash and cash equivalents
included in Consolidated
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Working Capital, (vii) other expenditures required to be made by HII
and its subsidiaries and paid in cash during such period that are not
deducted in computing consolidated net income of HII, and (viii) other
expenditures paid in cash during such period that are not deducted in
computing consolidated net income of HII and that, in the reasonable
judgment of the senior management of HII, are necessary in order to
accommodate, with respect to HL&P or NorAm, regulatory requirements
and sound utility financial and management practices.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Excluded Subsidiaries" means the collective reference to (i)
HI Energy and its Subsidiaries, (ii) the Subsidiaries of HII listed on
Schedule 1.1A hereto, (iii) the Borrower, (iv) any Hybrid Preferred
Securities Subsidiary and (v) any future subsidiary that is not a
Material Subsidiary, provided that, notwithstanding the foregoing,
Excluded Subsidiaries shall not include any Subsidiary in which an HII
Investment has been made pursuant to Section 8.4(g)(v) or (vi).
"Facility Fee" has the meaning specified in Section 4.2(a).
"Federal Funds Effective Rate" means, for any day, a
fluctuating rate per annum equal to the weighted average of the rates
on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, 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 Agent from three federal funds brokers of recognized
standing selected by it.
"FinanceCo GP" means HI FinanceCo LLC, a Delaware limited
liability company, that is the general partner of the Borrower and all
of the member interests in which are Wholly-Owned by HII.
"Fitch" means Fitch Investors Service, LP, and any successor
rating agency.
"Fixed Rate Loan" means any CAF Loan made by a Bank pursuant
to Section 3.2 based upon a fixed percentage rate per annum offered by
such Bank, expressed as a decimal (to no more than four decimal
places), and accepted by the Borrower.
"Fully Hedged" means, with respect to any Indexed Debt
Securities, that HII or any Consolidated Subsidiary of HII either (i)
owns or has in effect rights providing substantially the economic
effect, in such context, of owning, a sufficient amount of the Indexed
Asset relating thereto (including, with respect to the ACES, TWX
Stock) to satisfy completely its obligations at maturity of the
Indexed Debt Securities or (ii) has in effect a hedging arrangement
sufficient to enable it to satisfy completely its obligations at
maturity of the Indexed Debt Securities.
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"GAAP" means generally accepted accounting principles in
effect from time to time in the United States of America.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guarantee" means, as to any Person (the "guaranteeing
Person"), any obligation of (a) the guaranteeing Person or (b) another
Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing Person has
issued a reimbursement, counterindemnity or similar obligation, in
either case guaranteeing or in effect guaranteeing any principal of
any Indebtedness for Borrowed Money (the "primary obligation") of any
other third Person in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing
Person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security
therefor, (ii) to advance or supply funds for the purchase or payment
of any such primary obligation or (iii) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in
respect thereof.
"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, or any similar arrangement
designed to provide protection against fluctuations in market value or
market rates.
"HI Energy" means Houston Industries Energy, Inc., a Delaware
corporation.
"Highest Lawful Rate" means, with respect to each Bank, the
maximum nonusurious interest rate, if any, that at any time or from
time to time may be contracted for, taken, reserved, charged or
received with respect to any Loan hereunder or on other amounts, if
any, due to such Bank pursuant to this Agreement or any other Loan
Document under applicable law. "Applicable law" as used in this
definition means, with respect to each Bank, that law in effect from
time to time that permits the charging and collection by such Bank of
the highest permissible lawful, nonusurious rate of interest on the
transactions herein contemplated including, without limitation, the
laws of each State that may be held to be applicable, and of the
United States of America, if applicable.
"HII" means (i) prior to the Closing Date, Houston Industries
Incorporated, a Texas corporation, and (ii) upon and after the
effectiveness of the Mergers, Houston Industries Incorporated, a Texas
corporation, that is the surviving corporation pursuant to the Merger
with HL&P.
"HII Aggregate Investment Amount" means, at any time, the sum
of (a) the aggregate cumulative amount of all HII Investments made
after the Closing Date and at
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or prior to such time, net of returns of capital to HII in respect of
such HII Investments at or prior to such time, plus (b) if, at such
time, the Money Fund Advances made by HII and outstanding at such time
exceed the amount of Money Fund Obligations owed by or invested in HII
at such time, an amount equal to the lesser of (i) such excess and
(ii) the amount by which all Money Fund Obligations then owed by or
invested in Subsidiaries of HII (other than NorAm, the Borrower or any
HII Pledged Subsidiary meeting the requirements of Section 8.4(g)(v)
or (vi)) exceeds the aggregate amount of all Money Fund Advances made
by Subsidiaries of HII (other than NorAm, the Borrower or any HII
Pledged Subsidiary meeting the requirements of Section 8.4(g)(v) or
(vi)) and outstanding at such time, plus (c) if, at such time, the
Money Fund Advances made by the Borrower and outstanding at such time
exceed the amount of Money Fund Obligations owed by or invested in the
Borrower at such time, an amount equal to the lesser of (i) such
excess and (ii) without duplication of amounts included in "HII
Aggregate Investment Amount" pursuant to clause (b)(ii) above, the
amount by which all Money Fund Obligations then owed by or invested in
Subsidiaries of HII (other than NorAm, the Borrower or any HII Pledged
Subsidiary meeting the requirements of Section 8.4(g)(v) or (vi))
exceeds the aggregate amount of all Money Fund Advances made by
Subsidiaries of HII (other than NorAm or the Borrower) and outstanding
at such time.
"HII Investment" has the meaning specified in Section 8.4(g).
"HI Merger" means HI Merger, Inc., a Delaware corporation and
a Wholly-Owned Subsidiary of HII.
"HII Pledged Subsidiary" means (a) any Subsidiary of HII all
of the Capital Stock of which is pledged under any of the Security
Documents and (b) any other Subsidiary of HII with respect to which
the requirements of the foregoing clause (a) are not satisfied to the
extent, and only to the extent, that such Subsidiary does not satisfy
such requirements by virtue of Liens existing on the Capital Stock of
such Subsidiary pursuant to, and as permitted by, clause (i) or (ii)
of Section 8.4(a) provided that the term "HII Pledged Subsidiary"
shall not include any Hybrid Preferred Securities Subsidiary.
"HII Pledge and Collateral Agency Agreement" means the HII
Pledge and Collateral Agency Agreement to be executed and delivered by
HII, substantially in the form of Exhibit D.
"HII Preference Stock" means, for purposes of this Agreement,
the preference stock of HII to be issued by HII to the Borrower on the
Closing Date and having the terms set forth in Exhibit E.
"HL&P" means Houston Lighting & Power Company, which is, prior
to the Closing Date, a Texas corporation and a Subsidiary of HII, and
upon and after the effectiveness of the Mergers, a division of HII.
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"HL&P Mortgage" means the Mortgage and Deed of Trust dated as
of November 1, 1944 by HL&P to South Texas Commercial National Bank of
Houston, as Trustee (Texas Commerce Bank National Association,
successor Trustee), as amended and supplemented from time to time.
"Hybrid Preferred Securities" means preferred stock issued by
any Hybrid Preferred Securities Subsidiary.
"Hybrid Preferred Securities Subsidiary" means any Delaware
business trust (or similar entity) (i) all of the common equity
interest of which is owned (either directly or indirectly through one
or more Wholly-Owned Subsidiaries) at all times by HII, (ii) that has
been formed for the purpose of issuing Hybrid Preferred Securities and
(iii) substantially all of the assets of which consist at all times
solely of the Junior Subordinated Debt and payments made from time to
time on the Junior Subordinated Debt.
"Indebtedness" of any Person means the sum of (a) all items
(other than capital stock, capital surplus and retained earnings)
that, in accordance with GAAP consistently applied, would be included
in determining total liabilities as shown on the liability side of a
balance sheet of such Person as at the date on which the Indebtedness
is to be determined and (b) without duplication, the amount of all
Guarantees by such Person; provided, however, that Indebtedness of a
Person shall not include any Junior Subordinated Debt owned by any
Hybrid Preferred Securities Subsidiary or any Guarantee by HII or
NorAm of payments with respect to any Hybrid Preferred Securities.
"Indexed Asset" means, with respect to any Indexed Debt
Security, (i) any security or commodity that is deliverable upon
maturity of such Indexed Debt Security to satisfy the obligations
under such Indexed Debt Security at maturity or (ii) any security,
commodity or index relating to one or more securities or commodities
used to determine or measure the obligations under such Indexed Debt
Security at maturity thereof.
"Indexed Debt Securities" means (i) the ACES and (ii) any
other security issued by HII or any Consolidated Subsidiary of HII
that (a) in accordance with GAAP, is shown on the consolidated balance
sheet of HII and its Consolidated Subsidiaries as Indebtedness or a
liability and (b) the obligations at maturity of which may be
satisfied completely by the delivery of, or the amount of such
obligations are determined by reference to, (1) an equity security
issued by an issuer other than HII or any such Consolidated Subsidiary
or (2) an underlying index, commodity or security.
"Insolvency" means, as used in Section 7.12, 8.1(a)(v),
8.2(a)(iv) and 9.1(j), with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA (and "Insolvent" shall be construed accordingly for such
purposes).
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"Intercompany Indebtedness" means (i) any Indebtedness
constituting Money Fund Advances or Money Fund Obligations, (ii) any
Indebtedness for Borrowed Money owed by the Borrower to HII or to any
HII Pledged Subsidiary the proceeds of which are applied upon receipt
thereof to repayment of Loans or commercial paper supported by this
Agreement and (iii) any Indebtedness constituting an advance by HII to
the Borrower pursuant to the Support Agreement.
"Interest Period" means, for each Committed LIBOR Rate Loan
comprising part of the same Committed Borrowing, the period commencing
on the date of such Committed LIBOR Rate Loan or the date of the
conversion of any Committed Loan into such Committed LIBOR Rate Loan,
as the case may be, and ending on the last day of the period selected
by the Borrower pursuant to Section 2.2 or 4.7, as the case may be,
and, thereafter, each subsequent period commencing on the last day of
the immediately preceding Interest Period and ending on the last day
of the period selected by the Borrower pursuant to Section 4.7. The
duration of each such Interest Period shall be one, two, three, six
or, with the consent of all the Banks, nine months, as the Borrower
may select by notice pursuant to Section 2.2(a) or 4.7 hereof;
provided, however, that:
(i) any Interest Period in respect of a Loan
that would otherwise extend beyond the Termination Date shall
end on the Termination Date;
(ii) whenever the last day of any Interest
Period would otherwise occur on a day other than a Business
Day, the last day of such Interest Period shall be extended to
occur on the next succeeding Business Day; provided that if
such extension would cause the last day of such Interest
Period to occur in the next following calendar month, the last
day of such Interest Period shall occur on the next preceding
Business Day; and
(iii) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last
Business Day of a calendar month.
"Investment" of any Person means (a) any direct or indirect
loan, advance or extension of credit made by it to any other Person,
whether by means of purchase of debt or equity securities, loan,
advance, Guarantee or otherwise; (b) any capital contribution to any
other Person; and (c) any ownership or similar interest in any other
Person.
"Issuing Bank" means The Chase Manhattan Bank, in its capacity
as issuer of any Letter of Credit, and any other Bank, in such
capacity, selected by the Borrower with the consent of the Agent and
such Bank to be an Issuing Bank.
"Junior Subordinated Debt" means subordinated debt of HII or
any Subsidiary of HII other than the Borrower (i) that is issued at
par to a Hybrid Preferred Securities
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Subsidiary in connection with the issuance of Hybrid Preferred
Securities, (ii) the payment of the principal of which and interest on
which is subordinated (with certain exceptions) to the prior payment
in full in cash or its equivalent of all senior indebtedness of the
obligor thereunder and (iii) that has an original tenor no earlier
than 30 years from the issuance thereof.
"L/C Commitment" means the amount of $150,000,000.
"L/C Fee Payment Date" means the last day of each March, June,
September and December.
"L/C Obligations" means, at any time, an amount equal to the
sum of (a) the aggregate then undrawn and unexpired amount of the then
outstanding Letters of Credit and (b) the aggregate amount of drawings
under Letters of Credit that have not then been reimbursed pursuant to
Section 2.4.
"L/C Participants" means the collective reference to all the
Banks other than the Issuing Bank in their respective capacities as
participants in L/C Obligations.
"Letters of Credit" has the meaning assigned to such term in
Section 2.4(a).
"LIBOR Rate" means (a) with respect to any Committed LIBOR
Rate Loan, for each day during each Interest Period pertaining
thereto, the rate per annum equal to the average (rounded upward to
the nearest 1/64th of 1%) of the respective rates notified to the
Agent by each Reference Bank as the rate at which such Reference Bank
is offered Dollar deposits at or about 10:00 A.M., New York City time,
two Business Days prior to the beginning of such Interest Period in
the interbank eurodollar market where the eurodollar and foreign
currency and exchange operations in respect of its LIBOR Rate Loans
are then being conducted for delivery on the first day of such
Interest Period for the number of days therein and in an amount
comparable to the principal amount of its Committed LIBOR Rate Loan to
be outstanding during such Interest Period and (b) with respect to any
CAF LIBOR Rate Loan of a specified maturity requested pursuant to a
Competitive Bid Request, the rate per annum equal to the average
(rounded upward to the nearest 1/64 of 1%) of the respective rates
notified to the Agent by each Reference Bank as the rate at which such
Reference Bank is offered Dollar deposits at or about 10:00 A.M., New
York City time, two Business Days prior to the date of borrowing of
such CAF LIBOR Rate Loan in the interbank eurodollar market where the
eurodollar and foreign currency and exchange operations in respect of
its LIBOR Rate Loans are then being conducted for delivery on such
borrowing date, in an amount comparable to the principal amount of
such CAF LIBOR Rate Loan and with a maturity comparable to the
maturity applicable to such CAF LIBOR Rate Loan.
"LIBOR Rate Loan" means a Loan that bears interest at the
LIBOR Rate as provided in Section 4.4(b).
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"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, charge, security
interest, encumbrance or lien of any kind whatsoever (including any
Capital Lease).
"Loans" means the loans made by the Banks to the Borrower
pursuant to this Agreement.
"Loan Documents" means this Agreement, any Application, the
Support Agreement, the Security Documents, any Notes and any document
or instrument executed in connection with the foregoing.
"Loan Party" means, on the Closing Date, the Borrower, each of
its Subsidiaries, FinanceCo GP, HII and each of its Subsidiaries whose
Capital Stock is pledged pursuant to any of the Security Documents
and, thereafter, such parties and any other Person from time to time
party to any Loan Document.
"Long Term Debt Rating" means the rating assigned by a Rating
Agency to the Loans under this Agreement.
"Majority Banks" means, at any time, Banks having at least 51%
of the aggregate Commitments or, if the Commitments have been
terminated, 51% of the aggregate Commitments in effect immediately
prior to such termination.
"Mandatory Payment Preferred Stock" means any preference or
preferred stock of HII or of any Consolidated Subsidiary (in each case
other than any issued to HII or its subsidiaries and other than Hybrid
Preferred Securities or Junior Subordinated Debt) that is subject to
mandatory redemption, sinking fund or retirement provisions
(regardless of whether any portion thereof is due and payable within
one year).
"Margin Stock" has the meaning assigned to such term (or, in
the case of Regulation T, the term "margin security") in Regulation G,
T or U, as the case may be.
"Material Adverse Effect" means any material adverse effect on
the ability of the Borrower to perform on a timely basis its
obligations under this Agreement or any other Loan Document to which
it is a party.
"Material Subsidiary" has the same meaning specified for the
term "Significant Subsidiary" in Rule 405 under the Securities Act of
1933, as amended through the Closing Date, except that 5% shall be
used rather than 10%; provided, however, that no Subsidiary shall be
deemed to be a Material Subsidiary for purposes of this Agreement
solely on the basis of its losses.
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"Merger Agreement" means the Agreement and Plan of Merger,
dated as of August 11, 1996, among HII, HL&P, HI Merger and NorAm, as
amended by the Amendment to Agreement and Plan of Merger dated as of
October 23, 1996.
"Mergers" means (i) the merger of HII with and into HL&P on
the Closing Date and (ii) the merger of NorAm with and into HI Merger
on the Closing Date, in each case pursuant to Article I (and not
Article VIII) of the Merger Agreement and in accordance with the other
terms and provisions of the Merger Agreement; "Merger" shall refer to
the merger in either clause (i) or (ii) as the context may require.
"Moody's" means Moody's Investors Service, Inc., and any
successor rating agency.
"Money Fund" means the Person, accounts or series of accounts
in or through which the cash management practices and operations of
HII and its Consolidated Subsidiaries are consolidated from time to
time for purposes of conducting certain investing and/or borrowing
activities for HII and various of such Subsidiaries, consisting
primarily of a combination of (i) intercompany advances and related
intercompany obligations to repay such advances, (ii) short-term
investments and (iii) borrowings from third parties; initially such
Money Fund will be operated by FinanceCo GP and funded with borrowings
under this Agreement or commercial paper supported by this Agreement;
provided that at all times any Person conducting the operations of the
Money Fund, or owning and controlling the bank or investment accounts
thereunder, shall be an HII Pledged Subsidiary.
"Money Fund Advances" means, for any Person, loans or advances
to, or investments in, the Money Fund by such Person.
"Money Fund Obligations" means, for any Person, the
obligations of such person with respect to loans or advances to, or
investments in, such Person by the Money Fund (other than repayments
by the Money Fund of Money Fund Advances by such Person).
"Multiemployer Plan" means a Plan that is a multiemployer plan
as defined in Section 4001(a)(3) of ERISA.
"NorAm" means, prior to the Mergers, NorAm Energy Corp., a
Delaware corporation, and, upon and after the Mergers, NorAm Energy
Corp., a Subsidiary of HII (i) all of the common equity in which is
owned by HII, (ii) that was named HI Merger, Inc. prior to the
effectiveness of the Mergers and (iii), as the entity surviving the
merger with NorAm Energy Corp. pursuant to the Mergers, shall be
renamed NorAm Energy Corp. on the Closing Date..
"Note" has the meaning specified in Section 11.6(i).
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"Notice of Borrowing" has the meaning specified in Section
2.2(a).
"Notice of Interest Conversion/Continuation" has the meaning
specified in Section 4.7.
"Other Taxes" has the meaning specified in Section 5.3(b).
"Participant" has the meaning specified in Section 11.6(b).
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA or any
successor.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal
of and interest on which are unconditionally guaranteed by, the United
States of America (or by any agency thereof to the extent such
obligations are backed by the full faith and credit of the United
States of America), in each case maturing within one year from the
date of acquisition thereof;
(b) investments in commercial paper maturing within 270
days from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from S&P or from
Moody's, which at the date hereof are A-1 and P-1, respectively;
(c) investments in certificates of deposit, banker's
acceptances and time deposits maturing within 180 days from the date
of acquisition thereof issued or guaranteed by or placed with, and
money market deposit accounts issued or offered by, any domestic
office of any commercial bank organized under the laws of the United
States of America or any state thereof, or any Bank, in each case
which has a combined capital and surplus and undivided profits of not
less than $250,000,000; and
(d) fully collateralized repurchase agreements with a
term of not more than 30 days for securities described in clause (a)
or (b) above and entered into with a financial institution that either
satisfies the criteria described in clause (c) above or is an
investment or merchant banking institution with a rating applicable to
it or its direct or indirect corporate parent equivalent to the
highest rating obtainable from S&P or from Moody's.
"Permitted Liens" means with respect to any Person:
(a) Liens for current taxes, assessments or other
governmental charges that are not delinquent or remain payable
without any penalty, or the validity or amount of which is
contested in good faith by appropriate proceedings; provided,
however that, adequate reserves with respect thereto are
maintained on the books
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of such Person in accordance with GAAP; and provided, further,
that any right to seizure, levy, attachment, sequestration,
foreclosure or garnishment with respect to Property of such
Person or any Subsidiary of such Person by reason of such Lien
has not matured, or has been, and continues to be, effectively
enjoined or stayed;
(b) landlord Liens for rent not yet due and
payable and Liens for materialmen, mechanics, warehousemen,
carriers, employees, workmen, repairmen and other similar
nonconsensual Liens imposed by operation of law, for current
wages or accounts payable or other sums not yet delinquent, in
each case arising in the ordinary course of business;
provided, however, that any right to seizure, levy,
attachment, sequestration, foreclosure or garnishment with
respect to Property of such Person or any Subsidiary of such
Person by reason of such Lien has not matured, or has been,
and continues to be, effectively enjoined or stayed;
(c) Liens (other than any Lien imposed pursuant
to Section 401(a)(29) or 412(n) of the Code, ERISA or any
environmental law, order, rule or regulation) incurred or
deposits made, in each case, in the ordinary course of
business, (i) in connection with workers' compensation,
unemployment insurance and other types of social security or
(ii) to secure (or to obtain letters of credit that secure)
the performance of tenders, statutory obligations, surety and
appeal bonds, bids, leases, performance or payment bonds,
purchase, construction or sales contracts and other similar
obligations, in each case not incurred or made in connection
with the borrowing of money, the obtaining of advances or
credit or the payment of the deferred purchase price of
property;
(d) Liens arising out of or in connection with
any litigation or other legal proceeding that is being
contested in good faith by appropriate proceedings; provided,
however, that adequate reserves with respect thereto are
maintained on the books of such Person in accordance with
GAAP; and provided, further, that any right to seizure, levy,
attachment, sequestration, foreclosure or garnishment with
respect to Property of such Person or any Subsidiary of such
Person by reason of such Lien has not matured, or has been,
and continues to be, effectively enjoined or stayed; and
(e) precautionary filings under the applicable
Uniform Commercial Code made by a lessor with respect to
personal property leased to such Person or any Subsidiary of
such Person.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture, government (or any
political subdivision or agency thereof) or any other entity of
whatever nature.
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"Plan" means, at a particular time and with respect to the
Borrower, any employee benefit plan that is covered by ERISA and in
respect of which the Borrower or a Commonly Controlled Entity is (or,
if such plan were terminated at such time, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Pledge and Collateral Agency Agreement" means the Pledge and
Collateral Agency Agreement to be executed and delivered by HII and
the Collateral Agent thereunder, substantially in the form of Exhibit
F.
"Pledge and Guarantee Agreement" means the Pledge, Guarantee
and Collateral Agency Agreement to be executed and delivered by the
Borrower and each of its Subsidiaries and the Collateral Agent
thereunder, substantially in the form of Exhibit G.
"Projected Available Cash" means, for any quarter, the cash
resources projected to be available to the Borrower for such quarter
to meet its monetary obligations during such quarter, which available
cash may include projected Excess Cash Flow of HII (after payment of
its obligations other than to the Borrower during such quarter and
after payment of dividends on HII common stock, computed as the
Available Dividend Amount then in effect) and availability under this
Agreement and availability of proceeds from commercial paper issued by
the Borrower; provided that for the fiscal quarter ending September
30, 1997, Projected Available Cash shall be deemed to be the amount
thereof set forth in the certificate delivered pursuant to Section
6.1(h).
"Projected Borrower Debt Service" means, for any quarter, the
product of (i) projected interest service obligations of the Borrower
for such quarter multiplied by (ii) 1.1; provided that for the fiscal
quarter ending September 30, 1997, Projected Borrower Debt Service
shall be deemed to be the amount thereof set forth in the certificate
delivered pursuant to Section 6.1(h).
"Property" means any interest or right in any kind of property
or asset, whether real, personal or mixed, owned or leased, tangible
or intangible and whether now held or hereafter acquired.
"Pro Rata Percentage" means, with respect to any Bank, a
fraction (expressed as a percentage) the numerator of which is the
amount of such Bank's Commitment and the denominator of which is the
aggregate amount of the Commitments of all of the Banks.
"PUHCA" means the Public Utility Holding Company Act of 1935,
as amended.
"Purchasing Banks" has the meaning specified in Section
11.6(c).
"Rating Agencies" means S&P, Duff & Phelps, Moody's and Fitch.
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"Reference Banks" means The Chase Manhattan Bank, Morgan
Guaranty Trust Company of New York and Citibank, N.A., together with
any successors thereto.
"Register" has the meaning specified in Section 11.6(e)
hereof.
"Regulation G," "Regulation T" and "Regulation U" means
Regulation G, T and U, respectively, of the Board or any other
regulation hereafter promulgated by the Board to replace the prior
Regulation G, T or U, as the case may be, and having substantially the
same function.
"Reimbursement Obligation" means the obligation of the
Borrower to reimburse the Issuing Bank pursuant to Section 2.4(e) for
amounts drawn under Letters of Credit.
"Reorganization" means, with respect to any Multiemployer
Plan, the condition that such Plan is in reorganization within the
meaning of Section 4241 of ERISA.
"Replaced Bank" has the meaning specified in Section 5.6(b)
hereof.
"Replacement Bank" has the meaning specified in Section 5.6(b)
hereof.
"Reportable Event" means any of the events set forth in
Section 4043(b) of ERISA, other than those events as to which the
thirty day notice period is waived under subsections .13, .14, .15,
.16, .18, .19 or .20 of PBGC Reg. Section 2615.
