================================================================================
================================================================================
Exhibit 4(s)
CREDIT AGREEMENT
Among
THE DAYTON POWER AND LIGHT COMPANY
as Borrower
THE LENDING INSTITUTIONS NAMED THEREIN
as Lenders
HARRIS NESBITT CORP.,
as the Syndication Agent
And
KEYBANK NATIONAL ASSOCIATION
as the Administrative Agent and
Lead Arranger
------------------------
dated as of
December 12, 2003
------------------------
$150,000,000 Revolving Facility
================================================================================
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I. DEFINITIONS AND TERMS........................................1
Section 1.1 Certain Defined Terms.....................................1
Section 1.2 Computation of Time Periods..............................18
Section 1.3 Accounting Terms.........................................18
Section 1.4 Terms Generally..........................................18
ARTICLE II. AMOUNT AND TERMS OF LOANS...................................19
Section 2.1 Commitments for Loans....................................19
Section 2.2 Borrowing, Continuation or Conversion of Loans...........19
Section 2.3 Disbursement of Funds....................................20
Section 2.4 Evidence of Obligations..................................21
Section 2.5 Interest.................................................21
Section 2.6 Increased Costs; Illegality..............................23
Section 2.7 Breakage Compensation....................................24
Section 2.8 Change of Lending Office; Replacement of Lenders.........25
ARTICLE III. FEES; COMMITMENTS...........................................25
Section 3.1 Fees.....................................................25
Section 3.2 Voluntary Termination/Reduction of Commitments...........26
Section 3.3 Termination of Commitments...............................26
ARTICLE IV. PAYMENTS....................................................26
Section 4.1 Repayment of Loans.......................................26
Section 4.2 Voluntary Prepayments....................................26
Section 4.3 Mandatory Payments and Prepayments.......................27
Section 4.4 Method and Place of Payment..............................27
Section 4.5 Net Payments.............................................28
ARTICLE V. CONDITIONS PRECEDENT........................................30
Section 5.1 Conditions Precedent at Closing Date.....................30
Section 5.2 Conditions Precedent to the Making of Loans..............31
Section 5.3 Conditions Precedent to the Conversion or
Continuation of Loans...................................31
ARTICLE VI. REPRESENTATIONS AND WARRANTIES..............................32
Section 6.1 Corporate Status.........................................32
Section 6.2 Corporate Power and Authority............................32
Section 6.3 No Violation.............................................32
Section 6.4 Governmental Approvals...................................32
Section 6.5 Litigation, etc..........................................33
TABLE OF CONTENTS
Page
----
Section 6.6 Use of Proceeds; Margin Regulations......................33
Section 6.7 Financial Statements.....................................33
Section 6.8 Solvency.................................................34
Section 6.9 No Material Adverse Change...............................34
Section 6.10 Tax Returns and Payments.................................34
Section 6.11 Title to Properties......................................34
Section 6.12 Lawful Operations; Compliance with Agreements............34
Section 6.13 Environmental Matters....................................34
Section 6.14 ERISA....................................................35
Section 6.15 Intellectual Property....................................35
Section 6.16 Investment Company Act; Federal Power Act; PUHCA.........35
Section 6.17 True and Complete Disclosure.............................35
Section 6.18 Reportable Transaction...................................36
ARTICLE VII. AFFIRMATIVE COVENANTS.......................................36
Section 7.1 Reporting Requirements...................................36
Section 7.2 Books, Records and Inspections...........................38
Section 7.3 Insurance................................................38
Section 7.4 Payment of Taxes and Claims..............................38
Section 7.5 Preservation of Existence, etc...........................38
Section 7.6 Good Repair..............................................38
Section 7.7 Compliance with Statutes, Regulations, Orders,
Restrictions............................................39
Section 7.8 Fiscal Years, Fiscal Quarters............................39
Section 7.9 Use of Proceeds..........................................39
Section 7.10 Senior Debt..............................................39
Section 7.11 PUCO Order...............................................39
ARTICLE VIII. NEGATIVE COVENANTS..........................................39
Section 8.1 Changes in Business......................................39
Section 8.2 Merger, Consolidation, Asset Sales.......................39
Section 8.3 Liens....................................................40
Section 8.4 Investments..............................................41
Section 8.5 Financial Covenants......................................42
Section 8.6 Transactions with Affiliates.............................42
Section 8.7 Material Agreements......................................42
Section 8.8 Use of Proceeds/Margin Regulations.......................42
TABLE OF CONTENTS
Page
----
Section 8.9 No Dividend Restrictions.................................42
Section 8.10 Swap Agreements..........................................42
ARTICLE IX. EVENTS OF DEFAULT...........................................43
Section 9.1 Events of Default........................................43
Section 9.2 Acceleration; Remedies...................................45
Section 9.3 Application of Liquidation Proceeds......................45
ARTICLE X. THE ADMINISTRATIVE AGENT....................................46
Section 10.1 Appointment..............................................46
Section 10.2 Delegation of Duties.....................................46
Section 10.3 Exculpatory Provisions...................................46
Section 10.4 Reliance by Administrative Agent.........................47
Section 10.5 Notice of Default........................................47
Section 10.6 Non-Reliance.............................................47
Section 10.7 Indemnification..........................................48
Section 10.8 The Administrative Agent in Individual Capacity..........48
Section 10.9 Successor Administrative Agent...........................48
Section 10.10 Other Agents.............................................49
ARTICLE XI. MISCELLANEOUS...............................................49
Section 11.1 Payment of Expenses......................................49
Section 11.2 Right of Setoff..........................................50
Section 11.3 Notices..................................................51
Section 11.4 Benefit of Agreement.....................................52
Section 11.5 No Waiver; Remedies Cumulative...........................54
Section 11.6 Payments Pro Rata; Sharing of Setoffs....................54
Section 11.7 Governing Law; Submission to Jurisdiction; Venue;
Waiver of Jury Trial....................................55
Section 11.8 Counterparts.............................................56
Section 11.9 Integration..............................................56
Section 11.10 Headings Descriptive.....................................56
Section 11.11 Amendment or Waiver......................................56
Section 11.12 Survival of Indemnities..................................57
Section 11.13 Domicile of Loans........................................57
Section 11.14 Confidentiality..........................................58
Section 11.15 Lender Register..........................................58
Section 11.16 General Limitation of Liability..........................59
TABLE OF CONTENTS
Page
----
Section 11.17 No Duty..................................................59
Section 11.18 Lenders and Agent Not Fiduciary to Borrower..............59
Section 11.19 Survival of Representations and Warranties...............59
Section 11.20 Severability.............................................60
Section 11.21 Independence of Covenants................................60
Section 11.22 Interest Rate Limitation.................................60
Section 11.23 Treasury Regulations.....................................60
Exhibit A - Revolving Note
Exhibit B - Notice of Borrowing, Continuation or Conversion
Exhibit C - Compliance Certificate
Exhibit D - Closing Certificate
Exhibit E - Assignment Agreement
Exhibit F-1 - Legal Opinion of Cadwalader, Wickersham & Taft LLP
Exhibit F-2 - Legal Opinion of General Counsel of the Borrower
This CREDIT AGREEMENT, dated as of December 12, 2003, is entered into
by and among the following:
(i) THE DAYTON POWER AND LIGHT COMPANY, an Ohio corporation
(the "Borrower");
(ii) the Lenders, defined below, from time to time party
hereto;
(iii) KEYBANK NATIONAL ASSOCIATION, a national banking
association, as the Administrative Agent, defined below, and Lead
Arranger; and
(iv) HARRIS NESBITT CORP., as the Syndication Agent.
RECITALS:
A. The Borrower has applied to the Lenders for a credit facility to
refinance its existing senior debt facility and to provide working capital and
funds for other lawful purposes.
B. Subject to and upon the terms and conditions set forth herein,
the Lenders are willing to make available to the Borrower the credit facility
provided for herein.
AGREEMENT:
In consideration of the premises and the mutual covenants contained
herein, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS AND TERMS
Section 1.1 Certain Defined Terms. As used herein, the following
terms shall have the meanings herein specified unless the context otherwise
requires.
"Acquisition" means any acquisition (a) on a going concern basis
(whether by purchase, lease or otherwise) of assets constituting a business or a
division or line of business of a Person that is not a Subsidiary of the
Borrower, and (b) of a majority of the outstanding equity or other similar
interests in any such Person (whether by merger, stock purchase or otherwise).
"Adjusted Eurodollar Rate" means, with respect to each Interest Period
for a Eurodollar Loan, (a) the rate per annum appearing on the applicable
electronic page of Reuters or any successor to or substitute for such service,
providing rate quotations comparable to those currently provided by such
service, as determined by the Administrative Agent from time to time for
purposes of providing quotations of interest rates applicable to Dollar deposits
in the London interbank market), at approximately 11:00 a.m. (London time) two
Business Days prior to the commencement of such Interest Period, as the rate for
Dollar deposits with a maturity comparable to such Interest Period, divided (and
rounded to the nearest one one hundredth of 1%) by (b) a percentage equal to
100% minus the then stated maximum rate of all reserve requirements (including,
without limitation, any marginal, emergency, supplemental, special or other
reserves and without benefit of credits for proration, exceptions or offsets
that may be available from time to time) applicable to any member bank of the
Federal Reserve System in respect of Eurocurrency liabilities as defined in
Regulation D (or any successor category of liabilities under Regulation D);
provided, however, that if the rate referred to in clause (a) above is not
available at
any such time for any reason, then the rate referred to in clause (a) shall
instead be the average (rounded to the nearest one one hundredth of 1%) of the
rates at which Dollar deposits of $5,000,000 are offered to the Reference Banks
in the London interbank market at approximately 11:00 a.m. (London time), two
Business Days prior to the commencement of such Interest Period, for contracts
that would be entered into at the commencement of such Interest Period.
"Administrative Agent" means KeyBank in its capacity as administrative
agent for the Lenders, together with any successor to the Administrative Agent
appointed pursuant to Section 10.9.
"Affiliate" means, with respect to any Person, any other Person directly
or indirectly controlling, controlled by, or under direct or indirect common
control with such Person, or, in the case of any Lender that is an investment
fund, the investment advisor thereof and any investment fund having the same
investment advisor. A Person shall be deemed to control a second Person if such
first Person possesses, directly or indirectly, the power (a) to vote 10% or
more of the securities having ordinary voting power for the election of
directors or managers of such second Person or (b) to direct or cause the
direction of the management and policies of such second Person, whether through
the ownership of voting securities, by contract or otherwise. Notwithstanding
the foregoing, (i) a director, officer or employee of a Person shall not, solely
by reason of such status, be considered an Affiliate of such Person; and (ii)
neither the Administrative Agent nor any Lender shall in any event be considered
an Affiliate of the Borrower or any of its Subsidiaries.
"Agent Fee Letter" means the Agent Fee Letter, dated as of the date
hereof, between the Administrative Agent and the Borrower, as the same may from
time to time be amended, restated, supplemented or otherwise modified.
"Agreement" means this Credit Agreement, as the same may from time to
time be amended, restated, supplemented or otherwise modified.
"Applicable Facility Fee Rate" means, on any date of determination, a
rate that is determined based upon the S&P Rating or the Moody's Rating, as
follows:
S&P RATING MOODY'S RATING APPLICABLE FACILITY FEE RATE
-------------- ----------------- ----------------------------
A- or higher A3 or higher 12.50 basis points
BBB+ Baa1 15.00 basis points
BBB Baa2 17.50 basis points
BBB- Baa3 25.00 basis points
BB+ Ba1 37.50 basis points
Lower than BB+ Lower than Ba1 50.00 basis points
If there is a difference of one rating level between the S&P Rating and
the Moody's Rating, the Applicable Facility Fee Rate shall be determined based
on the higher rating. If there is a difference of two or more rating levels
between the S&P Rating and the Moody's Rating, the Applicable Facility Fee Rate
shall be determined based on the intermediate rating levels at the midpoint
between such S&P Rating and such Moody's Rating or, if there is no midpoint,
based on the higher intermediate level, unless either rating is below BBB- or
Baa3, as applicable, in which case the Applicable Facility Fee Rate shall be
determined based on the lower of the two ratings. If there is no S&P Rating,
then the Applicable
2
Facility Fee Rate shall be determined based on the Moody's Rating, or if there
is no Moody's Rating, then the Applicable Facility Fee Rate shall be determined
based on the S&P Rating. If (i) there is no S&P Rating and no Moody's Rating or
(ii) an Event of Default has occurred and is continuing, the Applicable Facility
Fee Rate shall be the highest rate per annum indicated therefor in the above
table. The S&P Rating and the Moody's Rating in effect on any date for purposes
of determining the Applicable Facility Fee Rate shall be that S&P Rating and
Moody's Rating in effect at the close of business on such date. Each change in
the Applicable Facility Fee Rate resulting from a publicly announced change in
the S&P Rating and/or the Moody's Rating shall be effective during the period
commencing on the date of the public announcement thereof and ending on the date
immediately preceding the effective date of the next change.
"Applicable Lending Office" means, with respect to each Lender, the
office or offices designated by such Lender to the Administrative Agent as such
Lender's lending office or offices for purposes of this Agreement.
"Applicable Margin" means, on any date of determination, a rate that is
determined, based upon the S&P Rating or the Moody's Rating, as follows:
APPLICABLE MARGIN FOR APPLICABLE MARGIN FOR
S&P RATING MOODY'S RATING EURODOLLAR LOANS BASE RATE LOANS
-------------- -------------- --------------------- --------------------------
A- or higher A3 or higher 75.00 basis points 0.0 basis points
BBB+ Baa1 85.00 basis points 0.0 basis points
BBB Baa2 95.00 basis points 0.0 basis points
BBB- Baa3 112.50 basis points 0.0 basis points
BB+ Ba1 187.50 basis points 0.0 basis points
Lower than BB+ Lower than Ba1 225.00 basis points 75.00 basis points
If there is a difference of one rating level between the S&P Rating and
the Moody's Rating, the Applicable Margin shall be determined based on the
higher rating. If there is a difference of two or more rating levels between the
S&P Rating and the Moody's Rating, the Applicable Margin shall be determined
based on the intermediate rating levels at the midpoint between such S&P Rating
and such Moody's Rating or, if there is no midpoint, based on the higher
intermediate level, unless either rating is below BBB- or Baa3, as applicable,
in which case the Applicable Margin shall be determined based on the lower of
the two ratings. If there is no S&P Rating, then the Applicable Margin shall be
determined based on the Moody's Rating, or if there is no Moody's Rating, then
the Applicable Margin shall be determined based on the S&P Rating. If (i) there
is no S&P Rating and no Moody's Rating or (ii) an Event of Default has occurred
and is continuing, the Applicable Margin shall be the highest rate per annum
indicated therefor in the above table. The S&P Rating and the Moody's Rating in
effect on any date for purposes of determining the Applicable Margin shall be
that S&P Rating and Moody's Rating in effect at the close of business on such
date. Each change in the Applicable Margin resulting from a publicly announced
change in the S&P Rating and/or the Moody's Rating shall be effective during the
period commencing on the date of the public announcement thereof and ending on
the date immediately preceding the effective date of the next change.
"Applicable Utilization Fee Rate" means, on any date of determination, a
rate that is determined based upon the S&P Rating or the Moody's Rating, as
follows:
3
S&P RATING MOODY'S RATING APPLICABLE UTILIZATION RATE
-------------- -------------- ---------------------------
BBB- or higher Baa3 or higher 12.50 basis points
BB+ or lower Ba1 or lower 25.00 basis points
If there is a difference of one rating level between the S&P Rating and
the Moody's Rating, the Applicable Utilization Fee Rate shall be determined
based on the higher rating. If there is a difference of two or more rating
levels between the S&P Rating and the Moody's Rating, the Applicable Utilization
Fee Rate shall be determined based on the intermediate rating levels at the
midpoint between such S&P Rating and such Moody's Rating or, if there is no
midpoint, based on the higher intermediate level, unless either rating is below
BBB- or Baa3, as applicable, in which case the Applicable Utilization Fee Rate
shall be determined based on the lower of the two ratings. If there is no S&P
Rating, then the Applicable Utilization Fee Rate shall be determined based on
the Moody's Rating, or if there is no Moody's Rating, then the Applicable
Utilization Fee Rate shall be determined based on the S&P Rating. If (i) there
is no S&P Rating and no Moody's Rating or (ii) an Event of Default has occurred
and is continuing, the Applicable Utilization Fee Rate shall be the highest rate
per annum indicated therefor in the above table. The S&P Rating and the Moody's
Rating in effect on any date for purposes of determining the Applicable
Utilization Fee Rate shall be that S&P Rating and Moody's Rating in effect at
the close of business on such date. Each change in the Applicable Utilization
Fee Rate resulting from a publicly announced change in the S&P Rating and/or the
Moody's Rating shall be effective during the period commencing on the date of
the public announcement thereof and ending on the date immediately preceding the
effective date of the next change.
"Approved Fund" means a fund that is administered or managed by a Lender
or an Affiliate of a Lender.
"Asset Sale" means the sale, transfer or other disposition (including by
means of Sale and Lease-Back Transactions, and by means of mergers,
consolidations, and liquidations of a corporation, partnership or limited
liability company of the interests therein of the Borrower or any of its
Subsidiaries) by the Borrower or any of its Subsidiaries to any Person of any of
their respective assets, provided that the term Asset Sale specifically excludes
any sales, transfers or other dispositions of inventory, or obsolete or excess
furniture, fixtures, equipment or other Property, real or personal, tangible or
intangible, in each case in the ordinary course of business.
"Assignment Agreement" means an Assignment Agreement substantially in
the form of Exhibit E.
"Authorized Officer" means any of the following officers of the
Borrower: the Chief Executive Officer, the Chief Financial Officer, the
President, the Executive Vice President and Chief Operating Officer, any Group
Vice President or any Vice President or the Treasurer.
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy," as now or hereafter in effect, or any successor thereto.
"Base Rate" means, for any period, a fluctuating interest rate per annum
as shall be in effect from time to time which rate per annum shall at all times
be equal to the greater of (a) the rate of interest established by KeyBank in
Cleveland, Ohio, from time to time, as its prime rate, whether or not publicly
announced, which interest rate may or may not be the lowest rate charged by it
for commercial loans or
4
other extensions of credit; and (b) the Federal Funds Effective Rate in effect
from time to time, determined one Business Day in arrears, plus 1/2 of 1% per
annum.
"Base Rate Loan" means each Loan bearing interest at a rate based upon
the Base Rate.
"Borrower" has the meaning provided in the first paragraph of this
Agreement.
"Borrowing" means the incurrence of Loans consisting of one Type of
Loan, by the Borrower from all of the Lenders on a pro rata basis on a given
date (or resulting from Conversions or Continuations on a given date), having in
the case of Eurodollar Loans the same Interest Period.
"Business Day" means, (a) for all purposes other than as covered by
clause (b) below, any day that is not a Saturday, Sunday or day on which
commercial banks in the city in which the Payment Office is located are
authorized or required by law or other governmental actions to close and (b)
with respect to all notices and determinations in connection with, and payments
of principal and interest on, Eurodollar Loans, any day that is a Business Day
described in clause (a) and that is also a day for trading by and between banks
in Dollar deposits in the London interbank market.
"Capital Lease" means, as applied to any Person, any lease of any
Property (whether real, personal or mixed) by such Person, as lessee, that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"Capitalized Lease Obligations" means all obligations under Capital
Leases of the Borrower or any of its Subsidiaries in each case taken at the
amount thereof accounted for as liabilities and identified as "capital lease
obligations" (or any similar words) on a consolidated balance sheet of the
Borrower and its Subsidiaries prepared in accordance with GAAP.
"Cash Equivalents" means any of the following:
(a) securities issued or directly and fully guaranteed or
insured by the United States of America or any agency or instrumentality
thereof (provided that the full faith and credit of the United States of
America is pledged in support thereof) having maturities of not more
than one year from the date of acquisition;
(b) Dollar denominated time deposits, certificates of
deposit and bankers' acceptances of (i) any Lender or (ii) any bank
whose short-term commercial paper rating from S&P is at least A-1 or the
equivalent thereof or from Moody's is at least P-1 or the equivalent
thereof (any such bank, an "Approved Bank"), in each case with
maturities of not more than three months from the date of acquisition;
(c) commercial paper issued by any Lender or Approved Bank
or by the parent company of any Lender or Approved Bank and commercial
paper issued by, or guaranteed by, any industrial or financial company
with a short- term commercial paper rating of at least A-1 or the
equivalent thereof by S&P or at least P-1 or the equivalent thereof by
Moody's, or guaranteed by any industrial company with a long term
unsecured debt rating of at least A or A2, or the equivalent of each
thereof, from S&P or Moody's, as the case may be, and in each case
maturing within 90 days after the date of acquisition;
(d) fully collateralized repurchase agreements entered into
with any Lender or Approved Bank having a term of not more than 30 days
and covering securities described in clause (a) above;
5
(e) investments in money market funds substantially all the
assets of which are comprised of securities of the types described in
clauses (a) through (d) above;
(f) investments in money market funds access to which is
provided as part of "sweep" accounts maintained with a Lender or an
Approved Bank;
(g) investments in industrial development revenue bonds that
(i) "re-set" interest rates not less frequently than quarterly, (ii) are
entitled to the benefit of a remarketing arrangement with an established
broker dealer, and (iii) are supported by a direct pay letter of credit
covering principal and accrued interest that is issued by an Approved
Bank;
(h) investments in pooled funds or investment accounts
consisting of investments of the nature described in the foregoing
clause (g); and
(i) other investments not specifically described in any of
clauses (a) through (h) above that have been approved in writing by the
Administrative Agent.
"CERCLA" means the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as the same may be amended from time to time, 42
U.S.C. Section 9601 et seq.
"Change of Control" means any of the following:
(a) during any 12-month period (or, if less, during the
period beginning on the Closing Date and ending on the date of
determination), individuals who at the beginning of such period
constituted the Parent's Board of Directors (together with any new
directors whose election by the Parent's Board of Directors or whose
nomination for election by the Parent's shareholders was approved by a
vote of a majority of the directors who either were directors at the
beginning of such period or whose election or nomination was previously
so approved) cease for any reason to constitute a majority of the Board
of Directors of the Parent;
(b) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the 1934 Act, but excluding any employee
benefit plan of such person or its subsidiaries, and any person or
entity acting in its capacity as trustee, agent or other fiduciary or
administrator of any such plan) becomes the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the 1934 Act, except that a
person or group shall be deemed to have "beneficial ownership" of all
securities that such person or group has the right to acquire (such
right, an "option right"), whether such right is exercisable immediately
or only after the passage of time), directly or indirectly, of 20% (or,
if one or more of the Permitted Holders becomes the beneficial owner,
30%) or more of the equity securities of the Parent entitled to vote for
members of the board of directors or equivalent governing body of the
Parent on a fully-diluted basis (and taking into account all such
securities that such person or group has the right to acquire pursuant
to any option right); or
(c) the Parent shall cease to own, free and clear of all
Liens and other encumbrances and on a fully diluted basis, 100% of the
outstanding shares of all classes of stock of the Borrower ordinarily
having the right to vote at an election of directors, or any contingency
shall occur that causes any class of stock of the Borrower, the shares
of which are not owned by the Parent, to have the right to vote at an
election of directors.
6
"Closing Date" means the date on which the conditions specified in
Section 5.1 are satisfied.
"Closing Fee Letter" means the Closing Fee Letter, dated as of the date
hereof, between the Borrower and the Administrative Agent, for the benefit of
the Lenders, as the same may from time to time be amended, restated,
supplemented or otherwise modified.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the regulations promulgated thereunder.
"Commitment" means, with respect to each Lender, its obligation to make
Loans to the Borrower from time to time pursuant to Section 2.1, in an aggregate
principal amount at any one time outstanding not to exceed the amount, if any,
set forth opposite such Lender's name on Annex I as its "Commitment" as the same
may be reduced from time to time pursuant to Section 3.2, 3.3 and/or 9.2, and/or
adjusted from time to time as a result of assignments to or from such Lender
pursuant to Section 11.4.
"Compliance Certificate" means a certificate, substantially in the form
of the attached Exhibit C.
"Consolidated EBIT" shall mean, for any period, Consolidated Net Income
for such period; plus (a) the sum of the amounts for such period included in
determining such Consolidated Net Income of (i) Consolidated Interest Expense,
(ii) Consolidated Income Tax Expense, and (iii) extraordinary and other
non-recurring non-cash losses and charges; less (b) gains on sales of assets and
other extraordinary gains and other non-recurring gains; all as determined for
the Borrower and its Subsidiaries on a consolidated basis in accordance with
GAAP.
"Consolidated Income Tax Expense" means, for any period, all provisions
for taxes based on the net income of the Borrower or any of its Subsidiaries
(including, without limitation, any additions to such taxes, and any penalties
and interest with respect thereto), all as determined for the Borrower and its
Subsidiaries on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" means, for any period, total interest
expense (including, without limitation, that which is capitalized, that which is
attributable to Capital Leases or Synthetic Leases and the pre-tax equivalent of
dividends payable on Redeemable Stock) of the Borrower and its Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of the Borrower
and its Subsidiaries including, without limitation, all commissions, discounts
and other fees and charges owed with respect to letters of credit and net costs
under Swap Agreements.