"Requirement of Law" means, as to any Person, any law,
statute, ordinance, decree, requirement, order, judgment, rule or
regulation of any Governmental Authority.
"Responsible Officer" means, with respect to any Person, its
chief financial officer, chief accounting officer, assistant
treasurer, treasurer or comptroller of such Person or any other
officer of such Person whose primary duties are similar to the duties
of any of the previously listed officers of such Person; with respect
to the Borrower, such Responsible Officer may be an officer in a
similar capacity with FinanceCo. GP having one of the foregoing titles
or duties in respect of the Borrower.
"Restricted Payment" means, with respect to any Person, any
dividend or other distribution (whether in cash, securities or other
property) with respect to any shares of any class of Capital Stock of
such Person or its Subsidiaries, 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 such
Capital Stock or of any option, warrant or other right to acquire any
such shares of Capital Stock.
"S&P" means Standard & Poor's Ratings Group, and any successor
rating agency.
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"SEC" means the Securities and Exchange Commission and any
successor thereto.
"Secured Indebtedness" means, with respect to any Person, all
Indebtedness secured (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured) by any Lien
on any Property (including, without limitation, accounts and contract
rights) owned by such Person or any of its Subsidiaries, even though
such Person has not assumed or become liable for the payment of such
Indebtedness.
"Security Documents" means the Pledge and Guarantee Agreement,
the Pledge and Collateral Agency Agreement and the HII Pledge and
Collateral Agency Agreement.
"Significant Subsidiary" has the meaning specified in Rule 405
under the Securities Act of 1933, as amended through the Closing Date;
provided, however, that (i) no Subsidiary shall be deemed to be a
Significant Subsidiary for purposes of this Agreement solely on the
basis of its losses and (ii) notwithstanding the foregoing, each of
NorAm and the Borrower shall be deemed to be a Significant Subsidiary
of HII.
"Single Employer Plan" means any Plan that is covered by Title
IV of ERISA, but that is not a Multiemployer Plan.
"Solvent" means, as used in Section 7.17, with respect to any
Person on a particular date, the condition that on such date, (a) the
fair value of the property of such Person is greater than the total
amount of liabilities, including, without limitation, contingent
liabilities, of such Person, (b) the present fair salable value of the
assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as
they become absolute and matured, (c) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond
such Person's ability to pay as such debts and liabilities mature, and
(d) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such
Person's property would constitute an unreasonably small amount of
capital. The term "Solvency" shall be construed accordingly for such
purpose.
"Subsidiary" means, as to any Person, a corporation,
partnership, limited liability company or other entity of which more
than 50% of the outstanding shares of Capital Stock or other ownership
interests having ordinary voting power (other than Capital Stock or
such other ownership interests having such power only by reason of the
happening of a contingency) to elect directors or other managers of
such corporation, partnership or other entity are at the time owned,
directly or indirectly, through one or more Subsidiaries of such
Person, by such Person.
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"Supermajority Banks" means, at any time, Banks having at
least 65% of the aggregate Commitments or, if the Commitments have
been terminated, 65% of the aggregate Commitments in effect
immediately prior to such termination.
"Support Agreement" means the Support Agreement to be executed
and delivered by HII, substantially in the form of Exhibit H.
"Taxes" has the meaning specified in Section 5.3(a).
"Tax Event" means the receipt by a Hybrid Preferred Securities
Subsidiary of an opinion of counsel experienced in such matters to the
effect that, as a result of any amendment to, or change (including any
announced proposed change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, or as a result of any official
administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is
effective or which proposed change, pronouncement or decision is
announced on or after the date of issuance of Hybrid Preferred
Securities of a Hybrid Preferred Securities Subsidiary, there is more
than an insubstantial risk that (i) such Hybrid Preferred Securities
Subsidiary is, or will be within 90 days of the date of such opinion
of counsel, subject to United States federal income tax with respect
to income received or accrued on the Junior Subordinated Debt held by
such Hybrid Preferred Securities Subsidiary, (ii) interest payable to
such Hybrid Preferred Securities Subsidiary on such Junior
Subordinated Debt is not, or within 90 days of the date of such
opinion of counsel, will not be, deductible by the payor, in whole or
in part, for United States federal income tax purposes or (iii) such
Hybrid Preferred Securities Subsidiary is, or will be within 90 days
of the date of such opinion of counsel, subject to more than a de
minimis amount of other taxes, duties or other governmental charges.
"Termination Date" means initially the date that is five years
after the Closing Date, or any earlier date on which (a) the
Commitments have been terminated in accordance with this Agreement or
(b) all unpaid principal amounts of Loans hereunder have been declared
due and payable in accordance with this Agreement.
"Tranche" means the collective reference to Committed LIBOR
Rate Loans, the Interest Periods with respect to all of which begin on
the same date and end on the same later date (whether or not such
Loans shall originally have been made on the same day).
"Transferee" has the meaning specified in Section 11.6(g).
"Transfer Effective Date" has the meaning specified in Section
11.6(c).
"Triggering Event" has the meaning specified in Section
5.7(b).
"TWX Stock" means shares of common stock of Time Warner Inc.
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"Type" refers to the determination of whether a Loan is an ABR
Loan or a Committed LIBOR Rate Loan (or a Committed Borrowing
comprised of such Loans).
"Uniform Customs" means the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be amended from time to time.
"Wholly-Owned" means, with respect to any Subsidiary of any
Person, all the outstanding Capital Stock (other than directors'
qualifying shares required by law) or other ownership interest of such
Subsidiary are at the time owned by such Person or by one or more
Wholly-Owned Subsidiaries of such Person, or both.
SECTION 1.2. Computation of Time Periods. In this Agreement,
in the computation of periods of time from a specified date to a later
specified date, unless otherwise specified herein, the word "from" means "from
and including" and the words "to" and "until" each means "to but excluding."
SECTION 1.3. Accounting Terms. Unless otherwise specified in
this Agreement, all accounting terms used herein shall be construed in
accordance with GAAP as in effect from time to time.
ARTICLE II
AMOUNTS AND TERMS OF THE
COMMITTED LOANS AND LETTERS OF CREDIT
SECTION 2.1. The Committed Loans. (a) Each Bank severally
agrees, on the terms and subject to the conditions hereinafter set forth, to
make revolving credit Loans (the "Committed Loans") to the Borrower from time
to time on any Business Day during the period from the Closing Date until the
Termination Date in an aggregate principal amount outstanding, which, when
added to such Bank's Pro Rata Percentage of the then outstanding L/C
Obligations, does not exceed at any time such Bank's Commitment; provided that
no Committed Loan shall be made as a Committed LIBOR Rate Loan after the day
that is one month prior to the Termination Date; and provided, further, that in
no event shall the aggregate amount of Committed Loans, CAF Loans and L/C
Obligations outstanding at any time exceed the aggregate amount of the
Commitments at such time.
(b) Each Committed Borrowing by the Borrower shall be in an
aggregate principal amount not less than $10,000,000 (in the case of Committed
LIBOR Rate Loans) or $5,000,000 (in the case of ABR Loans), or an integral
multiple of $1,000,000 in excess thereof and shall consist of Loans of the same
Type made on the same day by the Banks ratably according to their respective
Pro Rata Percentages. Within the limits of the applicable Commitments, the
Borrower may borrow, prepay pursuant to Section 5.5 and reborrow under
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this Section 2.1. The principal amount outstanding on the Committed Loans shall
mature and, together with accrued and unpaid interest thereon, shall be due and
payable on the Termination Date.
SECTION 2.2. Making the Loans. (a) Each Committed Borrowing
under Section 2.1 shall be made on the Borrower's oral or written notice given
by the Borrower to the Agent:
(i) not later than 11:00 A.M. (New York City time) on the third
Business Day prior to the date of the proposed Committed Borrowing in
the case of a Committed LIBOR Rate Loan;
(ii) not later than 11:00 A.M. (New York City time) on the
Business Day immediately preceding the date of the proposed Committed
Borrowing in the case of an Early Funding ABR Loan; and
(iii) not later than 11:00 A.M. (New York City time) on the same
Business Day of the proposed Committed Borrowing in the case of any
other ABR Loan.
With respect to any oral notice of borrowing given by the Borrower, the
Borrower shall promptly thereafter confirm such notice in writing. Each
written notice of borrowing and each confirmation of an oral notice of
borrowing shall be in substantially the form of Exhibit A hereto ("Notice of
Borrowing"). Each Notice of Borrowing shall be signed by the Borrower and
shall specify therein the requested (i) date of such Committed Borrowing, (ii)
Type of Loans comprising such Committed Borrowing, (iii) aggregate amount of
such Committed Borrowing and (iv) with respect to any Committed LIBOR Rate
Loan, the Interest Period for each such Loan. Upon receipt of any such notice,
the Agent shall promptly notify each Bank thereof. Each Bank shall, before
1:00 P.M. (New York City time) on the date of such Committed Borrowing, make
available to the Agent at its address referred to in Section 11.2, in
immediately available funds, such Bank's applicable Pro Rata Percentage of such
Committed Borrowing; provided, however, that, in the event of a requested ABR
Loan with respect to which the Borrower has delivered its notice of borrowing
on the Business Day immediately preceding the requested Borrowing Date (an
"Early Funding ABR Loan"), each Bank shall make its applicable Pro Rata
Percentage of such Committed Borrowing before 10:00 A.M. (New York City time)
on the requested Borrowing Date. The Agent shall, no later than 2:00 P.M. (New
York City time) on such date (or no later than 11:00 A.M. (New York City time),
in the case of an Early Funding ABR Loan), make available to the Borrower the
proceeds of the Committed Loans received by the Agent hereunder by crediting
such account of the Borrower with the Agent as the Borrower shall from time to
time designate. Each Notice of Borrowing shall be irrevocable and binding on
the Borrower.
(b) Unless the Agent shall have received notice from a
Bank at least two hours prior to the applicable time described in clause (a)
above by which such Bank is required to deliver its funds to the Agent with
respect to any Committed Borrowing that such Bank will not
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make available to the Agent such Bank's applicable Pro Rata Percentage of such
Committed Borrowing, the Agent may assume that such Bank has made such portion
available to the Agent on the date of such Committed Borrowing in accordance
with Section 2.2(a) and the Agent may, in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount. If such amount
is made available to the Agent on a date after such date of Committed
Borrowing, such Bank shall pay to the Agent on demand an amount equal to the
product of (i) the daily average Federal Funds Effective Rate during such
period, times (ii) the amount of such Bank's applicable Pro Rata Percentage of
such Committed Borrowing, times (iii) a fraction, the numerator of which is the
number of days that elapse from and including such date of Committed Borrowing
to the date on which such Bank's applicable Pro Rata Percentage of such
Committed Borrowing shall have become immediately available to the Agent and
the denominator of which is 360. A certificate of the Agent submitted to any
Bank with respect to any amounts owing under this Section 2.2(b) shall be
conclusive in the absence of manifest error. If such Bank shall repay to the
Agent such corresponding amount, such amount so repaid shall constitute such
Bank's Loan as part of such Committed Borrowing for purposes of this Agreement.
If such Bank's applicable Pro Rata Percentage of such Committed Borrowing is
not in fact made available to the Agent by such Bank within one Business Day of
such date of Committed Borrowing, the Agent shall be entitled to recover such
amount with interest thereon at the rate per annum, equal to (i) the ABR (in
the case of ABR Loans) or (ii) the Federal Funds Effective Rate (in the case of
Committed LIBOR Rate Loans), on demand, from the Borrower.
(c) The failure of any Bank to make the Loan to be made
by it as part of any Committed Borrowing shall not relieve any other Bank of
its obligation, if any, hereunder to make its Loan on the date of such
Committed Borrowing, but no Bank shall be responsible for the failure of any
other Bank to make the Loan to be made by such other Bank on the date of any
Committed Borrowing.
SECTION 2.3. Minimum Tranches. All Borrowings, prepayments,
conversions and continuations of Committed Loans hereunder and all selections
of Interest Periods hereunder shall be in such amounts and be made pursuant to
such elections so that, after giving effect thereto, the aggregate principal
amount of the Loans comprising each Tranche of Committed LIBOR Rate Loans shall
be equal to $10,000,000 or an integral multiple of $1,000,000 in excess
thereof.
SECTION 2.4. Letters of Credit. (a) L/C Commitment. (i)
Subject to the terms and conditions hereof, the Issuing Bank, in reliance on
the agreements of the other Banks set forth in Section 2.4(d), agrees to issue
letters of credit ("Letters of Credit") for the account of the Borrower in
support of obligations (including, without limitation, performance, bid and
similar bonding obligations) of the Borrower and its Affiliates on any Business
Day prior to the Termination Date in such form as may be approved from time to
time by the Issuing Bank; provided that the Issuing Bank shall have no
obligation to issue any Letter of Credit if, after giving effect to such
issuance, (A) the L/C Obligations would exceed the L/C Commitment or (B) the
sum of the Loans then outstanding and the L/C Obligations then outstanding
would exceed the aggregate Commitments then in effect.
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(ii) Each Letter of Credit shall be denominated in Dollars
and shall be a standby letter of credit issued to support obligations of the
Borrower or any of its Affiliates, contingent or otherwise, and expire no later
than the Termination Date.
(iii) Each Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent therewith, the laws of the State of
New York.
(iv) The Issuing Bank shall not at any time be obligated to
issue any Letter of Credit hereunder if such issuance would conflict with, or
cause the Issuing Bank or any L/C Participant to exceed any limits imposed on
such Issuing Bank by, any applicable Requirement of Law.
(b) Procedure for Issuance of Letters of Credit. The Borrower
may from time to time request that the Issuing Bank issue a Letter of Credit by
delivering to the Issuing Bank at its address for notices specified herein an
Application therefor, completed to the satisfaction of the Issuing Bank, and
such other certificates, documents and other papers and information as the
Issuing Bank may reasonably request. Upon receipt of any Application, the
Issuing Bank will process such Application and the certificates, documents and
other papers and information delivered to it in connection therewith in
accordance with its customary procedures and shall promptly issue the Letter of
Credit requested thereby (but in no event shall the Issuing Bank be required to
issue any Letter of Credit earlier than three Business Days after its receipt
of the Application therefor and all such other certificates, documents and
other papers and information relating thereto) by issuing the original of such
Letter of Credit in a form satisfactory to the Borrower to the beneficiary
thereof or as otherwise may be agreed by the Issuing Bank and the Borrower. The
Issuing Bank shall furnish a copy of such Letter of Credit to the Borrower
promptly following the issuance thereof and notify the Banks of the amount
thereof.
(c) Fees, Commissions and Other Charges. (i) The Borrower
shall pay to the Agent, for the account of the Issuing Bank and the L/C
Participants, a letter of credit commission with respect to each Letter of
Credit, computed for the period from the last L/C Fee Payment Date (or, if
later, the date of issuance thereof) to the date upon which such payment is due
hereunder at the rate per annum equal to the Applicable Margin for LIBOR Rate
Loans then in effect, calculated on the basis of a 365- (or 366-, as the case
may be) day year, of the aggregate amount available to be drawn under such
Letter of Credit on the date on which such fee is calculated. The Borrower
shall pay to the Agent, for the account of the Issuing Bank, a fronting fee
with respect to each Letter of Credit, computed for the period from the last
L/C Fee Payment Date to the date upon which such payment is due hereunder at
the rate per annum equal to 1/8 of 1%, calculated on the basis of a 365- (or
366-, as the case may be) day year, of the aggregate amount available to be
drawn under such Letter of Credit on the date on which such fee is calculated.
Such commissions and fronting fees shall be payable in arrears on each L/C Fee
Payment Date and shall be nonrefundable.
(ii) In addition to the foregoing fees and commissions, the
Borrower shall pay or reimburse the Issuing Bank for such normal and customary
costs and reasonable expenses as are
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incurred or charged by the Issuing Bank in issuing, effecting payment under,
amending or otherwise administering any Letter of Credit.
(iii) The Agent shall, promptly following its receipt
thereof, distribute to the Issuing Bank and the L/C Participants all fees and
commissions received by the Agent for their respective accounts pursuant to
this subsection.
(d) L/C Participations. (i) The Issuing Bank irrevocably
agrees to grant and hereby grants to each L/C Participant, and, to induce the
Issuing Bank to issue Letters of Credit hereunder, each L/C Participant
irrevocably agrees to accept and purchase and hereby accepts and purchases from
the Issuing Bank, on the terms and conditions hereinafter stated, for such L/C
Participant's own account and risk an undivided interest equal to such L/C
Participant's Pro Rata Percentage in the Issuing Bank's obligations and rights
under each Letter of Credit issued hereunder and the aggregate amount of
drawings under Letters of Credit that have not then been reimbursed pursuant to
Section 2.4. Each L/C Participant unconditionally and irrevocably agrees with
the Issuing Bank that, if a draft is paid under any Letter of Credit for which
the Issuing Bank is not reimbursed in full by the Borrower in accordance with
the terms of this Agreement, such L/C Participant shall pay to the Issuing Bank
upon demand at the Issuing Bank's address for notices specified herein an
amount equal to such L/C Participant's Pro Rata Percentage of the amount of
such draft, or any part thereof, which is not so reimbursed.
(ii) If any amount required to be paid by any L/C Participant
to the Issuing Bank pursuant to Section 2.4(d)(i) in respect of any
unreimbursed portion of any payment made by the Issuing Bank under any Letter
of Credit is paid to the Issuing Bank within one Business Day after the date
such payment is due, such L/C Participant shall pay to the Issuing Bank on
demand an amount equal to the product of (A) such amount, times (B) the daily
average Federal Funds Effective Rate as quoted by the Issuing Bank, during the
period from and including the date such payment is required to the date on
which such payment is immediately available to the Issuing Bank, times (C) a
fraction the numerator of which is the number of days that elapse during such
period and the denominator of which is 360. If any such amount required to be
paid by any L/C Participant pursuant to Section 2.4(d)(ii) is not in fact made
available to the Issuing Bank by such L/C Participant within three Business
Days after the date such payment is due, the Issuing Bank shall be entitled to
recover from such L/C Participant, on demand, such amount with interest thereon
calculated from such due date at the ABR. A certificate of the Issuing Bank
submitted to any L/C Participant with respect to any amounts owing under this
subsection shall be conclusive in the absence of manifest error.
(iii) Whenever, at any time after the Issuing Bank has made
payment under any Letter of Credit and has received from any L/C Participant
its pro rata share of such payment in accordance with Section 2.4(d), the
Issuing Bank receives any payment related to such Letter of Credit (whether
directly from the Borrower or otherwise, including proceeds of collateral
applied thereto by the Issuing Bank), or any payment of interest on account
thereof, the Issuing Bank will distribute to such L/C Participant its pro rata
share thereof; provided, however, that in the event that any such payment
received by the Issuing Bank shall be required to be returned by the
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Issuing Bank, such L/C Participant shall return to the Issuing Bank the portion
thereof previously distributed by the Issuing Bank to it.
(e) Reimbursement Obligation of the Borrower. (i) The
Borrower agrees to reimburse the Issuing Bank on each date on which the Issuing
Bank notifies the Borrower of the date and amount of a draft presented under
any Letter of Credit and paid by the Issuing Bank for the amount of (A) such
draft so paid and (B) any taxes, reasonable fees, charges or other reasonable
costs or expenses incurred by the Issuing Bank in connection with such payment.
Each such payment shall be made to the Issuing Bank at its address for notices
specified herein in lawful money of the United States of America and in
immediately available funds.
(ii) Interest shall be payable on any and all amounts
remaining unpaid by the Borrower under this subsection from the date such
amounts become payable (whether at stated maturity, by acceleration or
otherwise) until payment in full at the rate that would be payable on any
outstanding ABR Loans that were then overdue.
(iii) Each drawing under any Letter of Credit shall be deemed
to constitute a Committed Borrowing of ABR Loans in the amount of such drawing.
The Borrowing Date with respect to each such borrowing shall be deemed to be
the date of such drawing.
(f) Obligations Absolute. (i) The Borrower's payment
obligations under Section 2.4(e) shall be absolute and unconditional under any
and all circumstances and irrespective of any set-off, counterclaim or defense
to payment that the Borrower may have or have had against the Issuing Bank or
any beneficiary of a Letter of Credit other than a defense based upon the gross
negligence or willful misconduct of the Issuing Bank.
(ii) The Borrower also agrees with the Issuing Bank that the
Issuing Bank shall not be responsible for, and the Borrower's Reimbursement
Obligations under Section 2.4(e) shall not be affected by, among other things,
(i) the validity or genuineness of documents or of any endorsements thereon,
even though such documents shall in fact prove to be invalid, fraudulent or
forged, (ii) any dispute between or among the Borrower and any beneficiary of
any Letter of Credit or any other party to which such Letter of Credit may be
transferred or (iii) any claims whatsoever of the Borrower against any
beneficiary of such Letter of Credit or any such transferee.
(iii) The Issuing Bank shall not be liable for any error,
omission, interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Letter of
Credit, except for errors or omissions caused by the Issuing Bank's gross
negligence or willful misconduct.
(iv) The Borrower agrees that any action taken or omitted by
the Issuing Bank under or in connection with any Letter of Credit or the
related drafts or documents, if done in the absence of gross negligence of
willful misconduct and in accordance with the standards of care
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specified in the Uniform Commercial Code of the State of New York, shall be
binding on the Borrower and shall not result in any liability of the Issuing
Bank to the Borrower.
(g) Letter of Credit Payments. If any draft shall be
presented for payment under any Letter of Credit, the Issuing Bank shall
promptly notify the Borrower of the date and amount thereof. The responsibility
of the Issuing Bank to the Borrower in connection with any draft presented for
payment under any Letter of Credit shall, in addition to any payment obligation
expressly provided for in such Letter of Credit, be limited to determining that
the documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are in conformity with such Letter of Credit.
(h) Application. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 2.4, the provisions of this Section 2.4 shall apply.
ARTICLE III
AMOUNTS AND TERMS OF THE CAF LOANS
SECTION 3.1. The CAF Loans. (a) From time to time on any
Business Day during the period from the Closing Date until the Termination
Date, the Borrower may request CAF Loans from the Banks in amounts such that
the aggregate principal amount of Committed Loans and CAF Loans outstanding at
any time shall not exceed the aggregate amount of the Commitments at such time
(the "CAF Facility").
(b) Under the terms and conditions set forth below, the
Borrower may borrow, repay pursuant to Section 3.2(h) and reborrow under this
Section 3.1.
SECTION 3.2. Competitive Bid Procedure. (a) In order to
request a CAF Loan, the Borrower shall deliver to the Agent a written notice in
the form of Exhibit B-1, attached hereto (a "Competitive Bid Request"), to be
received by the Agent (i) in the case of each CAF LIBOR Rate Loan, not later
than 3:00 P.M. (New York City time), four (4) Business Days before the
borrowing date specified for such CAF LIBOR Rate Loan and (ii) in the case of
each Fixed Rate Loan, not later than 11:00 A.M. (New York City time), one (1)
Business Day before the borrowing date specified for such Fixed Rate Loan.
Each Competitive Bid Request shall in each case refer to this Agreement and
specify (i) the date of Borrowing of such CAF Loans (which shall be a Business
Day), (ii) the aggregate principal amount thereof, (iii) whether the CAF Loans
then being requested are to be CAF LIBOR Rate Loans or Fixed Rate Loans, (iv)
the maturity date for each CAF Loan requested to be made and (v) the interest
payment dates for each CAF Loan requested to be made. The Agent shall promptly
notify each Bank by telex or facsimile transmission of the contents of each
Competitive Bid Request received by it. Each Competitive Bid Request may
solicit bids for CAF Loans in an aggregate principal amount of $5,000,000 or an
integral multiple of $1,000,000 in excess thereof and for not more than three
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alternative maturity dates for such CAF Loans. The maturity date for each CAF
Loan shall be not less than 15 days nor more than 180 days after the applicable
date of CAF Borrowing (and in any event shall not extend beyond the Termination
Date).
(b) Each Bank may, in its sole discretion, irrevocably
offer to make one or more CAF Loans to the Borrower responsive to each
Competitive Bid Request from the Borrower. Any such irrevocable offer by a
Bank must be received by the Agent, in the form of Exhibit B-2 hereto (a
"Competitive Bid"), (i) in the case of each CAF LIBOR Rate Loan, not later than
10:30 A.M. (New York City time), three (3) Business Days before the borrowing
date specified for such CAF LIBOR Rate Loan and (ii) in the case of each Fixed
Rate Loan, not later than 9:30 A.M. (New York City time) on the borrowing date
specified for such Fixed Rate Loan. Competitive Bids that do not conform
substantially to the format of Exhibit B-1 may be rejected by the Agent after
conferring with, and upon the instruction of, the Borrower, and the Agent shall
notify the Bank of such rejection as soon as practicable. Each Competitive Bid
shall refer to this Agreement and (i) specify the maximum principal amount of
CAF Loans for each maturity date (which shall be in an aggregate principal
amount not less than $5,000,000 or an integral multiple of $1,000,000 in excess
thereof and which may equal, but not exceed, the principal amount requested for
such maturity date by the Borrower) and the aggregate maximum principal amount
of CAF Loans for all maturity dates (which amount, with respect to any Bank,
may exceed such Bank's Commitment) that the Bank is willing to make to the
Borrower; and (ii) specify the CAF Rate at which the Bank is prepared to make
each such CAF Loan. A Competitive Bid submitted by a Bank pursuant to this
Section 3.2(b) shall be irrevocable absent manifest error.
(c) The Agent shall (i) in the case of each CAF LIBOR
Rate Loan, not later than 11:00 A.M. (New York City time) three (3) Business
Days before the borrowing date specified for such CAF LIBOR Rate Loan and (ii)
in the case of each Fixed Rate Loan, not later than 10:00 A.M. (New York City
time) on the borrowing date specified for such Fixed Rate Loan, notify the
Borrower in writing of all the Competitive Bids made (arranging each such bid
in ascending interest rate order), and the CAF Rate or CAF Rates and the
maximum principal amount of each CAF Loan in respect of which Competitive Bid
was made, and the identity of the Bank that made each bid. The Agent shall
send a copy of all Competitive Bids to the Borrower for its records as soon as
practicable after completion of the bidding process set forth in this Section
3.2.
(d) The Borrower may in its sole and absolute discretion,
subject only to the provisions of this Section 3.2(d), accept or reject any
Competitive Bid referred to in Section 3.2(c); provided, however, that the
aggregate amount of the Competitive Bids for CAF Loans so accepted by the
Borrower may not exceed the lesser of (i) the principal amount of the
applicable CAF Borrowing requested by the Borrower in respect thereof and (ii)
the amount of the Commitments less the sum of (A) the aggregate principal
amount of Committed Loans and CAF Loans and (B) the L/C Obligations then
outstanding, after giving effect to the application of the proceeds of such
respective CAF Borrowing on the borrowing date therefor. The Borrower shall
notify the Agent in writing whether and to what extent it has decided to accept
or reject any or all of the bids referred to in Section 3.2(c) by delivering to
the Agent a written notice in the form of
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Exhibit B-3 hereto (a "Competitive Bid Confirmation"), (i) in the case of each
CAF LIBOR Rate Loan, not later than 1:00 P.M. (New York City time), three (3)
Business Days before the borrowing date specified for such CAF LIBOR Rate Loan
and (ii) in the case of each Fixed Rate Loan, not later than 11:00 A.M. (New
York City time) on the borrowing date specified for such Fixed Rate Loan, which
Competitive Bid Confirmation shall specify the principal amount of CAF Loans
for each relevant maturity date to be made by each such bidding Bank (which
amount for each such maturity date shall be equal to or less than the maximum
amount for such maturity date specified in the Competitive Bid of such Bank,
and for all maturity dates included in such Competitive Bid in respect thereof
shall be equal to or less than the aggregate maximum amount specified in such
Competitive Bid for all such maturity dates); provided, however, that (A) the
failure by the Borrower to so deliver a Competitive Bid Confirmation by the
specified time shall be deemed to be a rejection of all the bids referred to in
Section 3.2(c) for the related Competitive Bid Request; (B) the Borrower shall
not accept a bid made at a particular CAF Rate for a particular maturity if the
Borrower has decided to reject a bid made at a lower CAF Rate for such
maturity; (C) if the Borrower shall accept bids made at a particular CAF Rate
for a particular maturity but shall be restricted by other conditions hereof
from borrowing the maximum principal amount of CAF Loans in respect of which
bids at such CAF Rate have been made, then the Borrower shall accept a pro rata
portion of each bid made at such CAF Rate based as nearly as possible on the
respective maximum principal amounts of CAF Loans offered to be made by the
relevant Banks pursuant to such bids; and (D) no bid shall be accepted for a
CAF Loan by any Bank unless such CAF Loan is in an aggregate principal amount
not less than $5,000,000 or an integral multiple of $1,000,000 in excess
thereof. Notwithstanding the foregoing, if it is necessary for the Borrower to
accept a pro rata allocation of the bids made in response to a Competitive Bid
Request (whether pursuant to the events specified in clause (C) above or
otherwise) and the available principal amount of CAF Loans to be allocated
among the Banks is not sufficient to enable CAF Loans to be allocated to each
Bank in an aggregate principal amount not less than $5,000,000 or in integral
multiples of $1,000,000 in excess thereof, then the Borrower shall, subject to
clause (D) above, select the Banks to be allocated such CAF Loans and shall
round allocations up or down to the next higher or lower multiple of $1,000,000
as it shall deem appropriate; provided that the allocations among the Banks to
be allocated such CAF Loans shall be made pro rata based as nearly as possible
on the respective maximum principal amounts of CAF Loans offered to be made by
such Banks. The Competitive Bid Confirmation given by the Borrower pursuant to
this Section 3.2(d) shall be irrevocable.
(e) Upon receipt from the Agent of the LIBOR Rate
applicable to any CAF LIBOR Rate Loan to be made by any Bank pursuant to a
Competitive Bid that has been accepted by the Borrower pursuant to Section 3.2,
the Agent shall notify such Bank of the applicable LIBOR Rate.
(f) If the Agent shall at any time elect to submit a
Competitive Bid in its capacity as a Bank, it shall submit such bid directly to
the Borrower by (i) in the case of a CAF LIBOR Rate Loan, not later than 10:15
A.M. (New York City time), and (ii) in the case of a Fixed Rate Loan, not
later than 9:15 A.M. (New York City time), in each case, on the Business
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Day on which the other Banks are required to submit their bids to the Agent
pursuant to Section 3.2(b) above.
(g) If the Borrower accepts pursuant to Section 3.2(d)
one or more of the offers made by any Bank or Banks, the Agent shall promptly
notify each Bank that has made such an offer of the aggregate amount of such
CAF Loans to be made on the borrowing date for each maturity date and of the
acceptance or rejection of any offers to make such CAF Loans made by such Bank.
Each Bank that is to make a CAF Loan shall, before 12:00 Noon (New York City
time) on the borrowing date specified in the Competitive Bid Request applicable
thereto, make available to the Agent at its office set forth in Section 11.2
the amount of CAF Loans to be made by such Bank, in immediately available
funds. The Agent shall, no later than 1:00 P.M. (New York City time), make
available to the Borrower the proceeds of the CAF Loans received by the Agent
hereunder by crediting such account of the Borrower with the Agent as the
Borrower shall from time to time designate. As soon as practicable after each
borrowing date, the Agent shall notify each Bank of the aggregate amount of CAF
Loans advanced on such borrowing date and the respective maturity dates
thereof.
(h) The Borrower shall repay to the Agent for the account
of each Bank that has made a CAF Loan (or the CAF Loan Assignee in respect
thereof, as the case may be) on the maturity date of each CAF Loan (such
maturity date being that specified by the Borrower for repayment of such CAF
Loan in the related Competitive Bid Request) the then unpaid principal amount
of such CAF Loan. The Borrower shall not have the right to prepay any
principal amount of any CAF Loan.
(i) All notices required by this Section 3.2 shall be
made in accordance with Section 11.2 hereof; provided, however, that each
request or notice required to be made under Section 3.2(a) or 3.2(d) by the
Borrower may be made by the giving of telephone notice to the Agent that is
promptly confirmed by delivery of a notice in writing (in substantially the
form of Exhibit B-1 or Exhibit B-3, as the case may be) to the Agent.
ARTICLE IV
PROVISIONS RELATING TO ALL LOANS
SECTION 4.1. Evidence of Loans. (a) Each Bank shall
maintain in accordance with its usual practice an account or accounts
evidencing indebtedness of the Borrower to such Bank resulting from each Loan
made by such Bank from time to time, including, without limitation, the amounts
of principal and interest payable and paid to such Bank from time to time under
this Agreement.
(b) The Agent shall maintain the Register pursuant to Section
11.6(e) and a subaccount therein for each Bank, in which shall be recorded (i)
the amount of each Committed Loan and CAF Loan made by each Bank through the
Agent hereunder, the type thereof, and each
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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
Bank hereunder and (iii) both the amount of any sum received by the Agent
hereunder from the Borrower and each Bank's share thereof.
(c) The entries made in the Register and the accounts of each
Bank maintained pursuant to Section 4.1(a) shall, to the extent permitted by
law, be prima facie evidence of the existence and amount of the obligations of
the Borrower therein recorded; provided, however, that the failure of any Banks
or the Agent to maintain the Register or any such account, or any error
therein, shall not in any manner affect the obligation of the Borrower to repay
(with applicable interest) the Loans actually made to such Borrower by such
Bank in accordance with the terms of this Agreement.
SECTION 4.2. Fees. (a) The Borrower agrees to pay to the
Agent for the account of each Bank a facility fee (the "Facility Fee") on the
aggregate average daily amount of such Bank's Commitment (whether or not
utilized), from the Closing Date until the Termination Date, payable quarterly
in arrears beginning on September 30, 1997 and continuing thereafter on the
last day of each March, June, September and December during the term of this
Agreement, and on the Termination Date, at the applicable rate per annum as
specified below opposite the Designated Rating in effect from time to time
during the period for which payment is due:
Facility Fee
------------
Designated Rating Rate
------------------ ----
A-/A3 or higher .100%
BBB+/Baa1 .125%
BBB/Baa2 .150%
BBB-/Baa3 .175%
BB+/Ba1 or lower or Unrated .250%
(b) The Facility Fees payable under Section 4.2(a) shall
be calculated by the Agent on the basis of a 365- or 366-day year, as the case
may be, for the actual days (including the first day but excluding the last
day) occurring in the period for which such fee is payable.
(c) In each row in the table set forth in clause (a)
above, the first indicated rating corresponds to that assigned by S&P, Fitch
and Duff & Phelps, as the case may be, and the second indicated rating
corresponds to that assigned by Moody's; the determination of which row of such
table is applicable at any time is set forth in the definition of "Designated
Rating".
(d) The Borrower shall pay to the Agent, for its own
account, the fees in the amounts and on the dates previously agreed to in
writing by the Borrower and the Agent.
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SECTION 4.3. Optional and Mandatory Termination or Reduction
of the Commitments. (a) Optional. The Borrower shall have the right, upon at
least one (1) Business Day's irrevocable notice to the Agent (which shall give
prompt notice to each Bank), to terminate in whole or permanently reduce
ratably in part the unused portions of the Commitments, provided that (i) each
partial reduction shall be in the aggregate principal amount of $5,000,000 or
an integral multiple of $1,000,000 in excess thereof and (ii) no such
termination or reduction shall be permitted if, after giving effect thereto and
to any prepayments made under Section 5.5 hereof by the Borrower on the
effective date thereof, the aggregate principal amount of Loans plus the L/C
Obligations then outstanding would exceed the Commitments then in effect.
(b) Mandatory. (i) In the event that HII makes any repurchase
of its common stock pursuant to clause (iv) of Section 8.4(e) at any time that
the aggregate Commitments then in effect equal or exceed $1,500,000,000, the
amount of the aggregate Commitments shall automatically be permanently reduced
by an amount equal to 150% of the amount paid by HII in respect of such
repurchase, subject to and in accordance with the provisions of Section
4.3(b)(iv).
(ii) In the event that HII makes an HII Investment
pursuant to clause (i) of Section 8.4(g) at any time that the aggregate
Commitments then in effect equal or exceed $1,500,000,000, the amount of the
aggregate Commitments shall automatically be permanently reduced, subject to
and in accordance with the provisions of Section 4.3(b)(iv), by an amount equal
to 150% of the amount (an "Excess Investment Amount") by which the HII
Aggregate Investment Amount at such time exceeds the sum of (A) $500,000,000
and (B) those Excess Investment Amounts previously determined pursuant to this
subparagraph (b)(ii) for the purposes of making Commitment reductions
hereunder.
(iii) In the event that any debt is incurred pursuant to
Section 8.3(b)(iii), the amount of the aggregate Commitments shall
automatically be permanently reduced in accordance with the provisions of
Section 4.3(b)(iv) by an amount equal to the cash proceeds thereof (net of
reasonable fees and commissions and underwriters discount, if any, incurred by
the Borrower in connection therewith).
(iv) Notwithstanding the provisions of Section 4.3(b)(i)
or 4.3(b)(ii), in the event that, at the time of (a) any repurchase of HII
common stock pursuant to clause (iv) of Section 8.4(e) referred to in such
Section 4.3(b)(i) or (b) any HII Investment pursuant to Section 8.4(g) referred
to in such Section 4.3(b)(ii), the Borrower has made voluntary permanent
reductions of the Commitments pursuant to Section 4.3(a) prior to such time,
the amount of the reduction of Commitments otherwise required under Section
4.3(b)(i) or 4.3(b)(ii), as the case may be, shall be reduced by the amount of
such prior voluntary commitment reductions made prior to such time that have
not previously been used pursuant to this subparagraph (b)(iv) as an offset to
the requirement to reduce the Commitments under Section 4.3(b)(i) or Section
4.3(b)(ii). Each reduction of Commitments pursuant to this Section 4.3 shall
be applied pro rata to the Commitments of each Bank. If at any time, including
after giving effect to any reduction of Commitments pursuant to this Section
4.3, the Aggregate Outstanding Extensions of Credit for all Banks exceeds the
aggregate Commitments, the Borrower shall be obligated to prepay the
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Loans (and to cash collateralize Letters of Credit to the extent that the
aggregate amount of the L/C Obligations exceeds such aggregate Commitments
after prepayment of all Loans) in the amount of such excess.
SECTION 4.4. Interest. The Borrower shall pay interest on
the unpaid principal amount of each Loan made by each Bank from the date of
such Loan until such principal amount shall be paid in full, at the times and
at the rates per annum set forth below:
(a) ABR Loans. Each ABR Loan shall bear interest at a
rate per annum equal at all times to the lesser of (i) the ABR and
(ii) the Highest Lawful Rate, payable quarterly in arrears on the last
day of each March, June, September and December, commencing on
September 30, 1997, and on the Termination Date.
(b) LIBOR Rate Loans. Each LIBOR Rate Loan shall bear
interest at a rate per annum equal at all times to:
(i) in the case of each Committed LIBOR Rate Loan,
the lesser of (A) the sum of the LIBOR Rate for the applicable
Interest Period for such Loan plus the Applicable Margin and
(B) the Highest Lawful Rate, payable on the last day of such
Interest Period and, with respect to Interest Periods of six
or nine months, on the ninetieth (90th) day after the
commencement of the Interest Period and on each succeeding
ninetieth (90th) day during such Interest Period, and on the
Termination Date; and
(ii) in the case of each CAF LIBOR Rate Loan, the
lesser of (A) the sum of the LIBOR Rate applicable to such
Loan plus or minus, as the case may be, the CAF Margin
specified by a Bank with respect to such Loan in its
Competitive Bid submitted pursuant to Section 3.2(b) and (B)
the Highest Lawful Rate, payable on the date or dates
specified in the relevant Competitive Bid Request.
(c) Fixed Rate Loans. Each Fixed Rate Loan shall bear
interest at a rate per annum equal at all times to the lesser of (i)
the fixed rate of interest offered by the Bank making such Loan and
accepted by the Borrower pursuant to Section 3.2 and (ii) the Highest
Lawful Rate, payable on the date or dates specified in the relevant
Competitive Bid Request.
(d) Interest that is determined by reference to the Prime
Rate shall be calculated by the Agent on the basis of a 365- or
366-day year, as the case may be, for the actual days (including the
first day but excluding the last day) occurring in the period in which
such interest is payable and otherwise shall be calculated by the
Agent on the basis of a 360-day year for the actual days (including
the first day and excluding the last day) occurring in the period for
which such interest is payable.
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(e) Notwithstanding the foregoing, if all or a portion of
(i) the principal amount of any Loan, (ii) any interest payable
thereon, or (iii) any Facility Fee or other amount payable hereunder
shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest,
payable from time to time on demand, at a rate per annum equal to the
lesser of (A) the Highest Lawful Rate and (B) the Default Rate, in
each case from the date of such non-payment until such amount is paid
in full (as well after as before judgment).
(f) Each determination of an interest rate by the Agent
pursuant to any provisions of this Agreement shall be conclusive and
binding on the Borrower and the Banks in the absence of manifest
error. The Agent shall, at the request of the Borrower, deliver to
the Borrower a statement showing in reasonable detail the quotations
used by the Agent in determining the LIBOR Rate.
(g) If any Reference Bank shall for any reason no longer
have Commitments or any Loans, such Reference Bank shall thereupon
cease to be a Reference Bank, and the Agent (after consultation with
the Borrower and the Banks) shall, by notice to the Borrower and the
Banks, designate another Bank as a Reference Bank.
(h) Each Reference Bank shall use its best efforts to
furnish quotations of rates to the Agent as contemplated hereby. If
any of the Reference Banks shall be unable or shall otherwise fail to
supply such rates to the Agent upon its request, the rate of interest
shall, subject to the provisions of Section 4.6(b), be determined on
the basis of the quotations of the remaining Reference Banks or
Reference Bank.
SECTION 4.5. Reserve Requirements. (a) The Borrower agrees
to pay to each Bank that requests compensation under this Section 4.5 in
accordance with the provisions set forth in Section 5.7(b), so long as such
Bank shall be required to maintain reserves against "Eurocurrency liabilities"
under Regulation D of the Board (or, so long as such Bank shall be required by
the Board or by any other Governmental Authority to maintain reserves against
any other category of liabilities that includes deposits by reference to which
the interest rate on LIBOR Rate Loans is determined as provided in this
Agreement or against any category of extensions of credit or other assets of
such Bank that includes any LIBOR Rate Loans), an additional amount (determined
by such Bank and notified to the Borrower pursuant to the provisions set forth
in Section 5.7(b)) representing such Bank's calculation or, if an accurate
calculation is impracticable, reasonable estimate (using such method of
allocation to such Loans of the Borrower as such Bank shall determine in
accordance with Section 5.7(a)) of the actual costs, if any, incurred by such
Bank during the relevant Interest Period or during the period a CAF LIBOR Rate
Loan made by such Bank was outstanding, as the case may be, as a result of the
applicability of the foregoing reserves to such Committed LIBOR Rate Loans or
CAF LIBOR Rate Loans, which amount in any event shall not exceed the product of
the following for each day of such Interest Period or each day during the
period such CAF LIBOR Rate Loan was outstanding, as the case may be:
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(i) the principal amount of the relevant Committed
LIBOR Rate Loans or CAF LIBOR Rate Loans made by such Bank outstanding
on such day; and
(ii) the difference between (A) a fraction, the
numerator of which is the LIBOR Rate (expressed as a decimal)
applicable to such Committed LIBOR Rate Loan or CAF LIBOR Rate Loan,
as the case may be (expressed as a decimal), and the denominator of
which is one minus the maximum rate (expressed as a decimal) at which
such reserve requirements are imposed by the Board or other
Governmental Authority on such date minus (B) such numerator; and
(iii) a fraction, the numerator of which is one and the
denominator of which is 360.
(b) The agreements in this Section 4.5 shall survive the
termination of this Agreement and the payment of all amounts payable hereunder;
provided, however, that in no event shall the Borrower be obligated to
reimburse or compensate any Bank for amounts contemplated by this Section 4.5
for any period prior to the date that is 180 days prior to the date upon which
such Bank requests in writing such reimbursement or compensation from the
Borrower.
SECTION 4.6. Interest Rate Determination and Protection. (a)
The rate of interest for each Committed LIBOR Rate Loan shall be determined by
the Agent two (2) Business Days before the first day of each Interest Period
applicable to such Loan. The Agent shall give prompt notice to the Borrower
and the Banks of the applicable interest rate determined by the Agent for
purposes of Sections 4.4(a) and (b) hereof.
(b) If, with respect to any Committed LIBOR Rate Loans,
prior to the first day of an Interest Period (i) the Agent shall have
determined (which determination shall be conclusive and binding upon the
Borrower) that adequate and reasonable means do not exist for ascertaining the
LIBOR Rate for such Interest Period or (ii) the Agent shall have received
notice from the Majority Banks that the LIBOR Rate determined or to be
determined for such Interest Period will not adequately and fairly reflect the
cost to such Banks (as determined in good faith and certified by such Banks) of
making or maintaining their affected Committed LIBOR Rate Loans during such
Interest Period, the Agent shall give telecopy or telephonic notice thereof to
the Borrower and the Banks as soon as practicable thereafter. If such notice
is given, (A) any Committed LIBOR Rate Loans requested to be made on the first
day of such Interest Period shall be made as ABR Loans, (B) any Committed Loans
that were to have been converted on the first day of such Interest Period to
Committed LIBOR Rate Loans shall be continued as ABR Loans and (C) any
outstanding Committed LIBOR Rate Loans shall be converted, on the first day of
such Interest Period, to ABR Loans. Until such notice has been withdrawn by
the Agent, no further Committed LIBOR Rate Loans shall be made or continued as
such, nor shall the Borrower have the right to convert Committed Loans to
Committed LIBOR Rate Loans.
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SECTION 4.7. Voluntary Interest Conversion or Continuation of
Committed Loans. (a) The Borrower may on any Business Day, upon the
Borrower's irrevocable oral or written notice of interest
conversion/continuation given by the Borrower to the Agent not later than 11:00
A.M. (New York City time) on the third Business Day prior to the date of the
proposed interest conversion or continuation in the case of a Committed LIBOR
Rate Loan, (i) convert Committed Loans of one Type into Committed Loans of
another Type; (ii) convert Committed LIBOR Rate Loans for a specified Interest
Period into Committed LIBOR Rate Loans for a different Interest Period; or
(iii) continue Committed LIBOR Rate Loans for a specified Interest Period as
Committed LIBOR Rate Loans for the same Interest Period; provided, however,
that (A) no Committed Loan may be converted into or continued as a Committed
LIBOR Rate Loan by the Borrower so long as an Event of Default has occurred and
is continuing and the Agent has (or the Majority Banks have) determined that
such a conversion or continuation is not appropriate; (B) no Committed Loan may
be converted into or continued as a Committed LIBOR Rate Loan after the date
that is one month prior to the Termination Date and (C) no Committed Loan may
be converted into or continued as a Committed LIBOR Rate Loan if, after giving
effect thereto, Section 2.3 would be contravened. With respect to any oral
notice of interest conversion/continuation given by the Borrower under this
Section 4.7(a), the Borrower shall promptly thereafter confirm such notice in
writing. Each written notice of interest conversion/continuation given by the
Borrower under this Section 4.7(a) and each confirmation of an oral notice of
interest conversion/continuation given by the Borrower under this Section
4.7(a) shall be in substantially the form of Exhibit I hereto ("Notice of
Interest Conversion/Continuation"). Each such Notice of Interest
Conversion/Continuation shall specify therein (x) the requested date of such
interest conversion or continuation; (y) the Committed Loans to be converted or
continued; and (z) if such interest conversion or continuation is into
Committed LIBOR Rate Loans, the duration of the Interest Period for each such
Committed LIBOR Rate Loan. Upon receipt of any such Notice of Interest
Conversion/Continuation, the Agent shall promptly notify each Bank thereof.
Each Notice of Interest Conversion/Continuation shall be irrevocable and
binding on the Borrower.
(b) If the Borrower shall fail to deliver to the Agent a
Notice of Interest Conversion/Continuation in accordance with Section 4.7(a)
hereof, or to select the duration of any Interest Period for the principal
amount outstanding under any Committed LIBOR Rate Loan by 11:00 A.M. (New York
City time) on the third Business Day prior to the last day of the Interest
Period applicable to such Loan in accordance with Section 4.7(a), the Agent
will forthwith so notify the Borrower and the Banks provided that the failure
to give such notice shall not affect the conversion referred to below) and such
Committed Loans will automatically, on the last day of the then existing
Interest Period therefor, convert into ABR Loans.
SECTION 4.8. Funding Losses Relating to LIBOR Rate Loans and
Fixed Rate Loans. (a) The Borrower agrees, without duplication of any other
provision under this Agreement, to indemnify each Bank and to hold each Bank
harmless from any loss or expense that such Bank may sustain or incur as a
consequence of (i) default by the Borrower in payment when due of the principal
amount of or interest on any LIBOR Rate Loan, (ii) default by the Borrower in
making a borrowing of, conversion into or continuation of any LIBOR Rate Loan
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after the Borrower has given a notice requesting the same in accordance with
the provisions of this Agreement, (iii) default by the Borrower in making any
prepayment after the Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (iv) the making of a prepayment of LIBOR Rate
Loans or the conversion of Committed LIBOR Rate Loans into ABR Loans on a day
that is not the last day of an Interest Period with respect thereto (excluding
any prepayment made pursuant to Section 4.9) or the making of a prepayment of
any Fixed Rate Loan on a day that is not the scheduled maturity date with
respect thereto, including, without limitation, in each case, any such loss or
expense arising from the reemployment of funds obtained by it or from fees
payable to terminate the deposits from which such funds were obtained. The
calculation of all amounts payable to a Bank under this Section 4.8(a) shall be
made pursuant to the method described in Section 5.7(a), but in no event shall
such amounts payable with respect to any LIBOR Rate Loan exceed the amounts
that would have been payable assuming such Bank had actually funded its
relevant LIBOR Rate Loan through the purchase of a deposit bearing interest at
the LIBOR Rate in an amount equal to the amount of such LIBOR Rate Loan and
having a maturity comparable to (A) with respect to any Committed LIBOR Rate
Loan, the relevant Interest Period and (B) with respect to any CAF LIBOR Rate
Loan, the maturity set forth in the Competitive Bid applicable thereto;
provided, that each Bank may fund each of its LIBOR Rate Loans in any manner it
sees fit, and the foregoing assumption shall be utilized only for the
calculation of amounts payable under this Section 4.8(a).