"Consolidated Net Income" means, for any period, the net income (or
loss), without deduction for minority interests, of the Borrower and its
Subsidiaries on a consolidated basis for such period taken as a single
accounting period determined in conformity with GAAP.
"Consolidated Net Worth" means, at any time, all amounts that, in
conformity with GAAP, would be included under the caption "total stockholders'
equity" (or any like caption) on a consolidated balance sheet of the Borrower as
of such time, provided that in no event shall Consolidated Net Worth include any
amounts in respect of Redeemable Stock.
"Consolidated Tangible Assets" means at any time the consolidated total
assets of the Borrower and its Subsidiaries calculated on a consolidated basis
as of such time, but excluding therefrom goodwill, patents, patent applications,
permits, trademarks, trade names, copyrights, licenses, franchises, experimental
expense, organizational expense, unamortized debt discount and expense, the
excess of cost of shares acquired over book value of related assets and such
other assets that are properly classified as "intangible assets" in accordance
with GAAP.
7
"Consolidated Total Capitalization" means the sum of Consolidated Total
Debt and Consolidated Net Worth.
"Consolidated Total Debt" means the sum (without duplication) of all
Indebtedness of the Borrower and of each of its Subsidiaries, all as determined
on a consolidated basis.
"Continue", "Continuation" and "Continued" each refers to a continuation
of Eurodollar Loans for an additional Interest Period as provided in Section
2.2.
"Controlled Group" means all members of a controlled group of
corporations or other business entities and all trades or businesses (whether or
not incorporated) under common control that, together with the Borrower or any
of its Subsidiaries, are treated as a single employer under Section 414 of the
Code.
"Convert", "Conversion" and "Converted" each refers to a conversion of
Loans of one Type into Loans of another Type, pursuant to Section 2.2.
"Credit Documents" means this Agreement, the Notes, if any, the Agent
Fee Letter and the Closing Fee Letter.
"Credit Event" means any Borrowing, Conversion or Continuation.
"Default" means any event, act or condition that with notice or lapse of
time, or both, would constitute an Event of Default.
"Defaulting Lender" means any Lender with respect to which a Lender
Default is in effect.
"Dollars" and the sign "$" each means lawful money of the United States.
"Eligible Assignee" means (a) a Lender (other than a Defaulting Lender),
(b) an Affiliate of a Lender (other than a Defaulting Lender), (c) an Approved
Fund, and (d) any other Person (other than a natural person) approved by (i) the
Administrative Agent, and (ii) unless an Event of Default has occurred and is
continuing, the Borrower (each such approval not to be unreasonably withheld or
delayed); provided that notwithstanding the foregoing, "Eligible Assignee" shall
not include the Borrower or any of the Affiliates or Subsidiaries of the
Borrower.
"Energy-Related Business" means any business engaged in or directly
related to: (a) the production, sale, brokerage, management, transportation,
delivery or other provision of energy products, including but not limited to,
electricity, natural gas, oil, coal, propane and renewable energy producing
materials, (b) the provision of energy conservation services, including, but not
limited to, energy audits, installation of energy conservation devices, energy
efficient equipment and related systems, (c) the provision of services and
equipment in connection with the procurement of such energy products or
conservation of energy, (d) engineering, consulting, construction, operational
or maintenance services in connection with such energy products, the
conservation of energy or with equipment utilizing such energy products or (e)
the manufacturing of equipment used in connection with energy production or
conservation.
"Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices of
non-compliance or violation, investigations or proceedings relating in any way
to any Environmental Law or any permit issued under any such law, including,
without limitation, (a) any and all claims by governmental or regulatory
authorities for
8
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and (b) any and all claims by any
third party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from the storage, treatment or
Release (as defined in CERCLA) of any Hazardous Materials or arising from
alleged injury or threat of injury to health, safety or the environment.
"Environmental Law" means any applicable Federal, state, foreign or
local statute, law, rule, regulation, ordinance, code, binding and enforceable
guideline, binding and enforceable written policy and rule of common law now or
hereafter in effect and in each case as amended, and any binding and enforceable
judicial or administrative interpretation thereof, including, without
limitation, any judicial or administrative order, consent, decree or judgment
issued to or rendered against the Borrower or any of its Subsidiaries relating
to the environment, employee health and safety or Hazardous Materials,
including, without limitation, CERCLA; RCRA; the Federal Water Pollution Control
Act, 33 U.S.C. Section 1251 et seq.; the Clean Air Act, 42 U.S.C. Section 7401
et seq.; the Safe Drinking Water Act, 42 U.S.C. Section 300f et seq.; the Oil
Pollution Act of 1990, 33 U.S.C. Section 2701 et seq.; the Emergency Planning
and the Community Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et seq.,
the Hazardous Material Transportation Act, 49 U.S.C. Section 5101 et seq. and
the Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq. (to the
extent it regulates occupational exposure to Hazardous Materials); and any state
and local or foreign counterparts or equivalents, in each case as amended from
time to time.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated thereunder.
"Eurodollar Loans" means each Loan bearing interest at a rate based on
the Adjusted Eurodollar Rate.
"Event of Default" has the meaning provided in Section 9.1.
"Exemption Certificate" has the meaning provided in Section 4.5(b)(ii).
"Existing Credit Agreements" means, collectively, (a) the Credit
Agreement, dated as of December 18, 2002, among the Borrower, the lenders party
thereto, KeyBank, as syndication agent, and Bank One, NA, as administrative
agent; and (b) the Credit Agreement, dated as of December 18, 2002, among the
Parent, the lenders party thereto, KeyBank, as syndication agent, and Bank One,
NA, as administrative agent.
"Facility Fees" has the meaning provided in Section 3.1(a).
"Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate equal for each day during such period 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 for such day (or,
if such day is not a Business Day, for the next preceding 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 on such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.
"Fees" means all amounts payable pursuant to, or referred to in, Section
3.1, together with any other fees payable pursuant to this Agreement or any
other Credit Document.
"FPA" means the Federal Power Act, as amended, and all rules and
regulations promulgated thereunder.
9
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"Guaranty Obligations" means as to any Person (without duplication) any
obligation of such Person guaranteeing any Indebtedness ("primary Indebtedness")
of any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (a) to purchase any such primary Indebtedness or any
Property constituting direct or indirect security therefor, (b) to advance or
supply funds (i) for the purchase or payment of any such primary Indebtedness or
(ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (c) to
purchase Property, securities or services primarily for the purpose of assuring
the owner of any such primary Indebtedness of the ability of the primary obligor
to make payment of such primary Indebtedness, or (d) otherwise to assure or hold
harmless the owner of such primary Indebtedness against loss in respect thereof,
provided, however, that the term Guaranty Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guaranty Obligation shall be deemed to be an amount
equal to the stated or determinable amount of the primary Indebtedness in
respect of which such Guaranty Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
"Hazardous Materials" means (a) any petrochemical or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing levels of polychlorinated biphenyls, and radon gas;
and (b) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances", "hazardous wastes", "hazardous materials",
"restricted hazardous materials", "extremely hazardous wastes", "restrictive
hazardous wastes", "toxic substances", "toxic pollutants", "contaminants" or
"pollutants", or words of similar meaning and regulatory effect, under any
applicable Environmental Law.
"Indebtedness" means, with respect to any Person, all of the following
(without duplication):
(a) all indebtedness of such Person for borrowed money;
(b) all bonds, notes, debentures and similar debt securities
of such Person;
(c) the deferred purchase price of capital assets or
services that in accordance with GAAP would be shown on the liability
side of the balance sheet of such Person;
(d) non-contingent obligations to reimburse any other Person
in respect of amounts paid under a letter of credit or similar
instrument to the extent that such reimbursement obligations remain
outstanding after such obligations become non-contingent;
(e) all obligations, contingent or otherwise, of such Person
in respect of bankers' acceptances;
10
(f) all Indebtedness of a second Person secured by any Lien
on any Property owned by such first Person, whether or not such
Indebtedness has been assumed;
(g) all Capitalized Lease Obligations of such Person;
(h) the present value, determined on the basis of the
implicit interest rate, of all basic rental obligations under all
Synthetic Leases of such Person;
(i) the full outstanding balance of trade receivables, notes
or other instruments sold with full recourse (and the portion thereof
subject to potential recourse, if sold with limited recourse), other
than in any such case any thereof sold solely for purposes of collection
of delinquent accounts;
(j) the stated value, or liquidation value if higher, of all
Redeemable Stock of such Person; and
(k) all Guaranty Obligations of such Person;
provided, however, that (i) neither trade payables nor other similar accrued
expenses, in each case arising in the ordinary course of business, nor
obligations in respect of insurance policies or performance or surety bonds that
themselves are not guarantees of Indebtedness (nor drafts, acceptances or
similar instruments evidencing the same nor obligations in respect of letters of
credit supporting the payment of the same), shall constitute Indebtedness; and
(ii) the Indebtedness of any Person shall in any event include (without
duplication) the Indebtedness of any other entity (including any general
partnership in which such Person is a general partner) to the extent such Person
is liable thereon as a result of such Person's ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide expressly that such Person is not liable thereon.
"Interest Coverage Ratio" means, as of any date, the ratio of (a)
Consolidated EBIT to (b) Consolidated Interest Expense, in each case on a
consolidated basis for the Borrower and its Subsidiaries for the four fiscal
quarters of Borrower ended on or immediately prior to such date.
"Interest Period" means, with respect to each Eurodollar Loan, a period
of one, two, three or six months as selected by the Borrower, provided that (a)
the initial Interest Period for any Borrowing of Eurodollar Loans shall commence
on the date of such Borrowing (the date of a Borrowing resulting from a
Conversion or Continuation shall be the date of such Conversion or Continuation)
and each Interest Period occurring thereafter in respect of such Borrowing shall
commence on the day on which the next preceding Interest Period expires; (b) if
any Interest Period begins on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period, such
Interest Period shall end on the last Business Day of such calendar month; (c)
if any Interest Period would otherwise expire on a day that is not a Business
Day, such Interest Period shall expire on the next succeeding Business Day,
provided that if any Interest Period would otherwise expire on a day that is not
a Business Day but is a day of the month after which no further Business Day
occurs in such month, such Interest Period shall expire on the next preceding
Business Day; (d) no Interest Period for any Eurodollar Loan may be selected
that would end after the Maturity Date; and (e) if, upon the expiration of any
Interest Period, the Borrower has failed to (or may not) elect a new Interest
Period to be applicable to the respective Borrowing of Eurodollar Loans as
provided above, the Borrower shall be deemed to have elected to Convert such
Borrowing to a Base Rate Loan effective as of the expiration date of such
current Interest Period.
11
"Investment" means (a) any direct or indirect purchase or other
acquisition by the Borrower or any of its Subsidiaries of any of the capital
stock or other equity interest of any other Person, including any partnership or
joint venture interest in such Person; (b) any loan or advance to, guarantee or
assumption of debt or purchase or other acquisition of any other debt (other
than accounts receivable arising in the ordinary course of business on terms
customary in the trade) of, any Person by the Borrower or any of its
Subsidiaries; or (c) any purchase or other acquisition (in one transaction or a
series of transactions) of assets of another Person that constitute a business
unit or all or a substantial part of the business of, such Person.
"KeyBank" means KeyBank National Association, a national banking
association, together with its successors and assigns.
"Leaseholds" means, with respect to any Person, all the right, title and
interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.
"Lenders" means the Persons listed on Annex I and any other Person that
becomes a party hereto pursuant to an Assignment Agreement, other than any such
Person that ceases to be a party hereto pursuant to an Assignment Agreement.
"Lender Default" means (a) the refusal (which has not been retracted) of
a Lender in violation of the requirements of this Agreement to make available
its portion of any incurrence of Loans or (b) a Lender having notified the
Administrative Agent and/or the Borrower that it does not intend to comply with
its obligations under Section 2.1.
"Lender Register" has the meaning provided in Section 11.15.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien
or charge of any kind (including any agreement to give any of the foregoing, any
conditional sale or other title retention agreement or any lease in the nature
thereof).
"Loan" has the meaning provided in Section 2.1.
"Margin Stock" has the meaning provided in Regulation U.
"Material Adverse Effect" means any or all of the following: (a) a
material adverse effect on the business, operations, Property, assets,
liabilities, financial or other condition, or prospects of the Borrower and its
Subsidiaries, taken as a whole, or when used with reference to any other Person,
such Person and its Subsidiaries, taken as a whole, as the case may be; (b) a
material adverse effect on the ability of the Borrower to perform its
obligations under the Credit Documents to which it is a party; (c) a material
adverse effect on the ability of the Borrower and its Subsidiaries, taken as a
whole, to pay their liabilities and obligations as they mature or become due; or
(d) a material adverse effect on the validity, effectiveness or enforceability,
as against the Borrower, of any of the Credit Documents to which it is a party.
"Maturity Date" means December 10, 2004, or such earlier date on which
the Total Commitment is terminated.
"Minimum Borrowing Amount" means (a) for Base Rate Loans, $1,000,000,
with minimum increments thereafter of $500,000, and (b) for Eurodollar Loans,
$5,000,000, with minimum increments thereafter of $500,000.
12
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Moody's Rating" means, on any date of determination, the rating
accorded the Borrower's senior unsecured long-term debt by Moody's, or if such
rating is unavailable, the Borrower's long-term issuer credit rating accorded to
it by Moody's.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement as to which the Borrower or any
member of the Controlled Group is a party to which more than one employer is
obligated to make contributions.
"1933 Act" means the Securities Act of 1933, as amended.
"1934 Act" means the Securities Exchange Act of 1934, as amended.
"Non-Defaulting Lender" means each Lender other than a Defaulting
Lender.
"Note" has the meaning provided in Section 2.4(d).
"Notice of Borrowing, Continuation or Conversion" has the meaning
provided in Section 2.2(b).
"Notice Office" means the office of the Administrative Agent at 127
Public Square, Cleveland, Ohio 44114, Attention: Laura Binkley (facsimile: (216)
689-4981), or such other office of the Administrative Agent, as the
Administrative Agent may designate to the Borrower from time to time.
"Obligations" means all amounts, direct or indirect, contingent or
absolute, of every type or description, and at any time existing, owing by the
Borrower to the Administrative Agent or any Lender pursuant to the terms of this
Agreement or any other Credit Document (including, without limitation, interest
and fees that accrue after the commencement by or against the Borrower of any
insolvency proceeding, regardless of whether such interest and fees are allowed
claims in such proceeding and any and all indemnification obligations
hereunder).
"Operating Lease" means, with respect to any Person, any lease of any
Property (whether real, personal or mixed) by such Person as lessee that, in
conformity with GAAP, is not accounted for as a Capital Lease on the balance
sheet of such Person.
"Parent" means DPL Inc., an Ohio corporation.
"Payment Office" means the office of the Administrative Agent at 127
Public Square, Cleveland, Ohio 44114, Attention: Laura Binkley (facsimile: (216)
689-4981), or such other office of the Administrative Agent, as the
Administrative Agent may designate to the Borrower from time to time.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Percentage" means, at any time for any Lender, the percentage obtained
by dividing such Lender's Commitment by the Total Commitment, provided, that if
the Total Commitment has been terminated, the Percentage for each Lender shall
be determined by dividing such Lender's Commitment immediately prior to such
termination by the Total Commitment immediately prior to such termination.
"Permitted Acquisition" means and includes any Acquisition as to which
all of the following conditions are satisfied: (a) such Acquisition (i) involves
a line or lines of an Energy-Related Business,
13
and (ii) involves a Person or a line or lines of business that are located and
operated in the United States; (b) no Default or Event of Default shall exist
prior to or immediately after giving effect to such Acquisition; (c) such
Acquisition is not being consummated on a hostile basis and has been approved by
the Board of Directors of the target Person and no material challenge to such
Acquisition shall be pending or threatened by any shareholder or director of the
seller or Person to be acquired, and (d) as of the date of the consummation of
such Acquisition, all approvals required in connection therewith shall have been
obtained.
"Permitted Holder" means Dayton Ventures LLC, a Delaware limited
liability company, and/or one or more Affiliates of Kohlberg Kravis Roberts &
Co.
"Permitted Liens" means Liens permitted by Section 8.3.
"Permitted Restrictive Covenant" means (a) any covenant or restriction
contained in this Agreement, (b) any covenant or restriction contained in any
other agreement that is less burdensome than any covenant or restriction
contained in this Agreement, (c) in the case of transfers by any Subsidiary of
the Borrower to the Borrower or another Subsidiary of the Borrower of any
property or assets, any agreement setting forth customary restrictions on the
subletting, assignment or transfer of any property or asset that is a lease,
license or conveyance of similar property or assets; (d) in the case of
transfers by any Subsidiary of the Borrower to the Borrower or another
Subsidiary of the Borrower of any property or assets, any agreement with the
holder of a Lien otherwise permitted to exist under Section 8.3(e)(ii)
restricting on customary terms the transfer of any property or assets subject
thereto; (e) any agreement evidencing or setting forth the terms of any
refunding, refinancing or replacement Indebtedness the incurrence of which is
not prohibited by this Agreement that contains any such restrictions to the
extent such restrictions are no less favorable to the Borrower or any of its
Subsidiaries or to the rights or interest of the Lenders than the terms in
effect in the Indebtedness being so refunded, refinanced or replaced immediately
prior to such refunding, refinancing or replacement; (f) any agreement that has
been entered into by the Borrower or any of its Subsidiaries for the sale,
lease, transfer or other disposition of any of its property or assets so long as
such sale, lease, transfer or other disposition is otherwise permitted to be
made under Section 8.2; and (g) any agreement evidencing Indebtedness
outstanding on the date a Person first becomes a Subsidiary of the Borrower;
provided, that such agreement was not created in contemplation of the purchase
or other acquisition of such Person by the Borrower or any of its Subsidiaries
and does not extend to or cover any property or assets other than the property
or assets of the Person becoming such Subsidiary.
"Person" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other entity or
any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" means an employee pension benefit plan that is covered by Title
IV of ERISA or subject to minimum funding standards under Section 412 of the
Code as to which the Borrower or any member of the Controlled Group may have any
liability.
"Property" means, with respect to any Person, any and all property,
whether real, personal, tangible, intangible, or mixed, of such Person, or other
assets owned, leased or operated by such Person.
"PUHCA" means the Public Utility Holding Company Act of 1935, as
amended.
"RCRA" means the Resource Conservation and Recovery Act, as the same may
be amended from time to time, 42 U.S.C. Section 6901 et seq.
14
"Real Property" means, with respect to any Person, all of the right,
title and interest of such Person in and to land, improvements and fixtures,
including Leaseholds.
"Redeemable Stock" means, with respect to any Person, any capital stock
or similar equity interests of such Person that (a) is by its terms subject to
mandatory redemption, in whole or in part, pursuant to a sinking fund, scheduled
redemption or similar provisions, at any time prior to the latest Maturity Date;
or (b) otherwise is required to be repurchased or retired on a scheduled date or
dates, upon the occurrence of any event or circumstance, at the option of the
holder or holders thereof, or otherwise, at any time prior to the latest
Maturity Date under this Agreement, other than any such repurchase or retirement
occasioned by a "change of control" or similar event.
"Reference Banks" means (a) KeyBank and (b) any other Lender or Lenders
selected as a Reference Bank by the Administrative Agent.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing reserve requirements.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing margin requirements.
"Related Parties" means, with respect to any Person, such Person's
Affiliates and the directors, officers, employees, agents and advisors of such
Person and of such Affiliate.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect a Plan,
excluding, however, such events as to which the PBGC has by regulations waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event; provided, however, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code.
"Required Lenders" means Non-Defaulting Lenders whose outstanding Loans
and Unutilized Commitment constitute at least 66-2/3% of the sum of the total
outstanding Loans and Unutilized Commitments of Non-Defaulting Lenders.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw Hill,
Inc., and its successors.
"S&P Rating" means, on any date of determination, the rating accorded to
the Borrower's senior unsecured long-term debt by S&P.
"Sale and Lease-Back Transaction" means any arrangement with any Person
providing for the leasing by the Borrower or any Subsidiary of the Borrower of
any Property (except for temporary leases for a term, including any renewal
thereof, of not more than one year and except for leases between the Borrower
and a Subsidiary of the Borrower or between Subsidiaries of the Borrower), which
Property has been or is to be sold or transferred by the Borrower or such
Subsidiary to such Person.
"SEC" means the United States Securities and Exchange Commission.\
"SEC Regulation D" means Regulation D as promulgated under the 1933 Act,
as the same may be in effect from time to time.
15
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"Standard Permitted Liens" means the following:
(a) Liens for taxes not yet delinquent or Liens for taxes
being contested in good faith and by appropriate proceedings for which
adequate reserves in accordance with GAAP have been established;
(b) Liens in respect of Property or assets imposed by law
that were incurred in the ordinary course of business, such as
carriers', warehousemen's, materialmen's and mechanics' Liens and other
similar Liens arising in the ordinary course of business, that (i) do
not secure payment obligations more than 60 days past due; (ii) do not,
in the aggregate, materially detract from the value of such Property or
assets or materially impair the use thereof in the operation of the
business of the Borrower or any of its Subsidiaries and do not secure
any Indebtedness; or (iii) are contested in good faith by appropriate
proceedings and for which adequate reserves shall have been set aside on
the books of the Borrower or its respective Subsidiary, as the case may
be;
(c) bankers' Liens and rights of setoff arising by operation
of law and contractual rights of setoff;
(d) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Section 9.1(g);
(e) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security; and mechanic's Liens, carrier's Liens, and other Liens to
secure the performance of tenders, statutory obligations, contract bids,
government contracts, performance and return-of-money bonds and other
similar obligations, incurred in the ordinary course of business
(exclusive of obligations in respect of the payment for borrowed money),
whether pursuant to statutory requirements, common law or consensual
arrangements;
(f) Leases or subleases granted in the ordinary course of
business to others not interfering in any material respect with the
business of the Borrower or any of its Subsidiaries and any interest or
title of a lessor under any lease not in violation of this Agreement;
(g) easements, rights-of-way, zoning or other restrictions,
charges, encumbrances, defects in title, prior rights of other Persons,
and obligations contained in similar instruments, in each case that do
not involve, and are not likely to involve at any future time, either
individually or in the aggregate, (i) a substantial and prolonged
interruption or disruption of the business activities of the Borrower
and its Subsidiaries considered as an entirety, or (ii) a Material
Adverse Effect;
(h) precautionary filing of Uniform Commercial Code
financing statements by lessors in connection with Operating Leases;
(i) Liens arising from the rights of lessors under leases
(including financing statements regarding Property subject to lease)
permitted under this Agreement, provided
16
that such Liens are only in respect of the Property subject to, and
secure only, the respective lease (and any other lease with the same or
an affiliated lessor); and
(j) rights of consignors of goods, whether or not perfected
by the filing of a financing statement under the UCC.
"Subsidiary" means, with respect to any Person, (a) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether at the time stock of any class or classes of such
corporation shall have or might have voting power by reason of the happening of
any contingency) is at the time owned by such Person directly or indirectly
through Subsidiaries and (b) any partnership, limited liability company,
association, joint venture or other entity in which such Person directly or
indirectly through Subsidiaries, has more than a 50% equity interest at the time
or in which the Borrower, one or more other Subsidiaries of the Borrower, or the
Borrower and one or more Subsidiaries of the Borrower, directly or indirectly,
has the power to direct the policies, management and affairs thereof. Unless
otherwise expressly provided, all references herein to "Subsidiary" shall mean a
Subsidiary of the Borrower.
"Substantial Portion" means, with respect to the Property of the
Borrower and its Subsidiaries, Property that (a) represents more than 10% of the
Consolidated Tangible Assets of the Borrower and its Subsidiaries as would be
shown in the consolidated financial statements of the Borrower and its
Subsidiaries as at the beginning of the twelve-month period ending with the
month in which such determination is made or (b) is responsible for more than
10% of the consolidated net sales or of the Consolidated Net Income of the
Borrower and its Subsidiaries as reflected in the financial statements referred
to in clause (a) above.
"Swap Agreement" means (a) any and all rate swap transactions, basis
swaps, credit derivative transactions, forward rate transactions, commodity
swaps, commodity options, forward commodity contracts, equity or equity index
swaps or options, bond or bond price or bond index swaps or options or forward
bond or forward bond price or forward bond index transactions, interest rate
options, forward foreign exchange transactions, cap transactions, floor
transactions, collar transactions, currency swap transactions, cross-currency
rate swap transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), irrespective of whether any such
transaction is governed by or subject to any master agreement, and (b) any and
all transactions of any kind, and the related confirmations, that are subject to
the terms and conditions of, or governed by, any form of master agreement
published by the International Swaps and Derivatives Association, Inc., any
International Foreign Exchange Master Agreement, or any other master agreement
(any such master agreement, together with any related schedules, a "Master
Agreement"), including any such obligations or liabilities under any Master
Agreement.
"Synthetic Lease" means any lease (a) that is accounted for by the
lessee as an Operating Lease, and (b) under which the lessee is intended to be
the "owner" of the leased Property for Federal income tax purposes.
"Taxes" has the meaning provided in Section 4.5(a).
"Total Commitment" means the sum of the Commitments of the Lenders.
"Type" means any type of Loan determined with respect to the interest
option applicable thereto, i.e., a Base Rate Loan or Eurodollar Loan.
17
"UCC" means the Uniform Commercial Code as in effect from time to time.
Unless otherwise specified, the UCC shall refer to the UCC as in effect in the
State of New York.
"Unfunded Liabilities" means the amount, if any, by which the present
value of all vested and unvested accrued benefits under all Single Employer
Plans exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.
"United States" and "U.S." each means United States of America.
"Unutilized Commitment" means, at any time, with respect to any Lender,
the excess of (a) such Lender's Commitment at such time over (b) the aggregate
principal amount of outstanding Loans made by such Lender.
"Unutilized Total Commitment" means, at any time, the excess of (a) the
Total Commitment at such time over (b) the aggregate principal amount of all
outstanding Loans.
"Utilization Fees" has the meaning provided in Section 3.1(b).
"Wholly-Owned Subsidiary" means each Subsidiary of the Borrower at least
95% of whose capital stock, equity interests and partnership interests, other
than director's qualifying shares or similar interests, are owned directly or
indirectly by the Borrower.
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,
the word "from" means "from and including," the words "to" and "until" each
means "to but excluding," and the word "through" means "through and including."
Section 1.3 Accounting Terms. Except as otherwise specifically
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time.
Section 1.4 Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise, (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
restated, supplemented or otherwise modified (subject to any restrictions on
such amendments, restatements, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Sections, Annexes, Schedules and Exhibits shall be
construed to refer to Sections of, and Annexes, Schedules and Exhibits to, this
Agreement, and (e) the words "asset" and "property" (or "Property") shall be
construed to have the same meaning and effect and to refer to any and all Real
Property, tangible and intangible assets and properties, including cash,
securities, accounts and contract rights, and interests in any of the foregoing.
18
ARTICLE II.
AMOUNT AND TERMS OF LOANS
Section 2.1 Commitments for Loans. Subject to and upon the terms and
conditions herein set forth, each Lender severally agrees to make a revolving
loan or revolving loans (each a "Loan" and, collectively, the "Loans") to the
Borrower, which Loans (a) may be incurred by the Borrower at any time and from
time to time on and after the Closing Date and prior to the Maturity Date; (b)
except as otherwise provided herein, may, at the option of the Borrower, be
incurred and maintained as, or Converted into, Loans that are Base Rate Loans or
Eurodollar Loans, in each case denominated in Dollars, provided that all Loans
made as part of the same Borrowing shall, unless otherwise specifically provided
herein, consist of Loans of the same Type; (c) may be repaid or prepaid and
reborrowed in accordance with the provisions hereof; (d) may only be made if
after giving effect thereto the aggregate principal amount of outstanding Loans
does not exceed the Total Commitment; and (e) shall not exceed for any Lender at
any time outstanding such Lender's Commitment at such time. In addition, no
Loans shall be incurred at any time if after giving effect thereto the Borrower
would be required to prepay Loans in accordance with Section 4.3(a).
Section 2.2 Borrowing, Continuation or Conversion of Loans.
(a) Borrowings, Continuations and Conversions. The Borrower may, in
accordance with the provisions set forth in this Section and subject to the
other terms and conditions of this Agreement, (i) request Borrowings, (ii)
Convert all or a portion of the outstanding principal amount of Loans of one
Type into a Borrowing or Borrowings of another Type of Loans that can be made
pursuant to the terms of this Agreement and (iii) Continue a Borrowing of
Eurodollar Loans at the end of the applicable Interest Period as a new Borrowing
of Eurodollar Loans with a new Interest Period, provided that (A) any Conversion
of Eurodollar Loans into Base Rate Loans shall be made on, and only on, the last
day of an Interest Period for such Eurodollar Loans, (B) Base Rate Loans may
only be Converted into Eurodollar Loans if no Default under Section 9.1(a) or
Event of Default is in existence on the date of the Conversion unless the
Required Lenders otherwise agree, and (C) Base Rate Loans may not be Converted
into Eurodollar Loans during any period when such Conversion is not permitted
under Section 2.6.
(b) Notice of Borrowings, Continuation and Conversion. Each
Borrowing, Continuation or Conversion of a Loan shall be made upon notice in the
form provided for below, which notice shall be provided by the Borrower to the
Administrative Agent at the Notice Office not later than (i) in the case of each
Borrowing of or Continuation of or Conversion into a Eurodollar Loan, 12:00 noon
(local time at its Notice Office) at least three Business Days' prior to the
date of such Borrowing, Continuation or Conversion and (ii) in the case of each
Borrowing of or Conversion into a Base Rate Loan, 12:00 noon (local time at its
Notice Office) on the proposed date of such Borrowing or Conversion. Each such
request shall be made by an Authorized Officer delivering written notice of such
request substantially in the form of Exhibit B hereto (each such notice, a
"Notice of Borrowing, Continuation or Conversion") or by telephone (to be
confirmed immediately in writing by delivery of an Authorized Officer of a
Notice of Borrowing, Continuation or Conversion), and in any event each such
request shall be irrevocable and shall specify (A) the aggregate principal
amount of the Loans to be made (which shall be in the Minimum Borrowing Amount)
pursuant to such Borrowing or, if applicable, the Borrowings to be Continued or
Converted, (B) the date of the Borrowing, Continuation or Conversion (which
shall be a Business Day), (C) whether the Borrowing will consist of Base Rate
Loans or Eurodollar Loans or, in the case of a Continuation or Conversion, the
Loans to be Continued or Converted, and (D) if applicable, the initial Interest
Period thereto or, in the case of a Continuation, the new Interest Period.
Without in any way limiting the obligation of the Borrower to confirm in writing
any telephonic notice permitted to be given hereunder, the Administrative Agent
may act prior to receipt of written confirmation without liability
19
upon the basis of such telephonic notice believed by the Administrative Agent in
good faith to be from an Authorized Officer entitled to give telephonic notices
under this Agreement on behalf of the Borrower. In each such case, the
Administrative Agent's record of the terms of such telephonic notice shall be
conclusive absent manifest error.
(c) Minimum Borrowing Amount. The aggregate principal amount of each
Borrowing by the Borrower shall not be less than the Minimum Borrowing Amount.
No partial Conversion of a Borrowing of Eurodollar Loans shall reduce the
outstanding principal amount of the Eurodollar Loans made pursuant to such
Borrowing to less than the Minimum Borrowing Amount applicable thereto.
(d) Maximum Borrowings. More than one Borrowing may be incurred by
the Borrower on any day, provided that (i) if there are two or more Borrowings
on a single day by the Borrower that consist of Eurodollar Loans, each such
Borrowing shall have a different initial Interest Period, and (ii) at no time
shall there be more than six Borrowings of Eurodollar Loans outstanding
hereunder.
(e) Notice to Lenders. The Administrative Agent shall promptly give
each Lender written notice (or telephonic notice promptly confirmed in writing)
of (i) each proposed Borrowing, (ii) such Lender's proportionate share thereof
and (iii) the other matters covered by the Notice of Borrowing, Continuation or
Conversion relating thereto.
Section 2.3 Disbursement of Funds.
(a) Loans to be Made Pro Rata. The obligation of each Lender to make
Loans hereunder and the Commitment of each Lender are several and not joint
obligations. All Borrowings shall be made by the Lenders pro rata on the basis
of their respective Commitments. It is understood that no Lender shall be
responsible for any default by any other Lender in its obligation to make Loans
hereunder and that each Lender shall be obligated to make the Loans provided to
be made by it hereunder, regardless of the failure of any other Lender to
fulfill its Commitment.
(b) Funding of Loans. No later than 2:00 P.M. (local time at the
Payment Office) on the date specified in each Notice of Borrowing, Continuation
or Conversion, each Lender will make available its pro rata share, if any, of
each Borrowing requested to be made on such date in the manner provided below.
All amounts shall be made available to the Administrative Agent in Dollars and
immediately available funds at the Payment Office and the Administrative Agent
promptly will make available to the Borrower by depositing to its account at the
Payment Office the aggregate of the amounts so made available in the type of
funds received.
(c) Advance Funding. Unless the Administrative Agent shall have been
notified by any Lender prior to the date of Borrowing that such Lender does not
intend to make available to the Administrative Agent its portion of the
Borrowing or Borrowings to be made on such date, the Administrative Agent may
assume that such Lender has made such amount available to the Administrative
Agent on such date of Borrowing, and the Administrative Agent, in reliance upon
such assumption, may (in its sole discretion and without any obligation to do
so) make available to the Borrower a corresponding amount. If such corresponding
amount is not in fact made available to the Administrative Agent by such Lender
and the Administrative Agent has made available same to the Borrower, the
Administrative Agent shall be entitled to recover such corresponding amount from
such Lender. If such Lender does not pay such corresponding amount forthwith
upon the Administrative Agent's demand therefor, the Administrative Agent shall
promptly notify the Borrower, and the Borrower shall immediately pay such
corresponding amount to the Administrative Agent. The Administrative Agent shall
also be entitled to recover from such Lender or the Borrower, as the case may
be, interest on such corresponding amount in respect of each day from the date
such corresponding amount was made
20
available by the Administrative Agent to the Borrower to the date such
corresponding amount is recovered by the Administrative Agent, at a rate per
annum equal to (x) if paid by such Lender, the overnight Federal Funds Effective
Rate or (y) if paid by the Borrower, the then applicable rate of interest,
calculated in accordance with Section 2.5, for the respective Loans (but without
any requirement to pay any amounts in respect thereof pursuant to Section 2.7).
(d) Rights Not Prejudiced. Nothing herein and no subsequent
termination of the Commitments pursuant to Section 3.2 or 3.3 shall be deemed to
relieve any Lender from its obligation to fulfill its commitments hereunder and
in existence from time to time or to prejudice any rights that the Borrower may
have against any Lender as a result of any default by such Lender hereunder.
Section 2.4 Evidence of Obligations.
(a) Loan Accounts of Lenders. The Obligations of the Borrower owing
to each Lender shall be evidenced by, and each Lender shall maintain in
accordance with its usual practice, an account or accounts established by such
Lender, which account or accounts shall include the amounts of principal and
interest payable and paid to such Lender from time to time hereunder.
(b) Loan Accounts of Administrative Agent. The Administrative Agent
shall maintain accounts in which it shall record (i) the amount of each Loan
made hereunder, the Type thereof and the Interest Period and applicable interest
rate if such Loan is a Eurodollar Loan, (ii) the amount of any principal due and
payable or to become due and payable from the Borrower to each Lender hereunder,
and (iii) the amount of any sum received by the Administrative Agent hereunder
for the account of the Lenders and each Lender's share thereof.
(c) Effect of Loan Accounts. The entries made in the accounts
maintained pursuant to Section 2.4(a) and (b) shall be prima facie evidence of
the existence and amounts of the obligations recorded therein; provided, that
the failure of any Lender or the Administrative Agent to maintain such accounts
or any error therein shall not in any manner affect the obligation of the
Borrower to repay or prepay the Loans or any other amounts in accordance with
the terms of this Agreement.
(d) Notes. Upon request of any Lender, the Borrower's obligation to
pay the principal of, and interest on, the Loans made to it by each Lender shall
be evidenced by a promissory note of the Borrower substantially in the form of
Exhibit A with blanks appropriately completed in conformity herewith (each a
"Note" and, collectively, the "Notes"), provided that the decision of any Lender
not to request a Note shall in no way detract from the Borrower's obligation to
repay the Loans and other amounts owing by the Borrower to such Lender. Any Note
issued by the Borrower to a Lender shall: (i) be executed by the Borrower; (ii)
be payable to the order of such Lender and be dated on or prior to the Closing
Date; (iii) be payable in the principal amount of the Loans evidenced thereby;
(iv) mature on the Maturity Date; (v) bear interest as provided in Section 2.5
in respect of the Base Rate Loans or Eurodollar Loans, as the case may be,
evidenced thereby; (vi) be subject to mandatory prepayment as provided in
Section 4.3; and (vii) be entitled to the benefits of this Agreement and the
other Credit Documents.
Section 2.5 Interest.
(a) Interest on Base Rate Loans. During such periods as a Loan is a
Base Rate Loan, it shall bear interest at a fluctuating rate per annum that
shall at all times be equal to the Base Rate in effect from time to time plus
the Applicable Margin in effect from time to time for such Loan.
(b) Interest on Eurodollar Loans. During such periods as a Loan is a
Eurodollar Loan, it shall bear interest at a rate per annum that shall at all
times during an Interest Period therefor be the
21
relevant Adjusted Eurodollar Rate for such Eurodollar Loan for such Interest
Period plus the Applicable Margin in effect from time to time for such Loan.
(c) Default Interest. Notwithstanding the above provisions, if a
Default under Section 9.1(a) or an Event of Default has occurred and is
continuing, then, upon written notice by the Administrative Agent (which notice
the Administrative Agent shall give at the direction of the Required Lenders),
all outstanding amounts of principal and, to the extent permitted by law, all
overdue interest, in respect of each Loan shall bear interest, payable on
demand, at a rate per annum equal to 2% per annum above the interest rate that
is or would be applicable from time to time pursuant to Section 2.5(a). If any
amount (other than the principal of and interest on the Loans) payable by the
Borrower under the Credit Documents is not paid when due, upon written notice by
the Administrative Agent (which notice the Administrative Agent shall give at
the direction of the Required Lenders), such amount shall bear interest, payable
on demand, at a rate per annum equal to 2% per annum above the interest rate
that is or would be applicable from time to time pursuant to Section 2.5(a).
(d) Accrual and Payment of Interest. Interest shall accrue from and
including the date of any Borrowing to but excluding the date of any prepayment
or repayment thereof and shall be payable:
(i) in respect of each Base Rate Loan, monthly in arrears on
the last Business Day of each calendar month,
(ii) in respect of each Eurodollar Loan, on the last day of
each Interest Period applicable thereto and, in the case of an Interest
Period in excess of three months, on the dates that are successively 90
days after the commencement of such Interest Period, and
(iii) on any repayment, prepayment or Conversion (on the
amount repaid, prepaid or Converted), at maturity (whether by
acceleration or otherwise) and, after such maturity, on demand.
(e) Computations of Interest. All computations of interest on
Eurodollar Loans and other amounts (other than Base Rate Loans) hereunder shall
be made on the actual number of days elapsed over a year of 360 days, and all
computations of interest on Base Rate Loans hereunder shall be made on the
actual number of days elapsed over a year of 365 or 366 days, as applicable.
(f) Information as to Interest Rates. The Administrative Agent upon
determining the interest rate for any Borrowing or any change in interest rate
applicable to any Borrowing as a result of a change in the Applicable Margin, a
change in the Base Rate, the implementation of the default rate or otherwise,
shall promptly notify the Borrower and the Lenders thereof, provided that (i)
any such change shall be immediately effective as and when such change occurs
without regard to when the Administrative Agent provides any such notice, and
(ii) the failure of the Administrative Agent to give any such notice shall in no
way detract from or affect the obligation of the Borrower to pay interest at the
changed rate. If the Administrative Agent is unable to determine the Adjusted
Eurodollar Rate for any Borrowing of Eurodollar Loans based on the quotation
service referred to in clause (i) of the definition of the term Adjusted
Eurodollar Rate, it will promptly so notify the Reference Banks and each
Reference Bank will furnish the Administrative Agent timely information for the
purpose of determining the Adjusted Eurodollar Rate for such Borrowing. If any
one or more of the Reference Banks shall not timely furnish such information,
the Administrative Agent shall determine the Adjusted Eurodollar Rate for such
Borrowing on the basis of timely information furnished by the remaining
Reference Banks.
22
Section 2.6 Increased Costs; Illegality.
(a) If (x) in the case of clause (i) below, the Administrative Agent
or (y) in the case of clauses (ii) and (iii) below, any Lender, shall have
determined on a reasonable basis (which determination shall, absent manifest
error, be final and conclusive and binding upon all parties hereto):
(i) on any date for determining the Adjusted Eurodollar Rate
for any Interest Period that, by reason of any changes arising after the
Closing Date affecting the London interbank market, adequate and fair
means do not exist for ascertaining the applicable interest rate on the
basis provided for in the definition of Adjusted Eurodollar Rate; or
(ii) at any time, that such Lender shall incur increased
costs or reductions in the amounts received or receivable hereunder in
an amount that such Lender deems material with respect to any Eurodollar
Loans (other than any increased cost or reduction in the amount received
or receivable resulting from the imposition of or a change in the rate
of taxes or similar charges) because of (x) any change since the Closing
Date in any applicable law, governmental rule, regulation, guideline,
order or request (whether or not having the force of law), or in the
interpretation or administration thereof and including the introduction
of any new law or governmental rule, regulation, guideline, order or
request (such as, for example, but not limited to, a change in official
reserve requirements, but, in all events, excluding reserves includable
in the Adjusted Eurodollar Rate pursuant to the definition thereof)
and/or (y) other circumstances adversely affecting the London interbank
market or the position of such Lender in such market; or
(iii) at any time, that the making or continuance of any
Eurodollar Loan has become unlawful by compliance by such Lender in good
faith with any change since the Closing Date in any law, governmental
rule, regulation, guideline or order, or the interpretation or
application thereof, or would conflict with any thereof not having the
force of law but with which such Lender customarily complies or has
become impracticable as a result of a contingency occurring after the
Closing Date that materially adversely affects the London interbank
market;
then, and in each such event, such Lender (or the Administrative Agent in the
case of clause (i) above) shall (x) on or promptly following such date or time
and (y) within 10 Business Days of the date on which such event no longer exists
give notice (by telephone confirmed in writing) to the Borrower and to the
Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other Lenders). Thereafter (x) in
the case of clause (i) above, Eurodollar Loans shall no longer be available
until such time as the Administrative Agent notifies the Borrower and the
Lenders that the circumstances giving rise to such notice by the Administrative
Agent no longer exist, and any Notice of Borrowing, Continuation or Conversion
given by the Borrower with respect to Eurodollar Loans that have not yet been
incurred, Converted or Continued shall be deemed rescinded by the Borrower or,
in the case of a Notice of Borrowing, Continuation or Conversion, shall, at the
option of the Borrower, be deemed converted into a Notice of Borrowing,
Continuation or Conversion for Base Rate Loans to be made on the date of
Borrowing contained in such Notice of Borrowing, Continuation or Conversion, (y)
in the case of clause (ii) above, the Borrower shall pay to such Lender, upon
written demand therefor, such additional amounts (in the form of an increased
rate of, or a different method of calculating, interest or otherwise as such
Lender shall determine) as shall be required to compensate such Lender, for such
increased costs or reductions in amounts receivable hereunder (a written notice
as to the additional amounts owed to such Lender, showing the basis for the
calculation thereof, which basis must be reasonable, submitted to the Borrower
by such Lender shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) and (z) in the case of clause (iii) above, the Borrower
shall
23
take one of the actions specified in Section 2.6(b) as promptly as possible and,
in any event, within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 2.6(a)(ii) or (iii), the Borrower may (and in
the case of a Eurodollar Loan affected pursuant to Section 2.6(a)(iii) the
Borrower shall) either (i) if the affected Eurodollar Loan is then being made
pursuant to a Borrowing, by giving the Administrative Agent telephonic notice
(confirmed promptly in writing) thereof on the same date that the Borrower was
notified by a Lender pursuant to Section 2.6(a)(ii) or (iii), cancel such
Borrowing, convert the related Notice of Borrowing, Continuation or Conversion
into one requesting a Borrowing of Base Rate Loans or require the affected
Lender to make its requested Loan as a Base Rate Loan, or (ii) if the affected
Eurodollar Loan is then outstanding, upon at least one Business Day's notice to
the Administrative Agent, require the affected Lender to Convert each such
Eurodollar Loan into a Base Rate Loan, provided that if more than one Lender is
affected at any time, then all affected Lenders must be treated the same
pursuant to this Section 2.6(b).
(c) If any Lender shall have determined that after the Closing Date,
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged by law with the interpretation or administration thereof, or
compliance by such Lender or its parent corporation with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank, or comparable agency, in each case made
subsequent to the Closing Date, has or would have the effect of reducing by an
amount reasonably deemed by such Lender to be material the rate of return on
such Lender's or its parent corporation's capital or assets as a consequence of
such Lender's commitments or obligations hereunder to a level below that which
such Lender or its parent corporation could have achieved but for such adoption,
effectiveness, change or compliance (taking into consideration such Lender's or
its parent corporation's policies with respect to capital adequacy), then from
time to time, within 15 days after demand by such Lender (with a copy to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender or its parent corporation for
such reduction. Each Lender, upon determining in good faith that any additional
amounts will be payable pursuant to this Section 2.6(c), will give prompt
written notice thereof to the Borrower, which notice shall set forth, in
reasonable detail, the basis of the calculation of such additional amounts,
which basis must be reasonable, although the failure to give any such notice
shall not release or diminish any of the Borrower's obligations to pay
additional amounts pursuant to this Section 2.6(c) upon the subsequent receipt
of such notice.
(d) Notwithstanding anything in this Agreement to the contrary, no
Lender shall be entitled to compensation or payment or reimbursement of other
amounts under Section 2.6 or 4.5 for any amounts incurred or accruing more than
270 days prior to the giving of notice to the Borrower of additional costs or
other amounts of the nature described in such Sections.
Section 2.7 Breakage Compensation. The Borrower shall compensate
each applicable Lender, upon its written request (which request shall set forth
the detailed basis for requesting and the method of calculating such
compensation), for all reasonable losses, costs, expenses and liabilities
(including, without limitation, any loss, cost, expense or liability incurred by
reason of the liquidation or reemployment of deposits or other funds required by
such Lender to fund its Eurodollar Loans that such Lender may sustain): (i) if
for any reason (other than a default by such Lender or the Administrative Agent)
a Borrowing of Eurodollar Loans does not occur on a date specified therefor in a
Notice of Borrowing, Conversion or Continuation (whether or not withdrawn by the
Borrower); (ii) if any repayment, prepayment, Conversion or Continuation of any
of its Eurodollar Loans occurs on a date that is not the last day of an Interest
Period applicable thereto; (iii) if any prepayment of any of its Eurodollar
Loans is not made on any date specified in a notice of prepayment given by the
Borrower; (iv) as a result
24
of an assignment by a Lender of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto pursuant to a request by the Borrower
pursuant to Section 2.8(b); or (v) as a consequence of (x) any other default by
the Borrower to repay or prepay its Eurodollar Loans when required by the terms
of this Agreement or (y) an election made pursuant to Section 2.6(b). The
Borrower shall pay such Lender the amount shown as due on any such request
within 10 days after receipt thereof.
Section 2.8 Change of Lending Office; Replacement of Lenders.
(a) Each Lender agrees that, upon the occurrence of any event giving
rise to the operation of Section 2.6(a)(ii) or (iii) or 2.6(c) with respect to
such Lender, it will, if requested by the Borrower, use reasonable efforts
(subject to overall policy considerations of such Lender) to designate another
Applicable Lending Office for any Loans or Commitment affected by such event,
provided that such designation is made on such terms that such Lender and its
Applicable Lending Office suffer no economic, legal or regulatory disadvantage,
with the object of avoiding the consequence of the event giving rise to the
operation of any such Section.
(b) If any Lender requests any compensation, reimbursement or other
payment under Section 2.6(a)(ii) or (iii) or 2.6(c) with respect to such Lender,
or if any Lender is a Defaulting Lender, then the Borrower may, at its sole
expense and effort, upon notice to such Lender and the Administrative Agent,
require such Lender to assign and delegate, without recourse (in accordance with
the restrictions contained in Section 11.4(c)), all its interests, rights and
obligations under this Agreement to an Eligible Assignee that shall assume such
obligations; provided that (i) the Borrower shall have received the prior
written consent of the Administrative Agent, which consent shall not be
unreasonably withheld, (ii) such Lender shall have received payment of an amount
equal to the outstanding principal of its Loans, accrued interest thereon,
accrued fees and all other amounts payable to it hereunder, from the assignee
(to the extent of such outstanding principal and accrued interest and fees) or
the Borrower (in the case of all other amounts, including any breakage
compensation under Section 2.7 and any amounts accrued and owing to such Lender
under Section 2.6(a)(ii) or (iii) or 2.6(c)), and (iii) in the case of any such
assignment resulting from a claim for compensation, reimbursement or other
payments required to be made under Section 2.6(a)(ii) or (iii) or 2.6(c) with
respect to such Lender, such assignment will result in a reduction in such
compensation, reimbursement or payments. A Lender shall not be required to make
any such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrower to require
such assignment and delegation cease to apply.