(b) The agreements in this Section 4.8 shall survive the
termination of this Agreement and the payment of all amounts payable hereunder;
provided, however, that in no event shall the Borrower be obligated to
reimburse or compensate any Bank for amounts contemplated by this Section 4.8
for amounts accruing prior to the date that is 180 days prior to the date upon
which such Bank requests in writing such reimbursement or compensation from the
Borrower.
SECTION 4.9. Change in Legality. (a) Notwithstanding any
other provision of this Agreement, if any Bank shall notify the Agent that the
introduction of or any change in or in the interpretation or application of any
law or regulation makes it unlawful, or any central bank or other Governmental
Authority asserts that it is unlawful, for any Bank or its applicable lending
office to perform its obligations hereunder to make LIBOR Rate Loans or to fund
or maintain LIBOR Rate Loans hereunder, (i) the obligation of such Bank to
make, or to convert Committed Loans into, or to continue Committed LIBOR Rate
Loans as, LIBOR Rate Loans shall be suspended until the Agent shall notify the
Borrower that the circumstances causing such suspension no longer exist; (ii)
the Borrower shall, at its option, either prepay in full all Committed LIBOR
Rate Loans of such Bank then outstanding, or convert all such Loans to ABR
Loans, on the respective last days of the then current Interest Periods with
respect to such Loans (or within such earlier period as required by law),
accompanied, in the case of any prepayments, by interest accrued thereon; and
(iii) the Borrower shall, with respect to each CAF LIBOR Rate Loan of such
Bank, take such action as such Bank shall reasonably request. Each Bank agrees
that it will use reasonable efforts to designate a different lending office for
the LIBOR Rate Loans due to it affected by this Section 4.9, if such
designation will avoid the illegality described
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in this Section 4.9 so long as such designation will not be disadvantageous to
such Bank as determined by such Bank in its sole discretion acting in good
faith.
(b) For purposes of this Section 4.9, a notice to the
Borrower (with a copy to the Agent) by any Bank pursuant to paragraph (a) above
shall be effective on the date of receipt thereof by the Borrower.
ARTICLE V
INCREASED COSTS, TAXES, PAYMENTS
AND PREPAYMENTS
SECTION 5.1. Increased Costs; Capital Adequacy. (a) If
after the date of this Agreement the adoption of or any change in any law or
regulation or in the interpretation or application thereof or compliance by any
Bank with any request or directive (whether or not having the force of law)
from any central bank or other Governmental Authority made subsequent to the
date of this Agreement:
(i) shall subject any Bank to any tax of any kind
whatsoever with respect to this Agreement, any Note, any Letter of
Credit, any Application or any LIBOR Rate Loan made by it, or change
the basis of taxation of payments to such Bank in respect thereof
(except for (A) Taxes covered by Section 5.3, (B) net income taxes and
franchise taxes imposed on such Bank as a result of a present or
former connection between the jurisdiction of the government or taxing
authority imposing such tax and such Bank other than a connection
arising solely from such Bank having executed, delivered or performed
its obligations or received a payment under, or enforced, this
Agreement or any Note and (C) changes in the rate of tax on the
overall net income of such Bank);
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, deposits or other liabilities in or for the
account of, advances, loans or other extensions of credit by, or any
other acquisition of funds by, any office of such Bank that is not
otherwise included in the determination of the LIBOR Rate hereunder
(except for amounts covered by Section 4.5 or any other Section
hereof); or
(iii) shall impose on such Bank any other condition;
and the result of any of the foregoing is to increase the actual cost to such
Bank, by an amount that such Bank deems to be material, of making, converting
into, continuing or maintaining LIBOR Rate Loans or issuing or participating in
Letters of Credit or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Bank,
upon its demand in the manner set forth in Section 5.7(b), any additional
amounts, computed by such Bank in accordance with Section 5.7(a), necessary to
compensate such Bank
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for such actual increased cost or reduced amount receivable attributable to
Loans or Commitments to the Borrower (to the extent that such Bank has not
already been compensated or reimbursed for such amounts pursuant to any other
provision of this Agreement). If any Bank becomes entitled to claim any
additional amounts pursuant to this Section 5.1(a) from the Borrower, it shall
promptly notify the Borrower, through the Agent, of the event by reason of
which it has become so entitled in the manner set forth in Section 5.7(b).
(b) If any Bank determines in good faith that the
introduction of or any change in or in the interpretation or application of any
law or regulation regarding capital adequacy after the date of this Agreement
or compliance by such Bank or any corporation controlling such Bank with any
law or regulation or any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law) made or issued
after the date of this Agreement does or shall have the effect, as a result of
such Bank's obligations under this Agreement or under any Letter of Credit, of
reducing the rate of return on such Bank's or such corporation's capital to a
level below that which such Bank or such corporation could have achieved but
for such change or compliance (taking into consideration such Bank's or such
corporation's policies with respect to capital adequacy) by an amount deemed by
such Bank to be material, the Borrower shall pay to the Agent for the account
of such Bank, from time to time as specified by such Bank in the manner set
forth in Section 5.7(b), additional amounts, computed by such Bank in
accordance with Section 5.7(a), sufficient to compensate such Bank or such
corporation in the light of such circumstances, to the extent that such Bank
reasonably determines such reduction in rate of return is allocable to the
existence of such Bank's obligations hereunder.
(c) The agreements contained in this Section 5.1 shall
survive the termination of this Agreement and the payment of all amounts
payable hereunder; provided, however, that in no event shall the Borrower be
obligated to reimburse or compensate any Bank for amounts contemplated by this
Section 5.1 for any period prior to the date that is 180 days prior to the date
upon which such Bank requests in writing such reimbursement or compensation
from the Borrower.
SECTION 5.2. Payments and Computations. (a) The Borrower
shall make each payment (including each prepayment) hereunder, whether on
account of principal, interest, fees or otherwise, without setoff or
counterclaim, not later than 12:00 Noon (New York City time) on the day when
due in Dollars to the Agent at its address referred to in Section 11.2 in
immediately available funds. The Agent will promptly thereafter cause to be
distributed like funds relating to the payment of principal or interest or
Facility Fees (to the extent received by the Agent) ratably to the Banks
according to the amounts of their respective Loans, L/C Obligations and
Commitments in respect of which such payment is made, and like funds relating
to the payment of any other amount payable to any Bank (to the extent received
by the Agent) to such Bank, in each case to be applied in accordance with the
terms of this Agreement.
(b) Whenever any payment hereunder shall be stated to be
due on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such
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extension of time shall in such case be included in the computation of payment
of interest or fees, as the case may be; provided, however, if such extension
would cause payment of interest on or principal of LIBOR Rate Loans to be made
in the next following calendar month, such payment shall be made on the next
preceding Business Day.
(c) Unless the Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Banks hereunder
that the Borrower will not make such payment in full, the Agent may assume that
the Borrower has made such payment in full to the Agent on such date and the
Agent may, in reliance upon such assumption, cause to be distributed to each
Bank on such due date an amount equal to the amount then due such Bank. If and
to the extent the Borrower shall not have so made such payment in full to the
Agent, each Bank shall pay to the Agent on demand an amount equal to the
product of (i) the daily average Federal Funds Effective Rate during such
period, times (ii) the amount of such Bank's applicable Pro Rata Percentage of
such payment, times (iii) a fraction, the numerator of which is the number of
days that elapse from and including the date such amount is distributed to such
Bank to the date on which such Bank's applicable Pro Rata Percentage of such
payment shall have become immediately available to the Agent and the
denominator of which is 360.
SECTION 5.3. Taxes. (a) Except with respect to withholdings
of United States taxes as provided in Section 5.3(d), any and all payments by
the Borrower hereunder shall be made, in accordance with Section 5.2, free and
clear of and without deduction or withholding for or on account of any and all
present or future taxes, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto, excluding, in the case of each Bank
and the Agent, net income taxes and franchise taxes imposed on it as a result
of a present or former connection between the jurisdiction of the government or
taxing authority imposing such tax and the Agent or such Bank other than a
connection arising solely from the Agent or such Bank having executed,
delivered or performed its obligations or received a payment under, or
enforced, this Agreement or any Note (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter
referred to as "Taxes"). Except with respect to withholdings of United States
taxes as provided in Section 5.3(d), if the Borrower shall be required by law
to deduct any Taxes from or in respect of any sum payable hereunder or under
any Note to any Bank or the Agent, (i) the sum payable shall be increased as
may be necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 5.3) such
Bank or the Agent (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made; (ii) the Borrower shall
make such deductions; and (iii) the Borrower shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance with
applicable law. If requested by any Bank, the Borrower shall confirm that all
applicable Taxes, if any, imposed on it by virtue of the transactions under
this Agreement have been properly and legally paid by it to the appropriate
taxing authorities by sending either (A) official tax receipts or notarized
copies of such receipts to such Bank within thirty (30) days after payment of
any applicable tax or (B) a certificate executed by a Responsible Officer of
the Borrower confirming that such Taxes have been paid, together with evidence
of such payment.
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(b) In addition, the Borrower agrees to pay, in the
manner set forth in Section 5.7(b), any present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies that
arise from any payment made hereunder or under any Note or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or
any Note and for which such Bank or the Agent (as the case may be) has not been
otherwise reimbursed by the Borrower under this Agreement (hereinafter referred
to as "Other Taxes"). Notwithstanding the foregoing, the Borrower shall not
bear any stamp, documentary, other excise taxes, charges or similar levies that
are levied upon the sale or other transfer of any Note by a Bank or the Agent.
(c) The Borrower will indemnify each Bank and the Agent
for the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 5.3) paid by such Bank or the Agent (as the case may be) and any
liability (including penalties, interest and expenses) arising therefrom or
with respect thereto, including, without limitation or duplication, any
incremental taxes, interest or penalties that may become payable by the Agent
or any Bank as a result of any failure by the Borrower to pay any Taxes or
Other Taxes when due to the appropriate taxing authority or to remit to any
Bank the receipts or other evidence of payment of Taxes or Other Taxes.
(d) Each Bank and each CAF Loan Assignee registered in
the Register that is not incorporated under the laws of the United States of
America or a state thereof agrees that it will deliver to the Borrower and the
Agent (i) two duly completed copies of United States Internal Revenue Service
Form 1001 or 4224 or successor applicable form, as the case may be, and (ii) an
Internal Revenue Service Form W-8 or W-9 or successor applicable form. Each
such Bank and each such CAF Loan Assignee also agrees to deliver to the
Borrower and the Agent two further copies of the said Form 1001 or 4224 and
Form W-8 or W-9, or successor applicable forms or other manner of
certification, as the case may be, on or before the date that any such form
expires or becomes obsolete or after the occurrence of any event requiring a
change in the most recent form previously delivered by it to the Borrower, and
such extensions or renewals thereof as may reasonably be requested by the
Borrower or the Agent, unless in any such case any change in treaty, law or
regulation has occurred prior to the date on which any such delivery would
otherwise be required that renders all such forms inapplicable or that would
prevent such Bank or such CAF Loan Assignee from duly completing and delivering
any such form with respect to it and such Bank or such CAF Loan Assignee so
advises the Borrower and the Agent. Each such Bank and each such CAF Loan
Assignee shall certify (A) in the case of a Form 1001 or 4224, that it is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes and (B) in the case of a
Form W-8 or W-9, that it is entitled to an exemption from United States backup
withholding tax. In the event that any such Bank or CAF Loan Assignee fails to
deliver any forms required under this Section 5.3(d), the Borrower's obligation
to pay additional amounts shall be reduced to the amount that it would have
been obligated to pay had such forms been provided.
(e) If the Taxes or Other Taxes are not correctly or
legally asserted and any Bank receives a refund of those Taxes or Other Taxes,
such Bank shall within 20 days after such
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refund pay to the Borrower the amount of such refund to the extent that the
Borrower indemnified such Bank (or the Agent) for such Taxes or Other Taxes
pursuant to this Section 5.3.
(f) The agreements in this Section 5.3 shall survive the
termination of this Agreement and the payment of all amounts payable hereunder;
provided, however, that (i) in no event shall the Borrower be obligated to
reimburse or compensate any Bank for amounts contemplated by this Section 5.3
for any period prior to the date that is 180 days prior to the date upon which
such Bank requests in writing such reimbursement or compensation from the
Borrower (other than any amounts as to which the ultimate amount of the
reimbursement due could not then be determined) and (ii) nothing contained in
this Section 5.3 shall require the Borrower to pay any amount to any Bank or
the Agent in addition to that for which it has already reimbursed any Bank or
the Agent under any other provision of this Agreement.
SECTION 5.4. Sharing of Payments, Etc. If any Bank (a
"benefitted Bank") shall at any time receive any payment (other than pursuant
to Section 4.5, 4.8, 5.1 or 5.3) of all or part of its Committed Loans,
Reimbursement Obligations owing to it or interest thereon, or receive any
collateral in respect thereof (whether voluntarily or involuntarily, by setoff,
pursuant to events or proceedings of the nature referred to in Section 9.1(g)
or 9.1(h), or otherwise), in a greater proportion than any such payment to or
collateral received by any other Bank, if any, in respect of such other Bank's
Committed Loans or Reimbursement Obligations owing to it, respectively, or
interest thereon, such benefitted Bank shall purchase for cash from the other
Banks a participating interest in such portion of each such other Bank's
Committed Loans or Reimbursement Obligations owing to it, respectively, or
shall provide such other Banks with the benefits of any such collateral, or the
proceeds thereof, as shall be necessary to cause such benefitted Bank to share
the excess payment or benefits of such collateral or proceeds ratably with each
of the Banks; provided, however, that if all or any portion of such excess
payment or benefits is thereafter recovered from such benefitted Bank, such
purchase shall be rescinded, and the purchase price and benefits returned, to
the extent of such recovery, but without interest. The Borrower agrees that
any Bank so purchasing a participation from another Bank pursuant to this
Section 5.4 may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of setoff) with respect to such
participation as fully as if such Bank were the direct creditor of the Borrower
in the amount of such participation.
SECTION 5.5. Voluntary Prepayments. Subject to payment of
amounts due under Section 4.8, the Borrower may, upon notice delivered to the
Agent not later than 11:00 A.M. (New York City time) one Business Day prior to
the date of prepayment stating the aggregate principal amount of the prepayment
and the Committed Loans to be prepaid, prepay the outstanding principal amounts
of such Committed Loans comprising part of the same Committed Borrowing in
whole or ratably in part, together with accrued interest to the date of such
prepayment on the principal amount prepaid; provided, however, that all such
prepayments shall be made without premium or penalty thereon; and provided
further that losses incurred by any Bank under Section 4.8 shall be payable
with respect to each such prepayment in the manner set forth in Section 4.8.
Any such notice provided pursuant to this Section 5.5 shall be irrevocable, and
the payment amount specified in such notice shall be due and payable on the
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prepayment date described in such notice, together with accrued and unpaid
interest on the amount prepaid. Partial prepayments pursuant to this Section
5.5 with respect to any Tranche of Committed LIBOR Rate Loans shall be in an
aggregate principal amount equal to the lesser of (a) $10,000,000 or an
integral multiple of $1,000,000 in excess thereof or (b) the aggregate
principal amount of such Tranche of Committed LIBOR Rate Loans then
outstanding, as the case may be; provided, that, no partial prepayment of any
Tranche of Committed LIBOR Rate Loans may be made if, after giving effect
thereto, Section 2.3 would be contravened. Partial prepayments with respect to
the ABR Loans shall be made in an aggregate principal amount equal to the
lesser of (i) $5,000,000 or an integral multiple of $1,000,000 in excess
thereof or (ii) the aggregate principal amount of ABR Loans then outstanding,
as the case may be.
SECTION 5.6. Mitigation of Losses and Costs; Replacement of
Bank. (a) Any Bank claiming reimbursement from the Borrower under any of
Sections 4.5, 4.8, 5.1 and 5.3 hereof shall use reasonable efforts (including,
without limitation, if requested by the Borrower, reasonable efforts to
designate a different lending office of such Bank) to mitigate the amount of
such losses, costs, expenses and liabilities, if such efforts can be made and
such mitigation can be accomplished without such Bank suffering (i) any
economic disadvantage for which such Bank does not receive full indemnity from
the Borrower under this Agreement or (ii) any legal or regulatory disadvantage.
(b) Notwithstanding anything to the contrary contained
herein, the Borrower (for any reason and in its sole discretion) shall have the
right at any time and from time to time to replace any of the Banks (each such
Bank, a "Replaced Bank") with one or more other banks (which need not be
existing Banks hereunder) reasonably acceptable to the Agent (collectively, the
"Replacement Bank") that have agreed to purchase the Commitments and Committed
Loans of such Bank pursuant to one or more Committed Loan Assignment and
Acceptances in accordance with the provisions of Section 11.6(c) (including,
without limitation, the requirements of the last sentence thereof); provided
that:
(i) each such assignment shall be arranged by the Borrower
(with such reasonable assistance from such Replaced Bank as the
Borrower reasonably may request); and
(ii) no Replaced Bank shall be obligated to make any such
assignment pursuant to this Section 5.6(b) unless and until such
Replaced Bank shall have received one or more payments from the
Replacement Bank in an aggregate amount equal to the aggregate
outstanding principal amount of the Committed Loans owing to such
Replaced Bank, together with accrued and unpaid interest and fees
thereon (including, in any event, any breakage indemnities of the type
described in subsection 4.8) to the date of such payment and all other
amounts payable to such Replaced Bank under this Agreement.
Upon the effectiveness of such assignment, the Replacement Bank shall become a
Bank hereunder and (except with respect to any indemnities under this Agreement
with respect to events or circumstances arising prior to the replacement of
such Replaced Bank, which shall survive as to such Replaced Bank, and the
obligation to repay in a timely manner any then
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outstanding CAF Loans with accrued interest thereon and all other amounts
payable to such Replaced Bank under this Agreement, which shall survive as to
such Replaced Bank and shall continue to constitute Loans hereunder until paid
in full) the Replaced Bank shall cease to constitute a Bank hereunder.
SECTION 5.7. Determination and Notice of Additional Costs and
Other Amounts. (a) In determining the amount of any claim for reimbursement
or compensation under Sections 4.5, 4.8, 5.1 and 5.3, each Bank may use any
reasonable averaging, attribution and allocation methods consistent with such
methods customarily employed by such Bank in similar situations.
(b) Each Bank or, with respect to compensation claimed by
it pursuant to Section 5.3, the Agent, as the case may be, will (i) use best
efforts to notify the Borrower through the Agent (in the case of each Bank) of
any event giving rise to such claim occurring after the date of this Agreement
promptly after the occurrence thereof and (ii) notify the Borrower through the
Agent (in the case of each Bank) promptly after such Bank or the Agent, as the
case may be, becomes aware of any event occurring after the date of this
Agreement, in either case if such event (for purposes of this Section 5.7(b), a
"Triggering Event") will entitle such Bank or the Agent, as the case may be, to
compensation pursuant to Section 4.5, 4.8, 5.1 or 5.3, as the case may be.
Each such notification of a Triggering Event shall be accompanied by a
certificate of such Bank or the Agent, as the case may be, setting forth in
reasonable detail such amount or amounts as shall be necessary to compensate
such Bank or the Agent, as the case may be, as specified in Section 4.5, 4.8,
5.1 or 5.3, as the case may be, which certificate shall be conclusive absent
manifest error. The Borrower shall pay to the Agent for the account of such
Bank or to the Agent for its own account, as the case may be, the amount shown
as due on any such certificate within 10 Business Days after its receipt of the
same.
ARTICLE VI
CONDITIONS OF LENDING
SECTION 6.1. Conditions Precedent to Initial Loans. The
obligation of each Bank to make its initial Loan to the Borrower hereunder is
subject to the satisfaction of the following conditions precedent:
(a) The Agent (or its counsel) shall have received from
each party to this Agreement, the HII Pledge and Collateral Agency
Agreement, the Pledge and Guarantee Agreement, the Pledge and
Collateral Agency Agreement and the Support Agreement either (i) a
counterpart of such Loan Document signed on behalf of such party or
(ii) written evidence satisfactory to the Agent (which may include
telecopy transmission of a signed signature page of such Loan
Document) that such party has signed a counterpart of such Loan
Document.
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(b) The Agent shall have received evidence satisfactory
to it that, on the Closing Date and substantially concurrently with the
funding of the initial Loans hereunder, (i) the Mergers shall have
been consummated in accordance with the Merger Agreement, (ii) all
obligations under the facilities described on Schedule 6.1(b) shall
have been paid in full and the commitments thereunder terminated and
(iii) the HII Preference Stock shall have been issued to the Borrower.
(c) The Agent (or its counsel) shall have received a
certificate dated the Closing Date of an Assistant Secretary of HII
certifying (i) the names and true signatures of the officers of each
Loan Party authorized to sign each Loan Document to which it is a
party and the notices and other documents to be delivered by such Loan
Party pursuant to any such Loan Document; (ii) the bylaws and articles
of incorporation, partnership agreement or similar organizational
documents of each Loan Party as in effect on the date of such
certification; (iii) the resolutions of the Board of Directors of each
Loan Party (or, with respect to the Borrower, resolutions of the Board
of Directors of FinanceCo GP) approving and authorizing the execution,
delivery and performance by such Loan Party of each Loan Document to
which it is a party and, in the case of the Borrower, any Notes from
time to time issued hereunder and authorizing the borrowings and other
transactions contemplated hereunder; and (iv) that all authorizations,
approvals and consents by any Governmental Authority or other Person
necessary in connection with the execution, delivery and performance
of the Loan Documents and the consummation of the Mergers and the
transactions related thereto, including confirmation of the status of
HII as an exempt holding company under PUHCA after giving effect
thereto and any other regulatory approvals in respect thereof required
to be obtained prior to the Closing Date, have been obtained and are
in full force and effect.
(d) The Agent (or its counsel) shall have received a
certificate of a Responsible Officer of HII certifying that, as of the
Closing Date and except as disclosed on Schedule 6.1(d) attached
hereto, HII owns, directly or indirectly through one or more of its
Subsidiaries, all of the outstanding Capital Stock of each Significant
Subsidiary of HII, free and clear of any Liens other than those
arising under the Security Documents.
(e) The Agent (or its counsel) shall have received a
favorable opinion of Messrs. Baker & Botts, L.L.P., counsel for the
Borrower, dated the Closing Date and substantially in the form of
Exhibit J hereto.
(f) The Agent (or its counsel) shall have received
certificates dated on or about the Closing Date of the Secretary of
State of the State of Delaware as to the existence and good standing
of the Borrower and FinanceCo GP.
(g) The Agent (or its counsel) shall have received a
favorable opinion of a valuation firm satisfactory to it with respect
to the Solvency of the Borrower after giving effect to the initial
Borrowings and the transactions contemplated hereby.
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(h) The Agent shall have received a certificate showing
in reasonable detail Projected Borrower Debt Service and Projected
Available Cash for the fiscal quarter of the Borrower ending September
30, 1997.
SECTION 6.2. Conditions Precedent to Certain Borrowings. The
obligation of each Bank to make each extension of credit (including, to the
extent relevant, the initial Loans hereunder and any issuance of a Letter of
Credit) is subject to the satisfaction of the following conditions precedent:
(a) On or prior to the date of such extension of
credit, the Agent shall have received from the Borrower a Notice of
Borrowing or a Competitive Bid Confirmation, as the case may be, in
accordance with the terms of this Agreement, or, in the case of the
issuance of any Letter of Credit, the instruments required under
Section 2.4 in respect thereof.
(b) The representations and warranties of HII and the
Borrower contained in Article 7 of this Agreement shall be true and
correct in all material respects on and as of the date of such
extension of credit (except for those representations or warranties or
parts thereof that, by their terms, expressly relate solely to a
specific date, in which case such representations and warranties shall
be true and correct in all material respects as of such specific
date), before and after giving effect to such extension of credit, and
to the application of the proceeds therefrom, as though made on and as
of such date.
(c) No Default or Event of Default shall have occurred
and be continuing, or would result from such extension of credit.
(d) The Agent shall have received such other supporting
documents as the Agent or the Banks, through the Agent, reasonably may
have requested.