(c) Nothing in this Section 2.8 shall affect or postpone any of the
obligations of the Borrower or the right of any Lender provided in Section 2.6.
ARTICLE III.
FEES; COMMITMENTS
Section 3.1 Fees.
(a) Facility Fees. The Borrower agrees to pay to the Administrative
Agent facility fees ("Facility Fees") for the account of each Non-Defaulting
Lender that has a Commitment for the period from the Closing Date to the
Maturity Date, computed for each day at a rate per annum equal to the Applicable
Facility Fee Rate in effect for such day on the amount of such Non-Defaulting
Lender's Commitment in effect on such day. Facility Fees shall be due and
payable in arrears on the last Business Day of each December, March, June and
September and on the Maturity Date.
25
(b) Utilization Fee. The Borrower agrees to pay to the
Administrative Agent utilization fees (the "Utilization Fees") for the account
of each Non-Defaulting Lender that has a Commitment for each day on which the
aggregate principal amount of outstanding Loans made by all Lenders exceeds 33%
of the Total Commitment, computed for each such day at a rate per annum equal to
the Applicable Utilization Fee Rate in effect for such day on the aggregate
principal amount of Loans made by such Non-Defaulting Lender outstanding on such
day. Utilization Fees, if any, shall be due and payable quarterly in arrears on
the last Business Day of each December, March, June and September and on the
Maturity Date.
(c) Other Fees. The Borrower shall pay to the Administrative Agent,
on the Closing Date and thereafter, for its own account and/or for distribution
to the Lenders, such fees as heretofore agreed by the Borrower and the
Administrative Agent or the Lenders as set forth in the Agent Fee Letter, the
Closing Fee Letter or any other similar agreement.
(d) Computations of Fees. All computations of Facility Fees,
Utilization Fees and other Fees hereunder shall be made on the actual number of
days elapsed over a year of 360 days.
Section 3.2 Voluntary Termination/Reduction of Commitments. Upon at
least three Business Days' prior irrevocable written notice (or telephonic
notice confirmed in writing) to the Administrative Agent at the Notice Office
(which notice the Administrative Agent shall promptly transmit to each of the
Lenders), the Borrower shall have the right to:
(a) terminate in whole the Total Commitment, provided that all
outstanding Loans are contemporaneously prepaid in accordance with Section 4.2;
(b) partially and permanently reduce the Unutilized Total
Commitment, provided that (i) any such reduction shall apply to proportionately
and permanently reduce the Commitment of each of the Lenders; and (ii) any
partial reduction of the Unutilized Total Commitment pursuant to this Section
3.2(b) shall be in the amount of at least $10,000,000 (or, if greater, in
integral multiples of $500,000).
Section 3.3 Termination of Commitments. The Total Commitment (and
the Commitment of each Lender) shall terminate on the Maturity Date.
ARTICLE IV.
PAYMENTS
Section 4.1 Repayment of Loans. The Borrower shall repay the
aggregate principal amount of all outstanding Loans to the Administrative Agent
for the ratable account of the Lenders on the Maturity Date.
Section 4.2 Voluntary Prepayments. The Borrower shall have the right
to prepay any of its Loans, in whole or in part, without premium or penalty
(except as specified below), from time to time on the following terms and
conditions:
(a) the Borrower shall give the Administrative Agent at the Notice
Office written or telephonic notice (in the case of telephonic notice, promptly
confirmed in writing if so requested by the Administrative Agent) of its intent
to prepay the Loans, the amount of such prepayment and (in the case of
Eurodollar Loans) the specific Borrowing(s) pursuant to which made, which notice
shall be received by the Administrative Agent by (i) 12:00 noon (local time at
the Notice Office) three Business Days prior to the date of such prepayment, in
the case of any prepayment of Eurodollar Loans, or (ii) 12:00 noon (local time
at the Notice Office) one Business Day prior to the date of such prepayment, in
the case of any
26
prepayment of Base Rate Loans, and which notice shall promptly be transmitted by
the Administrative Agent to each of the Lenders;
(b) in the case of prepayment of any Borrowings under the Revolving
Facility, each partial prepayment of any such Borrowing shall be in an aggregate
principal of at least $2,000,000 or an integral multiple of $1,000,000 in excess
thereof, in the case of Base Rate Loans, and at least $1,000,000 or an integral
multiple of $500,000 in excess thereof, in the case of Eurodollar Loans;
(c) no partial prepayment of any Loans made pursuant to a Borrowing
shall reduce the aggregate principal amount of such Loans outstanding pursuant
to such Borrowing to an amount less than the Minimum Borrowing Amount applicable
thereto;
(d) each prepayment in respect of any Loans made pursuant to a
Borrowing shall be applied pro rata among such Loans; and
(e) each prepayment of Eurodollar Loans pursuant to this Section 4.2
on any date other than the last day of the Interest Period applicable thereto,
in the case of Eurodollar Loans shall be accompanied by any amounts payable in
respect thereof under Section 2.7.
Section 4.3 Mandatory Payments and Prepayments. The Loans shall be
subject to mandatory repayment or prepayment in accordance with the following
provisions:
(a) Mandatory Prepayment of Loans. If on any date (after giving
effect to any other payments on such date) the aggregate outstanding principal
amount of Loans exceeds the Total Commitment as then in effect, then the
Borrower shall prepay on such date the principal amount of Loans in an aggregate
amount at least equal to such excess.
(b) Particular Loans to be Prepaid. With respect to each repayment
or prepayment of Loans required by this Section 4.3, the Borrower shall
designate the Types of Loans that are to be repaid or prepaid and the specific
Borrowing(s) pursuant to which such repayment or prepayment is to be made,
provided that (i) the Borrower shall first so designate all Loans that are Base
Rate Loans and Eurodollar Loans with Interest Periods ending on the date of
repayment or prepayment prior to designating any other Eurodollar Loans for
repayment or prepayment, (ii) if the outstanding principal amount of Eurodollar
Loans made pursuant to a Borrowing is reduced below the applicable Minimum
Borrowing Amount as a result of any such repayment or prepayment, then all the
Loans outstanding pursuant to such Borrowing shall be Converted into Base Rate
Loans, and (iii) each repayment and prepayment of any Loans made pursuant to a
Borrowing shall be applied pro rata among such Loans. In the absence of a
designation by the Borrower as described in the preceding sentence, the
Administrative Agent shall, subject to the above, make such designation in its
sole discretion with a view, but no obligation, to minimize breakage costs owing
under Section 2.7. Any repayment or prepayment of Eurodollar Loans pursuant to
this Section 4.3 shall in all events be accompanied by such compensation as is
required by Section 2.7.
Section 4.4 Method and Place of Payment.
(a) Except as otherwise specifically provided herein, all payments
under this Agreement shall be made to the Administrative Agent for the ratable
(based on its pro rata share) account of the Lenders entitled thereto, not later
than 12:00 noon (local time at the Payment Office) on the date when due and
shall be made at the Payment Office in immediately available funds and in lawful
money of the United States of America, it being understood that written notice
by the Borrower to the Administrative Agent to make a payment from the funds in
the Borrower's account at the Payment Office shall constitute the making of such
payment to the extent of such funds held in such account. Any payments under
this
27
Agreement that are made later than 12:00 noon (local time at the Payment Office)
shall be deemed to have been made on the next succeeding Business Day. Whenever
any payment to be made hereunder shall be stated to be due on a day that is not
a Business Day, the due date thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest shall be
payable during such extension at the applicable rate in effect immediately prior
to such extension.
(b) If at any time insufficient funds are received by and available
to the Administrative Agent to pay fully all amounts of principal, interest and
Fees then due hereunder and an Event of Default is not then in existence, such
funds shall be applied (i) first, towards payment of interest and Fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and Fees then due to such parties, and (ii) second, towards
payment of principal then due hereunder, ratably among the parties entitled
thereto in accordance with the amounts of principal then due to such parties.
Section 4.5 Net Payments.
(a) All payments made by the Borrower hereunder, under any Note or
any other Credit Document, will be made without setoff, counterclaim or other
defense. Except as provided for in Section 4.5(b), all such payments will be
made free and clear of, and without deduction or withholding for, any present or
future taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein with respect to such payments
(but excluding any tax imposed on or measured by the net income or net profits
of a Lender pursuant to the laws of the jurisdiction under which such Lender is
organized or the jurisdiction in which the Applicable Lending Office of such
Lender is located or any subdivision thereof or therein) and all interest,
penalties or similar liabilities with respect to such non-excluded taxes, levies
imposts, duties, fees, assessments or other charges (all such non-excluded
taxes, levies, imposts, duties, fees assessments or other charges being referred
to collectively as "Taxes"). If any Taxes are so levied or imposed, the Borrower
agrees to pay the full amount of such Taxes and such additional amounts as may
be necessary so that every payment by it of all amounts due hereunder, under any
Note or under any other Credit Document, after withholding or deduction for or
on account of any Taxes, will not be less than the amount provided for herein or
in such Note or in such other Credit Document. Subject to Section 2.6(d), the
Borrower will furnish to the Administrative Agent within 45 days after the date
the payment of any Taxes (or any withholding or deduction on account thereof) is
made, certified copies of tax receipts, or other evidence satisfactory to the
Lender, evidencing such payment by the Borrower. The Borrower will indemnify and
hold harmless the Administrative Agent and each Lender, and reimburse the
Administrative Agent or such Lender upon its written request, for the amount of
any Taxes levied against, imposed on, or paid by the Administrative Agent or any
Lender within 30 days of any written request therefor.
(b) Each Lender that is not incorporated under the laws of the
United States of America or any State thereof (each a "Non-U.S. Lender") agrees
to provide to the Borrower and the Administrative Agent on or prior to the
Closing Date, or in the case of a Lender that is an assignee or transferee of an
interest under this Agreement pursuant to Section 11.4 (unless the respective
Lender was already a Lender hereunder immediately prior to such assignment or
transfer and such Lender is in compliance with the provisions of this Section
4.5(b)), on the date of such assignment or transfer to such Lender, and from
time to time thereafter if required by the Borrower or the Administrative Agent:
(i) an accurate and complete original signed copy of Internal Revenue Service
Form W-8BEN, W-8ECI, W-8EXP or W-8IMY (or successor, substitute or other
appropriate form and, in the case of Form W-8IMY, any related documentation
necessary to establish the claimed exemption) certifying to such Lender's
entitlement to a complete exemption from U.S. withholding tax with respect to
payments to be made under this Agreement, any Note or any other Credit Document,
and (ii) in the case of a Lender seeking to qualify for the portfolio interest
exemption, a certificate in form and substance acceptable to the Administrative
28
Agent (any such certificate, an "Exemption Certificate") certifying to such
Lender's entitlement to such exemption. In addition, each Lender agrees that
from time to time after the Closing Date, when a lapse in time or change in
circumstances renders the previous certification obsolete or inaccurate in any
material respect, it will deliver to the Borrower and the Administrative Agent a
new accurate and complete original signed copy of the applicable Internal
Revenue Service Form, including any related documentation or Exemption
Certificate, and such other forms as may be required to confirm or establish the
entitlement of such Lender to a continued exemption from U.S. withholding tax
with respect to payments under this Agreement, any Note or any other Credit
Document. Notwithstanding anything to the contrary contained in Section 4.5(a),
but subject to Section 11.4(c) and the immediately succeeding sentence, (x) the
Borrower shall be entitled, to the extent it is required to do so by law, to
deduct or withhold Taxes imposed by the United States (or any political
subdivision or taxing authority thereof or therein) from interest, fees or other
amounts payable hereunder for the account of any Non-U.S. Lender that has not
provided to the Borrower such forms or such Exemption Certificate and related
documentation that establish a complete exemption from such deduction or
withholding and (y) the Borrower shall not be obligated pursuant to Section
4.5(a) to gross-up payments to be made to a Lender in respect of Taxes imposed
by the United States or any additional amounts with respect thereto (I) to the
extent such Taxes result from a Lender's failure to provide the Borrower the
Internal Revenue Service forms required to be provided to the Borrower pursuant
to this Section 4.5(b) or (II) to the extent that such forms do not establish a
complete exemption from withholding of such Taxes at the time the Lender first
became a Lender under this Agreement. The Borrower agrees to pay additional
amounts and indemnify each Lender in the manner set forth in Section 4.5(a)
(without regard to the identity of the jurisdiction requiring the deduction or
withholding) in respect of any Taxes deducted or withheld by it as a result of
any changes after the Closing Date in any applicable law, treaty, governmental
rule, regulation, guideline or order, or in the interpretation thereof, relating
to the deducting or withholding of income or similar Taxes.
(c) The Borrower will indemnify and hold harmless the Administrative
Agent and each Lender, and reimburse each upon its written request within 30
days thereof, for the amount of any documentary, excise, stamp, property or
other similar taxes, duties, fees, assessments or other charges imposed with
respect to the execution, delivery, filing or enforcement of any Credit
Document.
(d) If any Lender, in its sole opinion, determines that it has
finally and irrevocably received or been granted a refund in respect of any
Taxes paid as to which indemnification has been paid by the Borrower pursuant to
this Section, it shall promptly remit such refund (including any interest
received in respect thereof), net of all out-of-pocket costs and expenses;
provided, that the Borrower agrees to promptly return any such refund (plus
interest) to such Lender if such Lender is required to repay such refund to the
relevant taxing authority. Any such Lender shall provide the Borrower with a
copy of any notice of assessment from the relevant taxing authority (redacting
any unrelated confidential information contained therein) requiring repayment of
such refund. Nothing contained herein shall impose an obligation on any Lender
to apply for any such refund.
(e) If the Borrower is required to pay additional amounts to the
Administrative Agent or any Lender pursuant to this Section 4.5, then the
Administrative Agent or such Lender shall use reasonable efforts (consistent
with legal and regulatory restrictions) to change the jurisdiction of its
office, branch, subsidiary or affiliate, or take other appropriate action, so as
to eliminate any additional payment by the Borrower that may thereafter accrue,
if such change or other action, in the judgment of the Administrative Agent or
such Lender, as the case may be, is not otherwise disadvantageous to the
Administrative Agent or such Lender.
29
ARTICLE V.
CONDITIONS PRECEDENT
Section 5.1 Conditions Precedent at Closing Date. The obligation of
the Lenders to make Loans is subject to the satisfaction of each of the
following conditions:
(a) Credit Agreement. This Agreement shall have been executed by the
Borrower, the Administrative Agent and each of the Lenders.
(b) Notes. The Borrower shall have executed and delivered to the
Administrative Agent a Note for the account of each Lender that has requested a
Note.
(c) Fees and Expenses. The Borrower shall have (i) executed and
delivered to the Administrative Agent the Agent Fee Letter and the Closing Fee
Letter and (ii) paid or caused to be paid all Fees required to be paid by it on
the Closing Date pursuant to Section 3.1 and all reasonable fees and expenses of
the Administrative Agent and of special counsel to the Administrative Agent that
have been invoiced at least two Business Days prior to such date in connection
with the preparation, negotiation, execution and delivery of this Agreement and
the other Credit Documents and the consummation of the transactions contemplated
hereby and thereby.
(d) Corporate Resolutions and Approvals. The Administrative Agent
shall have received certified copies of the resolutions of the Board of
Directors of the Borrower, approving the Credit Documents, and of all documents
evidencing other necessary corporate action, governmental approvals, if any, and
other consents or approvals with respect to the execution, delivery and
performance by the Borrower of the Credit Documents.
(e) Incumbency Certificates. The Administrative Agent shall have
received a certificate of the Secretary or an Assistant Secretary of the
Borrower, certifying the names and true signatures of the officers of the
Borrower authorized to sign the Credit Documents and any other documents to
which the Borrower is a party that may be executed and delivered in connection
herewith.
(f) Corporate Charter and Good Standing Certificates. The
Administrative Agent shall have received: (i) an original certified copy of the
Certificate of Incorporation of the Borrower and any and all amendments and
restatements thereof, certified as of a recent date by the relevant Secretary of
State and certified by the Secretary or an Assistant Secretary of the Borrower
as being true, correct and complete and in full force and effect as of the
Closing Date; (ii) the bylaws of the Borrower and any and all amendments and
restatements thereof certified by the Secretary or an Assistant Secretary of the
Borrower as being true, correct, and complete and in full force and effect as of
the Closing Date; and (iii) an original good standing certificate from the
Secretary of State of the state of incorporation, dated as of a recent date,
listing all charter documents filed with such Secretary of State affecting the
Borrower and certifying as to the good standing of the Borrower.
(g) Opinions of Counsel. The Administrative Agent shall have
received opinions of counsel, which shall be addressed to the Administrative
Agent and each of the Lenders and dated the Closing Date, from (i) Cadwalader,
Wickersham & Taft LLP, outside counsel to the Borrower, in substantially the
form of Exhibit F-1, and (ii) the General Counsel of the Borrower, in
substantially the form of Exhibit F-2.
(h) Existing Credit Agreements. The Borrower shall have terminated
the commitments of the lenders under each of the Existing Credit Agreements,
repaid any borrowings thereunder and
30
terminated or released all Liens granted in connection therewith and provided
evidence, in form and substance satisfactory to the Administrative Agent, of the
same to the Administrative Agent.
(i) Financial Statements. The Administrative Agent and the Lenders
shall have received the financial statements referred to in Section 6.7(a),
which financial statements shall be acceptable to the Administrative Agent and
the Lenders.
(j) Borrower's Closing Certificate. The Administrative Agent shall
have received a certificate in the form attached hereto as Exhibit D, dated the
Closing Date, of an Authorized Officer of the Borrower to the effect that, at
and as of the Closing Date and both before and after giving effect to the
initial Borrowings hereunder, if any, on the Closing Date, and the application
of the proceeds thereof: (i) all conditions set forth in Section 5.1 have been
satisfied; (ii) no Default or Event of Default has occurred or is continuing;
and (iii) all representations and warranties of the Borrower contained herein or
in the other Credit Documents are true and correct in all material respects with
the same effect as though such representations and warranties had been made on
and as of the Closing Date, except that as to any such representations and
warranties that expressly relate to an earlier specified date, such
representations and warranties are only represented as having been true and
correct in all material respects as of the date when made.
Section 5.2 Conditions Precedent to the Making of Loans.
(a) The obligations of the Lenders to make each Loan are subject, at
the time thereof, to the satisfaction of the following conditions:
(i) Notice of Borrowing, Continuation or Conversion. The
Administrative Agent shall have received a Notice of Borrowing,
Continuation or Conversion meeting the requirements of Section 2.2 with
respect to the Borrowing of a Loan.
(ii) No Default; Representations and Warranties. At the time
of the making of a Loan to the Borrower and after giving effect thereto,
(i) there shall exist no Default or Event of Default and (ii) all
representations and warranties of the Borrower contained herein or in
the other Credit Documents shall be true and correct in all material
respects with the same effect as though such representations and
warranties had been made on and as of the date such Loan is made, except
to the extent that such representations and warranties expressly relate
to an earlier specified date, in which case such representations and
warranties shall have been true and correct in all material respects as
of the date when made.
(b) The acceptance of the benefits of each Loan shall constitute a
representation and warranty by the Borrower to each of the Lenders that all of
the applicable conditions specified in Section 5.2 have been satisfied as of the
times referred to in Section 5.2. All of the certificates, legal opinions and
other documents and papers referred to in this Article V, unless otherwise
specified, shall be delivered to the Administrative Agent for the account of
each of the Administrative Agent and the Lenders and, except for the Notes, in
sufficient counterparts for the Administrative Agent and the Lenders, and the
Administrative Agent will promptly distribute to the Lenders their respective
Notes and the copies of such other certificates, legal opinions and documents.
Section 5.3 Conditions Precedent to the Conversion or Continuation
of Loans. The obligations of the Lenders to Convert or Continue any Loan are
subject, at the time thereof, to the receipt by the Administrative Agent of a
Notice of Borrowing, Continuation or Conversion meeting the requirements of
Section 2.2 with respect to the Conversion or Continuation, as applicable, of a
Loan.
31
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to make the
Loans, the Borrower makes the following representations and warranties to, and
agreements with, the Lenders, all of which shall survive the execution and
delivery of this Agreement and the making of each Loan:
Section 6.1 Corporate Status. Each of the Borrower and its
Subsidiaries (a) is a duly organized or formed and validly existing corporation,
partnership or limited liability company, as the case may be, in good standing
under the laws of the jurisdiction of its formation and has the corporate,
partnership or limited liability company power and authority, as applicable, to
own its Property and assets and to transact the business in which it is engaged,
and (b) has been duly qualified and is authorized to do business in all
jurisdictions where it is required to be so qualified except where the failure
to be so qualified would not have a Material Adverse Effect. Each Subsidiary of
the Borrower (and the direct and indirect ownership interest of the Borrower
therein) as of the date hereof and the jurisdiction of incorporation of Borrower
and each such Subsidiary as of the date hereof is listed on Schedule 6.1.
Section 6.2 Corporate Power and Authority. The Borrower has the
corporate or other organizational power and authority to execute, deliver and
carry out the terms and provisions of the Credit Documents to which it is party
and has taken all necessary corporate or other organizational action to
authorize the execution, delivery and performance of the Credit Documents to
which it is party. The Borrower has duly executed and delivered each Credit
Document to which it is party and each Credit Document to which it is party
constitutes the legal, valid and binding agreement or obligation of the Borrower
enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws generally affecting creditors'
rights and by equitable principles (regardless of whether enforcement is sought
in equity or at law).
Section 6.3 No Violation. Neither the execution, delivery and
performance by the Borrower of the Credit Documents to which it is party nor
compliance with the terms and provisions thereof (a) will contravene any
provision of any law, statute, rule, regulation, order, writ, injunction or
decree of any Governmental Authority applicable to the Borrower or its
properties and assets, (b) will conflict with or result in any breach of, any of
the terms, covenants, conditions or provisions of, or constitute a default
under, or result in the creation or imposition of (or the obligation to create
or impose) any Lien upon any of the Property or assets of the Borrower pursuant
to the terms of any material promissory note, bond, debenture, indenture,
mortgage, deed of trust, credit or loan agreement, or any other agreement or
other instrument, to which the Borrower is a party or by which it or any of its
Property or assets are bound or to which it may be subject, or (c) will violate
any provision of the certificate or articles of incorporation, regulations or
bylaws, or other charter documents of the Borrower.
Section 6.4 Governmental Approvals.
(a) Except as described in subsection (b) below, no order, consent,
approval, license, authorization, or validation of, or filing, recording or
registration with, or exemption by, any Governmental Authority is required to
authorize or is required as a condition to (i) the execution, delivery and
performance by the Borrower of any Credit Document to which it is a party, or
(ii) the legality, validity, binding effect or enforceability of any Credit
Document to which the Borrower is a party.
(b) The Parent is a "public utility holding company" within the
meaning of PUHCA that is exempt from registration and all other provisions
thereof except for Sections 9(a)(2) and 32 thereof. The
32
Borrower is the only "subsidiary company" or "affiliate" (within the meaning of
PUHCA) of the Parent that is a "public utility company" as defined in PUHCA. No
report to or approval by the SEC under PUHCA is required for the incurrence of
Indebtedness or the execution and performance of the Credit Documents. Other
than the approval of the Public Utility Commission of Ohio, which approval is in
full force and effect, no further authorization or consent of any Governmental
Authority is legally required for the incurrence of Indebtedness and/or the
execution and performance of the Credit Documents by the Borrower.
Section 6.5 Litigation, etc.
(a) Except as set forth in Schedule 6.5, there are no actions, suits
or proceedings pending or, to, the knowledge of the Borrower, threatened with
respect to the Borrower or any of its Subsidiaries (i) that have, or could
reasonably be expected to have, a Material Adverse Effect, or (ii) that question
the validity or enforceability of any of the Credit Documents, or of any action
to be taken by any of the Borrower pursuant to any of the Credit Documents.
(b) No action, suit, proceeding or investigation has been
instituted, or to the knowledge of the Borrower or any of its Subsidiaries,
threatened, and no rule, regulation, order, judgment or decree has been issued
or proposed to be issued by any Governmental Authority that, solely as a result
of the incurrence of Indebtedness or the entering into this Agreement or any
other Credit Document or any transaction contemplated hereby or thereby, would
cause or deem the Administrative Agent or the Lenders or any Affiliate of any of
them to be subject to, or not exempted from, regulation under the FPA or PUHCA.
Section 6.6 Use of Proceeds; Margin Regulations.
(a) The proceeds of all Loans will be utilized to provide working
capital and funds for general corporate and other lawful purposes not
inconsistent with the requirements of this Agreement.
(b) The Borrower is not engaged in the business of extending credit
for the purpose of purchasing or carrying any Margin Stock. At no time would
more than 25% of the value of the assets of the Borrower or its consolidated
Subsidiaries that are subject to any "arrangement" (as such term is used in
Section 221.2(g) of such Regulation U) hereunder be represented by Margin Stock.
Section 6.7 Financial Statements. The Borrower has furnished to the
Lenders and the Administrative Agent complete and correct copies of (a) the
audited consolidated balance sheets of the Borrower and its consolidated
Subsidiaries as of December 31, 2001 and December 31, 2002 and the related
audited consolidated statements of income, shareholders' equity, and cash flows
of the Borrower and its consolidated Subsidiaries for the fiscal years then
ended, accompanied by the report thereon of PricewaterhouseCoopers LLP; and (b)
the condensed consolidated balance sheets of the Borrower and its consolidated
Subsidiaries as of September 30, 2003, and the related condensed consolidated
statements of income and of cash flows of the Borrower and its consolidated
Subsidiaries for the fiscal period then ended. All such financial statements
have been prepared in accordance with GAAP, consistently applied (except as
stated therein), and fairly present in all material respects the financial
position of the entities described in such financial statements as of the
respective dates indicated and the consolidated results of their operations and
cash flows for the respective periods indicated, subject in the case of any such
financial statements that are unaudited, to normal audit adjustments. As of the
Closing Date, the Borrower and its Subsidiaries do not have any material or
significant contingent liability (other than any liability incident to any
litigation, arbitration or proceeding that could not reasonably be expected to
have a Material Adverse Effect) that is not reflected in the foregoing financial
statements or the notes thereto in accordance with GAAP.
33
Section 6.8 Solvency. The Borrower is not insolvent as defined in
any applicable state or federal statute, nor will the Borrower be rendered
insolvent by the execution and delivery of this Agreement or any of the Credit
Documents to the Administrative Agent and the Lenders.
Section 6.9 No Material Adverse Change. Since September 30, 2003
there has been no change in the financial or other condition, business, affairs
or prospects of the Borrower and its Subsidiaries taken as a whole, or their
properties and assets considered as an entirety, except for changes none of
which, individually or in the aggregate, has had or could reasonably be expected
to have, a Material Adverse Effect.
Section 6.10 Tax Returns and Payments. The Borrower and each of its
Subsidiaries has filed all federal income tax returns and all other material tax
returns, domestic and foreign, required to be filed by it and has paid all
material taxes and assessments payable by it that have become due, other than
those not yet delinquent and except for those contested in good faith. The
Borrower and each of its Subsidiaries has established on its books such charges,
accruals and reserves in respect of taxes, assessments, fees and other
governmental charges for all fiscal periods as are required by GAAP. The
Borrower does not know of any proposed assessment for additional federal,
foreign or state taxes for any period, or of any basis therefor, that,
individually or in the aggregate, taking into account such charges, accruals and
reserves in respect thereof as the Borrower and its Subsidiaries have made,
could reasonably be expected to have a Material Adverse Effect.
Section 6.11 Title to Properties. The Borrower and each of its
Subsidiaries has good and marketable title, in the case of Real Property, and
good title (or valid Leaseholds, in the case of any leased Property), in the
case of all other Property, to all of its material properties and assets free
and clear of Liens other than Liens permitted under Section 8.3. The interests
of the Borrower and each of its Subsidiaries in the properties reflected in the
most recent balance sheet referred to in Section 6.7, taken as a whole, were
sufficient, in the judgment of the Borrower, as of the date of such balance
sheet for purposes of the ownership and operation of the businesses conducted by
the Borrower and such Subsidiaries.
Section 6.12 Lawful Operations; Compliance with Agreements. The
Borrower and each of its Subsidiaries: (a) holds all necessary federal, state
and local governmental licenses, registrations, certifications, permits and
authorizations necessary to conduct its business; (b) is in full compliance with
all material requirements imposed by law, regulation or rule, whether federal,
state or local, that are applicable to it, its operations, or its properties and
assets, including without limitation, applicable requirements of Environmental
Laws; and (c) is in full compliance with all material terms, covenants and
conditions of any promissory note, bond, debenture, indenture, mortgage, deed of
trust, credit or loan agreement, or any other agreement or other instrument, to
which it is a party or by which it or any of its Property or assets are bound or
to which it may be subject, except in the case of clause (a), (b) or (c) of this
Section 6.12 for any failure to obtain and maintain in effect, or noncompliance,
that, individually or in the aggregate, could not reasonably be expected to have
a Material Adverse Effect.
Section 6.13 Environmental Matters. The Borrower and each of its
Subsidiaries is in compliance with all Environmental Laws governing its
business, except to the extent that any such failure to comply (together with
any resulting penalties, fines or forfeitures) would not reasonably be expected
to have a Material Adverse Effect. All licenses, permits, registrations or
approvals required for the conduct of the business of the Borrower and each of
its Subsidiaries under any Environmental Law have been secured and the Borrower
and each of its Subsidiaries is in substantial compliance therewith, except for
such licenses, permits, registrations or approvals the failure to secure or to
comply therewith is not reasonably likely to have a Material Adverse Effect.
Neither the Borrower nor any of its Subsidiaries has received written notice, or
otherwise knows, that it is in any respect in noncompliance with, breach of or
34
default under any applicable writ, order, judgment, injunction, or decree to
which the Borrower or such Subsidiary is a party or that would affect the
ability of the Borrower or such Subsidiary to operate any Real Property and no
event has occurred and is continuing that, with the passage of time or the
giving of notice or both, would constitute noncompliance, breach of or default
thereunder, except in each such case, such noncompliance, breaches or defaults
as would not reasonably be expected to, in the aggregate, have a Material
Adverse Effect. There are no Environmental Claims pending or, to the best
knowledge of the Borrower, threatened wherein an unfavorable decision, ruling or
finding would reasonably be expected to have a Material Adverse Effect. There
are no facts, circumstances, conditions or occurrences on any Real Property now
or at any time owned, leased or operated by the Borrower or any of its
Subsidiaries or on any Property adjacent to any such Real Property, that are
known by the Borrower or as to which the Borrower or any such Subsidiary has
received written notice, that could reasonably be expected: (i) to form the
basis of an Environmental Claim against the Borrower or any of its Subsidiaries
or any Real Property of the Borrower or any of its Subsidiaries; or (ii) to
cause such Real Property to be subject to any restrictions on the ownership,
occupancy, use or transferability of such Real Property under any Environmental
Law, except in each such case, such Environmental Claims or restrictions that
individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect.
Section 6.14 ERISA.
(a) As of the Closing Date, there are no Unfunded Liabilities. Each
Plan complies in all material respects with all applicable requirements of law
and regulations, no Reportable Event has occurred with respect to any Plan,
neither the Borrower nor any other member of the Controlled Group has withdrawn
from any Plan or initiated steps to do so, and no steps have been taken to
reorganize or terminate any Plan.
(b) Neither the Borrower nor any of its Subsidiaries is an entity
deemed to hold "plan assets" within the meaning of 29 C.F.R. Section 2510.3-101
of an employee benefit plan (as defined in Section 3(3) of ERISA) which is
subject to Title I of ERISA or any plan (within the meaning of Section 4975 of
the Code), and neither the execution of this Agreement nor the making of Loans
hereunder gives rise to a prohibited transaction within the meaning of Section
406 of ERISA or Section 4975 of the Code.
Section 6.15 Intellectual Property. The Borrower and each of its
Subsidiaries has obtained or has the right to use all material patents,
trademarks, service marks, trade names, copyrights, licenses and other rights
with respect to the foregoing necessary for the present and planned future
conduct of its business, without any known conflict with the rights of others,
except for such patents, trademarks, service marks, trade names, copyrights,
licenses and rights, the loss of which, and such conflicts, that in any such
case individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect.
Section 6.16 Investment Company Act; Federal Power Act; PUHCA. None
of the Borrower or any of its Subsidiaries is subject to regulation with respect
to the creation or incurrence of Indebtedness under the Investment Company Act
of 1940, as amended. None of the Borrower or any of its Subsidiaries, or any
Affiliate of any of them, is subject to regulation under the FPA or PUHCA, or
under applicable state or other laws and regulations respecting the rates or the
financial or organizational regulation of electric utilities, as a result of the
creation or incurrence of the Obligations or the entering into this Agreement or
any other Credit Document or the consummation of any transaction contemplated
hereby or thereby.
Section 6.17 True and Complete Disclosure. All factual information
(taken as a whole) heretofore or contemporaneously furnished by or on behalf of
the Borrower or any of its Subsidiaries in writing to the Administrative Agent
or any Lender for purposes of or in connection with this Agreement
35
or any transaction contemplated herein is, and all other such factual
information (taken as a whole) hereafter furnished by or on behalf of such
Person in writing to any Lender will be, true and accurate in all material
respects on the date as of which such information is dated or certified and not
incomplete by omitting to state any material fact necessary to make such
information (taken as a whole) not misleading at such time in light of the
circumstances under which such information was provided, except that any such
future information consisting of pro forma information and financial projections
prepared by the Borrower is only represented herein as being based on good faith
estimates and assumptions believed by such Persons to be reasonable at the time
made, it being recognized by the Lenders that such projections as to future
events are not to be viewed as facts and that actual results during the period
or periods covered by any such projections may differ materially from the
projected results.
Section 6.18 Reportable Transaction. The Borrower does not intend to
treat the Loans and related transactions as being a "reportable transaction"
(within the meaning of Treasury Regulation Section 1.6011-4). If the Borrower
determines to take any action inconsistent with such intention, it will promptly
notify the Administrative Agent thereof.
ARTICLE VII.
AFFIRMATIVE COVENANTS
The Borrower hereby covenants and agrees that on the Closing Date and
thereafter so long as this Agreement is in effect and until such time as the
Total Commitment has been terminated, no Notes remain outstanding and the Loans,
together with interest, Fees and all other Obligations incurred hereunder and
under the other Credit Documents, have been paid in full:
Section 7.1 Reporting Requirements.
The Borrower will furnish to each Lender and the Administrative Agent:
(a) Annual Financial Statements. As soon as available and in any
event within 90 days after the close of each fiscal year of the Borrower, the
consolidated and consolidating balance sheets of the Borrower and its
consolidated Subsidiaries as at the end of such fiscal year and the related
consolidated and consolidating statements of income, of stockholders' equity and
of cash flows for such fiscal year, in each case setting forth comparative
figures for the preceding fiscal year, all in reasonable detail and accompanied
by an opinion with respect to such consolidated financial statements of
independent public accountants of recognized national standing selected by the
Borrower, which opinion shall be unqualified and shall (i) state that such
accountants audited such consolidated financial statements in accordance with
generally accepted auditing standards, that such accountants believe that such
audit provides a reasonable basis for their opinion, and that in their opinion
such consolidated financial statements present fairly, in all material respects,
the consolidated financial position of the Borrower and its consolidated
Subsidiaries as at the end of such fiscal year and the consolidated results of
their operations and cash flows for such fiscal year in conformity with
generally accepted accounting principles, or (ii) contain such statements as are
customarily included in unqualified reports of independent accountants in
conformity with the recommendations and requirements of the American Institute
of Certified Public Accountants (or any successor organization).
(b) Quarterly Financial Statements. As soon as available and in any
event within 45 days after the close of each of the first three quarterly
accounting periods in each fiscal year of the Borrower, the unaudited
consolidated and consolidating balance sheets of the Borrower and its
consolidated Subsidiaries as at the end of such quarterly period and the related
unaudited consolidated and consolidating statements of income and of cash flows
for such quarterly period and/or for the fiscal year
36
to date, and setting forth, in the case of such unaudited consolidated
statements of income and of cash flows, comparative figures for the related
periods in the prior fiscal year, and that shall be certified on behalf of the
Borrower by the Chief Financial Officer or other Authorized Officer, subject to
changes resulting from normal year-end audit adjustments.
(c) Officer's Compliance Certificates. At the time of the delivery
of the financial statements provided for in Sections 7.1(a) and (b), a
Compliance Certificate signed by an Authorized Officer, which shall include
calculations of the financial covenants set forth in Section 8.5.
(d) Notice of Default, Litigation or Material Adverse Effect.
Promptly, and in any event within three Business Days, in the case of clause (i)
below, or five Business Days, after the Borrower or any of its Subsidiaries
obtains knowledge thereof, notice of (i) the occurrence of any event that
constitutes a Default or Event of Default, which notice shall specify the nature
thereof, the period of existence thereof and what action the Borrower has taken
or proposes to take with respect thereto, and (ii) the commencement of, or any
other material development concerning, any litigation, governmental or
regulatory proceeding pending against the Borrower or any of its Subsidiaries,
or any other event that could reasonably be expected to have a Material Adverse
Effect.
(e) ERISA. As soon as possible and in any event within ten days
after the Borrower knows that any Reportable Event has occurred with respect to
any Plan, a statement, signed by an Authorized Officer, describing such
Reportable Event and the action that the Borrower proposes to take with respect
thereto.
(f) Single Employer Plans. Within 270 days after the close of each
fiscal year of the Borrower, the Borrower will deliver to each of the Lenders a
statement of the Unfunded Liabilities, certified as correct by an actuary
enrolled under ERISA.
(g) Environmental Notices. Promptly, and in any event within 10 days
after receipt thereof by the Borrower or any Subsidiary of the Borrower, a copy
of (a) any notice or claim to the effect that the Borrower or any of its
Subsidiaries is or may be liable to any Person as a result of the release by the
Borrower, any of its Subsidiaries, or any other Person of any Hazardous
Materials into the environment, and (b) any notice alleging any violation of any
Environmental Law by the Borrower or any of its Subsidiaries, which in the case
of either (a) or (b) above could reasonably be expected to have a Material
Adverse Affect.
(h) SEC Reports and Registration Statements. Promptly after
transmission thereof or other filing with the SEC, copies of all registration
statements (other than the exhibits thereto and any registration statement on
Form S-8 or its equivalent) and all annual, quarterly or current reports that
the Borrower or any of its Subsidiaries files with the SEC on Form 10-K, 10-Q or
8-K (or any successor forms).
(i) Annual and Quarterly Reports, Proxy Statements and other Reports
Delivered to Stockholders Generally. Promptly after transmission thereof to its
stockholders, copies of all annual, quarterly and other reports and all proxy
statements that the Borrower furnishes to its stockholders generally.
(j) Other Information. Promptly, but in any event within 10 Business
Days upon request therefor, such other information or documents (financial or
otherwise) relating to the Borrower or any of its Subsidiaries as the
Administrative Agent or any Lender (through the Administrative Agent) may
reasonably request from time to time.
37
Section 7.2 Books, Records and Inspections. The Borrower will, and
will cause each of its Subsidiaries to, (a) keep proper books of record and
account, in which full and correct entries shall be made of all financial
transactions and the assets and business of the Borrower or such Subsidiaries,
as the case may be, in accordance with GAAP; and (b) permit, upon at least two
Business Days' notice to the Chief Financial Officer of the Borrower, officers
and designated representatives of the Administrative Agent or any of the Lenders
to visit and inspect any of the properties or assets of the Borrower and any of
its Subsidiaries in whomsoever's possession (but only to the extent the Borrower
or such Subsidiary has the right to do so to the extent in the possession of
another Person), to examine the books of account of the Borrower and any of its
Subsidiaries, and make copies thereof and take extracts therefrom, and to
discuss the affairs, finances and accounts of the Borrower and of any of its
Subsidiaries with, and be advised as to the same by, its and their officers and
independent accountants and independent actuaries, if any, all at such
reasonable times and intervals and to such reasonable extent as the
Administrative Agent or any of the Lenders may request. All costs and expenses
incurred by the Administrative Agent or any Lender in connection with any of the
foregoing shall be paid by the Administrative Agent or such Lender, as the case
may be, unless an Event of Default shall have occurred and be continuing at the
time such costs and/or expenses are incurred, in which case all such costs and
expenses shall be paid by the Borrower.
Section 7.3 Insurance. The Borrower will, and will cause each of its
Subsidiaries to, (i) maintain insurance coverage by such insurers and in such
forms and amounts and against such risks as are generally consistent with the
insurance coverage maintained by the Borrower and its Subsidiaries at the date
hereof, and (ii) forthwith upon any Lender's written request, furnish to such
Lender such information about such insurance as such Lender may from time to
time reasonably request, which information shall be prepared in form and detail
satisfactory to such Lender and certified by an Authorized Officer.
Section 7.4 Payment of Taxes and Claims. The Borrower will pay and
discharge, and will cause each of its Subsidiaries to pay and discharge, all
taxes, assessments and governmental charges or levies imposed upon it or upon
its income or profits, or upon any properties belonging to it, prior to the date
on which penalties attach thereto, and all lawful claims that, if unpaid, might
become a Lien or charge upon any properties of the Borrower or any of its
Subsidiaries; provided that neither the Borrower nor any of its Subsidiaries
shall be required to pay any such tax, assessment, charge, levy or claim that is
being contested in good faith and by proper proceedings if it has maintained
adequate reserves with respect thereto in accordance with GAAP. Without limiting
the generality of the foregoing, the Borrower will, and will cause each of its
Subsidiaries to, pay in full all of its wage obligations to its employees in
accordance with the Fair Labor Standards Act (29 U.S.C. Sections 206-207) and
any comparable provisions of applicable law.
Section 7.5 Preservation of Existence, etc. The Borrower will, and
will cause each of its Subsidiaries to, (a) preserve, renew and maintain in full
force and effect its legal existence and good standing under the laws of the
jurisdiction of its organization except in a transaction permitted by Section
8.2; (b) take all reasonable action to maintain all rights, privileges, permits,
licenses and franchises necessary or desirable in the normal conduct of its
business, except to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect; and (c) preserve or renew all of its
registered patents, trademarks, trade names and service marks, the
non-preservation of which could reasonably be expected to have a Material
Adverse Effect.
Section 7.6 Good Repair. The Borrower will, and will cause each of
its Subsidiaries to, ensure that its material properties and equipment used or
useful in its business in whomsoever's possession they may be, are kept in good
repair, working order and condition, normal wear and tear excepted, and that
from time to time there are made in such properties and equipment all needful
and
38
proper repairs, renewals, replacements, extensions, additions, betterments and
improvements, thereto, to the extent and in the manner customary for companies
in similar businesses.
Section 7.7 Compliance with Statutes, Regulations, Orders,
Restrictions. The Borrower will, and will cause each of its Subsidiaries to,
comply, in all material respects, with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all Governmental
Authorities, in respect of the conduct of its business and the ownership of its
Property, including, without limitation, ERISA and all applicable Environmental
Laws other than those the noncompliance with which would not have, and that
would not be reasonably expected to have, a Material Adverse Effect.
Section 7.8 Fiscal Years, Fiscal Quarters. The Borrower shall not
change any of its or any of its Subsidiaries' fiscal years or fiscal quarters
(other than the fiscal year or fiscal quarters of a Person that becomes a
Subsidiary, made at the time such Person becomes a Subsidiary to conform to the
Borrower's fiscal year and fiscal quarters).
Section 7.9 Use of Proceeds. The Borrower will, and will cause each
of its Subsidiaries to, use the proceeds of all Loans for working capital and
for general corporate and other lawful purposes not inconsistent with the
requirements of this Agreement.
Section 7.10 Senior Debt. The Borrower will at all times ensure that
(a) the claims of the Lenders in respect of the Obligations of the Borrower will
not be subordinate to, and will in all respects rank at least pari passu with or
senior to the claims of every unsecured creditor of the Borrower, and (b) any
Indebtedness of the Borrower that is subordinated in any manner to the claims of
any other creditor of the Borrower will be subordinated in like manner to such
claims of the Lenders.
Section 7.11 PUCO Order. If the Borrower requests a Borrowing on or
after November 6, 2004, the Borrower shall have obtained on or before the date
of the Notice of Borrowing, Continuation or Conversion relating to the first
Borrowing so requested on or after November 6, 2003, an order from The Public
Utility Commission of Ohio, authorizing the Borrower to incur Loans hereunder
from November 6, 2004 through the Maturity Date, and the Borrower shall deliver
to the Administrative Agent contemporaneously with such Notice of Borrowing,
Continuation or Conversion, a copy of such order certified by an Authorized
Officer as being a true, correct and complete copy and in full force and effect
as of the date of such notice.
ARTICLE VIII.
NEGATIVE COVENANTS
The Borrower hereby covenants and agrees that on the Closing Date and
thereafter for so long as this Agreement is in effect and until such time as the
Total Commitment has been terminated, no Notes remain outstanding and the Loans,
together with interest, Fees and all other Obligations incurred hereunder and
under the other Credit Documents, have been paid in full:
Section 8.1 Changes in Business. Neither the Borrower nor any of its
Subsidiaries will engage in any business if, as a result, the general nature of
the business, taken on a consolidated basis, that would then be engaged in by
the Borrower and its Subsidiaries, would be substantially changed from the
general nature of the business engaged in by the Borrower and its Subsidiaries
on the Closing Date.
Section 8.2 Merger, Consolidation, Asset Sales. The Borrower will
not, and will not permit any of its Subsidiaries to, (a) wind up, liquidate or
dissolve its affairs, (b) enter into any transaction of
39
merger or consolidation, (c) make or otherwise effect any Asset Sale, or (d)
agree to do any of the foregoing at any future time, except that the following
shall be permitted:
(i) a Subsidiary of the Borrower may merge with the
Borrower, provided that the surviving Person in any such merger shall be
the Borrower;
(ii) any Subsidiary of the Borrower may merge with another
Subsidiary of the Borrower;
(iii) any Subsidiary of the Borrower may merge with any Person
(other than the Borrower or any other Subsidiary of the Borrower),
provided that (A) the surviving Person in any such merger shall be such
Subsidiary and (B) immediately before and after such merger there shall
not exist any Default or Event of Default;
(iv) the Borrower may merge with any Person (other than a
Subsidiary of the Borrower), provided that (A) the surviving Person in
any such merger shall be the Borrower and (B) immediately before and
after such merger there shall not exist any Default or Event of Default;
(v) any Subsidiary of the Borrower may make or effect any
Asset Sale to the Borrower or another Wholly-Owned Subsidiary of the
Borrower;
(vi) the Borrower may wind up, voluntarily liquidate or
dissolve any Subsidiary if (A) such Subsidiary is not a "Significant
Subsidiary" (as defined in Regulation S-X under the 1933 Act), and (B)
the winding up, voluntary liquidation or dissolution of such Subsidiary
will not result in an Event of Default hereunder or otherwise have a
Material Adverse Effect;
(vii) in addition to any Asset Sale permitted pursuant to any
other subpart in this Section 8.2, the Borrower and its Subsidiaries may
make or effect other Asset Sales so long as (A) the aggregate amount
(based upon the fair market value of the assets) of all Property sold or
otherwise disposed pursuant to all such Asset Sales on and after the
Closing Date does not constitute a Substantial Portion of the Property
of the Borrower and its Subsidiaries at the time of and after giving
effect to any such Asset Sale and (B) at least 80% of the total
consideration received by the Borrower or any of its Subsidiaries, as
applicable, for such Asset Sale or series of Asset Sales consists of
cash or Cash Equivalents;
(viii) the Borrower and its Subsidiaries shall be permitted to
create, incur, assume and suffer to exist Liens permitted pursuant to
Section 8.3; and
(ix) the Borrower and its Subsidiaries shall be permitted to
make and dispose of the Investments permitted pursuant to Section 8.4.
Section 8.3 Liens. The Borrower will not, and will not permit any of
its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or
with respect to any Property or assets of any kind (real or personal, tangible
or intangible) of the Borrower or any such Subsidiary whether now owned or
hereafter acquired, or sell any such Property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such Property
or assets (including, without limitation, sales of accounts receivable or notes
with or without recourse to the Borrower or any of its Subsidiaries, other than
for purposes of collection of delinquent accounts in the ordinary course of
business) or assign any right to receive income, or file or permit the filing of
any financing statement under the UCC or any other
40
similar notice of Lien under any similar recording or notice statute, except
that the foregoing restrictions shall not apply to:
(a) the Standard Permitted Liens;
(b) Liens (i) in existence on the Closing Date that are listed, and
the Indebtedness secured thereby and the Property subject thereto on the Closing
Date described, on Schedule 8.3, or (ii) arising out of the refinancing,
extension, renewal or refunding of any Indebtedness secured by any such Liens,
provided that the principal amount of such Indebtedness is not increased and
such Indebtedness is not secured by any additional assets;
(c) Liens on Property of the Borrower securing the Borrower's First
Mortgage Bonds issued pursuant to the Indenture, dated as of October 1, 1935, as
amended, supplemented or otherwise modified from time to time, between the
Borrower and The Bank of New York;
(d) Liens on Property of the Borrower in connection with
collateralized pollution control bonds;
(e) any (i) Lien existing on any Property at the time such Property
is acquired by the Borrower or any of its Subsidiaries or on any Property of any
Person at the time such Person becomes, or is merged into, a Subsidiary of the
Borrower, provided that (A) such Lien is not created in contemplation of or in
connection with such acquisition or such Person becoming, or being merged into,
such Subsidiary, as the case may be, (B) such Lien shall not attach or apply to
any other Property or assets of the Borrower or any of its Subsidiaries, and (C)
such Lien shall secure only those obligations that it secures on the date of
such acquisition or the date such Person becomes, or is merged into, such
Subsidiary, as the case may be, and any extension or refinancing thereof, so
long as the aggregate principal amount so extended or refinanced is not
increased, and (ii) Lien securing Indebtedness in respect of purchase money
obligations for the acquisition, lease, construction or improvement of fixed
assets or Capital Lease Obligations, provided that (A) such Lien only attaches
to such fixed assets being acquired, leased, constructed or improved and (B) the
Indebtedness secured by such Lien does not exceed the cost or fair market value,
whichever is lower, of the fixed assets being acquired, leased, constructed or
improved on the date of acquisition, lease, construction or improvement;
provided, however, that the aggregate principal amount of Indebtedness at any
time outstanding secured by a Lien described in this subsection (e) shall not
exceed an amount equal to 5% of the Consolidated Tangible Assets at such time.