Each of the giving of any applicable Notice of Borrowing or Competitive Bid
Confirmation, as the case may be, the acceptance by the Borrower of the
proceeds of each Borrowing, and each Letter of Credit issued on behalf of the
Borrower, shall constitute a representation and warranty by the Borrower that
on the date of such Borrowing such statements set forth in Section 6.2(b) and
(c) are true and correct.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Each of the Borrower and HII hereby represents and warrants as
follows:
SECTION 7.1. Corporate, Partnership or Other Status. (a) HII
is validly organized and existing as a corporation and in good standing under
the laws of the State of
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Texas; (b) the Borrower is validly organized and existing as a limited
partnership and in good standing under the laws of the State of Delaware; (c)
FinanceCo GP is validly organized and existing as a limited liability company
and in good standing under the laws of the State of Delaware; (d) each of HII,
FinanceCo GP and the Borrower is duly authorized or qualified to do business in
and is in good standing in each other jurisdiction in which the conduct of its
business or the ownership or leasing of its Property requires it to be so
authorized or qualified to do business, except where the failure to be so duly
authorized or qualified or in good standing, individually or in the aggregate,
would not have a Material Adverse Effect; and (e) each of HII, FinanceCo GP and
the Borrower has the corporate, partnership or other requisite power and
authority to conduct its business as presently conducted.
SECTION 7.2. Organizational Status of Subsidiaries. Each
Subsidiary of the Borrower (if any) and each Significant Subsidiary of HII (a)
is validly organized and existing as a corporation, partnership or limited
liability company and in good standing under the laws of the jurisdiction of
its organization, (b) is duly authorized or qualified to do business in and is
in good standing in each other jurisdiction in which the conduct of its
business or the ownership or leasing of its Property requires it to be so
authorized or qualified to do business, except where the failure to be so
validly organized and existing or duly authorized or qualified or in good
standing, individually or in the aggregate, would not have a Material Adverse
Effect; and (c) has the corporate, partnership or other requisite power and
authority to conduct its business as presently conducted, except where the
failure to have such corporate power and authority, individually or in the
aggregate, would not have a Material Adverse Effect.
SECTION 7.3. Corporate, Partnership or Other Powers. Each
Loan Party has the corporate, partnership or other requisite power to execute,
deliver and perform and comply with its obligations under this Agreement, any
Notes to which it is (or may become) a party and the other Loan Documents to
which it is a party. This Agreement has been, and each other Loan Document to
which any Loan Party is a party will be, duly executed and delivered on behalf
of such Loan Party.
SECTION 7.4. Authorization, No Conflict etc. The borrowings
by the Borrower contemplated by this Agreement, the execution and delivery by
each Loan Party of the Loan Documents to which it is a party and the
performance by each Loan Party of its obligations hereunder and thereunder have
been duly authorized by all requisite corporate, partnership or other requisite
action on the part of such Loan Party and do not and will not (i) violate any
existing law, any order to which such Loan Party is subject of any court or
other Governmental Authority, or the articles of incorporation or bylaws or
other organizational documents (each as amended from time to time) of such Loan
Party; (ii) violate, conflict with, result in a breach of or constitute (with
due notice or lapse of time or both, or any other condition) a default under,
any indenture, loan agreement or other agreement to which such Loan Party is a
party or by which such Loan Party or any of its Subsidiaries, or any of its
respective Property, is bound (except for such violations, conflicts, breaches
or defaults that, individually or in the aggregate, do not have or would not
have a Material Adverse Effect); or (iii) except as provided by the Security
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Documents, result in, or require, the creation or imposition of any Lien upon
any of the Properties of any Loan Party.
SECTION 7.5. Governmental Approvals and Consents. Except for
(a) certain authorizations, approvals or actions by Governmental Authorities
required in connection with foreclosure under and as set forth in certain of
the Security Documents, (b) certain notice filings that may be required in
connection with the pledge of the Capital Stock of HI Energy and/or certain of
its Subsidiaries and (c) certain notice filings under the Uniform Commercial
Code required under the Security Documents, no authorization or approval or
action by, and no notice to or filing with, any Governmental Authority is
required for the due execution, delivery and performance by each Loan Party of
the Loan Documents to which it is a party.
SECTION 7.6. Obligations Binding. This Agreement and the
other Loan Documents are the legal, valid and binding obligations of each Loan
Party that is a party thereto enforceable against it in accordance with their
respective terms (assuming due and valid authorization, execution and delivery
of this Agreement by any party other than the Loan Parties), except (a) as such
enforceability may be (i) limited by the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the enforcement of creditors' rights generally and (ii) subject to
the effect of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and (b) the
availability of certain remedies under the Security Documents may require
certain authorizations, approvals or actions by Governmental Authorities as
indicated in Section 7.5.
SECTION 7.7. Use of Proceeds; Margin Stock. The proceeds of
the Loans will be used by the Borrower (i) to finance, in part, the payment of
the cash portion of the Merger of NorAm with and into HI Merger on the Closing
Date, along with related fees and expenses, (ii) to finance the refinancing of
certain obligations under, or for which credit support is provided by, the
facilities referred to in Section 6.1(b)(ii), (iii) to support the issuance of
short- term commercial paper or other short-term indebtedness of the Borrower,
(iv) to finance certain repurchases of HII common stock as described in, and
subject to limits of, Section 8.4(e)(iii) and Section 8.4(e) (iv) and (v) to
provide funds for the general purposes of the Borrower, including the making of
intercompany loans to, or securing Letters of Credit for the benefit of,
Affiliates to the extent permitted hereunder and by applicable law. Neither
HII nor the Borrower or any of its Subsidiaries is principally engaged in, or
has as one of its important activities, the business of extending credit for
the purpose of purchasing or carrying any Margin Stock, and no part of the
proceeds of any Loan made to the Borrower will be used for any purpose that
would violate the provisions of the margin regulations of the Board.
SECTION 7.8. Title to Properties. The issued and outstanding
Capital Stock owned by the Borrower of each of its Subsidiaries, and by HII of
each of its Significant Subsidiaries, whether such stock is owned directly or
indirectly through one or more of its Subsidiaries, is owned free and clear of
any Lien other than Liens arising under the Security Documents. In addition,
each of HII and its Significant Subsidiaries has good title to the Properties
reflected in the financial statements referred to in Section 7.13 and in any
financial
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statements delivered pursuant to Section 8.1(a) or 8.1(b), except for (a) such
Properties that have been disposed of subsequent to the dates of the balance
sheets included in such financial statements and that are no longer used or
useful in the conduct of the business of HII or of any of its Significant
Subsidiaries and (b) such Properties that have been disposed of in the ordinary
course of their respective business.
SECTION 7.9. Investment Company Act; PUHC Act of 1935.
Neither HII nor any Subsidiary of HII is (i) an "investment company" as defined
in, or required to register as an "investment company" under, the Investment
Company Act of 1940, as amended, or (ii) subject to regulation as a public
utility holding company under PUHCA except Section 9(a)(2) thereof relating to
the acquisition of securities of other public utility companies or public
utility holding companies.
SECTION 7.10. No Material Adverse Change. Since December 31,
1996, there has been no change in the consolidated financial position, results
of operations or business of HII and its Consolidated Subsidiaries that would
have a Material Adverse Effect.
SECTION 7.11. Litigation. There is no litigation, action,
suit or other legal or governmental proceeding pending or, to the best
knowledge of the Borrower, threatened, at law or in equity, or before or by any
arbitrator or Governmental Authority (i) relating to the transactions under
this Agreement or (ii) in which there is a reasonable possibility of an adverse
decision that is likely to have a Material Adverse Effect.
SECTION 7.12. ERISA. Neither HII nor any of its Significant
Subsidiaries has incurred any material liability or deficiency arising out of
or in connection with (i) any Reportable Event or "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) with respect to any Plan that has occurred during the five-year period
immediately preceding the date on which this representation is made or deemed
made, (ii) any failure of a Plan to comply with the applicable provisions of
ERISA and the Code, (iii) any termination of a Single Employer Plan, (iv) any
complete or partial withdrawal by the Borrower or any Commonly Controlled
Entity from any Multiemployer Plan, or (v) any Lien in favor of the PBGC or any
Plan that has arisen during the five-year period referred to in clause (i)
above. In addition, no Multiemployer Plan is in Reorganization or is
Insolvent, where such Reorganization or Insolvency, individually or when
aggregated with the events described in the first sentence of this Section
7.12, is likely to result in a material liability or deficiency of HII or any
of its Significant Subsidiaries. As used in this Section 7.12, any liability
or deficiency shall be deemed not to be "material" so long as the sum of all
liabilities and deficiencies referred to in this Section 7.12 at any one time
outstanding, individually and in the aggregate, is less than $25,000,000.
SECTION 7.13. Financial Statements. The audited consolidated
financial statements of HII as of and for the year ended December 31, 1996 and
the unaudited consolidated financial statements of HII as of and for the three
months ended March 31, 1997, copies of which have been delivered to the Banks,
present fairly the consolidated financial condition and results
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of operations of HII and its Consolidated Subsidiaries as of such dates and for
the periods then ended, in conformity with GAAP and, except as otherwise stated
therein, consistently applied.
SECTION 7.14. Accuracy of Information. None of the documents
or written information (excluding financial projections and forecasts) provided
by or on behalf of the Borrower to the Banks in connection with or pursuant to
this Agreement contains as of the date thereof or will contain as of the date
thereof any untrue statement of a material fact or omits or will omit to state
a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading. The financial
projections and forecasts furnished to the Banks by or on behalf of the
Borrower with respect to the transactions contemplated under this Agreement
were prepared in good faith and on the basis of information and assumptions
that the Borrower believed to be reasonable as of the date of such information.
SECTION 7.15. No Violation. Neither HII nor the Borrower is
in violation of any order, writ, injunction or decree of any court or any
order, regulation or demand of any Governmental Authority that, individually or
in the aggregate, reasonably could be expected to have a Material Adverse
Effect.
SECTION 7.16. Subsidiaries. Schedule 7.16 attached hereto
sets forth each Subsidiary of the Borrower as of the Closing Date and each
Significant Subsidiary of HII as of the Closing Date.
SECTION 7.17. Solvency. On and as of the Closing Date, after
giving effect to the Mergers, the Borrowings of initial Loans on the Closing
Date and the other transactions contemplated hereby and thereby, the Borrower
will be Solvent.
ARTICLE VIII
AFFIRMATIVE AND NEGATIVE COVENANTS
SECTION 8.1. Affirmative Covenants of the Borrower. The
Borrower covenants that, as long as any amount is owing hereunder or under any
other Loan Documents, any Letter of Credit is outstanding or any Bank shall
have any Commitment outstanding under this Agreement:
(a) Delivery of Financial Statements, Notices and
Certificates. The Borrower shall deliver to the Agent for distribution to the
Banks sufficient copies for each of the Banks of the following:
(i) as soon as practicable and in any event within 100
days after the end of each fiscal year of the Borrower (beginning with
fiscal 1997), a consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such fiscal year
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and the related statements of consolidated income, partners' capital
and cash flows, prepared in conformity with GAAP and, except as
otherwise stated therein, consistently applied, setting forth in
comparative form the figures for the previous fiscal year, together
with a report thereon by independent certified public accountants of
nationally recognized standing selected by the Borrower;
(ii) as soon as practicable and in any event within 55
days after the end of each of the first three quarters of each fiscal
year of the Borrower, beginning with the quarter ending September 30,
1997, unaudited consolidated financial statements of the Borrower and
its Consolidated Subsidiaries (without footnotes) consisting of at
least consolidated balance sheets as at the close of such quarter and
consolidated statements of income, partners' capital and cash flows
for such quarter and for the period from the beginning of such fiscal
year to the close of such quarter; such financial statements shall be
accompanied by a certificate of a Responsible Officer of the Borrower
to the effect that such unaudited financial statements present fairly
the consolidated financial condition and results of operations of the
Borrower or of the Borrower and its Consolidated Subsidiaries (as the
case may be) as of such date for the period then ending, and subject
to the limitation that no footnotes thereto have been prepared, have
been prepared in conformity with GAAP and, except as otherwise stated
therein, in a manner consistent with the financial statements referred
to in paragraph (a)(i) above;
(iii) with each set of statements to be delivered pursuant
to clauses (i) and (ii) above, a certificate in a form satisfactory to
the Agent, signed by a Responsible Officer of the Borrower stating
that no Default or Event of Default has occurred and is continuing or,
if there is any Default or Event of Default then continuing,
describing it and the steps, if any, being taken to cure it;
(iv) at least 15 days prior to the beginning of each
fiscal quarter (beginning with the fiscal quarter beginning October 1,
1997), a certificate in a form satisfactory to the Agent, signed by a
Responsible Officer of the Borrower, setting forth (A) the Projected
Borrower Debt Service and Projected Available Cash for such fiscal
quarter of the Borrower, including calculations in reasonable detail
supporting such determinations, and (B) the aggregate amount available
to be drawn under committed credit facilities of HII and any of its
Significant Subsidiaries and certified as based on good faith
assumptions believed to be reasonable at the date of such certificate;
(v) (A) within 10 days after the filing thereof, copies
of all reports, if any, under the Exchange Act (in each case other
than exhibits thereto and documents incorporated by reference therein)
filed by the Borrower with the SEC; (B) promptly, and in any event
within seven (7) days after a Responsible Officer of the Borrower
becomes aware of the occurrence thereof, written notice of (x) any
Default or Event of Default, (y) the institution of any litigation,
action, suit or other legal or governmental proceeding involving the
Borrower or any of its Subsidiaries as to which there is a reasonable
possibility of an adverse decision that is likely to have a Material
Adverse Effect or any
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final adverse determination in any litigation, action, suit or other
legal or governmental proceeding involving the Borrower or any of its
Subsidiaries that would have a Material Adverse Effect, or (z) the
incurrence by the Borrower or any Subsidiary of the Borrower of a
material liability or deficiency, or the existence of a reasonable
possibility of incurring a material liability or deficiency, arising
out of or in connection with (1) any Reportable Event with respect to
any Plan, (2) the failure to make any required contribution to a Plan,
(3) the creation of any Lien in favor of the PBGC or a Plan, (4) any
withdrawal from, or the termination, Reorganization or Insolvency of,
any Multiemployer Plan or (5) the institution of proceedings or the
taking of any other action by the PBGC or the Borrower or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the
withdrawal from, or the termination, Reorganization or Insolvency of,
any Plan; provided, that, as used in this clause (z), any liability or
deficiency shall be deemed not to be "material" so long as the sum of
all liabilities and deficiencies referred to in this clause (z) at any
one time outstanding, individually and in the aggregate, is less than
$25,000,000; and (C) such other information relating to the Borrower
or its business, properties, condition and operations as the Agent (or
any Bank through the Agent) may reasonably request; and
(vi) as soon as available, and in any event within 30 days
after the beginning of each fiscal year of the Borrower (beginning
with fiscal 1998) to which such forecast relates, an annual forecast
of Projected Available Cash and Projected Borrower Debt Service for
the four quarters comprising such fiscal year.
(b) Use of Proceeds. The Borrower will use the proceeds
of any Loan made by the Banks to it for the purposes set forth in the first
sentence of Section 7.7 in accordance therewith and with Section 8.3(d).
(c) Existence; Laws. The Borrower will, and will cause
each of its Subsidiaries to, do or cause to be done all things necessary (i) to
preserve, renew and keep in full force and effect its legal existence and all
rights, licenses, permits and franchises and (ii) to comply with all laws and
regulations applicable to it, except in each case, where the failure to do so,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
(d) Payment of Obligations. The Borrower will, and will
cause each of its Subsidiaries to, comply with all of its material Contractual
Obligations and pay its obligations, including any tax liabilities, that, if
not paid, could 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 in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to have a Material
Adverse Effect.
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(e) Maintenance of Properties. The Borrower will, and
will cause each of its Subsidiaries to, preserve and maintain all of its
Property that is material to the conduct of its business and keep the same in
good repair, working order and condition, and from time to time to make, or
cause to be made, such repairs, renewals and replacements thereto as in the
good faith judgment of the Borrower or such Subsidiary, as the case may be, are
necessary or proper so that the business carried on in connection therewith may
be properly conducted at all times, provided, however, that nothing in this
Section 8.1(e) shall prevent (a) the Borrower or any of its Subsidiaries from
selling, abandoning or otherwise disposing of any Properties (including the
Capital Stock of any Subsidiary of the Borrower that is not a Significant
Subsidiary of the Borrower), the retention of which in the good faith judgment
of the Borrower or such Subsidiary is inadvisable or unnecessary to the
business of the Borrower or such Subsidiary, as the case may be or (b) any
other transaction that is expressly permitted by the terms of any other
provision of this Agreement.
(f) Books and Records; Access. The Borrower will, and
will cause each of its Subsidiaries to, keep proper books of record and account
in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities. The Borrower will,
and will cause each of its Subsidiaries to, at any reasonable time and from
time to time, permit up to six representatives of the Banks designated by the
Majority Banks, or representatives of the Agent, on not less than five Business
Days' notice, to examine and make copies of and abstracts from the records and
books of account of, and visit the properties of, the Borrower and each of its
Subsidiaries, and to discuss the general business affairs of the Borrower and
each of its Subsidiaries with their respective officers and independent
certified public accountants; subject, however, in all cases to the imposition
of such conditions as the Borrower and each of its Subsidiaries shall deem
necessary based on reasonable considerations of safety and security.
Notwithstanding the foregoing, none of the conditions precedent to the exercise
of the right of access described in the preceding sentence that relate to
notice requirements or limitations on the Persons permitted to exercise such
right shall apply at any time when a Default or an Event of Default shall have
occurred and be continuing.
(g) Insurance. The Borrower will, and will cause each of
its Subsidiaries to, maintain insurance with responsible and reputable
insurance companies or associations, or, to the extent that the Borrower or
such Subsidiary deems it prudent to do so, through its own program of
self-insurance, in such amounts and covering such risks as is usually carried
by companies engaged in similar businesses, of comparable size and financial
strength and with comparable risks.
(h) Long Term Debt Rating. The Borrower will deliver to
the Agent notice of any change by a Rating Agency in the Long Term Debt Rating
of the Borrower, and the issuance by an additional Rating Agency of a Long Term
Debt Rating of the Borrower, promptly upon the effectiveness of such change or
issuance.
(i) Additional Collateral and Guarantees. In the event
that any Subsidiary of the Borrower created or acquired after the Closing Date
becomes a Significant Subsidiary of the
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Borrower, the Borrower will cause the Capital Stock of such Significant
Subsidiary to be pledged under the Pledge and Guarantee Agreement and will
cause such Significant Subsidiary to become a guarantor thereunder, in each
case in accordance with its terms, provided that the Borrower shall not be
required to so pledge any Capital Stock (i) of any Hybrid Preferred Securities
Subsidiary or (ii) to the extent that such Capital Stock is subject to any Lien
permitted hereunder in respect thereof that prevents such Capital Stock from
being so pledged.
SECTION 8.2. Affirmative Covenants of HII. HII covenants
that, as long as any amount is owing hereunder or under any other Loan
Documents, any Letter of Credit is outstanding or any Bank shall have any
Commitment outstanding under this Agreement:
(a) Delivery of Financial Statements. HII shall deliver
to the Agent for distribution to the Banks sufficient copies for each of the
Banks of the following:
(i) as soon as practicable and in any event within 100
days after the end of each fiscal year of HII, a consolidated balance
sheet of HII and its Consolidated Subsidiaries as of the end of such
fiscal year and the related statements of consolidated income,
retained earnings and cash flows prepared in conformity with GAAP and,
except as otherwise stated therein, consistently applied, setting
forth in comparative form the figures for the previous fiscal year,
together with a report thereon by independent certified public
accountants of nationally recognized standing selected by HII (which
requirement may be satisfied by delivering HII's Annual Report on Form
10-K with respect to such fiscal year as filed with the SEC);
(ii) as soon as practicable and in any event within 55
days after the end of each of the first three quarters of each fiscal
year of HII, unaudited consolidated financial statements of HII and
its Consolidated Subsidiaries (without footnotes) consisting of at
least consolidated balance sheets as at the close of such quarter and
consolidated statements of income, retained earnings and cash flows
for such quarter and for the period from the beginning of such fiscal
year to the close of such quarter (which requirement may, with respect
to the consolidated financial statements, be satisfied by delivering
HII's Quarterly Report on Form 10-Q with respect to such fiscal
quarter as filed with the SEC); such financial statements shall be
accompanied by a certificate of a Responsible Officer of HII to the
effect that such unaudited consolidated financial statements present
fairly the consolidated financial condition and results of operations
of HII or of HII and its Consolidated Subsidiaries (as the case may
be) as of such date for the period then ending, and subject to the
limitation that no (or limited) footnotes thereto have been prepared,
have been prepared in conformity with GAAP and, except as otherwise
stated therein, in a manner consistent with the financial statements
referred to in paragraph (a)(i) above;
(iii) with each set of statements to be delivered pursuant
to clauses (i) and (ii) above, a certificate in a form satisfactory to
the Agent, signed by a Responsible Officer of HII confirming
compliance with Section 8.4(b) and setting out in reasonable detail
the
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calculations necessary to demonstrate such compliance as at the date
of the most recent balance sheet included in such financial
statements; and
(iv) (A) within 10 days after the filing thereof, copies
of all periodic reports (other than (x) reports on Form 11-K or any
successor form and (y) Current Reports on Form 8-K that contain no
information other than exhibits filed therewith) under the Exchange
Act (in each case other than exhibits thereto and documents
incorporated by reference therein)) filed by HII with the SEC; (B)
promptly, and in any event within seven (7) days after a Responsible
Officer of HII becomes aware of the occurrence thereof, written notice
of the institution of any litigation, action, suit or other legal or
governmental proceeding involving HII or any of its Subsidiaries as to
which there is a reasonable possibility of an adverse decision that is
likely to have a Material Adverse Effect or any final adverse
determination in any litigation, action, suit or other legal or
governmental proceeding involving HII or any of its Subsidiaries that
would have a Material Adverse Effect, or (y) the incurrence by HII or
any of its Significant Subsidiaries of a material liability or
deficiency, or the existence of a reasonable possibility of incurring
a material liability or deficiency, arising out of or in connection
with (1) any Reportable Event with respect to any Plan, (2) the
failure to make any required contribution to a Plan, (3) the creation
of any Lien in favor of the PBGC or a Plan, (4) any withdrawal from,
or the termination, Reorganization or Insolvency of, any Multiemployer
Plan or (5) the institution of proceedings or the taking of any other
action by the PBGC or HII or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the
termination, Reorganization or Insolvency of, any Plan; provided,
that, as used in this clause (y), any liability or deficiency shall be
deemed not to be "material" so long as the sum of all liabilities and
deficiencies referred to in this clause (z) at any one time
outstanding, individually and in the aggregate, is less than
$25,000,000; and (C) such other information relating to HII or its
business, properties, condition and operations as the Agent (or any
Bank through the Agent) may reasonably request.
(b) Use of Proceeds. To the extent that HII, directly or
indirectly, receives the proceeds of any Loan made by the Banks to the
Borrower, HII will use such proceeds for the purposes set forth in the first
sentence of Section 7.7 in accordance therewith and with Section 8.4(d).
(c) Existence; Laws. HII will, and will cause each of
its Significant Subsidiaries to, do or cause to be done all things necessary
(i) to preserve, renew and keep in full force and effect its corporate
existence and all rights, licenses, permits and franchises and (ii) to comply
with all laws and regulations applicable to it, except in each case, where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
(d) Maintenance of Properties. HII will, and will cause
each of its Significant Subsidiaries to, preserve and maintain all of its
Property that is material to the conduct of its
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business and keep the same in good repair, working order and condition, and
from time to time to make, or cause to be made, such repairs, renewals and
replacements thereto as in the good faith judgment of HII or such Significant
Subsidiary, as the case may be, are necessary or proper so that the business
carried on in connection therewith may be properly conducted at all times;
provided, however, that nothing in this Section 8.2(d) shall prevent (a) HII or
any of its Significant Subsidiaries from selling, abandoning or otherwise
disposing of any Properties (including the Capital Stock of any Subsidiary of
HII that is not a Significant Subsidiary of the Borrower), the retention of
which in the good faith judgment of HII or such Significant Subsidiary is
inadvisable or unnecessary to the business of HII or such Significant
Subsidiary, as the case may be or (b) any other transaction that is expressly
permitted by the terms of any other provision of this Agreement, including, but
not limited to, any transaction permitted under Section 8.4(h).
(e) Access. HII will, and will cause each of its
Significant Subsidiaries to, at any reasonable time and from time to time,
permit up to six representatives of the Banks designated by the Majority Banks,
or representatives of the Agent, on not less than five Business Days' notice,
to examine and make copies of and abstracts from the records and books of
account of, and visit the properties of, HII and each of its Significant
Subsidiaries, and to discuss the general business affairs of HII and each of
its Significant Subsidiaries with their respective officers and independent
certified public accountants; subject, however, in all cases to the imposition
of such conditions as HII and each of its Significant Subsidiaries shall deem
necessary based on reasonable considerations of safety and security.