Section 8.4 Investments. The Borrower will not, and will not permit
any of its Subsidiaries to, make or hold any Investments, except (a) Investments
held by the Borrower or any of its Subsidiaries in cash or Cash Equivalents; (b)
Investments of the Borrower in any of its Subsidiaries; (c) Investments of a
Subsidiary of the Borrower in the Borrower or another Subsidiary of the
Borrower; (d) Permitted Acquisitions; (e) Investments by the Borrower and its
Subsidiaries in account debtors received in connection with the bankruptcy or
reorganization, or in settlement of the delinquent obligations of financially
troubled suppliers or customers, in the ordinary course of business; (f)
promissory notes, earn-outs, other contingent payment obligations and other
non-cash consideration received by Borrower or any of its Subsidiaries as
partial payment of the total consideration of any Asset Sale made in accordance
with Section 8.2(vii); (g) loans and advances by the Borrower and its
Subsidiaries to their respective employees in an aggregate amount not to exceed
$1,000,000, at any time outstanding; (h) Investments comprised of the purchase
of receivables from other energy marketers as required from time to time by one
or more applicable Governmental Authorities; (i) other Investments held by the
Borrower or its Subsidiaries on the Closing Date that are listed on Schedule
8.4; and (j) Investments by the Borrower and its Subsidiaries not otherwise
permitted under this Section 8.4 in an aggregate amount not to exceed
$5,000,000, at any time.
41
Section 8.5 Financial Covenants.
(a) Consolidated Total Debt/Consolidated Total Capitalization Ratio.
The Borrower will not at any time permit the ratio of (i) Consolidated Total
Debt to (ii) Consolidated Total Capitalization to exceed 0.55 to 1.00.
(b) Interest Coverage Ratio. The Borrower will not permit at any
time its Interest Coverage Ratio to be less than 2.00 to 1.00.
Section 8.6 Transactions with Affiliates. The Borrower will not, and
will not permit any of its Subsidiaries to, enter into any transaction or series
of transactions with any Affiliate (other than, in the case of the Borrower, any
Subsidiary of the Borrower, and in the case of a Subsidiary of the Borrower, the
Borrower or another Subsidiary of the Borrower) other than in the ordinary
course of business of and pursuant to the reasonable requirements of the
Borrower's or such Subsidiary's business and upon fair and reasonable terms no
less favorable to the Borrower or such Subsidiary than would be obtained in a
comparable arm's-length transaction with a Person other than an Affiliate,
except (i) sales of goods to an Affiliate for use or distribution outside the
United States that in the good faith judgment of the Borrower complies with any
applicable legal requirements of the Code, or (ii) agreements and transactions
with and payments to officers, directors and shareholders that are either (A)
entered into in the ordinary course of business and not prohibited by any of the
provisions of this Agreement, or (B) entered into outside the ordinary course of
business, approved by the directors or shareholders of the Borrower, and not
prohibited by any of the provisions of this Agreement.
Section 8.7 Material Agreements. Neither the Borrower nor any
Subsidiary of the Borrower shall default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
agreement, instrument or other document to which the Borrower or such
Subsidiary, as applicable, is a party, which default could reasonably be
expected to have a Material Adverse Effect.
Section 8.8 Use of Proceeds/Margin Regulations. The Borrower will
not, and will not permit any of its Subsidiaries to, use any part of the
proceeds of any Borrowing, directly or indirectly, to purchase or carry Margin
Stock, or to extend credit to others for the purpose of purchasing or carrying
any Margin Stock, in violation of any of the provisions of Regulation T, U or X
of the Board of Governors of the Federal Reserve System.
Section 8.9 No Dividend Restrictions. The Borrower shall not permit
any of its Subsidiaries to enter into any agreement or otherwise create or cause
or permit to exist or become effective any consensual restriction limiting the
ability (whether by covenant, event of default or otherwise) of such Subsidiary
to (i) pay dividends or make any other distributions on shares of such
Subsidiary's capital stock held by the Borrower or any other Subsidiary of the
Borrower or (ii) pay any obligation owed to the Borrower or any other Subsidiary
of the Borrower, provided, however, that this clause (ii) shall not apply to
Permitted Restrictive Covenants.
Section 8.10 Swap Agreements. The Borrower will not, and will not
permit any of its Subsidiaries to, enter into any Swap Agreement other than Swap
Agreements pursuant to which the Borrower or such Subsidiary has hedged its
reasonably estimated interest rate, foreign currency or commodity exposure, and
not for speculative purposes.
42
ARTICLE IX.
EVENTS OF DEFAULT
Section 9.1 Events of Default. Any of the following specified events
shall constitute an Event of Default (each an "Event of Default"):
(a) Payments: the Borrower shall (i) default in the payment when due
(whether at maturity, on a date fixed for a scheduled repayment, on a date on
which a required prepayment is to be made, upon acceleration or otherwise) of
any principal of the Loans; or (ii) default, and such default shall continue for
five or more days, in the payment when due of any interest on the Loans or any
Fees or any other amounts owing hereunder or under any other Credit Document;
(b) Representations: any representation, warranty or statement made
by the Borrower herein or in any other Credit Document (other than pursuant to
Section 6.14(b)) or in any statement or certificate delivered or required to be
delivered pursuant hereto or thereto shall prove to be untrue in any material
respect on the date as of which made or deemed made;
(c) Certain Covenants: the Borrower shall default in the due
performance or observance by it of any term, covenant or agreement contained in
Sections 7.1, 7.2(b), 7.5, 7.9, 7.10, 7.11 or Article VIII of this Agreement;
(d) Other Covenants: the Borrower shall default in the due
performance or observance by it of any term, covenant or agreement contained in
this Agreement or any other Credit Document, other than those referred to in
Section 9.1(a), (b) or (c) above, and such default is not remedied within 30
days after the date on which the Borrower receives written notice of such
default from the Administrative Agent or any Lender (any such notice to be
identified as a "notice of default" and to refer specifically to this
paragraph);
(e) Cross Default Under Other Agreements: the Borrower or any of its
Subsidiaries shall (i) default in any payment with respect to any Indebtedness
(other than the Obligations), and all grace periods applicable to such payment
shall have expired, in an aggregate amount in excess of $10,000,000, regardless
of whether the holder or holders of said Indebtedness (or a trustee or agent on
behalf of such holder or holders) exercises its rights, if any, to cause such
Indebtedness to become due and payable prior to its stated maturity; or (ii)
default in the observance or performance of any agreement or condition relating
to any such Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto (and all grace periods applicable to such
observance, performance or condition shall have expired), or any other event
shall occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause any such
Indebtedness to become due prior to its stated maturity, or any such
Indebtedness of the Borrower or any of its Subsidiaries shall be declared to be
due and payable, or shall be required to be prepaid (other than by a regularly
scheduled required prepayment or redemption, prior to the stated maturity
thereof).
(f) Invalidity of Credit Documents: any material provision of any
Credit Document, at any time after its execution and delivery and for any reason
other than as expressly permitted hereunder or under such Credit Document or
satisfaction in full of all the Obligations, ceases to be in full force and
effect; or the Borrower or any other Person (other than the Administrative Agent
or any Lender) contests in any manner the validity or enforceability of any
provision of any Credit Document; or the Borrower denies in writing that it has
any or further liability or obligation under any Credit Document, or purports to
revoke, terminate or rescind any Credit Document;
43
(g) Judgments: one or more judgments, orders or decrees shall be
entered against the Borrower and/or any of its Subsidiaries involving a
liability (other than a liability covered by insurance, as to which the carrier
has adequate claims paying ability and has not effectively reserved its rights)
of $10,000,000 or more in the aggregate for all such judgments, orders and
decrees for the Borrower and its Subsidiaries, and any such judgments or orders
or decrees shall not have been vacated, discharged or stayed or bonded pending
appeal within 30 days from the entry thereof;
(h) Bankruptcy: any of the following shall occur:
(i) the Borrower or any of its Subsidiaries (the Borrower
and each such Subsidiary, each a "Principal Party") shall commence a
voluntary case concerning itself under the Bankruptcy Code;
(ii) an involuntary case is commenced against any Principal
Party under the Bankruptcy Code and the petition is not dismissed within
60 days after commencement of the case;
(iii) a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, a Substantial Portion of the Property
of any Principal Party;
(iv) any Principal Party commences (including by way of
applying for or consenting to the appointment of, or the taking of
possession by, a rehabilitator, receiver, custodian, trustee,
conservator or liquidator (collectively, a "conservator") of itself or
all or a Substantial Portion of its Property) any other proceeding under
any reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency, liquidation, rehabilitation, conservatorship or
similar law of any jurisdiction whether now or hereafter in effect
relating to such Principal Party;
(v) any such proceeding of the type set forth in clause (iv)
above is commenced against any Principal Party to the extent such
proceeding is consented to by such Person or remains undismissed for a
period of 60 days;
(vi) any Principal Party is adjudicated insolvent or
bankrupt;
(vii) any order of relief or other order approving any such
case or proceeding is entered;
(viii) any Principal Party suffers any appointment of any
conservator or the like for it or any Substantial Portion of its
Property that continues undischarged or unstayed for a period of 60
days;
(ix) any Principal Party makes a general assignment for the
benefit of creditors;
(x) any Principal Party generally does not pay its debts as
such debts become due; or
(xi) any corporate (or similar organizational) action is
taken by any Principal Party for the purpose of effecting any of the
foregoing;
(i) ERISA: (i) the Unfunded Liabilities of all Single Employer Plans
shall exceed in the aggregate $20,000,000 or any Reportable Event that would
reasonably be expected to have a Material Adverse Effect shall occur in
connection with any Plan; (ii) the Borrower or any member of the Controlled
Group shall have been notified by the sponsor of a Multiemployer Plan that it
has incurred
44
withdrawal liability to such Multiemployer Plan in an amount that, when
aggregated with all other amounts required to be paid to Multiemployer Plans by
the Borrower or any other member of the Controlled Group as withdrawal liability
(determined as of the date of such notification), exceeds $10,000,000 or
requires payment exceeding $10,000,000 per annum; or (iii) the Borrower or any
other member of the Controlled Group shall have been notified by the sponsor of
a Multiemployer Plan that such Multiemployer Plan is in reorganization or is
being terminated, within the meaning of Title IV of ERISA, if as a result of
such reorganization or termination the aggregate annual contribution of the
Borrower and the other members of the Controlled Group (taken as a whole) to all
Multiemployer Plans that are then in reorganization or being terminated have
been or will be increased over the amounts contributed to such Multiemployer
Plans for the respective plan years of each such Multiemployer Plan immediately
preceding the plan in year in which the reorganization or termination occurs by
an amount exceeding $10,000,000; or
(j) Change of Control: there occurs a Change of Control.
Section 9.2 Acceleration; Remedies. Upon the occurrence of any Event
of Default, and at any time thereafter, if any Event of Default shall then be
continuing, the Administrative Agent shall, upon the written request of the
Required Lenders, by written notice to the Borrower, take any or all of the
following actions, without prejudice to the rights of the Administrative Agent
or any Lender to enforce its claims against the Borrower in any manner permitted
under applicable law:
(a) declare the Total Commitment terminated, whereupon the
Commitment of each Lender shall forthwith terminate immediately without any
other notice of any kind;
(b) declare the principal of and any accrued interest in respect of
all Loans and all other Obligations owing hereunder to be, whereupon the same
shall become, forthwith due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower; and/or
(c) exercise any other right or remedy available under any of the
Credit Documents or applicable law;
provided that, if an Event of Default specified in Section 9.1(h) (other than
Section 9.1(h)(x)) shall occur, the result that would occur upon the giving of
written notice by the Administrative Agent as specified in clauses (a) and/or
(b) above shall occur automatically without the giving of any such notice.
Section 9.3 Application of Liquidation Proceeds. All monies received
by the Administrative Agent or any Lender from the exercise of remedies
hereunder or under the other Credit Documents or under any other documents
relating to this Agreement shall, unless otherwise required by the terms of the
other Credit Documents or by applicable law, be applied as follows:
(a) first, to the payment of all expenses (to the extent not
otherwise paid by the Borrower) incurred by the Administrative Agent and the
Lenders in connection with the exercise of such remedies, including, without
limitation, all reasonable costs and expenses of collection, reasonable
documented attorneys' fees, court costs and any foreclosure expenses;
(b) second, to the payment pro rata of interest then accrued on the
outstanding Loans;
(c) third, to the payment pro rata of any fees then accrued and
payable to the Administrative Agent or any Lender under this Agreement in
respect of the Loans;
45
(d) fourth, to the payment pro rata of the principal balance then
owing on the outstanding Loans;
(e) fifth, to the payment to the Lenders of any amounts then accrued
and unpaid under Sections 2.6, 2.7, and 4.5, and if such proceeds are
insufficient to pay such amounts in full, to the payment of such amounts pro
rata;
(f) sixth, to the payment pro rata of all other amounts owed by the
Borrower to the Administrative Agent or any Lender under this Agreement or any
other Credit Document; and
(g) finally, any remaining surplus after all of the Obligations have
been paid in full, to the Borrower or to whomsoever shall be lawfully entitled
thereto.
ARTICLE X.
THE ADMINISTRATIVE AGENT
Section 10.1 Appointment. Each Lender hereby irrevocably designates
and appoints KeyBank as Administrative Agent to act as specified herein and in
the other Credit Documents, and each such Lender hereby irrevocably authorizes
KeyBank as the Administrative Agent for such Lender, to take such action on its
behalf under the provisions of this Agreement and the other Credit Documents and
to exercise such powers and perform such duties as are expressly delegated to
the Administrative Agent by the terms of this Agreement and the other Credit
Documents, together with such other powers as are reasonably incidental thereto.
The Administrative Agent agrees to act as such upon the express conditions
contained in this Article X. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Administrative Agent shall not have any duties
or responsibilities, except those expressly set forth herein or in the other
Credit Documents, nor any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or otherwise exist against the Administrative Agent.
The provisions of this Article X are solely for the benefit of the
Administrative Agent, and the Lenders, and neither the Borrower nor any of its
Subsidiaries shall have any rights as a third party beneficiary of any of the
provisions hereof. In performing its functions and duties under this Agreement,
the Administrative Agent shall act solely as agent of the Lenders and does not
assume and shall not be deemed to have assumed any obligation or relationship of
agency or trust with or for the Borrower or any of its Subsidiaries.
Section 10.2 Delegation of Duties. The Administrative Agent may
execute any of its duties under this Agreement or any other Credit Document by
or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care except to the extent
otherwise required by Section 10.3.
Section 10.3 Exculpatory Provisions. Neither the Administrative Agent
nor any of its respective officers, directors, employees, agents,
attorneys-in-fact or affiliates shall be (i) 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 Credit Document (except for its or such Person's own
gross negligence or willful misconduct) or (ii) responsible in any manner to any
of the Lenders for any recitals, statements, representations or warranties made
by the Borrower or any of its Subsidiaries or any of their respective officers
contained in this Agreement, any other Credit Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Administrative Agent under or in connection with, this Agreement or any
other Credit Document or for any failure of the Borrower or any Subsidiary of
the Borrower or any of their respective officers to perform its obligations
hereunder or
46
thereunder. The Administrative Agent shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement, or to inspect the
properties, books or records of the Borrower or any of its Subsidiaries. The
Administrative Agent shall not be responsible to any Lender for the
effectiveness, genuineness, validity, enforceability, collectability or
sufficiency of this Agreement or any Credit Document or for any representations,
warranties, recitals or statements made herein or therein or made in any written
or oral statement or in any financial or other statements, instruments, reports,
certificates or any other documents in connection herewith or therewith
furnished or made by the Administrative Agent to the Lenders or by or on behalf
of the Borrower or any of its Subsidiaries to the Administrative Agent or any
Lender or be required to ascertain or inquire as to the performance or
observance of any of the terms, conditions, provisions, covenants or agreements
contained herein or therein or as to the use of the proceeds of the Loans or of
the existence or possible existence of any Default or Event of Default.
Section 10.4 Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, e-mail or other electronic transmission, facsimile
transmission, telex or teletype message, statement, order or other document or
conversation believed by it, in good faith, 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 or any of its Subsidiaries), independent accountants and other experts
selected by the Administrative Agent. The Administrative Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Credit Document unless it shall first receive such advice or concurrence
of the Required Lenders as it deems appropriate or it shall first be indemnified
to its satisfaction by the Lenders against any and all liability and expense
that may be incurred by it by reason of taking or continuing to take any such
action. The Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and the other Credit
Documents in accordance with a request of the Required Lenders (or all of the
Lenders, or all of the Lenders (other than any Defaulting Lender), as
applicable, as to any matter that, pursuant to Section 11.11, can only be
effectuated with the consent of all Lenders, or all Lenders (other than any
Defaulting Lender), as the case may be), and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders.
Section 10.5 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from a
Lender or the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default." If the
Administrative Agent receives such a notice, the Administrative Agent shall give
prompt notice thereof to the Lenders. The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders, provided that unless and until the
Administrative Agent shall have received such directions, the Administrative
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 Lenders.
Section 10.6 Non-Reliance. Each Lender expressly acknowledges that
neither the Administrative Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates have made any representations or
warranties to it and that no act by the Administrative Agent hereinafter taken,
including any review of the affairs of the Borrower or any of its respective
Subsidiaries, shall be deemed to constitute any representation or warranty by
the Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent, or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, assets, operations, property, financial and
other conditions, prospects and creditworthiness of the Borrower and its
respective
47
Subsidiaries and made its own decision to make its Loans hereunder and enter
into this Agreement. Each Lender also represents that it will, independently and
without reliance upon the Administrative Agent, or any other Lender, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement, and to make such investigation as it
deems necessary to inform itself as to the business, assets, operations,
property, financial and other conditions, prospects and creditworthiness of the
Borrower and its Subsidiaries. The Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, assets, property, financial and other
conditions, prospects or creditworthiness of the Borrower or any of its
Subsidiaries that may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
Section 10.7 Indemnification. The Lenders agree to indemnify the
Administrative Agent and its Related Parties ratably according to their
respective Loans and Percentages of the Unutilized Total Commitment, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, reasonable expenses or disbursements of any
kind whatsoever that may at any time (including, without limitation, at any time
following the payment of the Obligations) be imposed on, incurred by or asserted
against the Administrative Agent or such Related Party in any way relating to or
arising out of this Agreement or any other Credit Document, or any documents
contemplated by or referred to herein or the transactions contemplated hereby or
any action taken or omitted to be taken by the Administrative Agent or such
Related Party under or in connection with any of the foregoing, but only to the
extent that any of the foregoing is not paid by the Borrower, provided that no
Lender shall be liable to the Administrative Agent or such Related Party for the
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements to the
extent resulting solely from the Administrative Agent's or such Related Party's
gross negligence or willful misconduct. If any indemnity furnished to the
Administrative Agent or any Related Party for any purpose shall, in the opinion
of the Administrative Agent, be insufficient or become impaired, the
Administrative Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished. The agreements in this Section 10.7 shall survive the payment of all
Obligations.
Section 10.8 The Administrative Agent in Individual Capacity. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower, its Subsidiaries
and their Affiliates as though not acting as Administrative Agent hereunder.
With respect to the Loans made by it and all Obligations owing to it, the
Administrative Agent shall have the same rights and powers under this Agreement
as any Lender and may exercise the same as though it were not the Administrative
Agent, and the terms "Lender" and "Lenders" shall include the Administrative
Agent in its individual capacity.
Section 10.9 Successor Administrative Agent. The Administrative Agent
may resign at any time upon not less than 30 days notice to the Lenders and the
Borrower. Upon receipt of any such notice of resignation, the Required Lenders
shall have the right to appoint a successor, provided that, so long as no Event
of Default shall have occurred and be continuing, the Borrower shall have the
right to consent to any such successor Administrative Agent, such consent not to
be unreasonably withheld. If no such successor shall have been so appointed by
the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may on behalf of the Lenders, appoint a
successor Administrative Agent, provided that if the Administrative Agent shall
notify the Borrower and the Lenders that no such successor is willing to accept
such appointment, then such resignation shall nonetheless become effective in
accordance with such notice and (i) the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder and under the other Credit
Documents (except that in the case of any
48
collateral security held by the Administrative Agent on behalf of the Lenders
under any of the Credit Documents, the retiring Administrative Agent shall
continue to hold such collateral security for the benefit of the Lenders until
such time as a successor Administrative Agent is appointed) and (ii) all
payments, communications and determinations provided to be made by, to or
through the Administrative Agent shall instead be made by or to each Lender
directly, until such time as the Required Lenders (with the consent of the
Borrower, if applicable) appoint a successor Administrative Agent as provided
for above in this paragraph. Upon the acceptance of a successor's appointment as
Administrative Agent hereunder, such successor shall succeed to and become
vested with all of the rights, powers, privileges and duties of the retiring (or
retired) Administrative Agent, and the retiring Administrative Agent shall be
discharged from all of its duties and obligations hereunder or under the other
Credit Documents (if not already discharged therefrom as provided above in this
paragraph). The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After the retiring Administrative
Agent's resignation hereunder and under the other Credit Documents, the
provisions of this Article and Section 11.1 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while the retiring Administrative Agent was acting as
Administrative Agent.
Section 10.10 Other Agents. Any Lender identified herein as a
Co-Agent, Syndication Agent, Documentation Agent, Co-Documentation Agent,
Managing Agent, Manager, Lead Arranger, Arranger or any other corresponding
title, other than "Administrative Agent," shall have no right, power,
obligation, liability, responsibility or duty under this Agreement or any other
Credit Document except those applicable to all Lenders as such. Each Lender
acknowledges that it has not relied, and will not rely, on any Lender so
identified in deciding to enter into this Agreement or in taking or not taking
any action hereunder.
ARTICLE XI.
MISCELLANEOUS
Section 11.1 Payment of Expenses.
(a) Irrespective of whether the transactions contemplated hereby are
consummated, the Borrower agrees to pay (or reimburse the Administrative Agent
for) all reasonable out-of-pocket costs and expenses of the Administrative Agent
in connection with the negotiation, preparation, syndication, administration and
execution and delivery of the Credit Documents and the documents and instruments
referred to therein and the syndication of the Commitments, including, without
limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent and its Affiliates.
(b) The Borrower agrees to pay, or reimburse the Administrative
Agent for, all reasonable out-of-pocket costs and expenses of the Administrative
Agent in connection with any amendment, waiver, consent or other modification of
or relating to any of the Credit Documents, including, without limitation, the
reasonable fees and disbursements of counsel to the Administrative Agent.
(c) The Borrower agrees to pay, or reimburse the Administrative
Agent and the Lenders for, all reasonable out-of-pocket costs and expenses of
the Administrative Agent and the Lenders in connection with the enforcement of
any of the Credit Documents or the other documents and instruments referred to
therein, including, without limitation, the reasonable fees and disbursements of
each counsel to the Administrative Agent and any Lender (including allocated
costs of internal counsel).
49
(d) Without limitation of the preceding Section 11.1(c), in the
event of the bankruptcy, insolvency, rehabilitation or other similar proceeding
in respect of the Borrower or any of its Subsidiaries, the Borrower agrees to
pay all costs of collection and defense, including reasonable attorneys' fees in
connection therewith and in connection with any appellate proceeding or
post-judgment action involved therein, which shall be due and payable together
with all required service or use taxes.
(e) Without duplication of any of the Borrower's obligations under
Section 4.5(c), the Borrower agrees to pay and hold the Administrative Agent and
each of the Lenders harmless from and against any and all present and future
stamp and other similar taxes with respect to the foregoing matters and save the
Administrative Agent and each of the Lenders harmless from and against any and
all liabilities with respect to or resulting from any delay or omission (other
than to the extent attributable to any such indemnified Person) to pay such
taxes.