Notwithstanding the foregoing, none of the conditions precedent to the exercise
of the right of access described in the preceding sentence that relate to
notice requirements or limitations on the Persons permitted to exercise such
right shall apply at any time when a Default or an Event of Default shall have
occurred and be continuing.
(f) Insurance. HII will, and will cause each of its
Significant Subsidiaries to, maintain insurance with responsible and reputable
insurance companies or associations, or, to the extent that HII or such
Significant Subsidiary deems it prudent to do so, through its own program of
self-insurance, in such amounts and covering such risks as is usually carried
by companies engaged in similar businesses, of comparable size and financial
strength and with comparable risks.
(g) Additional Collateral. In the event that any
Subsidiary of HII initially created or acquired after the Closing Date becomes
a Significant Subsidiary of HII, HII will cause the Capital Stock of such
Significant Subsidiary to be pledged under one of the Security Documents in
accordance with its terms, provided that HII shall not be required to so pledge
any Capital Stock (i) of any Hybrid Preferred Securities Subsidiary or (ii) to
the extent that such Capital Stock is subject to Liens permitted hereunder in
respect thereof that prevent such Capital Stock from being so pledged, and
provided, further, that notwithstanding the provisions of the applicable
Security Documents to the contrary, (i) HII or the Borrower may elect to pledge
or cause to be pledged under the applicable Security Documents the Capital
Stock of any additional Subsidiary of HII not otherwise required to be so
pledged under this clause (g) and (ii) so long as
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no Default or Event of Default has occurred and is continuing, at the
Borrower's request the Collateral Agent shall, and the Lenders hereby authorize
the Collateral Agent to, release any such additional Capital Stock from such
pledge so long as such Capital Stock would not, at such time, be required to be
pledged under this clause (g).
SECTION 8.3. Negative Covenants of the Borrower. The
Borrower hereby covenants that so long as any amount is owing hereunder or
under any other Loan Documents, any Letter of Credit is outstanding or any Bank
shall have any Commitment outstanding under this Agreement:
(a) Liens. The Borrower will not, and will not permit
any of its Subsidiaries 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 (including accounts receivable) or rights in
respect of any thereof, except:
(i) Permitted Liens;
(ii) Liens created under the Security Documents; and
(iii) any extension, renewal or refunding of any Lien
permitted by clause (i) or (ii) above on the same assets or property
previously subject thereto; provided that no extension, renewal or
refunding of any such Lien shall increase the principal amount of any
Indebtedness secured thereby immediately prior to such extension,
renewal or refunding.
(b) Indebtedness. The Borrower will not, and will not
permit any of its Subsidiaries to, create, incur, assume or permit to exist any
Indebtedness, except:
(i) Indebtedness created hereunder;
(ii) Indebtedness constituting commercial paper issued by the
Borrower, provided that the aggregate amount thereof outstanding at
any time, when added to the aggregate principal amount of the Loans
and L/C Obligations then outstanding, does not exceed the aggregate
amount of the Commitments then in effect;
(iii) unsecured Indebtedness of the Borrower all of the
proceeds of which are applied to prepay Loans and permanently reduce
Commitments in accordance with Section 4.3(b)(iii), provided that such
Indebtedness provides for no scheduled maturity or mandatory
repurchase or redemption thereof prior to the date that is six months
after the Termination Date; and
(iv) Intercompany Indebtedness;
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provided, further, that, notwithstanding the foregoing, at no time shall the
aggregate principal amount of Indebtedness outstanding pursuant to the
foregoing clauses (i), (ii), (iii) and (iv) exceed $1,644,000,000 except to
the extent of any such excess that constitutes Intercompany Indebtedness and is
subordinated to the Borrower's obligations hereunder on terms and pursuant to a
promissory note substantially conforming to the Intercompany Note attached as
Exhibit L hereto.
(c) Consolidation, Merger or Disposal of Assets. The
Borrower will not, and will not permit any of its Subsidiaries to, consolidate
with, or merge into or amalgamate with or into, any other Person; liquidate,
wind up or dissolve itself (or suffer any liquidation or dissolution); convey,
sell, transfer, lease or otherwise dispose of any of its Properties (including
pursuant to any sale-leaseback or similar arrangement); or except for issuances
of Capital Stock in connection with the formation or capitalization of the
Borrower or the transactions relating to consummation of the Mergers, issue any
Capital Stock, to any Person; provided, however, that nothing contained in this
Section 8.3(c) shall prohibit the following so long as, in each case,
immediately before and after giving effect to any such consolidation, merger,
amalgamation, dissolution or liquidation, or conveyance, sale, transfer, lease
or other disposition, no Event of Default or Default shall have occurred and be
continuing:
(i) a merger involving a Subsidiary of the Borrower
(including mergers to reincorporate or change the domicile of such
Subsidiary) if the Borrower or a Subsidiary of the Borrower is the
surviving entity thereof;
(ii) the liquidation, winding up or dissolution of a
Subsidiary of the Borrower if all of the Properties of such Subsidiary
are conveyed, transferred or distributed to the Borrower or a
Wholly-Owned Subsidiary of the Borrower;
(iii) the conveyance, sale, transfer or other disposal of all
or substantially all (or any lesser portion) of the Properties of any
Subsidiary of the Borrower to the Borrower or a Wholly-Owned
Subsidiary of the Borrower;
(iv) the issuance of Capital Stock by the Borrower to HII and
by any Subsidiary of the Borrower to the Borrower or any other
Subsidiary of the Borrower, provided that any such Capital Stock is
pledged pursuant to the HII Pledge and Collateral Agency Agreement or
the Pledge and Guarantee Agreement, as the case may be, in accordance
with the provisions thereof; and
(v) the sale of inventory and obsolete or surplus assets by
Subsidiaries of the Borrower in the ordinary course of business.
(d) Takeover Bids. (i) The Borrower will not, and will not
permit any of its Subsidiaries to, use the proceeds of any Loan made to the
Borrower to acquire control of any Person pursuant to a transaction that has
not been approved by the majority of the board of directors (or, for
non-corporate Persons, the analogous body) of the Person being acquired prior
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to the public announcement thereof, unless the Borrower notifies each Bank of
the material terms thereof immediately following such public announcement (an
"Acquisition Notice").
(ii) In the event that any Bank provides written notice (an
"Objection Notice") to the Agent and the Borrower within ten days of such
Bank's receipt of an Acquisition Notice from the Borrower that such Bank (for
any reason and in its sole discretion, and without any obligation to disclose
such reason to the Borrower or the Agent) objects to such transaction, the
Borrower will, on the fifth Business Day following its receipt of such
Objection Notice (or on such earlier date as the Borrower and such Bank shall
agree), prepay in full the Loans of such Bank and terminate its Commitments,
with such prepayment being accompanied by the payment of accrued interest
thereon and any other amounts (including, without limitation, breakage
indemnities) owing to such Bank hereunder. Notwithstanding anything to the
contrary contained herein, any such repayment to an objecting Bank and any such
Commitment termination shall be for the account only of such Bank and need not
be applied ratably to the amounts owing to or Commitments of all Banks.
(e) Investments, Loans, Advances, Guarantees and
Acquisitions; Hedging Agreements. (i) The Borrower will not, and will not
permit any of its Subsidiaries to, purchase, hold or acquire (including
pursuant to any merger with any Person that was not a Wholly-Owned Subsidiary
of the Borrower prior to such merger) any Capital Stock, evidences of
indebtedness or other securities (including any option, warrant or other right
to acquire any of the foregoing) of, make or permit to exist any loans or
advances to, Guarantee any obligations of, or make or permit to exist any
investment or any other interest in, any other Person, or purchase or otherwise
acquire (in one transaction or a series of transactions) any assets of any
other Person constituting a business unit, or make any Capital Expenditures,
except:
(A) Permitted Investments;
(B) investments by the Borrower (i) existing on the date
hereof, after giving effect to consummation of the Mergers and the
transactions related thereto, in HII Preference Stock issued in
accordance with the terms thereof, and (ii) additional investments by
the Borrower after the Closing Date in HII Preference Stock issued to
the Borrower in accordance with the terms thereof;
(C) loans or advances (other than Money Fund Advances) made
by the Borrower to HII or any Subsidiary of HII, provided that (i) any
such loans or advances are evidenced by a promissory note pledged
under the Pledge and Guarantee Agreement and (ii) such loans or
advances to any Subsidiary of HII are made in compliance with Section
8.4(g)(i) (such loans and advances being deemed to be HII Investments
for the purposes thereof);
(D) Money Fund Advances made by the Borrower;
(E) Guarantees constituting Indebtedness permitted by Section
8.3(b); and
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(F) obligations of one or more of the Borrower's initial
partners to the Borrower in connection with the initial purchase of
the Borrower's Capital Stock by such partners.
(ii) The Borrower will not, and will not permit any of its
Subsidiaries to, enter into any Hedging Agreement, other than (A) Hedging
Agreements entered into in respect of interest rate risk arising from the Loans
or commercial paper supported by this Agreement and (B) other Hedging
Agreements entered into in the ordinary course of business to hedge or mitigate
risks to which the Borrower or any of its Subsidiaries is exposed in the
conduct of its business or the management of its liabilities.
(f) Restricted Payments. The Borrower will not, and will not
permit any of its Subsidiaries to, declare or make, or agree to pay or make,
directly or indirectly, any Restricted Payment, provided that the foregoing
shall not restrict (i) any Restricted Payment made in connection with a use of
proceeds permitted under Section 7.7 or (ii) any 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.
(g) Transactions with Affiliates. The Borrower will not, and
will not permit any of its 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, except (a) in the ordinary course of business 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 its Wholly-Owned Subsidiaries
not involving any other Affiliate, (c) any transactions permitted under Section
8.3(e)(B), (C), (D) or (F) or Section 8.3(f) and (d) in connection with the
initial formation and capitalization of the Borrower as contemplated by this
Agreement.
(h) Restrictive Agreements. The Borrower will not, and will
not permit any of its Subsidiaries to, directly or indirectly, enter into,
incur or permit to exist any agreement or other arrangement that prohibits,
restricts or imposes any condition upon (a) the ability of the Borrower or any
of its Subsidiaries to create, incur or permit to exist any Lien upon any of
its property or assets, or (b) the ability of any of its Subsidiaries to pay
dividends or other distributions with respect to any shares of its Capital
Stock or to make or repay loans or advances to the Borrower or any other of its
Subsidiaries or to Guarantee Indebtedness of the Borrower or any other of its
Subsidiaries; provided that (i) the foregoing shall not apply to (A)
restrictions and conditions imposed by law or by any of the Loan Documents, (B)
customary restrictions and conditions contained in agreements relating to the
sale of a Subsidiary of the Borrower pending such sale, provided such
restrictions and conditions apply only to the Subsidiary that is to be sold and
such sale is permitted hereunder or (C) restrictions or conditions imposed by
any agreement relating to secured Indebtedness permitted by this Agreement if
such restrictions or conditions apply only to the property or assets securing
such Indebtedness, and (ii) clause (a) of the foregoing shall not apply to
customary provisions in leases and other contracts restricting the assignment
thereof.
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(i) Limitation on Optional Payments of Debt Instruments.
Make any optional payment or prepayment on or redemption or purchase of any
Indebtedness other than (i) the Loans and (ii) any return or repayment of Money
Fund Obligations owed by the Borrower.
(j) Limitation on Changes in Fiscal Year. Permit the fiscal
year of the Borrower to end on a day other than December 31.
(k) Changes in Lines of Business. Enter into any business,
either directly or through any of its Subsidiaries, except for those businesses
in which the Borrower and its Subsidiaries are engaged on the date of this
Agreement or that are directly related thereto.
SECTION 8.4. Negative Covenants of HII. HII hereby covenants
that so long as any amount is owing hereunder or under any other Loan
Documents, any Letter of Credit is outstanding or any Bank shall have any
Commitment outstanding under this Agreement:
(a) Certain Liens. HII will not, and will not permit any
of its Significant Subsidiaries to, pledge, mortgage, hypothecate or grant a
Lien upon, or permit any mortgage, pledge, security interest or other Lien
upon, the Capital Stock of HI Energy or any Significant Subsidiary of HII now
or hereafter owned directly or indirectly by HII; provided, however, that this
restriction shall neither apply to nor prevent the creation or existence of:
(i) any existing Liens or Liens arising under the Security
Documents;
(ii) any Lien upon any such Capital Stock (or the Capital
Stock of a holding company formed to acquire or hold such stock)
created at the time of the acquisition thereof or within one year
after such time to secure all or a portion of the purchase price for
such Capital Stock;
(iii) any Lien upon any such Capital Stock (or the Capital
Stock of a holding company formed to acquire or hold such stock)
existing thereon (A) at the time of the acquisition thereof or (B) at
the time at which such Subsidiary first becomes a Significant
Subsidiary, so long as such Lien was in existence prior to such time
in accordance with the provisions of this Agreement and was not
incurred in contemplation of such change of status;
(iv) any Lien upon any such Capital Stock of any Subsidiary of
NorAm existing on the Closing Date or permitted to exist pursuant to
any indenture, loan agreement or other agreement to which NorAm or any
of its Subsidiaries is a party;
(v) any Lien upon any such Capital Stock that is sold,
transferred or otherwise disposed of pursuant to and in accordance
with Section 8.4(c);
(vi) any Permitted Lien upon any such Capital Stock; or
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(vii) any extension, renewal or refunding of any Lien permitted
by clause (i), (ii), (iii), (iv), (v) or (vi) above on the same
Capital Stock (or the Capital Stock of a holding company formed to
acquire or hold such stock) previously subject thereto; provided that
no extension, renewal or refunding of any such Lien shall increase the
principal amount of any Indebtedness secured thereby immediately prior
to such extension, renewal or refunding.
(b) Financial Ratios. HII will not permit the ratio of
Consolidated Indebtedness for Borrowed Money to Consolidated Capitalization at
any date after September 30, 1997, to exceed the ratio set forth below opposite
the period during which such date occurs:
Period Ratio
------ -------
10/1/97 - 12/31/97 0.64:1.00
1/1/98 - 12/31/98 0.62:1.00
1/1/99 - thereafter 0.60:1.00
(c) Consolidation, Merger or Disposal of Assets. (i) HII
will not, and will not permit any of its Significant Subsidiaries to, (A)
consolidate with, or merge into or amalgamate with or into, any other Person;
(B) liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution); or (C) convey, sell, transfer, lease or otherwise dispose of all
or substantially all of its Properties, or the Capital Stock of any Significant
Subsidiary of HII, to any Person; provided, however, that, subject to Section
8.4(c)(ii), nothing contained in this Section 8.4(c)(i) shall prohibit (1) a
merger (other than any involving NorAm) involving HII in which HII is the
surviving entity thereof; (2) a merger involving a Significant Subsidiary of
HII other than NorAm or the Borrower (including mergers to reincorporate or
change the domicile of such Significant Subsidiary) if HII or a Wholly-Owned
Significant Subsidiary of HII is the surviving entity thereof; (3) the
liquidation, winding up or dissolution of a Significant Subsidiary of HII
(other than NorAm or the Borrower) if all of the Properties of such Significant
Subsidiary are conveyed, transferred or distributed to HII or a Wholly-Owned
Significant Subsidiary of HII; or (4) the conveyance, sale, transfer or other
disposal of all or substantially all (or any lesser portion) of the Properties
of any Significant Subsidiary (other than NorAm or the Borrower) to HII or a
Wholly-Owned Significant Subsidiary of HII; provided, that, in each case,
immediately before and after giving effect to any such merger, dissolution or
liquidation, or conveyance, sale, transfer, lease or other disposition, no
Default or Event of Default shall have occurred and be continuing.
(ii) Notwithstanding the provisions of Section 8.4(c)(i),
except pursuant to existing contractual arrangements as set forth on Schedule
8.4(c), HII will not convey, sell, transfer or otherwise dispose of all or
substantially all of the Properties of HI Energy or any of the Capital Stock of
HI Energy; provided, however, that this restriction shall neither apply to nor
prevent:
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(A) (1) a merger involving HI Energy if HII or a Wholly-Owned
Subsidiary of HII is the surviving entity thereof; (2) the
liquidation, winding up or dissolution of HI Energy if all of the
Properties of HI Energy are conveyed, transferred or distributed to
HII or a Wholly-Owned Subsidiary of HII; or (3) the conveyance, sale,
transfer or other disposal of all or substantially all (or any lesser
portion) of the Properties of HI Energy to HII or a Wholly-Owned
Subsidiary of HII; provided, that, in each case, (x) in the case of
any such merger or transfer with or to any such Wholly-Owned
Subsidiary, the Capital Stock of such Wholly-Owned Subsidiary is
concurrently pledged as Collateral under the Security Documents, and
(y) immediately before and after giving effect to any such merger,
dissolution or liquidation, or conveyance, sale, transfer or other
disposition, no Event of Default or Default shall have occurred and be
continuing; and
(B) any sale, transfer or disposition of the Capital Stock of
HI Energy so long as, after giving effect thereto, HII owns on a fully
diluted basis at least a majority of the Capital Stock of HI Energy
having ordinary voting power in the election of directors of HI Energy
and at least a majority of the equity interests represented by the
Capital Stock of HI Energy, provided, that immediately before and
after giving effect to any such sale, transfer or other disposition,
no Event of Default or Default shall have occurred and be continuing.
(d) Use of Proceeds; Other Agreements of the Borrower. HII
will not, and will not permit any of its Significant Subsidiaries to, use
direct or indirect proceeds of any Loans for any purpose described in Section
8.3(d) other than in accordance with the provisions thereof.
(e) Restricted Payments. HII will not declare or make, or
agree to pay or make, directly or indirectly, any Restricted Payment, except
that:
(i) HII may (A) declare and pay dividends and make payments in
redemption with respect to its preferred and preference stock
(including Mandatory Payment Preferred Stock) and any Hybrid Preferred
Securities, at any time and (B) declare and pay dividends with respect
to its other Capital Stock at any time so long as Projected Available
Cash would exceed Projected Borrower Debt Service for the fiscal
quarter of HII in which the dividend is to be paid after giving effect
to (1) the payment of such dividend (computed for this purpose as the
proposed actual amount thereof, rather than the Available Dividend
Amount) and (2) any sources of cash available or reasonably expected
by HII at the time of the proposed dividend to be available during the
fiscal quarter of HII then in effect; provided that during the period
from the Closing Date through September 30, 1997, Projected Available
Cash shall be deemed to exceed Projected Borrower Debt Service;
(ii) HII may make Restricted Payments pursuant to and in
accordance with stock option plans or other benefit plans for
management or employees of HII;
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(iii) at any time (x) at which no Default or Event of Default
has occurred and is continuing and (y) that the long-term senior
secured debt rating in effect for HII is at least BBB by S&P or Baa2
by Moody's, HII may make additional repurchases of its outstanding
common stock in the amount, if any, by which the cash portion of the
consideration paid on the Closing Date for the shares of NorAm
tendered and accepted in connection with the Mergers is less than 58%
of the total amount of such consideration; and
(iv) at any time (x) at which no Default or Event of Default
has occurred and is continuing, (y) that Projected Available Cash
exceeds Projected Borrower Debt Service for the fiscal quarter of HII
then in effect and (z) that the long-term senior secured debt rating
in effect for HII is at least BBB by S&P or Baa2 by Moody's, HII shall
be permitted to repurchase its outstanding common stock, so long as
the Commitments are permanently reduced to the extent required
pursuant to Section 4.3(b) on the date of any such repurchase;
provided that the requirements set forth in clauses (x) and (y) above
would be satisfied after giving effect to (1) such repurchases and (2)
any sources of cash available or reasonably expected by HII at the
time of the proposed repurchase to be available during the fiscal
quarter of HII then in effect; and provided further that during the
period from the Closing Date through September 30, 1997, Projected
Available Cash shall be deemed to exceed Projected Borrower Debt
Service.
(f) Agreements Restricting Dividends. HII will not, and will
not permit any of its Significant Subsidiaries to, directly or indirectly,
enter into, incur or permit to exist any agreement or other arrangement that
explicitly prohibits or restricts the ability of any of its Significant
Subsidiaries to pay dividends or other distributions with respect to any shares
of its Capital Stock; provided that the foregoing shall not apply to (i)
restrictions and conditions imposed by law or by this Agreement, (ii)
restrictions and conditions existing on the date hereof identified on Schedule
8.4(f), any amendment or modification thereof other than an amendment or
modification expanding the scope of any such restriction or condition and any
restrictions or conditions that (x) replace restrictions or conditions existing
on the date hereof and (y) are substantially similar to such existing
restriction or condition and (iii) restrictions existing at the time at which
any such Subsidiary first becomes a Significant Subsidiary, so long as such
restriction was in existence prior to such time in accordance with the other
provisions of this Agreement and was not agreed to or incurred in contemplation
of such change of status.
(g) Certain Investments, Loans, Advances, Guarantees and
Acquisitions. HII will not purchase, or acquire (including pursuant to any
merger) any Capital Stock, evidences of indebtedness or other securities of or
other interest in (including any option, warrant or other right to acquire any
of the foregoing), make or permit to exist any loans or advances to, Guarantee
any obligations of, or make any investment in or capital contribution to, any
Subsidiary or any other Person (any of the foregoing, an "HII Investment"), in
each case after the Closing Date, except that, notwithstanding the foregoing:
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(i) at any time (x) at which no Default or Event of Default
has occurred and is continuing, (y) that Projected Available Cash
exceeds Projected Borrower Debt Service for the fiscal quarter of HII
then in effect and (z) that the long-term senior secured debt rating
in effect for HII is at least BBB by S&P or Baa2 by Moody's, HII shall
be permitted to make direct or indirect HII Investments in HII Pledged
Subsidiaries, and HII Investments constituting purchases or
acquisitions of assets, securities or Capital Stock that result, upon
the consummation thereof, in such assets, securities or Capital Stock
being owned by or becoming HII Pledged Subsidiaries (it being
understood that the foregoing shall not apply to any investments,
acquisitions, loans, advances or Guarantees made by any Subsidiary of
HII so long as the source of payment therefor is received by such
Subsidiary in accordance with this clause (i) and the other applicable
provisions of this Agreement); provided that (A) the Commitments shall
be permanently reduced to the extent required pursuant to Section
4.3(b)(ii) on the date of the consummation of any such HII Investment
and (B) the requirements set forth in clauses (x) and (y) above would
be satisfied after giving effect to (1) such HII Investments and (2)
any sources of cash available or reasonably expected by HII at the
time of the proposed investment to be available during the fiscal
quarter of HII then in effect;
(ii) HII may at any time make HII Investments in NorAm and the
Subsidiaries of NorAm listed on Schedule 8.4(g) and HII Investments
constituting purchases or acquisitions of assets, securities or
Capital Stock that result, upon the consummation thereof, in such
assets, securities or Capital Stock being owned by NorAm or such
Subsidiaries, provided that any investments, capital contributions or
acquisitions by NorAm in any Subsidiary of HII that would constitute
HII Investments if made by HII shall be deemed for the purposes hereof
to be HII Investments subject to the limitations of clause (i) above;
(iii) HII may make Money Fund Advances;
(iv) HII may issue Junior Subordinated Debt to, and may
Guarantee payments to be made by a Hybrid Preferred Securities
Subsidiary and other liabilities or obligations of such Hybrid
Preferred Securities Subsidiary directly related to the subject Hybrid
Preferred Securities issued by it and the administration of such
Subsidiary;
(v) at any time (x) at which no Default or Event of Default
has occurred and is continuing, (y) that Projected Available Cash
exceeds Projected Borrower Debt Service for the fiscal quarter of HII
then in effect and (z) that the long-term senior secured debt rating
in effect for HII is at least BBB by S&P or Baa2 by Moody's, HII may
make HII Investments in any domestic HII Pledged Subsidiary so long as
such Subsidiary (i) is a Subsidiary domiciled and organized in the
United States, having all or substantially all of its assets and
operations located in the United States and (ii) is engaged in one or
more businesses all of which are directly related to the normal
conduct of the domestic utility business of HL&P or NorAm in
accordance with normal industry standards as generally in effect at
such time; provided that the requirement of clause (y) would be
satisfied after
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giving effect to (1) such HII Investment and (2) any sources of cash
available or reasonably expected by HII at the time of the proposed
investment to be available during the fiscal quarter of HII then in
effect; and
(vi) at any time at which no Default or Event of Default has
occurred and is continuing, HII may make HII Investments (i) to fund
operating expenses of Subsidiaries existing at the time of such HII
Investment and (ii) in any Wholly-Owned domestic HII Pledged
Subsidiary so long as such Subsidiary is created, and continues, to
engage in, and all or substantially all of the operations and assets
of such Subsidiary are involved in the conduct of, the business of
holding assets, providing services or conducting operations that,
prior to such creation or such HII Investment, were held, provided or
conducted, as the case may be, by HL&P or NorAm in the ordinary course
of their respective utility businesses.