(f) The Borrower agrees to indemnify the Administrative Agent, each
Lender, and their respective Related Parties (collectively, the "Indemnitees")
from and hold each of them harmless against any and all losses, liabilities,
claims, damages or expenses reasonably incurred by any of them as a result of,
or arising out of, or in any way related to, or by reason of
(i) any investigation, litigation or other proceeding
(whether or not any Lender is a party thereto) related to the entering
into and/or performance of any Credit Document or the use of the
proceeds of any Loans hereunder or the consummation of any transactions
contemplated in any Credit Document, other than any such investigation,
litigation or proceeding arising out of transactions solely between or
among one or more of the Lenders and/or the Administrative Agent,
transactions solely involving the assignment by a Lender of all or a
portion of its Loans and Commitments, or the granting of participations
therein, as provided in this Agreement, or arising solely out of any
examination of a Lender by any regulatory or other governmental
authority having jurisdiction over it, or
(ii) the actual or alleged presence of Hazardous Materials in
the air, surface water or groundwater or on the surface or subsurface of
any Real Property owned, leased or at any time operated by the Borrower
or any of its Subsidiaries, the release, generation, storage,
transportation, handling or disposal of Hazardous Materials at any
location, whether or not owned or operated by the Borrower or any of its
Subsidiaries, if the Borrower or any such Subsidiary could have or is
alleged to have any responsibility in respect thereof, the
non-compliance of any such Real Property with foreign, federal, state
and local laws, regulations and ordinances (including, without
limitation, applicable permits thereunder) applicable thereto, or any
Environmental Claim asserted against the Borrower or any of its
Subsidiaries, in respect of any such Real Property,
including, in each case, without limitation, the reasonable documented fees and
disbursements of counsel incurred in connection with any such investigation,
litigation or other proceeding (but excluding in each case under this clause (f)
any such losses, liabilities, claims, damages or expenses to the extent incurred
by reason of the gross negligence or willful misconduct of the Person to be
indemnified or of any other Indemnitee who is such Person or an Affiliate of
such Person). To the extent that the undertaking to indemnify, pay or hold
harmless any Person set forth in the preceding sentence may be unenforceable
because it is violative of any law or public policy, the Borrower shall make the
maximum contribution to the payment and satisfaction of each of the indemnified
liabilities that is permissible under applicable law.
Section 11.2 Right of Setoff. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence and during the continuance of
an Event of Default, each Lender is hereby authorized at any time or from time
50
to time, without presentment, demand, protest or other notice of any kind to the
Borrower or to any other Person, any such notice being hereby expressly waived,
to set off and to appropriate and apply any and all deposits (general or
special) and any other Indebtedness at any time held or owing by such Lender
(including, without limitation, by branches, agencies and Affiliates of such
Lender wherever located) to or for the credit or the account of the Borrower
against and on account of the Obligations and liabilities of the Borrower to
such Lender under this Agreement or under any of the other Credit Documents,
including, without limitation, all interests in Obligations of the Borrower
purchased by such Lender pursuant to Section 11.4(c), and all other claims of
any nature or description arising out of or connected with this Agreement or any
other Credit Document, irrespective of whether or not such Lender shall have
made any demand hereunder and although such Obligations, liabilities or claims,
or any of them, shall be contingent or unmatured. Each Lender agrees promptly to
notify the Borrower after any such set off and application, provided, however,
that the failure to give such notice shall not affect the validity of such set
off and application.
Section 11.3 Notices.
(a) Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in subparagraph (c) below), all notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
telecopier as follows:
(i) if to the Borrower, to The Dayton Power and Light
Company, 1065 Woodman Drive, Dayton, Ohio 45432, Attention: Pamela
Holdren (Telecopier No. (937) 259-7813; Telephone No. (937) 259-7914);
(ii) if to the Administrative Agent, to KeyBank National
Association, 127 Public Square, Cleveland, Ohio 44114, Attention: Laura
Binkley (Telecopier No. (216) 689-4981; Telephone No.(216) 689-4448);
and
(iii) if to a Lender, to it at its address (or telecopier
number) set forth on Annex I hereto or, in the case of any Lender that
becomes a party to this Agreement by way of assignment under Section
11.4 of this Agreement, to it at the address set forth in the Assignment
Agreement to which it is a party;
(b) Receipt of Notices. Notices and communications sent by hand or
overnight courier service, or mailed by certified or registered mail, shall be
deemed to have been given when received; notices sent by telecopier shall be
deemed to have been given when sent and receipt has been confirmed by telephone.
Notices delivered through electronic communications to the extent provided in
subparagraph (c) below, shall be effective as provided in such subparagraph (c).
(c) Electronic Communications. Notices and other communications to
the Administrative Agent or any Lender pursuant to Section 7.1(a), (b), (c),
(h), (i) or (j) may be delivered or furnished by electronic communication
(including e-mail and Internet or intranet websites) pursuant to procedures
approved by the Administrative Agent. The Administrative Agent or the Borrower
may, in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it,
provided that approval of such procedures may be limited to particular notices
or communications. Unless the Administrative Agent otherwise prescribes, (i)
notices and other communications sent to an e-mail address shall be deemed
received upon the sender's receipt of an acknowledgement from the intended
recipient (such as by the "return receipt requested" function, as available,
return e-mail or other written acknowledgement), provided that if such notice or
other communication is not sent during the normal business hours of the
recipient, such notice or
51
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.
(d) Change of Address. Any party hereto may change its address or
telecopier number for notices and other communications hereunder by notice to
each of the other parties hereto.
Section 11.4 Benefit of Agreement.
(a) Successors and Assigns Generally. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors and assigns, provided that the Borrower
may not assign or transfer any of its rights or obligations hereunder without
the prior written consent of all the Lenders (other than any Defaulting Lender),
and, provided, further, that any assignment by a Lender of its rights and
obligations hereunder shall be effected in accordance with Section 11.4(c).
(b) Participations. Notwithstanding the foregoing, each Lender may
at any time grant participations in any of its rights hereunder or under any of
the Notes to any Person (other than the Borrower or any of its Affiliates or a
natural Person), provided that in the case of any such participation,
(i) the participant shall not have any rights under this
Agreement or any of the other Credit Documents, including, without
limitation, rights of consent, approval or waiver (the participant's
rights against such Lender in respect of such participation to be those
set forth in the agreement executed by such Lender in favor of the
participant relating thereto),
(ii) such Lender's obligations under this Agreement
(including, without limitation, its Commitment hereunder) shall remain
unchanged,
(iii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations,
(iv) such Lender shall remain the holder of any Note for all
purposes of this Agreement, and
(v) the Borrower, the Administrative Agent, and the other
Lenders shall continue to deal solely and directly with the selling
Lender in connection with such Lender's rights and obligations under
this Agreement, and all amounts payable by the Borrower hereunder shall
be determined as if such Lender had not sold such participation, except
that the participant shall be entitled to the benefits of Sections 2.6,
2.7 and 4.5 of this Agreement to the extent that such Lender would be
entitled to such benefits if the participation had not been entered into
or sold (provided that the participant shall only be entitled to the
benefits of Section 4.5 to the extent that it complies with the
requirements of that section as though it were a Lender),
and, provided further, that no Lender shall transfer, grant or sell any
participation under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Credit Document except to
the extent such amendment or waiver would (w) extend the final scheduled
maturity of the Loans in which such participant is participating, or reduce the
rate or extend the time of payment of interest or Fees thereon (except in
connection with a waiver of the applicability of any post-default increase in
interest rates), or reduce the principal amount thereof, or increase such
participant's
52
participating interest in any Commitment over the amount thereof then in effect
(it being understood that a waiver of any Default or Event of Default shall not
constitute a change in the terms of any such Commitment), (x) release any
guarantor from its guaranty of any of the Obligations, except strictly in
accordance with the terms of the Credit Documents, or (y) consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement.
(c) Assignments by Lenders. Any Lender may assign all, or if less
than all, a fixed portion, of its Loans and/or Commitment and its rights and
obligations hereunder to one or more Eligible Assignees, each of which shall
become a party to this Agreement as a Lender by execution of an Assignment
Agreement, provided that
(i) except in the case of (x) an assignment of the entire
remaining amount of the assigning Lender's Loans and/or Commitment or
(y) an assignment to another Lender, an Affiliate of such Lender or an
Approved Fund with respect to such Lender, the aggregate amount of each
such assignment of such Commitment (which for this purpose includes the
Loans outstanding thereunder), shall not be less than $5,000,000 (or, if
greater, in integral multiples of $1,000,000),
(ii) in the case of any assignment to an Eligible Assignee at
the time of any such assignment the Lender Register shall be deemed
modified to reflect the Commitments of such new Lender and of the
existing Lenders,
(iii) upon surrender of the old Notes, if any, upon request of
the new Lender, new Notes will be issued, at the Borrower's expense, to
such new Lender and to the assigning Lender, such new Notes to be in
conformity with the requirements of Section 2.4 (with appropriate
modifications) to the extent needed to reflect the revised Commitments,
(iv) unless waived by the Administrative Agent, the
Administrative Agent shall receive at the time of each such assignment,
from the assigning or assignee Lender, the payment of a non-refundable
assignment fee of $3,500,
and, provided further, that such transfer or assignment will not be effective
until the Assignment Agreement in respect thereof is recorded by the
Administrative Agent on the Lender Register maintained by it as provided herein.
To the extent of any assignment pursuant to this Section 11.4(c) the
assigning Lender shall be relieved of its obligations hereunder with respect to
its assigned Commitments.
At the time of each assignment pursuant to this Section 11.4(c) to a
Person that is not already a Lender hereunder and that is not a United States
Person (as such term is defined in Section 7701(a)(30) of the Code) for Federal
income tax purposes, the respective assignee Lender shall provide to the
Borrower and the Administrative Agent the appropriate Internal Revenue Service
Forms (and, if applicable, an Exemption Certificate) described in Section
4.5(b). To the extent that an assignment of all or any portion of a Lender's
Commitment and related outstanding Obligations pursuant to this Section 11.4(c)
would, at the time of such assignment, result in increased costs under Section
4.5 from those being charged by the respective assigning Lender prior to such
assignment, then the Borrower shall not be obligated to pay such increased costs
(although the Borrower shall be obligated to pay any other increased costs of
the type described above resulting from changes after the date of the respective
assignment).
Nothing in this Section 11.4(c) shall prevent or prohibit (i) any Lender
that is a bank, trust company or other financial institution from pledging its
Notes or Loans to a Federal Reserve Bank in
53
support of borrowings made by such Lender from such Federal Reserve Bank, or
(ii) any Lender that is a trust, limited liability company, partnership or other
investment company from pledging its Notes or Loans to a trustee or agent for
the benefit of holders of certificates or debt securities issued by it. No such
pledge, or any assignment pursuant to or in lieu of an enforcement of such a
pledge, shall relieve the transferor Lender from its obligations hereunder.
(d) No SEC Registration or Blue Sky Compliance. Notwithstanding any
other provisions of this Section 11.4, no transfer or assignment of the
interests or obligations of any Lender hereunder or any grant of participation
therein shall be permitted if such transfer, assignment or grant would require
the Borrower to file a registration statement with the SEC or to qualify the
Loans under the "Blue Sky" laws of any State.
(e) Representations of Lenders. Each Lender initially party to this
Agreement hereby represents, and each Person that becomes a Lender pursuant to
an assignment permitted by this Section 11.4 will, upon its becoming party to
this Agreement, represent that it is a commercial lender, other financial
institution or other "accredited" investor (as defined in SEC Regulation D) that
makes or acquires loans in the ordinary course of its business and that it will
make or acquire Loans for its own account in the ordinary course of such
business, provided that subject to the preceding Sections 11.4(b) and (c), the
disposition of any promissory notes or other evidences of or interests in
Indebtedness held by such Lender shall at all times be within its exclusive
control.
Section 11.5 No Waiver; Remedies Cumulative. No failure or delay on
the part of the Administrative Agent or any Lender in exercising any right,
power or privilege hereunder or under any other Credit Document and no course of
dealing between the Borrower and the Administrative Agent or any Lender shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder or under any other Credit Document preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege hereunder or thereunder. No notice to or demand on the Borrower in
any case shall entitle the Borrower to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the
Administrative Agent or the Lenders to any other or further action in any
circumstances without notice or demand. Without limiting the generality of the
foregoing, the making of a Loan shall not be construed as a waiver of any
Default or Event of Default, regardless of whether the Administrative Agent, any
Lender may have had notice or knowledge of such Default or Event of Default at
the time. The rights and remedies herein expressly provided are cumulative and
not exclusive of any rights or remedies that the Administrative Agent or any
Lender would otherwise have.
Section 11.6 Payments Pro Rata; Sharing of Setoffs.
(a) The Administrative Agent agrees that promptly after its receipt
of each payment from or on behalf of the Borrower in respect of any Obligations,
it shall distribute such payment to the Lenders (other than any Lender that has
expressly waived in writing its right to receive its pro rata share thereof) pro
rata based upon their respective shares, if any, of the Obligations with respect
to which such payment was received. As to any such payment received by the
Administrative Agent prior to 1:00 P.M. (local time at the Payment Office) in
funds that are immediately available on such day, the Administrative Agent will
use all reasonable efforts to distribute such payment in immediately available
funds on the same day to the Lenders as aforesaid.
(b) Each of the Lenders agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) that is applicable to the payment of the principal of, or interest
on, the Loans or Fees, of a sum that with
54
respect to the related sum or sums received by other Lenders is in a greater
proportion than the total of such Obligation then owed and due to such Lender
bears to the total of such Obligation then owed and due to all of the Lenders
immediately prior to such receipt, then such Lender receiving such excess
payment shall purchase for cash without recourse or warranty from the other
Lenders an interest in the Obligations to such Lenders in such amount as shall
result in a proportional participation by all of the Lenders in such amount,
provided that (i) if all or any portion of such excess amount is thereafter
recovered from such Lender, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest, and (ii)
the provisions of this Section 11.6(b) shall not be construed to apply to any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement, or any payment obtained by a Lender as consideration
for the assignment of or sale of a participation in any of its Loans to any
assignee or participant pursuant to Section 11.4, other than to the Borrower or
any Subsidiary or Affiliate thereof (as to which the provisions of this Section
11.6(b) shall apply). The Borrower consents to the foregoing and agrees, to the
extent it may effectively do so under applicable law, that any Lender acquiring
a participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of the Borrower in the amount
of such participation.
(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding Sections 11.6(a) and (b) shall be subject to the
express provisions of this Agreement that require, or permit, differing payments
to be made to Lenders that are not Defaulting Lenders, as opposed to Defaulting
Lenders.
(d) If any Lender shall fail to make any payment required to be made
by it to the Administrative Agent pursuant to Section 2.3(b), then the
Administrative Agent may, in its discretion (notwithstanding any contrary
provision of this Agreement), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender's
obligations to the Administrative Agent under such Sections until all such
unsatisfied obligations are fully paid.
Section 11.7 Governing Law; Submission to Jurisdiction; Venue; Waiver
of Jury Trial.
(a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. TO THE
FULLEST EXTENT PERMITTED BY LAW, THE BORROWER HEREBY UNCONDITIONALLY AND
IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY JURISDICTION OTHER
THAN THE STATE OF NEW YORK GOVERNS THIS AGREEMENT OR ANY OF THE OTHER CREDIT
DOCUMENTS. Any legal action or proceeding with respect to this Agreement or any
other Credit Document may be brought in the Supreme Court of the State of New
York sitting in New York County or in the United States District Court of the
Southern District of New York, and, by execution and delivery of this Agreement,
the Borrower hereby irrevocably accepts for itself and in respect of its
Property, generally and unconditionally, the jurisdiction of the aforesaid
courts. The Borrower hereby further irrevocably consents to the service of
process out of any of the aforementioned courts in any such action or proceeding
by the mailing of copies thereof by registered or certified mail, postage
prepaid, to the Borrower at its address for notices pursuant to Section 11.3,
such service to become effective 30 days after such mailing or at such earlier
time as may be provided under applicable law. Nothing herein shall affect the
right of the Administrative Agent or any Lender to serve process in any other
manner permitted by law or to commence legal proceedings or otherwise proceed
against the Borrower in any other jurisdiction.
55
(b) The Borrower hereby irrevocably waives any objection that it may
now or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement or any other
Credit Document brought in the courts referred to in Section 11.7(a) above and
hereby further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS
(INCLUDING, WITHOUT LIMITATION, ANY AMENDMENTS, WAIVERS OR OTHER MODIFICATIONS
RELATING TO ANY OF THE FOREGOING), OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY. EACH PARTY HERETO HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS PARAGRAPH.
Section 11.8 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same agreement.
Section 11.9 Integration. This Agreement, the other Credit Documents
and any separate letter agreements with respect to fees payable to the
Administrative Agent, for its own account and benefit and/or for the account,
benefit of, and distribution to, the Lenders, constitute the entire contract
among the parties relating to the subject matter hereof and thereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof or thereof.
Section 11.10 Headings Descriptive. The headings of the several
sections and other portions of this Agreement are inserted for convenience only
and shall not in any way affect the meaning or construction of any provision of
this Agreement.
Section 11.11 Amendment or Waiver.
(a) Neither this Agreement nor any other Credit Document, nor the
terms hereof or thereof, may be amended, changed, waived or otherwise modified
unless such amendment, change, waiver or other modification is in writing and
signed by the Borrower and the Administrative Agent, and also signed (or
consented to in writing by) the Required Lenders, provided that
(i) no change in, or waiver or other modification otherwise
affecting, the amount or time of any scheduled or mandatory reduction in
or termination of the Total Commitment provided for in Section 3.3 to
which a Lender shall be entitled, shall be made without the written
consent of each Lender;
(ii) no change, waiver or other modification shall:
(A) increase (1) the Commitment of any Lender
hereunder, without the written consent of such Lender, or (2)
the Total Commitment, without the consent of all of the Lenders;
56
(B) extend or postpone any Maturity Date provided
for herein that is applicable to any Loan of any Lender, or
extend or postpone any scheduled expiration or termination date
provided for herein that is applicable to a Commitment of any
Lender, without the written consent of such Lender;
(C) reduce the principal amount of any Loan made by
any Lender, or reduce the rate or extend the time of payment of,
or excuse the payment of, interest thereon (other than as a
result of waiving the applicability of any post-default increase
in interest rates), without the written consent of such Lender;
or
(D) reduce the rate or extend the time of payment
of, or excuse the payment of, any Fees to which any Lender is
entitled hereunder, without the written consent of such Lender;
and
(iii) no change, waiver or other modification or termination
shall, without the written consent of each Lender (other than a
Defaulting Lender) affected thereby,
(A) release the Borrower from any obligations as a
guarantor of its Subsidiaries' obligations under any Credit
Document, except in accordance with the express terms of this
Agreement;
(B) amend, modify or waive any provision of this
Section 11.11, or Section 9.3, 10.7, 11.1, 11.4 or 11.6, or any
other provision of any of the Credit Documents pursuant to which
the consent or approval of all Lenders, or a number or specified
percentage or other required grouping of Lenders is by the terms
of such provision explicitly required;
(C) reduce the percentage specified in, or otherwise
modify, the definition of Required Lenders; or
(D) consent to the assignment or transfer by the
Borrower of any of its rights and obligations under this
Agreement, except in accordance with the express terms of this
Agreement.
Any waiver, consent, amendment or other modification with respect to this
Agreement given or made in accordance with this Section 11.11 shall be effective
only in the specific instance and for the specific purpose for which it was
given or made.
(b) No provision of Article X may be amended without the consent of
the Administrative Agent.
Section 11.12 Survival of Indemnities. All indemnities set forth
herein including, without limitation, in Section 2.6, 2.7, 4.5, 10.7 or 11.1
shall survive the execution and delivery of this Agreement and the making and
repayment of Loans.
Section 11.13 Domicile of Loans. Each Lender may transfer and carry
its Loans at, to or for the account of any branch office, subsidiary or
affiliate of such Lender, provided that the Borrower shall not be responsible
for costs arising under Section 2.6 resulting from any such transfer (other than
a transfer pursuant to Section 2.8) to the extent not otherwise applicable to
such Lender prior to such transfer.
57
Section 11.14 Confidentiality.
(a) The Administrative Agent and the Lenders each agrees to maintain
the confidentiality of all Confidential Information (as defined below), except
that Confidential Information may be disclosed (i) to its and its Affiliates'
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Confidential
Information and instructed to keep such Confidential Information confidential),
(ii) to any direct or indirect contractual counterparty in any swap, hedge or
similar agreement (or to any such contractual counterparty's professional
advisor, so long as such contractual counterparty (or such professional advisor)
agrees to be bound by the provisions of this Section 11.14, (iii) to the extent
requested by any regulatory authority, (iv) to the extent required by applicable
laws or regulations or by any subpoena or similar legal process, (v) to any
other party to this Agreement, (vi) to any other creditor of the Borrower that
is a direct or intended beneficiary of any of the Credit Documents, (vii) in
connection with the exercise of any remedies hereunder or under any of the other
Credit Documents, or any suit, action or proceeding relating to this Agreement
or any of the other Credit Documents or the enforcement of rights hereunder or
thereunder, (viii) subject to an agreement containing provisions substantially
the same as those of this Section 11.14, to any assignee of or participant in,
or any prospective assignee of or participant in, any of its rights or
obligations under this Agreement, (ix) with the consent of the Borrower, or (x)
to the extent such Confidential Information (A) becomes publicly available other
than as a result of a breach of this Section 11.14, or (B) becomes available to
the Administrative Agent or any Lender on a non-confidential basis from a source
other than the Borrower.
(b) As used in this Section, "Confidential Information" shall mean
all information received from the Borrower relating to the Borrower or its
business, other than any such information that is available to the
Administrative Agent or any Lender on a non-confidential basis prior to
disclosure by the Borrower, provided that in the case of information received
from the Borrower after the Closing Date, such information is clearly identified
at the time of delivery as confidential. Notwithstanding anything herein to the
contrary, "Confidential Information" shall not include, and the Borrower, the
Administrative Agent and each Lender and the respective Affiliates of each of
the foregoing (and the respective partners, directors, officers, employees,
agents, advisors and other representatives of each of the foregoing and their
Affiliates) may disclose to any and all Persons, without limitation of any kind
(i) any information with respect to the U.S. federal and state income tax
treatment of the transactions contemplated hereby and the facts that may be
relevant to understanding such tax treatment, which facts shall not include for
this purpose the names of the parties or such other Persons named herein, or
information that would permit identification of the parties or such other
Persons, or any pricing terms or other nonpublic business or financial
information that is unrelated to such tax treatment or facts, and (ii) all
materials of any kind (including opinions or other tax analyses) relating to
such tax treatment or facts that are provided to any of the Persons referred to
above.
Section 11.15 Lender Register. The Borrower hereby designates the
Administrative Agent to serve as its agent, solely for purposes of this Section
11.15, to maintain a register (the "Lender Register") on or in which it will
record the names and addresses of the Lenders, and the Commitments from time to
time of each of the Lenders, the Loans made to the Borrower by each of the
Lenders and each repayment and prepayment in respect of the principal amount of
such Loans of each such Lender. Failure to make any such recordation, or (absent
manifest error) any error in such recordation, shall not affect the Borrower's
obligations in respect of such Loans. With respect to any Lender, the transfer
of the Commitment of such Lender and the rights to the principal of, and
interest on, any Loan made pursuant to such Commitment shall not be effective
until such transfer is recorded on the Lender Register maintained by the
Administrative Agent with respect to ownership of such Commitment and Loans and
prior to such recordation all amounts owing to the transferor with respect to
such Commitment and Loans shall remain
58
owing to the transferor. The registration of assignment or transfer of all or
part of any Commitments and Loans shall be recorded by the Administrative Agent
on the Lender Register only upon the acceptance by the Administrative Agent of a
properly executed and delivered Assignment Agreement pursuant to Section
11.4(c). The Borrower agrees to indemnify the Administrative Agent from and
against any and all losses, claims, damages and liabilities of whatsoever nature
that may be imposed on, asserted against or incurred by the Administrative Agent
in performing its duties under this Section 11.15, except to the extent
attributable to the gross negligence or willful misconduct of the Administrative
Agent. The Lender Register shall be available for inspection by the Borrower or
any Lender at any reasonable time and from time to time upon reasonable prior
notice.
Section 11.16 General Limitation of Liability. No claim may be made by
the Borrower, any Lender, the Administrative Agent or any other Person against
the Administrative Agent or any other Lender or the Affiliates, directors,
officers, employees, attorneys or agents of any of them for any damages other
than actual compensatory damages in respect of any claim for breach of contract
or any other theory of liability arising out of or related to the transactions
contemplated by this Agreement or any of the other Credit Documents, or any act,
omission or event occurring in connection therewith; and the Borrower, each
Lender and the Administrative Agent hereby, to the fullest extent permitted
under applicable law, waives, releases and agrees not to sue or counterclaim
upon any such claim for any special, consequential or punitive damages, whether
or not accrued and whether or not known or suspected to exist in its favor.
Section 11.17 No Duty. All attorneys, accountants, appraisers,
consultants and other professional Persons (including, without limitation, the
firms or other entities on behalf of which any such Person may act) retained by
the Administrative Agent or any Lender with respect to the transactions
contemplated by the Credit Documents shall have the right to act exclusively in
the interest of the Administrative Agent or such Lender, as the case may be, and
shall have no duty of disclosure, duty of loyalty, duty of care, or other duty
or obligation of any type or nature whatsoever to the Borrower, to any of its
Subsidiaries, or to any other Person, with respect to any matters within the
scope of such representation or related to their activities in connection with
such representation. The Borrower agrees, on behalf of itself and its
Subsidiaries, not to assert any claim or counterclaim against any such Persons
with regard to such matters, all such claims and counterclaims, now existing or
hereafter arising, whether known or unknown, foreseen or unforeseeable, being
hereby waived, released and forever discharged.
Section 11.18 Lenders and Agent Not Fiduciary to Borrower. The
relationship among the Borrower and its Subsidiaries, on the one hand, and the
Administrative Agent and the Lenders, on the other hand, is solely that of
debtor and creditor, and the Administrative Agent and the Lenders have no
fiduciary or other special relationship with the Borrower and its Subsidiaries,
and no term or provision of any Credit Document, no course of dealing, no
written or oral communication, or other action, shall be construed so as to deem
such relationship to be other than that of debtor and creditor.
Section 11.19 Survival of Representations and Warranties. All
representations and warranties herein shall survive the making of Loans, the
execution and delivery of this Agreement, the Notes and the other documents (the
forms of which are attached as Exhibits hereto), the issue and delivery of the
Notes, any disposition thereof by any holder thereof, and any investigation made
by the Administrative Agent or any Lender or any other holder of any of the
Notes or on its behalf. All statements contained in any certificate or other
document delivered to the Administrative Agent or any Lender or any holder of
any Notes by or on behalf of the Borrower or of its Subsidiaries pursuant hereto
or otherwise specifically for use in connection with the transactions
contemplated hereby shall constitute representations and warranties by the
Borrower hereunder, made as of the respective dates specified therein or, if no
date is specified, as of the respective dates furnished to the Administrative
Agent or any Lender.
59
Section 11.20 Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
Section 11.21 Independence of Covenants. All covenants hereunder shall
be given independent effect so that if a particular action, event, condition or
circumstance is not permitted by any of such covenants, the fact that it would
be permitted by an exception to, or would otherwise be within the limitations or
restrictions of, another covenant, shall not avoid the occurrence of a Default
or an Event of Default if such action is taken or event, condition or
circumstance exists.
Section 11.22 Interest Rate Limitation. Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts that are treated as interest
on such Loan under applicable law (collectively the "Charges"), shall exceed the
maximum lawful rate (the "Maximum Rate") that may be contracted for, charged,
taken, received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Base Rate to the date of repayment, shall have been
received by such Lender.
Section 11.23 Treasury Regulations. The Borrower acknowledges that the
Administrative Agent and/or one or more of the Lenders may treat the Loans as
part of a transaction that is subject to Treasury Regulation Section 1.6011-4 or
Section 301.6112-1, and the Administrative Agent and such Lender or Lenders, as
applicable, may file such IRS forms or maintain such lists and other records as
they may determine is required by such Treasury Regulations.
[Remainder of page intentionally left blank; signature pages follow.]
60
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Agreement to be duly executed and delivered as of the date first above
written.
THE DAYTON POWER AND LIGHT COMPANY
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
KEYBANK NATIONAL ASSOCIATION,
as a Lender and as the Administrative Agent
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
BMO NESBITT BURNS FINANCING, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
BANK HAPOALIM B.M.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
And
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
LASALLE BANK NATIONAL ASSOCIATION
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Signature Page
to
The Dayton Power and Light Company Credit Agreement
FIFTH THIRD BANK
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
NATIONAL CITY BANK
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
UNION BANK OF CALIFORNIA, N.A.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Signature Page
to
The Dayton Power and Light Company Credit Agreement
ANNEX I
INFORMATION AS TO LENDERS
Name of Lender Commitments Notice Address
- --------------------------------- ------------------- ---------------------------------
KeyBank National Association Commitment: KeyBank National Association
127 Public Square
$37,500,000 Cleveland, Ohio 44114
Facsimile: (216) 689-4981
Attention: Laura Binkley
BMO Nesbitt Burns Financing, Inc. Commitment: BMO Nesbitt Burns Financing, Inc.
115 S. LaSalle Street
$27,500,000 Chicago, Illinois 60603
Facsimile: (312) 750-6061
Attention: Alicia Garcia
Bank Hapoalim B.A. Commitment: Bank Hapoalim B.A.
1177 Avenue of the Americas
$20,000,000 14th Floor
New York, New York 10036
Facsimile: (212) 302-3125
Attention: Dwight Ghana
LaSalle Bank National Association Commitment: LaSalle Bank National Association
135 South LaSalle Street
$20,000,000 Chicago, Illinois 60603
Facsimile: (312) 904-0373
Attention: Jeanette Lahart
Fifth Third Bank Commitment: Fifth Third Bank
110 N. Main Street
$15,000,000 Dayton, Ohio 45402
Facsimile: (937) 229-8383
Attention: Jackie Ginn
National City Bank Commitment: National City Bank
155 East Broad Street
$15,000,000 Columbus, Ohio 43251
Facsimile: (614) 463-8572
Attention: Vicki Niemela
Union Bank of California, N.A. Commitment: Union Bank of California, N.A.
CLSO, Commercial Loan Operations
$15,000,000 601 Potrero Grande, 2nd Floor
Monterey Park, California 91754
Facsimile: (323) 720-2252
Attention: Shirley Davis
EXHIBIT A
REVOLVING NOTE
$________________ Cleveland, Ohio
________, 20__
FOR VALUE RECEIVED, the undersigned, THE DAYTON POWER AND LIGHT COMPANY,
an Ohio corporation (herein, together with its successors and assigns, the
"Borrower"), hereby promises to pay to the order of _______________________ (the
"Lender"), in lawful money of the United States of America and in immediately
available funds, at the Payment Office (such term and certain other capitalized
terms used herein without definition shall have the meanings ascribed thereto in
the Credit Agreement referred to below) of KeyBank National Association (the
"Administrative Agent"), the principal sum of ________________ DOLLARS AND
00/100 ($___________) or, if less, the then unpaid principal amount of all Loans
made by the Lender to the Borrower pursuant to the Credit Agreement, on the
Maturity Date.
The Borrower promises also to pay interest in like currency and funds at
the Payment Office on the unpaid principal amount of each Loan made by the
Lender from the date of such Loan until paid at the rates and at the times
provided in Section 2.5 of the Credit Agreement.
This Note is one of the Notes referred to in the Credit Agreement, dated
as of December 12, 2003, among the Borrower, the lending institutions from time
to time party thereto (including the Lender), and the Administrative Agent (as
the same may from time to time be amended, restated, supplemented or otherwise
modified, the "Credit Agreement"), and is entitled to the benefits thereof and
of the other Credit Documents. As provided in the Credit Agreement, this Note is
subject to mandatory prepayment prior to the Maturity Date, in whole or in part.
In case an Event of Default shall occur and be continuing, the principal
of and accrued interest on this Note may be declared to be due and payable in
the manner and with the effect provided in the Credit Agreement.
The Borrower hereby waives presentment, demand, protest or notice of any
kind in connection with this Note. No failure to exercise, or delay in
exercising, any rights hereunder on the part of the holder hereof shall operate
as a waiver of any such rights.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the undersigned has duly executed this Note as of
the date first written above.
THE DAYTON POWER AND LIGHT COMPANY
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
EXHIBIT B
NOTICE OF BORROWING, CONTINUATION OR CONVERSION
______________, 200__
KeyBank National Association,
as Administrative Agent for the Lenders party
to the Credit Agreement referred to below
127 Public Square
Cleveland, Ohio 44114
Attention: Laura Binkley
Re: Notice of Borrowing, Continuation or Conversion
Ladies and Gentlemen:
[For a Borrowing:
The undersigned, The Dayton Power and Light Company, an Ohio corporation
(the "Company"), refers to the Credit Agreement, dated as of December 12, 2003
(as amended, modified or supplemented from time to time, the "Credit Agreement,"
the terms defined therein being used herein as therein defined), among the
Company, as Borrower, the lending institutions from time to time party thereto
(the "Lenders"), and KeyBank National Association, as Administrative Agent for
such Lenders, and hereby gives you notice, irrevocably, pursuant to Section
2.2(b) of the Credit Agreement, that the undersigned hereby requests one or more
Borrowings under the Credit Agreement, and in that connection therewith sets
forth in the schedule attached hereto the information relating to each such
Borrowing (collectively the "Proposed Borrowing") as required by Section 2.2(b)
of the Credit Agreement.
The undersigned hereby specifies that the Proposed Borrowing will
consist of Loans as indicated in the schedule attached hereto.
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the Proposed Borrowing:
(A) the representations and warranties of the Borrower contained in
the Credit Agreement and the other Credit Documents are and will be true and
correct in all material respects, before and after giving effect to the Proposed
Borrowing and to the application of the proceeds thereof, as though made on such
date, except to the extent that such representations and warranties expressly
relate to an earlier specified date, in which case such representations and
warranties were true and correct in all material respects as of the date when
made; and
(B) no Default or Event of Default has occurred and is continuing,
or would result from such Proposed Borrowing or from the application of the
proceeds thereof.]
[For a Continuation:
The undersigned, The Dayton Power and Light Company, an Ohio corporation
(the "Company"), refers to the Credit Agreement, dated as of December 12, 2003
(as amended, modified or supplemented from time to time, the "Credit Agreement,"
the terms defined therein being used herein as therein defined), among the
Company, as Borrower, the lending institutions from time to time party thereto
(the
"Lenders"), and KeyBank National Association, as Administrative Agent for such
Lenders, and hereby gives you notice, irrevocably, pursuant to Section 2.2(b) of
the Credit Agreement, that the undersigned hereby requests one or more
Continuations of Loans, consisting of one Type of Loan, pursuant to Section
2.2(a) of the Credit Agreement, and in that connection therewith sets forth in
the schedule attached hereto the information relating to each such
Continuation.]
[For a Conversion:
The undersigned, The Dayton Power and Light Company, an Ohio corporation
(the "Company"), refers to the Credit Agreement, dated as of December 12, 2003
(as amended, modified or supplemented from time to time, the "Credit Agreement,"
the terms defined therein being used herein as therein defined), among the
Company, as Borrower, the lending institutions from time to time party thereto
(the "Lenders"), and KeyBank National Association, as Administrative Agent for
such Lenders, and hereby gives you notice, irrevocably, pursuant to Section
2.2(b) of the Credit Agreement, that the undersigned hereby requests one or more
Conversions of Loans, consisting of one Type of Loan, into Loans of another
Type, pursuant to Section 2.2(a) of the Credit Agreement, and in that connection
therewith sets forth in the schedule attached hereto the information relating to
each such Conversion.]
Very truly yours,
THE DAYTON POWER AND LIGHT COMPANY
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
BORROWING SCHEDULE
Proposed Borrowing #1:
Business Day Interest Period
of Aggregate if Loans are
Proposed Type of Amount Eurodollar
Borrowing Loans of Loans Loans
-------------- -------------------- ------------- ------------------
Base Rate Loans One Month
Eurodollar Loans Two Months
Three Months
______, 200___ [Circle one of $____________
above] Six Months
[Circle one of
above]
Proposed Borrowing #2:
Business Day Interest Period
of Aggregate if Loans are
Proposed Type of Amount Eurodollar
Borrowing Loans of Loans Loans
-------------- -------------------- ------------- ------------------
Base Rate Loans One Month
Eurodollar Loans Two Months
Three Months
______, 200___ [Circle one of $____________
above] Six Months
[Circle one of
above]
CONTINUATION SCHEDULE
Proposed Continuation #1
[of the Loans described in the first table below
into the Loans described in the second table below]
Aggregate
Amount Interest Period
Date of Loans Type of Loans of Loans of Loans
-------------- -------------------- ------------- ------------------
Eurodollar Loans One Month
Two Months
Three Months
____, 200__ $________
Six Months
[Circle one of
above]
Aggregate
Amount Interest Period
Date of Loans Type of Loans of Loans of Loans
-------------- -------------------- ------------- ------------------
Eurodollar Loans One Month
Two Months
Three Months
____, 200__ $________
Six Months
[Circle one of
above]
Proposed Continuation #2
[of the Loans described in the first table below
into the Loans described in the second table below]
Aggregate
Amount Interest Period
Date of Loans Type of Loans of Loans of Loans
-------------- -------------------- ------------- ------------------
Eurodollar Loans One Month
Two Months
Three Months
____, 200__ $________
Six Months
[Circle one of
above]
Aggregate
Amount Interest Period
Date of Loans Type of Loans of Loans of Loans
-------------- -------------------- ------------- ------------------
Eurodollar Loans One Month
Two Months
Three Months
____, 200__ $________
Six Months
[Circle one of
above]
CONVERSION SCHEDULE
Proposed Conversion #1
[of the Loans described in the first table below
into the Loans described in the second table below]
Aggregate Interest Period
Amount if Loans are
Date of Loans Type of Loans of Loans Eurodollar Loans
-------------- -------------------- ------------- ------------------
Base Rate Loans One Month
Eurodollar Loans Two Months
Three Months
______, 200___ [Circle one of $________
Above] Six Months
[Circle one of
above]
Aggregate Interest Period
Amount if Loans are
Date of Loans Type of Loans of Loans Eurodollar Loans
-------------- -------------------- ------------- ------------------
Base Rate Loans One Month
Eurodollar Loans Two Months
Three Months
______, 200___ [Circle one of $________
Above] Six Months
[Circle one of
above]
Proposed Conversion #2
[of the Loans described in the first table below
into the Loans described in the second table below]
Aggregate Interest Period
Amount if Loans are
Date of Loans Type of Loans of Loans Eurodollar Loans
-------------- -------------------- ------------- ------------------
Base Rate Loans One Month
Eurodollar Loans Two Months
Three Months
______, 200___ [Circle one of $________
Above] Six Months
[Circle one of
above]
Aggregate Interest Period
Amount if Loans are
Date of Loans Type of Loans of Loans Eurodollar Loans
-------------- -------------------- ------------- ------------------
Base Rate Loans One Month
Eurodollar Loans Two Months
Three Months
______, 200___ [Circle one of $________
Above] Six Months
[Circle one of
above]
EXHIBIT C
COMPLIANCE CERTIFICATE
For Fiscal Quarter ended ____________________
THE UNDERSIGNED HEREBY CERTIFIES THAT:
(1) I am the duly elected _______________________ of THE DAYTON
POWER AND LIGHT COMPANY, an Ohio corporation (the "Borrower");
(2) I am familiar with the terms of that certain Credit Agreement,
dated as of December 12, 2003, among the undersigned, the Lenders, as defined in
the Credit Agreement, and KeyBank National Association, as Administrative Agent
(as the same may from time to time be amended, restated, supplemented or
otherwise modified, the "Credit Agreement", the terms defined therein being used
herein as therein defined), and the terms of the other Credit Documents, and I
have made, or have caused to be made under my supervision, a review in
reasonable detail of the transactions and condition of the Borrower and its
Subsidiaries during the accounting period covered by the attached financial
statements;
(3) The review described in paragraph (2) above did not disclose,
and I have no knowledge of, the existence of any condition or event that
constitutes or constituted a Default or Event of Default, at the end of the
accounting period covered by the attached financial statements or as of the date
of this Certificate;
(4) The Borrower hereby represents that the representations and
warranties made by the Borrower contained in the Credit Agreement and each other
Credit Document are true and correct as though made on and as of the date
hereof, except to the extent that such representations and warranties expressly
relate to an earlier specified date, in which case such representations and
warranties were true and correct in all material respects as of the date when
made; and
(5) Set forth on Attachment I hereto are calculations of the
covenants set forth in Sections 8.5 of the Credit Agreement, which calculations
show compliance with the terms thereof.
IN WITNESS WHEREOF, I have signed this certificate the ___ day of
_________, 20___.
THE DAYTON POWER AND LIGHT COMPANY
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
EXHIBIT D
CLOSING CERTIFICATE
Pursuant to Section 5.1(j) of the Credit Agreement, dated as of December 12,
2003 (the "Credit Agreement"; all capitalized terms used herein have the meaning
given to them in the Credit Agreement unless otherwise defined herein), among
THE DAYTON POWER AND LIGHT COMPANY, an Ohio corporation (the "Borrower"), the
lending institutions party thereto (collectively, the "Lenders") and KEYBANK
NATIONAL ASSOCIATION, as administrative agent for the Lenders under the Credit
Agreement ("Agent"), the undersigned, being the duly elected, qualified and
acting _____________________ of the Borrower hereby certifies on behalf of the
Borrower as follows:
1. all conditions precedent set forth in Section 5.1 of the Credit
Agreement have been satisfied;
2. both before and after giving effect to any Borrowings made on
the date hereof and the application of the proceeds thereof, no Default or Event
of Default has occurred or is continuing; and
3. both before and after giving effect to any Borrowings made on
the date hereof and the application of the proceeds thereof, all representations
and warranties of the Borrower contained in the Credit Agreement and in the
other Credit Documents are true and correct in all material respects with the
same effect as though such representations and warranties had been made on and
as of the date hereof, except that, as to any such representations and
warranties that expressly relate to an earlier specified date, such
representations and warranties are only represented as having been true and
correct in all material respects as of the date when made.
IN WITNESS WHEREOF, the undersigned has executed this Certificate on
December ___, 2003.
THE DAYTON POWER AND LIGHT COMPANY
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
EXHIBIT E
ASSIGNMENT AGREEMENT
DATE:_____________
Reference is made to the Credit Agreement described in Item 2 of Annex I
annexed hereto (as the same may from time to time be amended, restated,
supplemented or otherwise modified, the "Credit Agreement"). Unless defined in
Annex I attached hereto, terms defined in the Credit Agreement are used herein
as therein defined.
_____________ (the "Assignor") and ______________ (the "Assignee")
hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee without
recourse and without representation or warranty (other than as expressly
provided herein), and the Assignee hereby purchases and assumes from the
Assignor, that interest in and to all of the Assignor's rights and obligations
under the Credit Agreement as of the date hereof that represents the percentage
interest specified in Item 4 of Annex I (the "Assigned Share") of all of
Assignor's outstanding rights and obligations under the Credit Agreement
indicated in Item 4 of Annex I, including, without limitation, all rights and
obligations with respect to the Assigned Share of the Assignor's Commitment and
of the Loans and the Notes held by the Assignor. After giving effect to such
sale and assignment, the Assignee's Commitment will be as set forth in Item 4 of
Annex I.
2. The Assignor (i) represents and warrants that it is duly
authorized to enter into and perform the terms of this Assignment Agreement,
that it is the legal and beneficial owner of the interest being assigned by it
hereunder and that such interest is free and clear of any liens or security
interests; (ii) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or the other Credit Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement or the other Credit Documents or any other
instrument or document furnished pursuant thereto; and (iii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or any of its Subsidiaries or the
performance or observance by the Borrower of any of its obligations under the
Credit Agreement or the other Credit Documents or any other instrument or
document furnished pursuant thereto.
3. The Assignee (i) represents and warrants that it is duly
authorized to enter into and perform the terms of this Assignment Agreement;
(ii) confirms that it has received a copy of the Credit Agreement and the other
Credit Documents, together with copies of the financial statements referred to
therein and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this Assignment
Agreement; (iii) agrees that it will, independently and without reliance upon
the Administrative Agent, the Assignor or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (iv) appoints and authorizes each Agent to take such action as agent
on its behalf and to exercise such powers under the Credit Agreement and the
other Credit Documents as are delegated to such Agent by the terms thereof,
together with such powers as are reasonably incidental thereto; [and] (v) agrees
that it will perform in accordance with their terms all of the obligations that
by the terms of the Credit Agreement are required to be performed by it as
a Lender[; and (vi) to the extent legally entitled to do so, attaches the forms
described in Section 4.5(b)(ii) of the Credit Agreement]/1/.
4. Following the execution of this Assignment Agreement by the
Assignor and the Assignee, an executed original hereof (together with all
attachments) will be delivered to the Administrative Agent. The effective date
of this Assignment Agreement shall be the date of execution hereof by the
Assignor, the Assignee and the consent hereof by the Administrative Agent and
the receipt by the Administrative Agent of the administrative fee referred to in
Section 11.4(c) of the Credit Agreement, unless otherwise specified in Item 5 of
Annex I hereto (the "Settlement Date").
5. Upon the delivery of a fully executed original hereof to the
Administrative Agent, as of the Settlement Date, (i) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment
Agreement, shall have the rights and obligations of a Lender thereunder and
under the other Credit Documents and (ii) the Assignor shall, to the extent
provided in this Assignment Agreement, relinquish its rights and be released
from its obligations under the Credit Agreement and the other Credit Documents.
6. It is agreed that upon the effectiveness hereof, the Assignee
shall be entitled to (x) all interest on the Assigned Share of the Loans at the
rates specified in Item 6 of Annex I, and (y) all Facility Fees (if applicable)
on the Assigned Share of the Commitment at the rate specified in Item 7 of Annex
I, that, in each case, accrue on and after the Settlement Date, such interest
and, if applicable, Facility Fees, to be paid by the Administrative Agent, upon
receipt thereof from the Borrower, directly to the Assignee. It is further
agreed that all payments of principal made by the Borrower on the Assigned Share
of the Loans that occur on and after the Settlement Date will be paid directly
by the Administrative Agent to the Assignee. Upon the Settlement Date, the
Assignee shall pay to the Assignor an amount specified by the Assignor in
writing that represents the Assigned Share of the principal amount of the
respective Loans made by the Assignor pursuant to the Credit Agreement that are
outstanding on the Settlement Date, net of any closing costs, and that are being
assigned hereunder. The Assignor and the Assignee shall make all appropriate
adjustments in payments under the Credit Agreement for periods prior to the
Settlement Date directly between themselves on the Settlement Date.
7. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
* * *
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
[NAME OF ASSIGNOR], [NAME OF ASSIGNEE],
as Assignor as Assignee
By: By:
---------------------------------- ----------------------------------
Name: Name:
-------------------------------- --------------------------------
Title: Title:
------------------------------- -------------------------------
- ----------
/1/ If the Assignee is organized under the laws of a jurisdiction
outside the United States.
[Consented to]/2/ and Accepted:
KEYBANK NATIONAL ASSOCIATION,
as Administrative Agent
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
[Consented to:]/3/
THE DAYTON POWER AND LIGHT
COMPANY
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
- ----------
/2/ To be added only if the consent of the Administrative Agent is
required by the terms of the Credit Agreement.
/3/ To be added only if the consent of the Borrower is required by
the terms of the Credit Agreement.
ANNEX I
TO
ASSIGNMENT AND ASSUMPTION AGREEMENT
1. The Borrower:
THE DAYTON POWER AND LIGHT COMPANY
2. Name and Date of Credit Agreement:
Credit Agreement, dated as of December 12, 2003, among The
Dayton Power and Light Company, the Lenders from time to time
party thereto, and KeyBank National Association, as
Administrative Agent.
3. Date of Assignment Agreement:
_________ ___, _____
4. Amounts (as of date of item #3 above):
COMMITMENT LOANS
---------- ---------
Aggregate Amount $_____ $_____
for all Lenders
Assigned Share _____% _____%
Amount of $_____ $_____
Assigned Share
Amount Retained $_____ $_____
by Assignor
5. Settlement Date:
_________ ___, _____
6. Rate of Interest
to the Assignee: As set forth in Section 2.5 of the Credit
Agreement (unless otherwise agreed to by the
Assignor and the Assignee)./4/
7. Commitment
Fee: As set forth in Section 3.1(a) of the Credit
Agreement (unless otherwise agreed to by the
Assignor and the Assignee)./5/
- ----------
/4/ The Borrower and the Administrative Agent shall direct the
entire amount of the interest to the Assignee at the rate set forth in Section
2.5 of the Credit Agreement, with the Assignor and Assignee effecting any agreed
upon sharing of interest through payments by the Assignee to the Assignor.
/5/ The Borrower and the Administrative Agent shall direct the
entire amount of the Facility Fees to the Assignee at the rate set forth in
Section 3.1(a) of the Credit Agreement, with the Assignor and the Assignee
effecting any agreed upon sharing of Facility Fees through payment by the
Assignee to the Assignor.
8. Notices:
ASSIGNOR: ASSIGNEE:
- ---------------------- ----------------------
- ---------------------- ----------------------
- ---------------------- ----------------------
Attention: Attention:
Telephone No.: Telephone No.:
Facsimile No.: Facsimile No.:
9. Payment Instructions:
ASSIGNOR: ASSIGNEE:
- ---------------------- ----------------------
- ---------------------- ----------------------
- ---------------------- ----------------------
ABA No. ABA No.
Account No.: Account No.:
Reference: Reference:
Attention: Attention:
Telephone No.: Telephone No.:
Facsimile No.: Facsimile No.:
EXHIBIT F-1
(Legal Opinion of Cadwalader, Wickersham & Taft LLP)
EXHIBIT F-2
(Legal Opinion of General Counsel of the Borrower)