(h) Certain Material Transfers and Changes in Business. (i)
Notwithstanding the provisions of subsection 8.4(a) or (c), HII will not, and
will not permit any Significant Subsidiary of HII to, (A) undertake or effect
any material sale, transfer, lease, intercompany distribution or other
disposition of the material assets, or any voluntary significant change in the
structure, capitalization, liabilities or operations, of NorAm or HL&P that,
individually or in the aggregate, could reasonably be expected to materially
adversely affect Excess Cash Flow or (B) sell, assign, transfer, or otherwise
dispose of any of, or permit the issuance of or subject to any Lien, any
Capital Stock of the Borrower, FinanceCo GP or NorAm other than preferred or
preference stock or Hybrid Preferred Securities of NorAm that represent, at the
time of issuance of any thereof when aggregated with the then book value of all
of such securities issued by NorAm at or prior to such time of issuance, not
more than 10% of the Consolidated Capitalization of NorAm. HII will at all
times directly own all of the limited partnership interests in the Borrower,
all of the membership interests in FinanceCo GP, and subject to the preceding
sentence, all of the Capital Stock of NorAm, and FinanceCo GP will at all times
continue to be the general partner of the Borrower.
(ii) Notwithstanding the provisions of subsection 8.4(c), HII
will not, and will not permit any Significant Subsidiary of HII to, (A) fail to
maintain HL&P's or NorAm's fundamental business of providing services and
products in the energy market or fail to continue to conduct the business of
either of HL&P or NorAm that constitutes the primary business of HL&P and
NorAm, respectively, as of the Closing Date or (B) make Investments
constituting a material portion of the Investments permitted to be made
pursuant to clauses (i) and (ii) of Section 8.4(g) that are not in or directly
related to the businesses described in the foregoing clause (A).
ARTICLE IX
EVENTS OF DEFAULT
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SECTION 9.1. Events of Default. The occurrence of any of the
following events shall constitute an "Event of Default":
(a) Non-Payment of Principal, Interest and Facility Fee. The
Borrower fails to pay, in the manner provided in this Agreement, (i) any
principal or Reimbursement Obligation payable by it hereunder when due or (ii)
any interest payment or the Facility Fee payable by it hereunder within three
Business Days after its due date; or
(b) Non-Payment of Other Amounts. The Borrower fails to pay,
in the manner provided in this Agreement, any other amount (other than the
amounts set forth in Section 9.1(a) above) payable by it hereunder within ten
Business Days after notice of such payment is received by the Borrower from the
Agent; or
(c) Breach of Representation or Warranties. Any
representation or warranty by HII or the Borrower in Article 7 or in any
certificate, document or instrument delivered under this Agreement shall have
been incorrect in any material respect when made or when deemed hereunder to
have been made; or
(d) Breach of Certain Covenants. Any Loan Party fails to
perform or comply with any one or more of its obligations under Section
8.1(a)(v)(B)(x), Section 8.1(b), Section 8.2(b), Section 8.3(a), (b) (other
than clause (iv)), (c), (d), (e) (other than clause (C) or (D)), (f) or (i),
Section 8.4(a), (b), (c), (e), (g) or (h), Section 5.6 of the Pledge and
Guarantee Agreement, Section 5(a), (b) or (c) of the HII Pledge and Collateral
Agency Agreement, Section 5(a), (b) or (c) of the Pledge and Collateral Agency
Agreement or Section 2 or 6 of the Support Agreement; or
(e) Any Loan Party fails to perform or comply with any one or
more of its obligations under Section 8.3(g) or (h) or Section 8.4(d) or (f)
and such failure to perform or comply shall not have been remedied within 10
days after the earlier of notice thereof to it by the Agent or the Majority
Banks or discovery thereof by a Responsible Officer of the Borrower; or
(f) Breach of Other Obligations. Any Loan Party fails to
perform or comply with any one or more of its other obligations under the Loan
Documents (other than those set forth in Sections 9.1(a), (b), (c), (d) or (e)
above) and such failure to perform or comply shall not have been remedied
within 30 days after the earlier of notice thereof to it by the Agent or the
Majority Banks or discovery thereof by a Responsible Officer of the Borrower;
or
(g) Other Indebtedness. (i) The Borrower, any of its
Subsidiaries, FinanceCo GP, HII or any of its Significant Subsidiaries fails to
pay when due (either at stated maturity or by acceleration or otherwise but
subject to applicable grace periods) any principal or interest in respect of
any Indebtedness for Borrowed Money, Secured Indebtedness or Junior
Subordinated Debt (other than Indebtedness of the Borrower under this
Agreement) if the aggregate principal amount of all such Indebtedness for which
such failure to pay shall have occurred and be continuing exceeds $50,000,000
or (ii) any default, event or condition shall have occurred and be
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continuing with respect to any Indebtedness for Borrowed Money, Secured
Indebtedness or Junior Subordinated Debt of the Borrower, any of its
Subsidiaries, HII or any of its Significant Subsidiaries (other than
Indebtedness of the Borrower under this Agreement), the effect of which
default, event or condition is to cause, or to permit the holder thereof to
cause, (A) such Indebtedness to become due prior to its stated maturity or (B)
in the case of any Guarantee of Indebtedness for Borrowed Money of any Person
or Junior Subordinated Debt by the Borrower, any of its Subsidiaries, HII or
any of its Significant Subsidiaries the primary obligation (as such term is
defined in the definition of "Guarantee" in Section 1.1) to which such
Guarantee relates to become due prior to its stated maturity, if the aggregate
amount of all such Indebtedness or primary obligations (as the case may be)
that is or could be caused to be due prior to its stated maturity exceeds
$50,000,000; or
(h) Involuntary Bankruptcy, etc. (i) There shall be
commenced against the Borrower, any of its Subsidiaries, FinanceCo GP, HII or
any of its Significant Subsidiaries any case, proceeding or other action (A)
seeking a decree or order for relief in respect of the Borrower, any of its
Subsidiaries, FinanceCo GP, HII or any of its Significant Subsidiaries under
any applicable domestic or foreign bankruptcy, insolvency, reorganization or
other similar law, (B) seeking a decree or order adjudging the Borrower, any of
its Subsidiaries, FinanceCo GP, HII or any of its Significant Subsidiaries a
bankrupt or insolvent, (C) seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other similar relief of or
in respect of the Borrower, any of its Subsidiaries, FinanceCo GP, HII or any
of its Significant Subsidiaries or their respective debts under any applicable
domestic or foreign law or (D) seeking the appointment of a custodian,
receiver, conservator, liquidator, assignee, trustee, sequestrator or other
similar official of the Borrower, any of its Subsidiaries, FinanceCo GP, HII or
any of its Significant Subsidiaries or of any substantial part of their
respective Properties, or the liquidation of their respective affairs, and such
petition is not dismissed within 60 days or (ii) a decree, order or other
judgment is entered in respect of any of the remedies, reliefs or other matters
for which any petition referred to in (i) above is presented or (iii) there
shall be commenced against the Borrower, any of its Subsidiaries, FinanceCo GP,
HII or any of its Significant Subsidiaries any case, proceeding or other action
seeking issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets that results in the
entry of an order for any such relief that shall not have been vacated,
discharged or stayed or bonded pending appeal within 60 days from the entry
thereof; or
(i) Voluntary Bankruptcy, etc. (i) The commencement by the
Borrower, any of its Subsidiaries, FinanceCo GP, HII or any of its Significant
Subsidiaries of a voluntary case, proceeding or other action under any
applicable domestic or foreign bankruptcy, insolvency, reorganization or other
similar law (A) seeking to have an order of relief entered with respect to it,
(B) seeking to be adjudicated a bankrupt or insolvent, (C) seeking
reorganization, arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other similar relief with respect to it or its debts under any
applicable domestic or foreign law or (D) seeking the appointment of or the
taking possession by a custodian, receiver, conservator, liquidator, assignee,
trustee, sequestrator or similar official of the Borrower, any of its
Subsidiaries, FinanceCo GP, HII or any of its Significant Subsidiaries or of
any substantial part of their
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respective Properties; or (ii) the making by the Borrower, any of its
Subsidiaries, FinanceCo GP, HII or any of its Significant Subsidiaries of a
general assignment for the benefit of creditors; or (iii) the Borrower, any of
its Subsidiaries, FinanceCo GP, HII or any of its Significant Subsidiaries
shall take any action in furtherance of, or indicating its consent to, approval
of, or acquiescence in, any of the acts described in clause (i) or (ii) above
or in Section 9.1(h); or (iv) the admission by the Borrower, any of its
Subsidiaries, FinanceCo GP, HII or any of its Significant Subsidiaries in
writing of its inability to pay its debts generally as they become due or the
failure by the Borrower, any of its Subsidiaries, FinanceCo GP, HII or any of
its Significant Subsidiaries generally to pay its debts as such debts become
due; or
(j) Enforcement Proceedings. A final judgment or decree for
the payment of money which, together with all other such judgments or decrees
against the Borrower, any of its Subsidiaries, HII or any of its Significant
Subsidiaries then outstanding and unsatisfied, exceeds $25,000,000 in aggregate
amount shall be rendered against the Borrower, any of its Subsidiaries, HII or
any of its Significant Subsidiaries and the same shall remain undischarged for
a period of 60 days, during which the execution thereon shall not effectively
be stayed, released, bonded or vacated; or
(k) ERISA Events. (i) The Borrower, any of its
Subsidiaries, HII or any of its Significant Subsidiaries shall incur any
liability arising out of (A) any "prohibited transaction" (as defined in
Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (B) the
occurrence of any "accumulated funding deficiency" (as defined in Section 302
of ERISA) by a Plan, whether or not waived, or any Lien in favor of the PBGC or
a Plan on the assets of the Borrower or any Commonly Controlled Entity, (C) the
occurrence of a Reportable Event with respect to, or the commencement of
proceedings under Section 4042 of ERISA to have a trustee appointed, or the
appointment of a trustee under Section 4042 of ERISA, to administer or to
terminate any Single Employer Plan, which Reportable Event, commencement of
proceedings or appointment of a trustee is likely to result in the termination
of such Plan for purposes of Title IV of ERISA, (D) the termination of any
Single Employer Plan for purposes of Title IV of ERISA, (E) withdrawal from, or
the Insolvency or Reorganization of, a Multiemployer Plan or (F) the occurrence
of any other event or condition with respect to a Plan, and any of such item
(A) through (F) above results in or is likely to result in a material liability
or deficiency of the Borrower, any of its Subsidiaries, HII or any of its
Significant Subsidiaries; provided, however, that for purposes of this Section
9.1(k), any liability or deficiency of the Borrower, any of its Subsidiaries,
HII or any of its Significant Subsidiaries shall be deemed not to be material
so long as the sum of all liabilities or deficiencies referred to in this
Section 9.1(k) at any one time outstanding, individually and in the aggregate,
is less than $25,000,000, or (ii) the occurrence of any one or more of the
events specified in clauses (A) through (F) above if, individually or in the
aggregate, such event or events would have a Material Adverse Effect.
(l) Change in Control of HII. A Change in Control of HII
shall have occurred.
(m) Invalidity of Agreements. (i) Any of the Security
Documents or the Support Agreement shall cease, for any reason, to be in full
force and effect, or the Borrower or any other
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Loan Party that is a party to any of the Security Documents or the Support
Agreement shall deny the validity thereof, or (ii) the Lien created by any of
the Security Documents shall cease to be enforceable and of the same effect and
priority purported to be created thereby.
SECTION 9.2. Cancellation/Acceleration. If at any time and
for any reason (whether within or beyond the control of any party to this
Agreement):
(a) either of the Events of Default specified in Section
9.1(h) or 9.1(i) occurs with respect to the Borrower, then
automatically:
(i) the Commitments and the CAF Facility shall
immediately be cancelled; and
(ii) all Loans made hereunder, all amounts of L/C
Obligations (whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the
documents required for draws thereunder), all unpaid accrued
interest or fees and any other sum payable under this
Agreement shall become immediately due and payable; or
(b) any other Event of Default specified in Section 9.1
occurs and, while such Event of Default is continuing, the Agent,
having been so instructed by the Majority Banks, by notice to the
Borrower shall so declare that:
(i) the Commitments and the CAF Facility shall
immediately be cancelled; and/or
(ii) either (A) all Loans made hereunder, all
amounts of L/C Obligations (whether or not the beneficiaries
of the then outstanding Letters of Credit shall have presented
the documents required for draws thereunder), all unpaid
accrued interest or fees and any other sum payable under this
Agreement shall become immediately due and payable or (B) all
Loans made hereunder, all amounts of L/C Obligations (whether
or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required for draws
thereunder), all unpaid accrued interest or fees and any other
sum payable under this Agreement shall become due and payable
at any time thereafter immediately on demand by the Agent
(acting on the instructions of the Majority Banks).
With respect to all Letters of Credit with respect to which
presentment for honor shall not have occurred at the time of an acceleration
pursuant to the preceding paragraph, the Borrower shall at such time deposit in
a cash collateral account opened by the Agent cash or cash equivalents in an
amount equal to the aggregate then undrawn and unexpired face amount of such
Letters of Credit. The Borrower hereby grants to the Agent, for the benefit of
the Issuing Bank and the L/C Participants, a security interest in such cash
collateral to secure all obligations of the Borrower under this Agreement and
the other Loan Documents. Amounts held in such cash
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collateral account shall be applied by the Agent to the payment of drafts drawn
under such Letters of Credit, and the unused portion thereof after all such
Letters of Credit shall have expired or been fully drawn upon, if any, shall be
applied to repay other obligations of the Borrower hereunder and under the
Notes. After all such Letters of Credit shall have expired or been fully drawn
upon, all Reimbursement Obligations shall have been satisfied and all other
obligations of the Borrower hereunder and under the Notes shall have been paid
in full, the balance, if any, in such cash collateral account shall be returned
to the Borrower. The Borrower shall execute and deliver to the Agent, for the
account of the Issuing Bank and the L/C Participants, such further documents
and instruments as the Agent may request to evidence the creation and
perfection of the within security interest in such cash collateral account.
Except as expressly provided above in this Section 9.2,
presentment, demand, protest, notice of intent to accelerate, notice of
acceleration and all other notices of any kind whatsoever are hereby expressly
waived by the Borrower.
ARTICLE X
THE AGENT
SECTION 10.1. Appointment. Each Bank hereby irrevocably
designates and appoints The Chase Manhattan Bank as the Agent of such Bank
under this Agreement and the other Loan Documents and as Collateral Agent under
the Security Documents and the Support Agreement, and each such Bank
irrevocably authorizes The Chase Manhattan Bank, as the Agent for such Bank, to
take such action on its behalf under the provisions of this Agreement and the
other Loan Documents and to exercise such powers and perform such duties as are
expressly delegated to the Agent by the terms of this Agreement and the other
Loan Documents, together with such other powers as are reasonably incidental
thereto. For purposes of this Article X, "Agent" shall mean The Chase
Manhattan Bank as Agent hereunder and as Collateral Agent under the Security
Documents and the Support Agreement. Notwithstanding any provision to the
contrary elsewhere in this Agreement, (a) the Agent shall not have any duties
or responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the Agent and
(b) the Arranger shall not have any duties or responsibilities hereunder, or
any fiduciary relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the Arranger.
SECTION 10.2. Delegation of Duties. The Agent may execute
any of its duties under this Agreement and the other Loan Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
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SECTION 10.3. Exculpatory Provisions. Neither the Agent nor
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (a) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except for its or such Person's own gross negligence or
willful misconduct) or (b) responsible in any manner to any of the Banks for
any recitals, statements, representations or warranties made by the Borrower or
any officer thereof contained in this Agreement or any other Loan Document or
in any certificate, report, statement or other document referred to or provided
for in, or received by the Agent under or in connection with, this Agreement or
any other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any Note or any other Loan
Document or for any failure of the Borrower to perform its obligations
hereunder or thereunder. The Agent shall not be under any obligation to any
Bank to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Borrower.
SECTION 10.4. Reliance by Agent. The Agent shall be entitled
to rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or
teletype message, statement, order or other document or conversation believed
by it to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower), independent
accountants and other experts selected by the Agent. The Agent may deem and
treat the payee of any Note or any loan account in the Register as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Agent. The Agent shall be
fully justified in failing or refusing to take any action under this Agreement
or any other Loan Document unless it shall first receive such advice or
concurrence of the Majority Banks as it deems appropriate or it shall first be
indemnified to its satisfaction by the Banks against any and all liability and
expense that may be incurred by it by reason of taking or continuing to take
any such action. The Agent shall in all cases be fully protected in acting, or
in refraining from acting, under this Agreement and the other Loan Documents in
accordance with a request of the Majority Banks, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Banks and all future holders of the amounts owing hereunder.
SECTION 10.5. Notice of Default. The Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Agent has received notice from a Bank or the
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event
that the Agent receives such a notice, the Agent shall give notice thereof to
the Banks. The Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Majority Banks;
provided that unless and until the Agent shall have received such directions,
the Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it
shall deem advisable in the best interests of the Banks.
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SECTION 10.6. Non-Reliance on Agent and Other Banks. Each
Bank expressly acknowledges that neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by the Agent hereinafter
taken, including any review of the affairs of the Borrower, shall be deemed to
constitute any representation or warranty by the Agent to any Bank. Each Bank
represents to the Agent that it has, independently and without reliance upon
the Agent or any other Bank, and based on such documents and information as it
has deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Borrower and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Bank also represents that it
will, independently and without reliance upon the Agent or any other Bank, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Banks by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Bank with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
the Borrower that may come into the possession of the Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates.
SECTION 10.7. Indemnification. The Banks agree to indemnify
the Agent and the Arranger, in their respective capacities as such (to the
extent not reimbursed by the Borrower and without limiting the obligation of
the Borrower to do so), ratably according to their respective applicable Pro
Rata Percentages in effect on the date on which indemnification is sought under
this Section 10.7, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever that may at any time (including, without
limitation, at any time following the payment of all amounts owing hereunder
and the termination of the Commitments) be imposed on, incurred by or asserted
against the Agent or the Arranger, as the case may be, in any way relating to
or arising out of this Agreement, any of the other Loan Documents or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Agent or
the Arranger, as the case may be, under or in connection with any of the
foregoing; provided that no Bank shall be liable for the payment of any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from the
Agent's or the Arranger's, as the case may be, gross negligence or willful
misconduct. The agreements in this Section 10.7 shall survive the payment of
all amounts payable hereunder.
SECTION 10.8. Agent in Its Individual Capacity. The Agent
and its Affiliates may make loans to, accept deposits from and generally engage
in any kind of business with the Borrower as though the Agent were not the
Agent hereunder and under the other Loan Documents. With respect to its Loans
made or renewed by it, any Letter of Credit issued or participated in by it and
its Commitment hereunder, the Agent shall have the same rights and
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powers under this Agreement and the other Loan Documents as any Bank and may
exercise the same as though it were not the Agent, and the terms "Bank" and
"Banks" shall include the Agent in its individual capacity.
SECTION 10.9. Successor Agent. The Agent may resign as Agent
upon 30 days' notice to the Banks and the Borrower. If the Agent shall resign
as Agent under this Agreement and the other Loan Documents, then the Majority
Banks shall appoint from among the Banks a successor agent for the Banks, which
successor agent shall be approved by the Borrower, whereupon such successor
agent shall succeed to the rights, powers and duties of the Agent, and the term
"Agent" shall mean such successor agent effective upon such appointment and
approval, and the former Agent's rights, powers and duties as Agent shall be
terminated, without any other or further act or deed on the part of such former
Agent or any of the parties to this Agreement or any holders of any amounts
payable hereunder; provided, that if an Event of Default has occurred and is
continuing, no consent of the Borrower shall be required. If a successor Agent
shall not have been so appointed within said 30-day period, the Agent may then
appoint a successor Agent who shall be a financial institution that has total
assets in excess of $500,000,000 and who shall serve as Agent until such time,
if any, as an Agent shall have been appointed as provided above. After any
retiring Agent's resignation or removal as Agent, the provisions of this
Article X shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement and the other Loan
Documents.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Amendments and Waivers. Neither this
Agreement, any Note, any other Loan Document, nor any terms hereof or thereof
may be amended, supplemented or modified except pursuant to an instrument or
instruments in writing executed in accordance with the provisions of this
Section 11.1. The Majority Banks may, or, with the written consent of the
Majority Banks, the Agent may, from time to time, (a) enter into with the
Borrower written amendments, supplements or modifications hereto and to any
Notes and the other Loan Documents for the purpose of adding any provisions to
this Agreement or any Notes or the other Loan Documents or changing in any
manner the rights of the Banks or of the Borrower hereunder or thereunder or
(b) waive, on such terms and conditions as the Majority Banks or the Agent, as
the case may be, may specify in such instrument, any of the requirements of
this Agreement or any Notes or the other Loan Documents or any Default or Event
of Default and its consequences; provided, however, that no such waiver and no
such amendment, supplement or modification shall:
(i) reduce the amount or extend the scheduled date of
maturity of any Note or Loan, or reduce the stated rate of any
interest or fee payable hereunder or extend the scheduled date of any
payment thereof or increase the amount or extend the expiration
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date of any Bank's Commitments, in each case without the consent of
each Bank directly affected thereby;
(ii) amend, modify or waive any provision of this Section or
reduce the percentage specified in the definition of Majority Banks,
or consent to the assignment or transfer by the Borrower of any of its
respective rights and obligations under this Agreement and the other
Loan Documents, in each case without the written consent of all the
Banks;
(iii) amend, modify or waive any provision of Article X
without the written consent of the then Agent;
(iv) amend, modify or waive any provision of Section 2.4 in a
manner that adversely affects any Issuing Bank without the written
consent of the then Issuing Bank or Issuing Banks; or
(v) except as specifically provided in any of the Loan
Documents, including, but not limited to, Section 8.7(b) of the Pledge
and Guarantee Agreement, release any portion of the Collateral (as
defined in the respective Security Documents) that represents a
material portion of all such Collateral, taken as a whole, without the
consent of the Supermajority Banks.
Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Banks and shall be binding upon the Borrower, the Banks,
the Issuing Bank or Issuing Banks, the Agent and all future holders of the
amounts payable hereunder. In the case of any waiver, the Borrower, the Banks,
the Issuing Bank or Issuing Banks, and the Agent shall be restored to their
former position and rights hereunder and under any outstanding Notes and any
other Loan Documents, and any Default or Event of Default waived shall be
deemed to be cured and not continuing, but no such waiver shall extend to any
subsequent or other Default or Event of Default, or impair any right consequent
thereon.
SECTION 11.2. Notices. Unless otherwise expressly provided
herein, all notices, requests and demands to or upon the respective parties
hereto to be effective shall be in writing (including by telecopy) and shall be
deemed to have been duly given or made when delivered by hand, or three days
after being deposited in the mail, postage prepaid, or, in the case of telecopy
notice, when received, addressed as follows in the case of the Borrower and the
Agent, and as set forth in Schedule 1.1 in the case of the other parties
hereto, or to such other address as may be hereafter notified by the respective
parties hereto and any future holders of the amounts payable hereunder:
The Borrower or HII: 1111 Louisiana
Houston, Texas 77002
Attention: Marc Kilbride
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Telecopy: 713-207-3301
with a copy to: Assistant Treasurer
The Agent: Chase Loan and Agency Services
Group
One Chase Manhattan Plaza
8th Floor
New York, New York 10081
Attention: Janet Belden
Telecopy: (212) 552-5658
with a copy to: The Chase Manhattan Bank
One Chase Manhattan Plaza, 3rd Floor
Global Power Group
New York, New York 10081
Attention: Jaimin Patel
Telecopy: 212-552-5276
provided that any notice, request or demand to or upon the Agent or the Banks
pursuant to Sections 2.2, 3.2, 4.3, 4.7, 5.2 and 5.5 shall not be effective
until received.
SECTION 11.3. No Waiver, Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Agent or any Bank, any
right, remedy, power or privilege hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
SECTION 11.4. Survival of Representations and Warranties.
All representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the other Loan
Documents.
SECTION 11.5. Payment of Expenses and Taxes. The Borrower
agrees (a) to pay or reimburse the Agent for all its reasonable out-of-pocket
costs and expenses incurred in connection with the development, preparation,
negotiation and execution of, and any amendment, supplement or modification to,
this Agreement and any Notes and the other Loan Documents and any other
documents prepared in connection herewith or therewith, and the consummation
and administration of the transactions contemplated hereby and thereby,
including, without limitation, the reasonable fees and disbursements of Simpson
Thacher & Bartlett, special counsel to the Agent (but excluding the fees or
expenses of any other counsel), (b) to pay or reimburse each Bank and the Agent
for all its costs and expenses incurred in
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connection with the enforcement or preservation of any rights under this
Agreement, any Notes, the other Loan Documents and any such other documents,
including, without limitation, the reasonable fees and disbursements of the
several special counsel to the Banks and the Agent, (c) without duplication of
any other provision contained in this Agreement or any Notes, to pay,
indemnify, and hold each Bank and the Agent harmless from, any and all
recording and filing fees, if any, and any and all liabilities (for which each
Bank has not been otherwise reimbursed under this Agreement) with respect to,
or resulting from any delay in paying, stamp, excise and other taxes, if any,
that may be payable or determined to be payable in connection with the
execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement, any Notes, the
other Loan Documents and any such other documents, and (d) without duplication
of any other provision contained in this Agreement or any Notes, to pay,
indemnify, and hold each Bank and the Agent harmless from and against, any and
all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance
and administration of this Agreement, any Notes, the other Loan Documents and
any such other documents and the transactions contemplated hereby (including,
without limitation, the Mergers and the use of proceeds of the Loans) (all the
foregoing in this clause (d), collectively, the "indemnified liabilities");
provided, that the Borrower shall have no obligation hereunder to the Agent or
any Bank with respect to indemnified liabilities arising from the gross
negligence or willful misconduct of the Agent or any such Bank; and provided,
further, that it is the intention of the Borrower to indemnify the Agent and
the Banks against the consequences of their own negligence. The agreements in
this Section 11.5 shall survive repayment of all amounts payable hereunder.
SECTION 11.6. Effectiveness; Successors and Assigns;
Participations; Assignments. (a) This Agreement shall become effective on the
first date on which all of the conditions precedent set forth in Section 6.1
have been satisfied (which date shall occur on or before October 31, 1997)
(such date on which all such conditions are satisfied and such initial Loans
are made, the "Closing Date").
(b) Any Bank may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time sell to one
or more banks or other financial institutions (a "Participant") participating
interests in any Loan owing to such Bank, any Commitment of such Bank or any
other interest of such Bank hereunder and under the other Loan Documents. In
the event of any such sale by a Bank of a participating interest to a
Participant, such Bank's obligations under this Agreement to the other parties
to this Agreement shall remain unchanged, such Bank shall remain solely
responsible for the performance thereof, such Bank shall remain the holder of
any such Loan and Commitment or other interest for all purposes under this
Agreement and the other Loan Documents, the Borrower and the Agent shall
continue to deal solely and directly with such Bank in connection with such
Bank's rights and obligations under this Agreement and the other Loan Documents
and except with respect to the matters set forth in Section 11.1, the amendment
of which requires the consent of all of the Banks, the participation agreement
between the selling Bank and the Participant may not restrict
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such Bank's voting rights hereunder. The Borrower agrees that each
Participant, to the extent provided in its participation, shall be entitled to
the benefits of Sections 4.5, 4.8, 5.1 and 5.3 with respect to its
participation in the Commitments and the Loans outstanding from time to time;
provided, that no Participant shall be entitled to receive any greater amount
pursuant to such Sections than the selling Bank would have been entitled to
receive in respect of the amount of the participation sold by such selling Bank
to such Participant had no such sale occurred. Except as expressly provided in
this Section 11.6(b), no Participant shall be a third-party beneficiary of or
have any rights under this Agreement or under any of the other Loan Documents.
(c) Any Bank may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time sell to any
Affiliate of such Bank that is a bank (a "Bank Affiliate") and, with the
consent of the Borrower and the Agent (which in each case shall not be
unreasonably withheld), to one or more additional banks ("Purchasing Banks")
all or any part of its rights and obligations under this Agreement pursuant to
a Committed Loan Assignment and Acceptance ("Committed Loan Assignment and
Acceptance"), substantially in the form of Exhibit K, executed by such
Purchasing Bank and such transferor Bank (and, in the case of a Purchasing Bank
that is not a Bank Affiliate, by the Borrower and the Agent) and delivered to
the Agent for its acceptance and recording in the Register; provided, that (i)
each such sale shall be of a uniform, and not a varying, percentage of all
rights and obligations under and in respect of the Commitment of such Bank,
(ii) each such sale that is not to an existing Bank hereunder shall be in an
aggregate amount of not less than .925% of the Commitments hereunder then in
effect, (iii) after giving effect to such sale, the transferor Bank shall (to
the extent that it continues to have any Commitment hereunder) have a
Commitment of not less than the greater of (A) .925% of the Commitments
hereunder then in effect and (B) 51% of (1) the total amount of such Bank's
Commitment as of the date on which such Bank first had a Commitment hereunder
less (2) the amount of permanent reductions after such date in the amount of
such Commitment and (iv) at any time other than any time that an Event of
Default has occurred and is continuing, each such assignment shall be to a
"bank", as such term is defined in Rule 3 promulgated under PUHCA. Upon such
execution, delivery, acceptance and recording, from and after the effective
date determined pursuant to such Committed Loan Assignment and Acceptance (the
"Transfer Effective Date"), (i) the Purchasing Bank thereunder shall be a party
hereto and, to the extent provided in such Committed Loan Assignment and
Acceptance, have the rights and obligations of a Bank hereunder with the
Commitments as set forth therein and (ii) the transferor Bank thereunder shall,
to the extent provided in such Committed Loan Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of a
Committed Loan Assignment and Acceptance covering all or the remaining portion
of a transferor Bank's rights and obligations under this Agreement, such
transferor Bank shall cease to be a party hereto). Such Committed Loan
Assignment and Acceptance shall be deemed to amend this Agreement to the
extent, and only to the extent, necessary to reflect the addition of such
Purchasing Bank and the resulting adjustment of Pro Rata Percentages arising
from the purchase by such Purchasing Bank of all or a portion of the rights and
obligations of such transferor Bank under this Agreement. On or prior to the
Transfer Effective Date determined pursuant to such Committed Loan Assignment
and Acceptance, (i) appropriate entries shall be made in the accounts of the
transferor Bank and the Register
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evidencing such assignment and releasing the Borrower from any and all
obligations to the transferor Bank in respect of the assigned Loan or Loans and
(ii) appropriate entries evidencing the assigned Loan or Loans shall be made in
the accounts of the Purchasing Bank and the Register as required by Section 4.1
hereof. In the event that any Notes have been issued in respect of the
assigned Loan or Loans, such Notes shall be marked "cancelled" and surrendered
by the transferor Bank to the Agent for return to the applicable Borrower.
(d) Any Bank may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time assign to
one or more banks or other financial institutions (a "CAF Loan Assignee") any
CAF Loan owing to such Bank pursuant to a CAF Loan Assignment and Acceptance
executed by the assignor Bank and the CAF Loan Assignee. Upon such execution,
from and after the date of such CAF Loan Assignment and Acceptance, the CAF
Loan Assignee shall, to the extent of the assignment provided for in such CAF
Loan Assignment and Acceptance, be deemed to have the same rights and benefits
of payment and enforcement with respect to such CAF Loan and the same
obligation to share and rights of setoff pursuant to Sections 5.4 and 11.7 as
it would have had if it were a Bank hereunder; provided that (i) unless such
CAF Loan Assignment and Acceptance shall otherwise specify and a copy of such
CAF Loan Assignment and Acceptance shall have been delivered to the Agent for
its acceptance and recording in the Register in accordance with Section
11.6(e), the assignor thereunder shall act as collection agent for the CAF Loan
Assignee thereunder, and the Agent shall pay all amounts received from the
Borrower that are allocable to the assigned CAF Loan directly to such assignor
without any further liability to such CAF Loan Assignee and (ii) at any time
other than any time an Event of Default has occurred and is continuing, each
such assignment shall be to a "bank", as such term is defined in Rule 3
promulgated under PUHCA. A CAF Loan Assignee under a CAF Loan Assignment and
Acceptance shall not, by virtue of such CAF Loan Assignment and Acceptance,
become a party to this Agreement or have any rights to consent to or refrain
from consenting to any amendment, supplement, waiver or other modification of
any provision of this Agreement or any related document; provided that (i) the
assignor under such CAF Loan Assignment and Acceptance and such CAF Loan
Assignee may, in their discretion, agree between themselves upon the manner in
which such assignor will exercise its rights under this Agreement and any
related document and (ii) if a copy of such CAF Loan Assignment and Acceptance
shall have been delivered to the Agent for its acceptance and recording in the
Register in accordance with Section 11.6(e), neither the principal amount of,
the interest rate on, nor the maturity date of any CAF Loan assigned to the CAF
Loan Assignee thereunder will be reduced or postponed, as the case may be,
without the written consent of such CAF Loan Assignee. If a CAF Loan Assignee
has caused a CAF Loan Assignment and Acceptance to be recorded in the Register
in accordance with Section 11.6(e), such CAF Loan Assignee may thereafter, in
the ordinary course of its business and in accordance with applicable law,
assign such CAF Loan to any Bank, to any Affiliate or Subsidiary of such CAF
Loan Assignee or to any other financial institution that has total assets in
excess of $1,000,000,000 and that in the ordinary course of its business
extends credit of the type represented by such CAF Loan, and the foregoing
provisions of this Section 11.6(d) shall apply, mutatis mutandis, to any such
assignment by a CAF Loan Assignee. Except in accordance with the preceding
sentence,
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CAF Loans may not be further assigned by a CAF Loan Assignee, subject to any
legal or regulatory requirement that the CAF Loan Assignee's assets must remain
under its control.
(e) The Agent shall maintain at its address referred to
in Section 11.2 a copy of each CAF Loan Assignment and Acceptance and each
Committed Loan Assignment and Acceptance delivered to it and a register (the
"Register") for the recordation of (i) the names and addresses of the Banks and
the Commitments of, and principal amount of the Loans owing to, each Bank from
time to time and (ii) with respect to each CAF Loan Assignment and Acceptance
delivered to the Agent, the name and address of the CAF Loan Assignee and the
principal amount of each CAF Loan owing to such CAF Loan Assignee. To the
extent permitted by applicable law, the entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrower, the Agent and
the Banks may (and, in the case of any Loan or other obligation hereunder that
is not evidenced by a Note, shall) treat each Person whose name is recorded in
the Register as the owner of a Loan or other obligations hereunder as the owner
thereof for all purposes of this Agreement and the other Loan Documents,
notwithstanding any notice to the contrary. Any assignment of any Loan or
other obligation hereunder which is not evidenced by a Note shall be effective
only upon appropriate entries with respect thereto being made in the Register.
The Register shall be available for inspection by the Borrower or any Bank or
any CAF Loan Assignee at any reasonable time and from time to time upon
reasonable prior notice.
(f) Upon its receipt of a Committed Loan Assignment and
Acceptance executed by a transferor Bank and Purchasing Bank (and, in the case
of a Purchasing Bank that is not then a Bank Affiliate, by the Borrower and the
Agent) together with payment to the Agent of a registration and processing fee
of (i) $2,000 with respect to (and payable by) any Purchasing Bank that is not
already a Bank or a Bank Affiliate and (ii) $750 with respect to any Purchasing
Bank that is already a Bank or a Bank Affiliate (which fee shall be for the
account of the Borrower only in the case of an assignment made pursuant to
Section 5.6(b) hereof), the Agent shall promptly accept such Committed Loan
Assignment and Acceptance on the Transfer Effective Date determined pursuant
thereto, record the information contained therein in the Register and give
notice of such acceptance and recordation to the Banks and the Borrower. Upon
its receipt of a CAF Loan Assignment and Acceptance executed by an assignor
Bank and a CAF Loan Assignee, together with payment to the Agent of a
registration and processing fee of $750 (which fee shall not be for the account
of the Borrower), the Agent shall promptly accept such CAF Loan Assignment and
Acceptance, record the information contained therein in the Register and give
notice of such acceptance and recordation to the assignor Bank, the CAF Loan
Assignee and the Borrower.
(g) Each Bank agrees to exercise its reasonable best efforts
to keep, and to cause any third party recipient of the information described in
this Section 11.6(g) to keep, any information delivered or made available by
the Borrower to it (including any information obtained pursuant to Section 8.1)
that is clearly indicated to be confidential information, confidential from
anyone other than Persons employed or retained by such Bank and its Affiliates
who are or are expected to become engaged in evaluating, approving, structuring
or administering the transactions contemplated hereunder; provided that nothing
herein shall
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prevent any Bank from disclosing such information (i) to any other Bank or any
Affiliate of any Bank, (ii) pursuant to subpoena or upon the order of any court
or administrative agency, (iii) upon the request or demand of any Governmental
Authority having jurisdiction over such Bank, (iv) if such information (A) was
already in the possession of such Bank without being subject to any applicable
confidentiality agreement or (B) has otherwise been publicly disclosed, (v) to
the extent reasonably required in connection with any litigation to which
either the Agent, the Arranger, any Bank, the Borrower or their respective
affiliates may be a party, (vi) to the extent reasonably required in connection
with the exercise of any remedy hereunder, (vii) to such Bank's legal counsel,
independent auditors and other professional advisors and (viii) to any actual
or proposed Participant, Purchasing Bank or CAF Loan Assignee (each, a
"Transferee") that has agreed to be bound by the provisions of this Section
11.6(g). Unless prohibited from doing so by applicable law, each Bank will use
its reasonable best efforts to notify the Borrower of any information that it
is required or requested to deliver pursuant to clause (ii) of this Section
11.6(g) and, if the Borrower is not a party to any such litigation, clause (v)
of this Section 11.6(g), prior to such Bank's delivery of such information.
(h) If, pursuant to this Section, any interest in this
Agreement is transferred to any Transferee that is organized under the laws of
any jurisdiction other than the United States or any state thereof, the
transferor Bank shall cause such Transferee, concurrently with the
effectiveness of such transfer, (i) to represent to the transferor Bank (for
the benefit of the transferor Bank, the Agent and the Borrower) that under
applicable law and treaties no taxes will be required to be withheld by the
Agent, the Borrower or the transferor Bank with respect to any payments to be
made to such Transferee in respect of the Loans, (ii) to furnish to the
transferor Bank (and, in the case of any Purchasing Bank or CAF Loan Assignee
registered in the Register, the Agent and the Borrower) either U.S. Internal
Revenue Service Form 4224 or U.S. Internal Revenue Service Form 1001 (wherein
such Transferee claims entitlement to complete exemption from U.S. federal
withholding tax on all interest payments hereunder) and (iii) to agree (for the
benefit of the transferor Bank, the Agent and the Borrower) to provide the
transferor Bank (and, in the case of any Purchasing Bank or CAF Loan Assignee
registered in the Register, the Agent and the Borrower) a new Form 4224 or Form
1001 upon the expiration or obsolescence of any previously delivered form and
comparable statements in accordance with applicable U.S. laws and regulations
and amendments duly executed and completed by such Transferee, and to comply
from time to time with all applicable U.S. laws and regulations with regard to
such withholding tax exemption.
(i) Nothing herein shall prohibit any Bank from pledging or
assigning all or any portion of its Loans hereunder to any Federal Reserve Bank
in accordance with applicable law. The Borrower hereby agrees that, upon the
request of any Bank at any time and from time to time after the Borrower has
made its initial Borrowing hereunder, the Borrower will provide to such Bank
(at the Borrower's own expense) a promissory note, substantially in the form of
Exhibit C (a "Note"), evidencing the Loans owing to such Bank.
SECTION 11.7. Set-off. In addition to any rights and
remedies of the Banks provided by law, each Bank shall have the right, without
prior notice to the Borrower, any such
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notice being expressly waived by the Borrower to the extent permitted by
applicable law, upon any amount becoming due and payable by the Borrower
hereunder (whether at the stated maturity, by acceleration or otherwise) to
set-off and appropriate and apply against such amount any and all deposits
(general or special, time or demand, provisional or final), in any currency,
and any other credits, indebtedness or claims, in any currency, in each case
whether direct or indirect, absolute or contingent, matured or unmatured, at
any time held or owing by such Bank or any branch or agency thereof to or for
the credit or the account of the Borrower. Each Bank agrees promptly to notify
the Borrower and the Agent after any such set-off and application made by such
Bank, provided that the failure to give such notice shall not affect the
validity of such set-off and application.
SECTION 11.8. Counterparts. This Agreement may be executed
by one or more of the parties to this Agreement on any number of separate
counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Agreement
signed by all the parties shall be maintained with the Borrower and the Agent.
SECTION 11.9. Severability. Any provision of this Agreement
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
SECTION 11.10. Integration. This Agreement and the other
Loan Documents represent the agreement of the Borrower, HII, the Agent and the
Banks with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Agent or any Bank relative
to the subject matter hereof not expressly set forth or referred to herein or
in the other Loan Documents.
SECTION 11.11. GOVERNING LAW. (a) THIS AGREEMENT AND ANY
NOTES AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND
THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW YORK.
(b) Notwithstanding anything in Section 11.11(a) to the
contrary, nothing in this Agreement or in any Note or any Loan Documents shall
be deemed to constitute a waiver of any rights which any Bank may have under
applicable federal law relating to the amount of interest which any Bank may
contract for, take, receive or charge in respect of any Loans, including any
right to take, receive, reserve and charge interest at the rate allowed by the
laws of the state where such Bank is located. To the extent that Texas law is
applicable to the determination of the Highest Lawful Rate, the Banks and the
Borrower agree that (i) if Article 1.4, Subtitle 1, Title 79, of the Revised
Civil Statutes of Texas, 1925, as amended, is applicable to such determination,
the indicated rate ceiling computed from time to time pursuant to Section (a)
of
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such Article shall apply, provided that, to the extent permitted by such
Article, the Agent may from time to time by notice to the Borrower revise the
election of such interest rate ceiling as such ceiling affects the then current
or future balances of the Loans; and (ii) the provisions of Chapter 15 of
Subtitle 3, Title 79, of the Revised Civil Statutes of Texas, 1925, as amended,
shall not apply to this Agreement or any Note issued hereunder.
SECTION 11.12. Submission To Jurisdiction, Waivers. Each of
the Borrower and HII hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action
or proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the Courts of the State
of New York, the courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and agrees not
to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth in Section 11.2 or at such other address of
which the Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent permitted by applicable
law, any right it may have to claim or recover in any legal action or
proceeding referred to in this Section 11.12 any special, exemplary, punitive
or consequential damages.
SECTION 11.13. Acknowledgements. The Borrower hereby
acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement, any Notes and the other Loan
Documents;
(b) neither the Agent nor any Bank has any fiduciary
relationship with or duty to the Borrower arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
the Agent and the Banks, on the one hand, and the Borrower, on the other hand,
in connection herewith or therewith is solely that of debtor and creditor; and
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(c) no joint venture exists among the Banks or among the
Borrower and the Banks.
SECTION 11.14. Limitation on Agreements. All agreements
between the Borrower, the Agent or any Bank, whether now existing or hereafter
arising and whether written or oral, are hereby expressly limited so that in no
contingency or event whatsoever, whether by reason of demand being made in
respect of an amount due under any Loan Document or otherwise, shall the amount
paid, or agreed to be paid, to the Agent or any Bank for the use, forbearance,
or detention of the money to be loaned under this Agreement, any Notes or any
other Loan Document or otherwise or for the payment or performance of any
covenant or obligation contained herein or in any other Loan Document exceed
the Highest Lawful Rate. If, as a result of any circumstances whatsoever,
fulfillment of any provision hereof or of any of such documents, at the time
performance of such provision shall be due, shall involve transcending the
limit of validity prescribed by applicable usury law, then, ipso facto, the
obligation to be fulfilled shall be reduced to the limit of such validity, and
if, from any such circumstance, the Agent or any Bank shall ever receive
interest or anything that might be deemed interest under applicable law that
would exceed the Highest Lawful Rate, such amount that would be excessive
interest shall be applied to the reduction of the principal amount owing on
account of such Bank's Loans or the amounts owing on other obligations of the
Borrower to the Agent or any Bank under any Loan Document and not to the
payment of interest, or if such excessive interest exceeds the unpaid principal
balance of such Bank's Loans and the amounts owing on other obligations of the
Borrower to the Agent or any Bank under any Loan Document, as the case may be,
such excess shall be refunded to the Borrower. All sums paid or agreed to be
paid to the Agent or any Bank for the use, forbearance or detention of the
indebtedness of the Borrower to the Agent or any Bank shall, to the fullest
extent permitted by applicable law, be amortized, prorated, allocated and
spread throughout the full term of such indebtedness until payment in full of
the principal (including the period of any renewal or extension thereof) so
that the interest on account of such indebtedness shall not exceed the Highest
Lawful Rate. Notwithstanding anything to the contrary contained in any Loan
Document, it is understood and agreed that if at any time the rate of interest
that accrues on the outstanding principal balance of any Loan shall exceed the
Highest Lawful Rate, the rate of interest that accrues on the outstanding
principal balance of any Note shall be limited to the Highest Lawful Rate, but
any subsequent reductions in the rate of interest that accrues on the
outstanding principal balance of any Loan shall not reduce the rate of interest
that accrues on the outstanding principal balance of any Note below the Highest
Lawful Rate until the total amount of interest accrued on the outstanding
principal balance of any Loan equals the amount of interest that would have
accrued if such interest rate had at all times been in effect. The terms and
provisions of this Section 11.14 shall control and supersede every other
provision of all Loan Documents.
SECTION 11.15. Non-recourse to Limited Partner, General
Partner. By execution hereof, each Bank, the Arranger and the Agent agree
that, notwithstanding statutory and/or common law liability of a general
partner for the debts and obligations of a partnership, no general or limited
partner of the Borrower, solely by virtue of its legal status as such, shall be
liable for the obligations of the Borrower under this Agreement, any Note or
any Loan
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Document, it being expressly agreed that except as specifically provided and
set forth pursuant to the Security Documents and the Support Agreement, all
such debts and obligations shall be satisfied only from assets of the Borrower.
Notwithstanding the foregoing, nothing in this Section 11.15 shall be deemed to
relieve the Borrower or any other Loan Party of its obligations under this
Agreement or to prejudice the rights or remedies of the Agent and the Lenders
hereunder or under any Loan Documents.
SECTION 11.16. Notice Under Section 26.02 of the Texas
Business and Commerce Code. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers or agents thereunto duly
authorized, as of the date first above written.
HOUSTON INDUSTRIES
FINANCECO LP
By: HOUSTON INDUSTRIES FINANCECO
GP, LLC,
its General Partner
By:
------------------------------------
Name:
Title:
HOUSTON INDUSTRIES INCORPORATED
By:
------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, as Agent and
as a Bank
By:
------------------------------------
Name:
Title:
94
BANK OF MONTREAL
By:
------------------------------------
Name:
Title:
95
THE BANK OF NEW YORK
By:
------------------------------------
Name:
Title:
96
THE BANK OF NOVA SCOTIA
By:
------------------------------------
Name:
Title:
97
THE BANK OF TOKYO-MITSUBISHI, LTD.,
HOUSTON AGENCY
By:
------------------------------------
Name:
Title:
98
BARCLAYS BANK PLC
By:
------------------------------------
Name:
Title:
99
CAISSE NATIONALE DE CREDIT AGRICOLE
By:
------------------------------------
Name:
Title:
100
CIBC INC.
By:
------------------------------------
Name:
Title:
101
CITIBANK, N.A.
By:
------------------------------------
Name:
Title:
102
COMERICA BANK
By:
------------------------------------
Name:
Title:
103
COMMERZBANK
AKTIENGESELLSCHAFT,
ATLANTA AGENCY
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
104
CREDIT LYONNAIS
NEW YORK BRANCH
By:
------------------------------------
Name:
Title:
105
CREDIT SUISSE FIRST BOSTON
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
106
THE DAI-ICHI KANGYO BANK, LIMITED
By:
------------------------------------
Name:
Title:
107
BANKBOSTON, N.A.
By:
------------------------------------
Name:
Title:
108
FIRST UNION NATIONAL BANK
By:
------------------------------------
Name:
Title:
109
FLEET NATIONAL BANK
By:
------------------------------------
Name:
Title:
110
THE FUJI BANK, LIMITED-
HOUSTON AGENCY
By:
------------------------------------
Name:
Title:
111
THE INDUSTRIAL BANK OF JAPAN,
LIMITED, NEW YORK BRANCH
By:
------------------------------------
Name:
Title:
112
THE LONG-TERM CREDIT BANK OF
JAPAN, LTD.
By:
------------------------------------
Name:
Title:
113
MELLON BANK, N.A.
By:
------------------------------------
Name:
Title:
114
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK
By:
------------------------------------
Name:
Title:
115
NATIONSBANK OF TEXAS, N.A.
By:
------------------------------------
Name:
Title:
116
THE NORTHERN TRUST COMPANY
By:
------------------------------------
Name:
Title:
117
ROYAL BANK OF CANADA
By:
------------------------------------
Name:
Title:
118
THE SAKURA BANK, LIMITED
By:
------------------------------------
Name:
Title:
119
SOCIETE GENERALE,
SOUTHWEST AGENCY
By:
------------------------------------
Name:
Title:
120
THE SUMITOMO BANK, LIMITED
By:
------------------------------------
Name:
Title:
121
TORONTO DOMINION (TEXAS), INC.
By:
------------------------------------
Name:
Title:
122
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
123
WACHOVIA BANK OF GEORGIA, N.A.
By:
------------------------------------
Name:
Title:
124
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
NEW YORK BRANCH
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
125
THE YASUDA TRUST AND BANKING
COMPANY LIMITED
NEW YORK BRANCH
By:
------------------------------------
Name:
Title: