EXHIBIT 10(a)(3)
EXECUTION COPY
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U.S.$430,000,000 CREDIT AGREEMENT
AMONG
AQUILA, INC.,
AS BORROWER,
THE SEVERAL LENDERS FROM TIME TO TIME PARTIES HERETO,
THE ISSUING BANKS FROM TIME TO TIME PARTIES HERETO
AND
CREDIT SUISSE FIRST BOSTON,
ACTING THROUGH ITS CAYMAN ISLANDS BRANCH,
AS ADMINISTRATIVE AGENT,
LEAD ARRANGER AND SOLE BOOK RUNNER
DATED AS OF APRIL 9, 2003
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TABLE OF CONTENTS
PAGE
ARTICLE 1. DEFINITIONS..................................................................................1
1.1 Defined Terms..............................................................................1
1.2 Other Definitional Provisions.............................................................24
1.3 Fair Value of Collateral Utility Business.................................................25
ARTICLE 2. AMOUNT AND TERMS OF COMMITMENTS.............................................................25
2.1 Term Loans................................................................................25
2.2 Repayment of Loans; Evidence of Debt......................................................25
2.3 Procedure for Borrowing...................................................................26
2.4 Fees......................................................................................26
2.5 Letters of Credit.........................................................................27
2.6 Credit-Linked Deposit Account.............................................................34
2.7 Optional and Mandatory Prepayments and Reductions.........................................34
2.8 Interest Rate Conversion and Continuation Options.........................................40
2.9 Maximum Amounts of Eurodollar Tranches....................................................40
2.10 Interest Rates; Default Rate Payment Dates................................................41
2.11 Computation of Interest...................................................................41
2.12 Inability to Determine Interest Rate......................................................42
2.13 Pro Rata Treatment and Payments; Funding Reliance.........................................42
2.14 Illegality................................................................................43
2.15 Requirements of Law.......................................................................43
2.16 Taxes.....................................................................................45
2.17 Indemnity.................................................................................47
2.18 Discretion of Lender as to Manner of Funding..............................................47
2.19 Change of Lending Office; Replacement Lender..............................................47
2.20 Collateral................................................................................48
ARTICLE 3. REPRESENTATIONS AND WARRANTIES..............................................................50
3.1 Financial Condition.......................................................................50
3.2 No Change.................................................................................50
3.3 Corporate Existence; Compliance with Law..................................................50
3.4 Corporate Power; Authorization; Enforceable Obligations...................................50
3.5 No Legal Bar..............................................................................51
3.6 No Material Litigation....................................................................51
3.7 No Default................................................................................51
3.8 Ownership of Property; Liens..............................................................51
3.9 Subsidiaries..............................................................................52
3.10 Intellectual Property.....................................................................52
3.11 Taxes.....................................................................................52
3.12 Margin Stock..............................................................................52
3.13 ERISA.....................................................................................53
3.14 Holding Company; Investment Company Act; Other Regulations................................53
3.15 Purpose of Loans..........................................................................53
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3.16 Environmental Matters.....................................................................54
3.17 Insurance.................................................................................54
3.18 Accuracy and Completeness of Information..................................................54
3.19 Leaseholds, Permits, etc..................................................................55
3.20 No Restrictive Covenants..................................................................55
3.21 First Mortgage Indenture..................................................................55
ARTICLE 4. CONDITIONS PRECEDENT........................................................................57
4.1 Conditions to Closing Date................................................................57
ARTICLE 5. AFFIRMATIVE COVENANTS.......................................................................60
5.1 Financial Statements......................................................................60
5.2 Certificates; Other Information...........................................................61
5.3 Payment and Performance of Obligations....................................................62
5.4 Maintenance of Existence..................................................................62
5.5 Maintenance of Property; Insurance........................................................62
5.6 Inspection of Property; Books and Records; Discussions....................................62
5.7 Notices...................................................................................62
5.8 Environmental Laws........................................................................63
5.9 ERISA.....................................................................................64
5.10 Use of Proceeds...........................................................................64
5.11 Margin Stock..............................................................................64
5.12 Maintain Ownership of Domestic Utility Business...........................................64
5.13 Post-Closing Matters......................................................................64
5.14 Credit Ratings............................................................................65
ARTICLE 6. NEGATIVE COVENANTS..........................................................................65
6.1 Financial Covenants.......................................................................65
6.2 Limitation on Fundamental Changes.........................................................66
6.3 Limitation on Transactions with Affiliates................................................67
6.4 Limitation on Liens.......................................................................68
6.5 Amendments of Organizational Documents....................................................68
6.6 Limitation on Guarantee Obligations.......................................................68
6.7 Limitation on Sale of Assets..............................................................69
6.8 Limitation on Investments, Loans and Advances.............................................70
6.9 Limitation on Dividends and Stock Repurchases.............................................73
6.10 Limitation on Indebtedness or Mandatory Redeemable Stock..................................73
6.11 Limitation on Sales and Leasebacks........................................................75
6.12 Payment Restrictions......................................................................75
6.13 Limitation on Businesses..................................................................75
6.14 Limitation on Certain Amendments..........................................................76
6.15 Limitations on Subsidiaries' Equity Interests.............................................76
6.16 Limitation on Release of Mortgaged Property; Limitation in Respect of Insurance...........77
6.17 Hedging Arrangements; Forward Sale or Purchase Contracts..................................77
6.18 Limitation on Amendments or Supplements to the First Mortgage Indenture...................77
6.19 Prohibition on Liens on Indenture Collateral and Additional Collateral....................78
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6.20 Other Indentures..........................................................................78
6.21 Limitation on Other Liens.................................................................78
6.22 MEP Pleasant Hill, LLC....................................................................78
ARTICLE 7. EVENTS OF DEFAULT...........................................................................79
7.1 Events of Default.........................................................................79
ARTICLE 8. THE AGENTS..................................................................................81
8.1 Appointment...............................................................................81
8.2 Delegation of Duties......................................................................82
8.3 Exculpatory Provisions....................................................................82
8.4 Reliance by Agents........................................................................82
8.5 Notice of Default.........................................................................83
8.6 Non-Reliance on Agents and Other Lenders..................................................83
8.7 Indemnification...........................................................................83
8.8 Agent in Its Individual Capacity..........................................................84
8.9 Successor Administrative Agent............................................................84
ARTICLE 9. MISCELLANEOUS...............................................................................84
9.1 Amendments and Waivers....................................................................84
9.2 Notice....................................................................................85
9.3 No Waiver; Cumulative Remedies............................................................86
9.4 Survival of Representations and Warranties................................................86
9.5 Payment of Expenses and Taxes; Indemnification............................................86
9.6 Successors and Assigns; Participations and Assignments....................................87
9.7 Adjustments; Setoff.......................................................................91
9.8 Confidentiality...........................................................................92
9.9 Effectiveness.............................................................................92
9.10 Counterparts..............................................................................92
9.11 Severability..............................................................................92
9.12 Integration...............................................................................93
9.13 Governing Law.............................................................................93
9.14 Submission To Jurisdiction; Waivers.......................................................93
9.15 Acknowledgments...........................................................................94
9.16 Waivers of Jury Trial.....................................................................94
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EXHIBITS AND SCHEDULES
Exhibit A-1 Form of Notice of Borrowing
Exhibit A-2 Form of Notice of Interest Rate Conversion
Exhibit B Form of Closing Certificate
Exhibit C Form of Assignment and Assumption Agreement
Schedule I Commitments and Lending Offices of Lenders
Schedule 3.4a First Mortgage Approvals
Schedule 3.4b Required Consents of Governmental Authorities
Schedule 3.8 Exceptions to Title to Borrower's Properties
Schedule 3.9 Material Subsidiaries and Collateral Subsidiaries
Schedule 6.10 Debt and Mandatory Redeemable Stock
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CREDIT AGREEMENT, dated as of April 9, 2003, among AQUILA, INC., a
Delaware corporation (the "BORROWER"), the several banks and other financial
institutions from time to time party hereto (the "LENDERS"), the Issuing Banks
from time to time party hereto (the "ISSUING BANKS") and CREDIT SUISSE FIRST
BOSTON, acting through its Cayman Islands Branch, as Administrative Agent (in
such capacity the "ADMINISTRATIVE AGENT"), Lead Arranger and Sole Book Runner.
PRELIMINARY STATEMENTS
1. The Borrower has requested the Lenders extend credit to the
Borrower in the form of term loans and risk participations in letters of credit
in an aggregate principal amount not in excess of $430,000,000. The proceeds of
the Loans are to be used by the Borrower, first, to repay in full the Existing
Credit Agreements and certain other indebtedness and, thereafter, to provide
working capital and for other general corporate purposes of the Borrower. The
letters of credit are to be used for the general corporate purposes of the
Borrower.
2. In consideration of the foregoing premises and the mutual
covenants herein contained and for other good and valuable consideration the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
ARTICLE 1. DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the following terms
shall have the following meanings:
"ADDITIONAL COLLATERAL" shall mean (i) the Pledged Equity Interests
(as such term is defined in the Canadian Pledge Agreement), (ii) the
Pledged Equity Interests (as such term is defined in the IPP Pledge
Agreement), and (iii) the Pledged Equity Interests (as such term is defined
in the ANCMC Canadian Pledge Agreement), in each case so long as such
collateral remains subject to the Lien of such pledge agreement in
accordance with the terms hereof and thereof.
"ADMINISTRATIVE AGENT" shall have the meaning ascribed thereto in the
heading hereto and shall include such other Lender or financial institution
as shall have subsequently been appointed as the successor Administrative
Agent pursuant to SECTION 8.9.
"AFFECTED LENDER" shall have the meaning ascribed thereto in SECTION
2.19.
"AFFILIATE" shall mean, as to any Person, any other Person which,
directly or indirectly, is in control of (including all directors and
officers of such Person), is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person
shall mean the power, directly or indirectly, to direct or cause the
direction of the management and policies of such Person, whether by
ownership of voting securities, by contract or otherwise.
"AGENTS" shall have the meaning ascribed thereto in SECTION 8.1.
"AGREEMENT" shall mean this
Credit Agreement, as amended, supplemented
or otherwise modified from time to time.
"ALTERNATE BASE RATE" shall mean, on any particular date, a rate of
interest per annum equal to the highest of
(a) the rate of interest most recently announced by CSFB as its
prime rate in effect at its principal office in
New York City
(which rate is not necessarily intended to be the lowest rate of
interest charged by CSFB in connection with extensions of
credit);
(b) the Federal Funds Rate for such date PLUS 0.50%; and
(c) 4.00%.
"ALTERNATE BASE RATE LOANS" shall mean Loans the rate of interest
applicable to which is based upon the Alternate Base Rate.
"ANCFC" shall mean Aquila Networks Canada Finance Corporation, an
unlimited company organized under the laws of the Province of Nova Scotia.
"ANCFC GUARANTY" shall mean a guaranty made by ANCFC, as Guarantor, in
favor of the Collateral Agent for the benefit of the Secured Parties in
support of ANCMC Canadian Pledge Agreement, in form and substance
satisfactory to the Lenders and the Collateral Agent.
"ANCL CREDIT FACILITY" shall mean that certain
Credit Agreement, dated
as of May 31, 2001, among Aquila Canada Ltd., as Borrower, Bank of America
Canada, Bank of Montreal, Deutsche Bank AG, Canada Branch, Royal Bank of
Canada, The Toronto-Dominion Bank and the financial institutions who become
parties thereto from time to time, as Lenders, The Toronto-Dominion Bank,
as Administration Agent, and Bank of Montreal, as Syndication Agent.
"ANCMC" shall mean Aquila Networks Canada Management Corporation, a
corporation organized under the laws of the Province of Alberta.
"ANCMC CANADIAN PLEDGE AGREEMENT" shall mean a pledge agreement
between ANCFC and the Collateral Agent for the benefit of the Secured
Parties (as defined therein) pursuant to which, among other things, ANCFC
pledges to the Collateral Agent all of the outstanding Capital Stock of
ANCMC, in form and substance satisfactory to the Lenders and the Collateral
Agent.
"APPROVED FUND" shall mean, with respect to any Lender that is a fund
or commingled investment vehicle that invests in commercial loans, any
other fund that invests in commercial loans and is managed or advised by
the same investment advisor as such Lender or by an Affiliate of such
investment advisor.
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"ARRANGER" shall mean CSFB and its successors.
"ASSIGNEE" shall have the meaning ascribed thereto in SECTION 9.6(c).
"ASSIGNMENT AND ASSUMPTION AGREEMENT" shall have the meaning ascribed
thereto in SECTION 9.6(c).
"AVAILABILITY PERIOD" shall mean the period from and including the
Closing Date to, but excluding, April 15, 2006.
"BENEFITED LENDER" shall have the meaning ascribed thereto in SECTION
9.7(a).
"BOND COLLATERAL AGREEMENT" shall mean a bond collateral agreement
between the Borrower and the Collateral Agent for the benefit of the
Secured Parties (as therein defined) in form and substance satisfactory to
the Lenders and the Collateral Agent.
"BORROWER" shall have the meaning ascribed thereto in the heading
hereto.
"BUSINESS" shall have the meaning ascribed thereto in SECTION 3.16(a).
"BUSINESS DAY" shall mean a day other than a Saturday, Sunday or other
day on which commercial banks in
New York City are authorized or required
by law to close; PROVIDED, HOWEVER, that, when used in connection with a
Eurodollar Loan, the term "BUSINESS DAY" shall also exclude any day on
which banks are not open for dealings in Dollars in the interbank market in
London, England.
"CANADIAN ASSETS" shall mean the shares of, or all or substantially
all of the assets of, Aquila Networks Canada (Alberta) Ltd., an Alberta
company, and Aquila Networks Canada (British Columbia) Ltd., a British
Columbia company, each a Wholly-Owned Subsidiary of the Borrower.
"CANADIAN COLLATERAL EVENT" shall have the meaning ascribed thereto in
SECTION 2.7(b)(ii).
"CANADIAN NET PROCEEDS" shall have the meaning ascribed thereto in
SECTION 2.7(c).
"CANADIAN PARENTS" shall mean Missouri Public Service Company, a
Missouri corporation and a Wholly-Owned Subsidiary of the Borrower, and
Aquila Networks Canada Corp., an Alberta corporation and a Wholly-Owned
Subsidiary of the Borrower.
"CANADIAN PLEDGE AGREEMENT" shall mean a pledge agreement among the
Borrower, Aquila Canada Holdings, Inc. and the Collateral Agent for the
benefit of the Secured Parties (as defined therein) pursuant to which,
among other things, the Borrower and Aquila Canada Holdings, Inc. pledge to
the Collateral Agent all of the outstanding Capital Stock of the Canadian
Parents, in form and substance satisfactory to the Lenders and the
Collateral Agent.
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"CAPITAL EXPENDITURES" of any Person shall mean, for any period,
without duplication, all expenditures (whether paid in cash or other
consideration) during such period that, in accordance with GAAP, are or
should be capitalized on such Person's financial statements.
"CAPITAL STOCK" shall mean any and all shares, interests,
participations or other equivalents (however designated) of capital stock
of a corporation, any and all equivalent ownership interests in a Person
(other than a corporation) and any and all warrants or options to purchase
any of the foregoing.
"CASH COLLATERAL ACCOUNT" shall have the meaning ascribed thereto in
SECTION 2.5(j).
"CASH EQUIVALENTS" shall mean (a) securities with maturities of one
year or less from the date of acquisition issued or fully guaranteed or
insured by the United States Government or any agency thereof, (b)
certificates of deposit and eurodollar time deposits with maturities of one
year or less from the date of acquisition and overnight bank deposits of
any Lender and certificates of deposit with maturities of one year or less
from the date of acquisition and overnight bank deposits of any other
commercial bank having capital and surplus in excess of $500,000,000, (c)
commercial paper of any issuer rated at least A-2 by Standard & Poor's or
P-2 by ▇▇▇▇▇'▇, (d) additional money market investments with maturities of
one year or less from the date of acquisition rated at least A1 or AA by
Standard & Poor's or P-1 or Aa by ▇▇▇▇▇'▇ and (e) tax-exempt debt
obligations of any State of the United States or of any county or other
municipal government subdivision of any State of the United States with
maturities of one year or less from the date of acquisition rated at the
highest investment grade rating by Standard & Poor's or by ▇▇▇▇▇'▇, or
publicly traded or open-end bond funds that invest exclusively in such
tax-exempt debt obligations.
"CITIBANK 364-DAY REVOLVING
CREDIT AGREEMENT" shall mean the
U.S.$325,000,000 364-Day Revolving
Credit Agreement dated as of April 12,
2002 among the Borrower, the lenders party thereto and Citibank, N.A., as
agent.
"CITIBANK 3-YEAR REVOLVING
CREDIT AGREEMENT" shall mean that certain
U.S.$325,000,000 3-Year Revolving
Credit Agreement dated as of April 12,
2002 among the Borrower, the lenders party thereto, Citibank, N.A., as
agent, and Bank One, NA, as LC Issuing Bank.
"CHANGE IN TAX LAW" shall have the meaning ascribed thereto in SECTION
2.16(a).
"CHANGE OF CONTROL" shall mean the occurrence of any of the following:
(a) any Person or "GROUP" (within the meaning of SECTION 13(d) or
14(d) of the Securities Exchange Act of 1934) (i) shall have acquired
beneficial ownership of 40% or more of the aggregate outstanding classes of
Capital Stock having voting power in the election of directors of the
Borrower or (ii) shall obtain the power (whether or not exercised) to elect
a majority of the Borrower's directors;
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(b) a majority of the persons who comprise the Board of Directors of
the Borrower on the date hereof shall be replaced, unless such replacement
(i) was either recommended by at a majority of the Board of Directors of
the Borrower then still in office who either were members of such Board of
Directors on the date hereof or whose election as a member of such Board of
Directors was previously so approved or (ii) the replacing persons have
been appointed by such Board of Directors; or
(c) the Borrower shall be liquidated or dissolved.
"CLAY COUNTY SYNTHETIC LEASE" shall mean the lease financing of the
Raccoon Creek 334 MW Peaking Power Plant in Clay County, Illinois, entered
into pursuant to the Second Amended and Restated Participation Agreement,
dated as of August 31, 2001, among MEP Flora Power, LLC, Aquila Merchant
Services, Inc., Clay County Purchaser, L.L.C., Clay County Trust 2000,
Wilmington Trust Company, not in its individual capacity but solely as
Trustee of the Clay County Trust 2000, the financial institutions named as
Tranche A Lenders in the Participation Agreement, the financial
institutions named as Tranche B Lenders in the Participation Agreement, the
financial institutions named as Certificate Holders in the Participation
Agreement, Credit Lyonnais
New York Branch, as Administrative Agent and
Sole Lead Arranger, and Credit Lyonnais
New York Branch, as Swap Party.
"CLOSING DATE" shall mean the date on which the conditions precedent
set forth in SECTION 4.1 shall be satisfied or waived by the Required
Lenders.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"COLLATERAL" shall have the meaning ascribed thereto in the Collateral
Documents.
"COLLATERAL AGENT" shall mean CSFB, acting through its Cayman Islands
Branch, as collateral agent under the Canadian Pledge Agreement, the ANCMC
Canadian Pledge Agreement, the IPP Pledge Agreement and the Bond Collateral
Agreement.
"COLLATERAL DOCUMENTS" shall mean a collective reference to the First
Mortgage Bonds, the Bond Collateral Agreement, the Supplemental Indenture,
the Canadian Pledge Agreement, the ANCMC Canadian Pledge Agreement, and the
IPP Pledge Agreement (to the extent such documents have not been terminated
in accordance with the terms hereof and thereof) and such other documents
executed and delivered in connection with the attachment and perfection of
the Collateral Agent's security interest and liens arising thereunder,
including, without limitation, UCC financing statements filed in connection
therewith, but excluding the First Mortgage Indenture.
"COLLATERAL EBITDA" shall mean, for any period, without duplication,
the sum of (i) the gross profit of the Collateral Utility Business, MINUS
(ii) the operating expense of the Collateral Utility Business for such
period, PLUS (iii) to the extent otherwise reflected as a charge in
operating expense of the Collateral Utility Business for such period, any
non-recurring, non-cash charges resulting from any write-down to the
appraised value set forth in the applicable appraisal referred to in
SECTION 4.1, PLUS (iv) to the extent
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otherwise reflected in clause (i) or (ii) above, depreciation and
amortization, PLUS, (v) so long as the Lien of the Canadian Pledge
Agreement remains in effect in accordance with the terms hereof and
thereof, cash dividends actually received by the Borrower which were
declared and made during such period and based upon (and not in excess of)
retained consolidated earnings of Aquila Networks Canada Corp. for the
immediately preceding period. For purposes of the calculations in SECTION
6.1, the Collateral EBITDA of any line of business constituting a portion
of Collateral Utility Business shall be for the last four consecutive
fiscal quarters regardless of when during the period such line of business
became a portion of Collateral Utility Business.
"COLLATERAL SUBSIDIARIES" shall mean, collectively, (i) so long as the
Liens of the ANCMC Canadian Pledge Agreement remains in effect in
accordance with the terms hereof and thereof, ANCMC and each Subsidiary of
ANCMC, (ii) so long as the Liens of the Canadian Pledge Agreement remains
in effect in accordance with the terms hereof and thereof, each of the
Canadian Parent and each of the Canadian Parent's respective Subsidiaries,
and (iii) so long as the Lien of the IPP Pledge Agreement remains in effect
in accordance with the terms hereof and thereof, UtilCo Group Inc. and each
of its Subsidiaries.
"COLLATERAL UTILITY BUSINESS" shall mean the regulated natural gas
transmission and distribution assets and businesses owned and operated by
the Borrower in the States of Michigan and Nebraska, and upon and after
substantially all of the tangible assets of such line or lines of business
become subject to the Lien of the First Mortgage Indenture, the regulated
electric or natural gas transmission and distribution assets and businesses
owned and operated by the Borrower in any other jurisdiction in the United
States.
"COMMITMENT" shall mean, as to any Lender, the obligation of such
Lender to make a Loan to the Borrower and to fund its Credit-Linked Deposit
in an aggregate principal amount not to exceed the amount set forth
opposite such Lender's name on SCHEDULE I. The aggregate amount of the
Commitments is $430,000,000.
"COMMITMENT LETTER" shall mean the Commitment Letter, dated March 21,
2003, between the Borrower and the Arranger.
"COMMITMENT PERCENTAGE" shall mean, as to any Lender at any time, the
percentage which such Lender's Commitment then constitutes of the aggregate
Commitments (or, at any time after the Closing Date, the percentage which
the aggregate principal amount of such Lender's Loans and Credit-Linked
Deposit then outstanding constitutes of the aggregate principal amount of
the Loans and Credit-Linked Deposits then outstanding).
"COMMONLY CONTROLLED ENTITY" shall mean an entity, whether or not
incorporated, which is under common control with the Borrower or any
Subsidiary within the meaning of SECTION 4001(a)(14) of ERISA or is part of
a group which includes the Borrower and which is treated as a single
employer under SECTION 414 of the Code.
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"COMPLIANCE CERTIFICATE" shall have the meaning ascribed thereto in
SECTION 5.2(b).
"CONFIDENTIAL INFORMATION" shall have the meaning ascribed thereto in
SECTION 9.8.
"CONSOLIDATED GROUP" shall mean the Borrower and its Consolidated
Subsidiaries.
"CONSOLIDATED NET INCOME" means, for any fiscal period, net income of
the Consolidated Group for such period, determined on a consolidated basis
in accordance with GAAP.
"CONSOLIDATED NET WORTH" means, as of the last day of any fiscal
quarter, the amount of the common stock equity of the Borrower less
accumulated other comprehensive gains (or, if applicable, plus accumulated
other comprehensive losses) as of such day, determined on a consolidated
basis in accordance with GAAP.
"CONSOLIDATED SUBSIDIARY" shall mean, at any time, any Subsidiary the
accounts of which are consolidated with the Borrower in its consolidated
financial statements as of such time in accordance with GAAP.
"CONTRACTUAL OBLIGATION" shall mean as to the Borrower or any
Subsidiary, any provision of any security issued by the Borrower or any
Subsidiary or of any agreement, instrument or other undertaking to which
the Borrower or any Subsidiary is a party or by which it or any of its
property is bound.
"CREDIT-LINKED DEPOSIT" shall mean, as to each Lender, the cash
deposit made by such Lender pursuant to Section 2.5(d)(i), as such deposit
may be (a) reduced from time to time pursuant to SECTION 2.5(e) OR
2.7(a)(i) and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to SECTION 9.6. The initial
amount of each Lender's Credit-Linked Deposit is set forth on Schedule I,
or in the Assignment and Acceptance pursuant to which such Lender shall
have acquired its Credit-Linked Deposit, as applicable. The aggregate
amount of the Lenders' Credit-Linked Deposits is $0.00.
"CREDIT-LINKED DEPOSIT ACCOUNT" shall mean the account established by
the Administrative Agent under its sole and exclusive control maintained at
the office of CSFB at Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇▇▇-▇▇▇▇, designated as the "Aquila Credit-Linked Deposit Account" that
shall be used solely to hold the Credit-Linked Deposits.
"CREDIT PARTY" shall mean, collectively, (i) the Borrower, (ii) so
long as the Lien of the Canadian Pledge Agreement remains in effect in
accordance with the terms hereof and thereof, Aquila Canada Holdings, Inc.,
(iii) so long as the Lien of the ANCMC Canadian Pledge Agreement remains in
effect in accordance with the terms hereof and thereof, ANCFC, and (iv) so
long as the Lien of the IPP Pledge Agreement remains in effect in
accordance with the terms hereof and thereof, Aquila Merchant Services,
Inc.
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"CSFB" shall mean Credit Suisse First Boston.
"DEBT" shall mean, with respect to any Person, the aggregate principal
amount of all obligations that, in accordance with GAAP consistently
applied and without duplication, would be classified as debt on its balance
sheet; PROVIDED, however, that with respect to the Borrower, "Debt" shall
(i) exclude the principal amount of all obligations relating to the gas
prepay contracts to which the Borrower has, as of the date hereof, signed,
co-signed or guaranteed, (ii) include the principal amount of all
reimbursement obligations of the Borrower, contingent or otherwise, in
respect of any Letters of Credit, and (iii) exclude obligations (other than
debt incurred under this Agreement) to the extent that such obligations are
cash collaterized.
"DEFAULT" shall mean any of the events specified in SECTION 7.1,
whether or not any requirement for the giving of notice, the lapse of time,
or both, has been satisfied.
"DISPOSITION" shall have the meaning ascribed thereto in SECTION
2.7(b).
"DOLLARS" and "$" shall mean dollars in lawful currency of the United
States of America.
"DOMESTIC LENDING OFFICE" shall mean, initially, the office of each
Lender designated as such in SCHEDULE I (or the office of an Assignee
designated pursuant to an Assignment and Assumption Agreement), and
thereafter, such other office of such Lender, if any, which shall be making
or maintaining Alternate Base Rate Loans as may be designated from time to
time by notice from such Lender to the Borrower and the Administrative
Agent.
"DOMESTIC UTILITY BUSINESS" shall mean the regulated electric and
natural gas transmission and distribution assets and businesses owned and
operated by the Borrower in the United States.
"ENVIRONMENTAL LAWS" shall mean any and all foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees, judgments, permits, licenses, registrations or
authorizations or requirements of any Governmental Authority or other
Requirements of Law (including common law) regulating, relating to or
imposing liability or standards of conduct concerning the health and safety
of humans and other living organisms as it relates to exposures to
Materials of Environmental Concern, protection of natural resources or the
environment, including the manufacture, distribution in commerce, and use
of, or Release to the environment of, Materials of Environmental Concern,
as now or may at any time hereafter be in effect.
"ENVIRONMENTAL LIABILITY" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation,
fines, penalties or indemnities), of the Borrower or any Subsidiary
directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Materials of Environmental Concern,
(c) exposure to any Materials of Environmental Concern, (d) the release or
threatened release of any Materials of Environmental Concern into the
environment or (e) any
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contract, agreement or other consensual arrangement pursuant to which
liability is assumed or imposed with respect to any of the foregoing.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
"EURODOLLAR BASE RATE" shall mean, with respect to any Eurodollar Loan
for any Interest Period, the rate per annum determined by the
Administrative Agent at approximately 11:00 a.m. (London time) on the date
which is two (2) Business Days prior to the beginning of such Interest
Period by reference to the British Bankers' Association Interest Settlement
Rates for deposits in Dollars (as set forth by any service selected by the
Administrative Agent which has been nominated by the British Bankers'
Association as an authorized information vendor for the purpose of
displaying such rates) for a period equal to such Interest Period; PROVIDED
that, to the extent that an interest rate is not ascertainable pursuant to
the foregoing provisions of this definition, the "Eurodollar Base Rate"
shall be the interest rate per annum determined by the Administrative Agent
to be the average of the rates per annum at which deposits in Dollars are
offered for such Interest Period to major banks in the London interbank
market in London, England by the Administrative Agent at approximately
11:00 a.m. (London time) on the date which is two (2) Business Days prior
to the beginning of such Interest Period; PROVIDED, FURTHER, that if the
Eurodollar Base Rate determined as provided above with respect to any Loan
for any Interest Period would be less than 3.00% per annum, then the
"EURODOLLAR BASE RATE" with respect to such Loan for such Interest Period
shall be deemed to be 3.00% per annum.
"EURODOLLAR LOANS" shall mean Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"EURODOLLAR OFFICE" shall mean, initially, the office of each Lender
designated as such in SCHEDULE I (or the office of an Assignee designated
pursuant to an Assignment and Assumption Agreement), and thereafter, such
other office of such Lender, if any, which shall be making or maintaining
Eurodollar Loans as may be designated from time to time by notice from such
Lender to the Borrower and the Administrative Agent.
"EURODOLLAR RATE" shall mean with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum
determined for such day in accordance with the following formula:
Eurodollar Base Rate
-------------------------------------
1.00 - Eurodollar Reserve Requirements
"EURODOLLAR RESERVE REQUIREMENTS" shall mean, for any day as applied
to a Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal) of reserve requirements in effect on such day
(including, without limitation, basic, supplemental, marginal and emergency
reserves) under any regulations of the Board of Governors of the Federal
Reserve System or other Governmental Authority having jurisdiction with
respect thereto) dealing with reserve requirements prescribed for
9
eurocurrency funding (currently referred to as "Eurocurrency Liabilities"
in Regulation D of such Board) maintained by a member bank of such System.
"EURODOLLAR TRANCHE" shall mean all Loans which consist of Eurodollar
Loans incurred on the Closing Date (or which result from continuations or
conversions on a given date after the Closing Date) and have the same
Interest Period.
"EVENT OF DEFAULT" shall mean any of the events specified in SECTION
7.1; PROVIDED that any requirement for the giving of notice, the lapse of
time, or both, has been satisfied.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended (including the rules and regulations thereunder).
"EXISTING
CREDIT AGREEMENTS" shall mean, collectively, (i) the
Citibank 364-Day Revolving Credit Agreement, and (ii) the Citibank 3-Year
Revolving Credit Agreement.
"FDIC" shall mean the Federal Deposit Insurance Corporation or any
successor thereto.
"FEDERAL FUNDS RATE" shall mean for any particular date, the rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to
the weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers on such day, as published by the Federal Reserve Bank of
New York
on the Business Day next succeeding such day; PROVIDED that (a) if such day
is not a Business Day, the Federal Funds Rate for such day shall be such
rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (b) if no such rate is
so published on such next succeeding Business Day, the Federal Funds Rate
for such day shall be the average rate charged to the Administrative Agent
(in its individual capacity) on such day on such transactions as determined
by the Administrative Agent.
"FERC" shall mean the Federal Energy Regulatory Commission.
"FINANCING LEASE" shall mean any lease of property, real or personal,
the obligations of the lessee in respect of which are required in
accordance with GAAP to be capitalized on a balance sheet of the lessee.
"FIRST MORTGAGE APPROVALS" shall have the meaning ascribed thereto in
SECTION 3.4.
"FIRST MORTGAGE BONDS" shall mean the first mortgage bonds issued,
pursuant to the First Mortgage Indenture, to and registered in the name of
the Collateral Agent.
"FIRST MORTGAGE INDENTURE" shall mean the Indenture of Mortgage and
Deed of Trust, dated as of April 1, 2003, of the Borrower to Bank One Trust
Company, NA, as trustee, as amended or supplemented from time to time.
10
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time consistent with
those utilized in preparing the audited financial statements referred to in
SECTION 3.1; PROVIDED that in the event that any change in accounting
principles required by the promulgation of any rule, regulation,
pronouncement or opinion by the Financial Accounting Standards Board of the
American Institute of Certified Public Accountants (or successor thereto or
any agency with similar functions) or the SEC results in a change in the
method of calculation of any of the financial covenants hereunder, the
Lenders (acting through the Administrative Agent) and the Borrower will in
good faith enter into negotiations in order to reevaluate such financial
covenants in light of such change; and PROVIDED, FURTHER, that this
provision shall not operate as a waiver of any right, remedy, power or
privilege available to any Lender under any provision of any Loan Document
or pursuant to any applicable law.
"GOVERNMENTAL AUTHORITY" shall mean any national government (United
States or foreign), any state or other political subdivision thereof, any
entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government and any agency,
authority, instrumentality, or regulatory body of any thereof.
"GRANTING LENDER" shall have the meaning ascribed thereto in SECTION
9.6(f).
"GUARANTEE OBLIGATION" shall mean as to any Person (the "GUARANTEEING
PERSON"), any obligation of the guaranteeing person (including, without
limitation, any reimbursement, counter-indemnity or similar obligation),
guaranteeing or in effect guaranteeing any Indebtedness, lease, dividend or
other similar obligation (the "PRIMARY OBLIGATION") of any other third
Person (the "PRIMARY OBLIGOR") in any manner, whether directly or
indirectly, including, without limitation, any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor, (ii) to advance or supply funds (x) for the purchase or payment
of any such primary obligation or (y) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth,
liquidity or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of
any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (iv) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
thereof; PROVIDED that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary
course of business.
"INDEBTEDNESS" of any Person at any date shall mean, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, (c) all Financing Lease obligations of such Person, (d) all
obligations of such Person under synthetic leases, tax retention operating
leases, off-balance sheet loans or other off-balance sheet financing
products that, for tax purposes, are considered indebtedness for borrowed
money of the lessee but are classified as operating leases under GAAP, (e)
all indebtedness of such Person for the deferred purchase price of property
or services (other than current trade liabilities incurred in the ordinary
course of business), (f) all outstanding reimbursement
11
obligations of such Person in respect of outstanding letters of credit,
acceptances and similar obligations issued or created for the account of
such Person, (g) all liabilities secured by any Lien on any property owned
by such Person even though such Person has not assumed or otherwise become
liable for the payment thereof, and (h) all Guarantee Obligations of such
Person; PROVIDED that "Indebtedness" shall exclude (i) the principal amount
of all obligations relating to the gas prepay contracts to which Aquila or
any of its Subsidiaries has, as of the date hereof, signed, co-signed or
guaranteed and (ii) liabilities or other obligations to the extent cash
collaterized.
"INDENTURE COLLATERAL" shall mean, at any time, all of the assets of
the Borrower then subject to the Lien of the First Mortgage Indenture.
"INDENTURE COLLATERAL EVENT" shall have the meaning ascribed thereto
in SECTION 2.7(b)(i).
"INDENTURE TRUSTEE" shall mean Bank One Trust Company, NA.
"INDEPENDENT POWER PROJECTS" shall mean, collectively, Koma Kulhan
Associates, Topsham Hydroelectric Generating Facility Trust No. 2, Badger
Creek Limited, L.P., Stockton Cogen Company, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Limited, L.P.,
BAF Energy LP, Jamaica Private Power Company Limited, Rumford Cogeneration
Company L.P., Lake Cogen, LTD., Mid-▇▇▇▇▇▇▇ ▇▇▇▇▇, L.P., ▇▇▇▇▇ ▇▇▇▇▇, LTD.,
Onondaga Cogeneration Limited Partnership, Selkirk Cogen Partners, L.P.,
and Prime Energy Limited Partnership.
"INSOLVENCY" shall mean with respect to any Multiemployer Plan, the
condition that such plan is insolvent within the meaning of Section 4245 of
ERISA.
"INSOLVENT" shall mean pertaining to a condition of Insolvency.
"INTELLECTUAL PROPERTY" shall have the meaning ascribed thereto in
SECTION 3.10.
"INTEREST PAYMENT DATE" shall mean (a) as to any Alternate Base Rate
Loan, the last Business Day of each March, June, September and December to
occur while such Loan is outstanding, (b) as to any Eurodollar Loan having
an Interest Period of three months or less, the last day of such Interest
Period, and (c) as to any Eurodollar Loan having an Interest Period longer
than three months, each day which is three months after the first day of
such Interest Period and the last day of such Interest Period.
"INTEREST PERIOD" shall mean (a) with respect to any Eurodollar Loan,
(1) initially, the period commencing on the borrowing or conversion date,
as the case may be, with respect to such Eurodollar Loan and ending one,
two, three or six months thereafter, as selected by the Borrower in its
Notice of Borrowing or Notice of Interest Rate Conversion, as the case may
be, given with respect thereto; and (2) thereafter, each period commencing
on the last day of the next preceding Interest Period applicable to such
Eurodollar Loan and ending one, two, three or six months thereafter, as
selected by the Borrower by irrevocable notice to the Administrative Agent
not less than three
12
Business Days prior to the last day of the then current Interest Period
with respect thereto; and
(b) with respect to the Credit-Linked Deposits, each period commencing
on the date the Credit-Linked Deposits are initially funded by the Lenders
or on the last day of the preceding Interest Period applicable thereto, as
the case may be, and ending on the numerically corresponding day in the
calendar month that is three months thereafter;
PROVIDED that, the foregoing provisions relating to Interest Periods
are subject to the following:
(i) a single Interest Period shall at all times apply to all
the Credit-Linked Deposits;
(ii) if any Interest Period would otherwise end on a day that is
not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day (and, with respect to payments of principal
and interest thereon, shall be payable at the then applicable rate
during such extension) unless the result of such extension would be to
carry such Interest Period into another calendar month in which event
such Interest Period shall end on the immediately preceding Business
Day;
(iii) no Interest Period shall be selected which would extend
beyond the Maturity Date; and
(iv) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month.
"INVESTMENT" shall have the meaning ascribed thereto in SECTION 6.8.
"IPP COLLATERAL EVENT" shall have the meaning ascribed thereto in
SECTION 2.7(b)(iii).
"IPP PLEDGE AGREEMENT" shall mean a pledge agreement between Aquila
Merchant Services, Inc. and the Collateral Agent for the benefit of the
Secured Parties (as defined therein) pursuant to which, among other things,
Aquila Merchant Services, Inc. pledges to the Collateral Agent all of the
outstanding Capital Stock of UtilCo Group Inc., a Delaware corporation and
an indirect Wholly-Owned Subsidiary of the Borrower, in form and substance
satisfactory to the Lenders and the Collateral Agent.
"ISSUING BANK" shall mean each Person executing (or otherwise becoming
a party to) this Agreement as an Issuing Bank, in its capacity as issuer of
Letters of Credit hereunder, and each of their successors in such capacity
as provided in SECTION 2.5(i).
"LC COMMITMENT" of an Issuing Bank shall mean, as of any date, $0.00.
13
"LC DISBURSEMENT" shall mean a payment made by an Issuing Bank
pursuant to a Letter of Credit.
"LC EXPOSURE" shall mean, at any time, the sum of (a) the aggregate
undrawn amount of all Letters of Credit outstanding at such time PLUS (b)
the aggregate amount of all LC Disbursements that have not yet been
reimbursed by or on behalf of the Borrower (directly or through an LC Loan)
at such time. The LC Exposure of any Lender at any time shall be its
Commitment Percentage of the total LC Exposure at such time.
"LC LOAN" shall have the meaning ascribed thereto in SECTION
2.5(e)(ii).
"LC Outstandings" shall have meaning ascribed thereto in the Citibank
3-Year Revolving Credit Agreement.
"LENDER" shall have the meaning ascribed thereto in the heading
hereto.
"LETTERS OF CREDIT" shall mean the letters of credit issued pursuant
to SECTION 2.5(a).
"LIBID RATE" shall mean the Eurodollar Base Rate (without giving
effect to the last proviso of the definition thereof) MINUS 0.125% per
annum.
"LIEN" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement and any Financing Lease having substantially the same
economic effect as any of the foregoing.
"LOAN DOCUMENTS" shall mean collectively, this Agreement, the
Collateral Documents, the Notes (if any) and each other agreement,
instrument or certificate (other than the First Mortgage Indenture or an
Assignment and Assumption Agreement, pursuant to which the assignor therein
sells and/or assigns an interest under this Agreement) issued, executed and
delivered to the Administrative Agent, the Collateral Agent, any Issuing
Bank, or the Lenders hereunder or thereunder or pursuant hereto or thereto
(in each case as the same may be amended, restated, supplemented, extended,
renewed or replaced from time to time), and "LOAN DOCUMENT" means any one
of them.
"LOANS" shall mean Term Loans and LC Loans.
"MAKE-WHOLE PREMIUM" shall mean the difference (but not less than
zero) between (i) the sum, as determined by a Quotation Agent, of the
present values of the principal amount of the Loans to be prepaid, together
with scheduled payments of interest (exclusive of interest to the
prepayment date) from the prepayment date to the Maturity Date (based upon
an assumed fixed interest rate equal to the then applicable Eurodollar Rate
for a three month Interest Period), in each case discounted to the
prepayment date on
14
a quarterly basis, assuming a 360-day year consisting of twelve 30-day
months, at the Adjusted Treasury Rate and (ii) the aggregate principal
amount of the Loans so prepaid. Any Make-Whole Premium with respect to a
reduction in the Total Credit-Linked Deposits shall be equal to the
Make-Whole Premium for the prepayment on such date of a Loan in an
aggregate principal amount equal to such reduction. As used herein, the
following terms have the following meanings:
"ADJUSTED TREASURY RATE" means, with respect to any prepayment
date, (i) the yield, under the heading which represents the average
for the immediately preceding week, appearing in the most recently
published statistical release designated "H.15 (519)" or any successor
publication which is published weekly by the Board of Governors of the
Federal Reserve System and which establishes yields on actively traded
United States Treasury securities adjusted to constant maturity under
the caption "Treasury Constant Maturities," for the maturity
corresponding to the a Comparable Treasury Issue (if no maturity is
within three months before or after the Maturity Date, yields for the
two published maturities most closely corresponding to the Comparable
Treasury Issue shall be determined and the Adjusted Treasury Rate
shall be interpolated or extrapolated from such yields on a straight
line basis, rounding to the nearest month) or (ii) if such release (or
any successor release) is not published during the week preceding the
calculation date or does not contain such yields, the rate per year
equal to the quarterly equivalent yield to maturity of the Comparable
Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such prepayment date, in
each case calculated on the third Business Day preceding the
prepayment date, plus 0.50%.
"COMPARABLE TREASURY ISSUE" means the United States Treasury
security selected by the Quotation Agent as having a maturity
comparable to the remaining term of the prepayment date to the
Maturity Date that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term
of the Loans.
"COMPARABLE TREASURY PRICE" means, with respect to any prepayment
date, if clause (ii) of the definition of Adjusted Treasury Rate is
applicable, the average of three, or such lesser number as is obtained
by the Administrative Agent, Reference Treasury Dealer Quotations for
such prepayment date.
"QUOTATION AGENT" means the Reference Treasury Dealer selected by
the Administrative Agent.
"REFERENCE TREASURY DEALER" means a primary U.S. Government
securities dealer selected by the Administrative Agent.
"REFERENCE TREASURY DEALER QUOTATIONS" means, with respect to
each Reference Treasury Dealer and any prepayment date, the average,
as determined by the Administrative Agent, of the bid and asked prices
for the Comparable
15
Treasury Issue, expressed in each case as a percentage of its
principal amount, quoted in writing to the Administrative Agent by
such Reference Treasury Dealer at 5:00 p.m.,
New York City time, on
the third Business Day preceding such prepayment date.
"MANDATORY REDEEMABLE STOCK" shall mean, with respect to any Person,
any share of such Person's Capital Stock, to the extent that it is (a)
redeemable, payable or required to be purchased or otherwise retired or
extinguished, or convertible into any Indebtedness or other liability,
obligation, covenant or duty of or binding upon, or any term or condition
to be observed by or binding upon such Person or any of its assets, (i) at
a fixed or determinable date, whether by operation of a sinking fund or
otherwise, (ii) at the option of any other Person or (iii) upon the
occurrence of a condition not solely within the control of such Person such
as a redemption required to be made utilizing future earnings, or (b)
convertible into Capital Stock which has the features set forth in clause
(a).
"MATERIAL ADVERSE EFFECT" shall mean any material adverse effect (a)
on the business, operations, property, condition (financial or otherwise)
or prospects of the Borrower and its Subsidiaries (taken as a whole), (b)
on the Indenture Collateral and the Additional Collateral (taken as a
whole), (c) that is reasonably likely to affect the legality, validity or
enforceability of this Agreement, any of the First Mortgage Bonds, any of
the other Loan Documents or the First Mortgage Indenture, or the rights or
remedies of the Administrative Agent, the Collateral Agent, or the Lenders
hereunder or thereunder (or the Indenture Trustee under the First Mortgage
Indenture), or (d) that is reasonably likely to affect the perfection,
priority or enforceability of the Lien of the First Mortgage Indenture or
of any other Collateral Document.
"MATERIAL SUBSIDIARY" shall mean, as at any time of determination,
each Subsidiary of the Borrower which, in the aggregate, as at the end of
the fiscal quarter immediately preceding such time of determination, has
consolidated assets equal to or greater than 10% of the total consolidated
assets of the Borrower and its Subsidiaries as at the end of such fiscal
quarter, as determined in accordance with GAAP. Whether or not the
foregoing requirements are satisfied, (i) for so long as the Lien of the
Canadian Pledge Agreement remains in effect in accordance with the terms
thereof and hereof, each Canadian Parent and their respective Subsidiaries
and (ii) for so long as the Lien of the IPP Pledge Agreement remains in
effect in accordance with the terms thereof and hereof, UtilCo Group Inc.
and each of its Subsidiaries that has consolidated assets equal to or
greater than 20% of the total consolidated assets of UtilCo Group Inc. and
its Subsidiaries, in each case, shall be a Material Subsidiary.
"MATERIALS OF ENVIRONMENTAL CONCERN" shall mean any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any other pollutant, contaminant, hazardous substance,
hazardous waste, special waste, toxic substance, radioactive material, or
other compound, element, material or substance in any form whatsoever
(including products) regulated, restricted or addressed by or under any
Environmental Law, including, without limitation, asbestos, polychlorinated
biphenyls and urea-formaldehyde insulation.
16
"MATURITY DATE" shall mean May 15, 2006.
"MICHIGAN GAS UTILITIES INDENTURE" shall mean the Indenture of
Mortgage and Deed of Trust, dated July 1, 1951, of Michigan Gas Utilities
Company to Continental Illinois National Bank and Trust Company of Chicago
and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as Trustees.
"MOODY'S" shall mean ▇▇▇▇▇'▇ Investors Service, Inc.
"MULTIEMPLOYER PLAN" shall mean a plan which is a "multiemployer plan"
as defined in Section 3(37) or 4001(a)(3) of ERISA.
"NET CASH PROCEEDS" shall mean, with respect to any Reduction Event,
an amount equal to the cash proceeds from or in respect of such Reduction
Event (including any cash received by way of deferred payment pursuant to a
promissory note, receivable or otherwise, but only as and when received),
less (a) any investment banking, auditing and legal fees, printing costs,
rating agency fees and any other fees and expenses reasonably incurred by
such Person in respect of such Reduction Event, (b) if such Reduction Event
is a Disposition of assets, the amount of any contractually required
payments, including Debt, and associated costs which become due and owing
as a result of such Disposition, and (c) any taxes actually paid or to be
payable by such Person (as estimated by a senior financial or accounting
officer of the Borrower) in respect of such Reduction Event.
"NON-EXCLUDED TAXES" shall have the meaning ascribed thereto in
SECTION 2.16(a).
"NON-RECOURSE DEBT" shall mean any Debt as to which the Borrower has
no direct or indirect liability whether as primary obligor, guarantor,
surety, provider of collateral security or through any other right or
arrangement of any nature (including any election by the holder of such
indebtedness) providing direct or indirect assurance of payment or
performance of any such obligations in whole or in part (other than direct
or indirect liability which by its terms may be payable solely in Capital
Stock (other than Mandatory Redeemable Stock) of the Borrower).
"NOTE" shall mean any promissory note issued by the Borrower in
accordance with SECTION 2.2(e).
"NOTICE OF BORROWING" shall mean a notice given by the Borrower
pursuant to SECTION 2.3.
"NOTICE OF INTEREST RATE CONVERSION" shall have the meaning ascribed
thereto in SECTION 2.8.
"OBLIGATIONS" shall mean the unpaid principal of and interest
(including, without limitation, interest accruing after the maturity of the
Loans and interest accruing after the filing of any petition in bankruptcy,
or the commencement of any insolvency, reorganization or like proceeding,
relating to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding and whether the
Administrative Agent, for the benefit of the Lenders, is oversecured or
undersecured with respect to such Loans) on the Loans, the L/C
Disbursements and all other obligations and
17
liabilities of the Borrower to the Administrative Agent, the Collateral
Agent and the Lenders, whether direct or indirect, absolute or contingent,
due or to become due, now existing or hereafter incurred, which may arise
under, out of, or in connection with, this Agreement, the other Loan
Documents or any other document made, delivered or given in connection
herewith or therewith, whether on account of principal, interest, fees,
indemnities, costs, expenses (including, without limitation, the Borrower's
obligation to provide cash collateral pursuant to Section 2.5(j) and all
fees and disbursements of counsel to the Administrative Agent, the
Collateral Agent or the Lenders that are required to be paid by the
Borrower pursuant to the terms of this Agreement or any other Loan
Document) or otherwise.
"PARTICIPANT" shall have the meaning ascribed thereto in SECTION
9.6(b).
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA or any successor thereto.
"PENSION PLAN" shall mean any single-employer plan, as defined in
Section 4001(a)(15) of ERISA, which the Borrower or any Commonly Controlled
Entity maintains, administers, contributes to or is required to contribute
to, or under which the Borrower or any Commonly Controlled Entity has any
liability.
"PERMITTED LIENS" shall mean
(a) Liens for taxes, assessments, governmental charges or levies not
yet due or which are being contested in good faith by appropriate
proceedings; PROVIDED that adequate reserves with respect thereto
are maintained on the books of the Borrower or its Consolidated
Subsidiaries, as the case may be, in conformity with GAAP;
(b) Landlord liens for rent not yet due and payable and statutory
Liens of carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other similar nonconsensual Liens imposed by law
arising in the ordinary course of business securing obligations
which are not overdue for a period of more than 60 days or which
are being contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(d) (i) deposits securing liability to insurance carriers under
insurance or self-insurance arrangements in the ordinary course
of business, and (ii) deposits to secure true operating leases,
performance of bids, trade contracts (other than for Debt),
statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature incurred in the ordinary
course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which,
in the aggregate, do not
18
in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct
of the business of the Borrower and its Subsidiaries;
(f) any attachment or judgment Lien not constituting an Event of
Default under SECTION 7.1(h);
(g) (i) Liens on assets of a Subsidiary (other than a Collateral
Subsidiary) securing Indebtedness of a Subsidiary, (ii) Liens on
assets of a Canadian Parent or any of its Subsidiaries securing
Indebtedness of a Canadian Parent or any of its Subsidiaries, or
(iii) Liens on assets of UtilCo Group Inc. or any of its
Subsidiaries securing Indebtedness of UtilCo Group Inc. or any of
its Subsidiaries;
(h) the Lien of the First Mortgage Indenture, as the same may be
amended or supplemented from time to time in accordance with the
terms hereof, securing the First Mortgage Bonds and other first
mortgage bonds permitted to be outstanding pursuant to SECTION
6.10(i);
(i) Liens on accounts receivables of the Borrower (PROVIDED such
assets are not subject to the Lien of the First Mortgage
Indenture) securing Indebtedness permitted to be outstanding
pursuant to SECTION 6.10(k);
(j) Liens on (i) assets of the Borrower not subject to the Lien of
the First Mortgage Indenture, the Canadian Pledge Agreement, the
ANCMC Canadian Pledge Agreement or the IPP Pledge Agreement and
(ii) assets of the Borrower's Subsidiaries (other than Credit
Parties or Collateral Subsidiaries), in each case, securing
Indebtedness permitted to be outstanding pursuant to SECTION
6.10(j), (l) OR (m), PROVIDED that prior to granting any such
liens on tangible assets of any portion of the Domestic Utility
Business, the Borrower shall have complied with the provisions of
SECTION 5.13(a) and (b);
(k) any Lien vested in any licensor or permitter for obligations or
acts to be performed, the performance of which obligations or
acts is required under licenses or permits, so long as the
performance of such obligations or acts is not delinquent or is
being contested in good faith and by appropriate proceedings;
(l) Liens existing on the date hereof securing Debt as set forth in
SCHEDULE 6.10 hereto;
(m) Liens permitted under the proviso set forth in SECTION 6.19;
(n) other Liens not securing Indebtedness, as such Liens exist on the
date hereof;
19
(o) the Lien of the St. ▇▇▇▇▇▇ Power & Light Indenture (as in effect
on the date hereof) securing Indebtedness thereunder, if any,
outstanding on the date hereof;
(p) the Lien of the UtiliCorp Indenture (as in effect on the date
hereof) securing Indebtedness thereunder, if any, outstanding on
the date hereof;
(q) Liens of the Michigan Gas Utilities Indenture (as in effect on
the date hereof) securing Indebtedness thereunder, if any,
outstanding on the date hereof;
(r) Liens of any Collateral Document; or
(s) any Lien incurred pursuant to any agreement relating to a
Disposition of assets so long as the terms of such Disposition
comply with SECTION 6.7 (and such Lien extends solely over the
assets which are the subject of such Disposition).
"PERSON" shall mean an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority, or other
entity of whatever nature.
"▇▇▇▇▇ COUNTY SYNTHETIC LEASE" shall mean the lease financing of the
Goose Creek power plant entered into pursuant to the Amended and Restated
Participation Agreement, dated as of May 16, 2002, among ▇▇▇▇▇▇ ▇▇▇▇▇
County Power L.L.C., ▇▇▇▇▇ County Purchaser, L.L.C., ▇▇▇▇▇ Midwest
Statutory Trust II, State Street Bank and Trust Company of Connecticut,
National Association, not in its individual capacity, except as expressly
set forth therein, but solely as Trustee, the Persons named therein as Note
Holders, the Persons named therein as Certificate Holders, Citibank, N.A.,
as Swap Party, and Citicorp USA, Inc., as Agent.
"PLAN" shall mean at a particular time, any employee benefit plan
which is defined in Section 3(2) of ERISA and in respect of which the
Borrower or any Subsidiary is, an "employer" as defined in Section 3(5) of
ERISA.
"PROPERTIES" shall have the meaning ascribed thereto in SECTION
3.16(a).
"RATE REDUCTION DATE" shall mean the date (or if not a Business Day,
the next succeeding Business Day after such date) on which (A) each of the
following conditions shall have been satisfied, (i) all consents or
authorizations of, filings with, notices to or other acts by or in respect
of, any Governmental Authority or any other Person required in order to
subject substantially all of the property of the Borrower of the types
described in the granting clauses of the First Mortgage Indenture located
in any jurisdiction in the United States other than Michigan and Nebraska
to the Lien of the First Mortgage Indenture shall have been obtained and be
in full force and effect, (ii) the Administrative Agent shall have received
an appraisal of such property, dated within three months thereof (or sooner
if there has been a material adverse change affecting such property), in
form and substance reasonably satisfactory to the Administrative Agent (and
upon which
20
the Secured Parties may expressly rely), (iii) the fair value of the
Collateral Utility Business (including the fair value of such property, as
evidenced by such appraisal) shall be equal to or exceed 167% of the then
outstanding aggregate principal amount of the First Mortgage Bonds, (iv) an
indenture supplemental to the First Mortgage Indenture subjecting such
property to the Lien of the First Mortgage Indenture shall have been
properly executed, delivered, filed and recorded, and (v) the
Administrative Agent shall have received, in form and substance reasonably
satisfactory to it, (a) copies of all opinions, certificates, orders,
consents and other documents that are required to be delivered to the
Indenture Trustee under the First Mortgage Indenture as conditions
precedent to (or otherwise in connection with) the subjection of such
property to the Lien of the First Mortgage Indenture and the execution,
delivery, filing and recording of the supplemental indenture specified in
(iv) (together with, in the case of each such opinion that is not addressed
to the Collateral Agent, a letter from the counsel rendering such opinion
to the effect that the Collateral Agent is entitled to rely on such opinion
as if such opinion were addressed to the Collateral Agent) and (b) such
other opinions, certificates and documents reasonably related thereto as
the Administrative Agent shall have reasonably requested or (B) the
Borrower prepays the Loans pursuant to SECTION 2.7 for any reason and,
after giving effect to such prepayment, the fair value of Collateral
Utility Business shall be equal to or exceed 167% of the outstanding
aggregate principal amount of the First Mortgage Bonds (and the Borrower
shall deliver a written certificate to the Administrative Agent certifying
as to such ratio).
"REDUCTION EVENT" shall mean any Canadian Collateral Event, Indenture
Collateral Event or IPP Collateral Event.
"REGISTER" shall have the meaning ascribed thereto in SECTION 9.6(d).
"REGULATION D, T, U OR X" shall mean Regulation D, T, U or X,
respectively, of the Board of Governors of the Federal Reserve System as in
effect from time to time, or any successor regulation.
"RELEASE" shall mean any release, pumping, pouring, emptying,
injecting, escaping, leaching, migrating, dumping, seepage, spill, leak,
flow, discharge, disposal or emission.
"REORGANIZATION" shall mean with respect to any Multiemployer Plan,
the condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"REPLACEMENT LENDER" shall have the meaning ascribed thereto in
SECTION 2.19(d).
"REPORTABLE EVENT" shall mean any of the events set forth in Section
4043(c) of ERISA other than those events for which the notice requirement
has been waived under applicable regulations.
"REQUIRED COLLATERAL VALUE RATIO" shall have the meaning ascribed
thereto in SECTION 2.7(b)(y).
21
"REQUIRED LENDERS" shall mean, at any time, Lenders having Commitments
(or after the Closing Date, Loans and LC Exposure) representing more than
50% of the aggregate of all Commitments (or after the Closing Date, Loans
and LC Exposure) outstanding at such time.
"REQUIREMENT OF LAW" as to any Person shall mean the articles of
organization and by-laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority (including, without
limitation, the Public Utility Holding Company Act of 1935, as amended, any
of the foregoing relating to public utilities and any Environmental Law),
in each case, applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.
"RESPONSIBLE OFFICER" shall mean, with respect to a Person, the
chairman of the board of directors, the chief executive officer, the
president, any senior vice president, or any vice president of such Person
or, with respect to financial matters, the chief financial officer or the
treasurer of such Person, or any other officer of such Person designated as
a Responsible Officer by any of the foregoing.
"RESTRICTED PAYMENT" shall have the meaning ascribed thereto in
SECTION 6.9.
"SEC" shall mean the Securities and Exchange Commission.
"SEC REPORTS" shall mean the reports filed by the Borrower with the
SEC on Form 10-K, Form 10-Q or Form 8-K or any successor Form.
"SECURED PARTIES" shall mean the Administrative Agent, the Collateral
Agent, the Issuing Banks, and the Lenders.
"7.00% SENIOR NOTES" shall mean 7.00% senior notes of the Borrower
maturing on July 15, 2004.
"6.875% SENIOR NOTES" shall mean 6.875% senior notes of the Borrower
maturing on October 1, 2004.
"ST. ▇▇▇▇▇▇ POWER & LIGHT INDENTURE" shall mean the Indenture of
Mortgage and Deed of Trust, dated as of April 1, 1946, among St. ▇▇▇▇▇▇
Light & Power Company, ▇▇▇▇▇▇ Trust and Savings Bank and ▇▇▇▇▇▇ Boder.
"SPC" shall have the meaning ascribed thereto in SECTION 9.6(f).
"STANDARD & POOR'S" shall mean Standard & Poor's Rating Group, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"SUBSIDIARY" shall mean, with respect to any Person, any corporation
or unincorporated entity of which more than 50% of the outstanding capital
stock (or comparable interest) having ordinary voting power (irrespective
of whether at the time capital stock (or comparable interest) of any other
class or classes of such corporation or
22
entity shall or might have voting power upon the occurrence of any
contingency) is at the time directly or indirectly owned by such Person
(whether directly or through one or more other subsidiaries). In the case
of an unincorporated entity, a Person shall be deemed to have more than 50%
of interests having ordinary voting power only if such Person's vote in
respect of such interests comprises more than 50% of the total voting power
of all such interests in the unincorporated entity. Unless otherwise
expressly stated herein, all references to any Subsidiary are to direct or
indirect Subsidiaries of the Borrower.
"SUPPLEMENTAL INDENTURE" shall have the meaning set forth in SECTION
3.21(a).
"TERM LOANS" shall have the meaning ascribed thereto in SECTION 2.1.
"364-DAY CREDIT AGREEMENT" shall mean that certain U.S.$200,000,000
364-Day Credit Agreement dated as of the date hereof among UtiliCorp
Australia, Inc., as borrower, the lenders party thereto and CSFB, as
administrative agent.
"TOTAL CAPITAL" shall mean on any date (a) Debt on such date PLUS (b)
Consolidated Net Worth as of the end of the most recent fiscal quarter.
"TOTAL CREDIT-LINKED DEPOSITS" shall mean, at any time, the sum of all
the Lenders' Credit-Linked Deposits, as the same may be reduced from time
to time pursuant to SECTION 2.5(e) OR 2.7(a)(i).
"TRANSACTIONS" shall mean, collectively, (a) the execution, delivery
and performance by the Borrower of this Agreement, the other Loan Documents
and the First Mortgage Indenture, (b) borrowings hereunder, the use of the
proceeds thereof, and the issuance of Letters of Credit, (c) the
authorization, issuance and delivery of the First Mortgage Bonds to the
Collateral Agent, (d) the granting of security interests pursuant to the
Collateral Documents and (e) any other transactions related or entered into
in connection with any of the foregoing or otherwise in connection with any
of the Loan Documents.
"TRANSFEREE" shall have the meaning ascribed thereto in SECTION
9.6(g).
"TURBINE WAREHOUSE SYNTHETIC LEASE" shall mean the $265,000,000 lease
financing pursuant to the Participation Agreement, dated May 17, 2001,
among Aquila Turbines, L.L.C., ▇▇▇▇▇ Midwest Statutory Trust, State Street
Bank and Trust Company of Connecticut, National Association, not in its
individual capacity, except as expressly set forth therein, but solely as
Trustee, the Persons named therein as Note Holders, the Persons named
therein as Certificate Holders, and Citibank, N.A., as Agent and Lessor
Agent.
"TYPE" shall mean as to any Loan, its nature as an Alternate Base Rate
Loan or a Eurodollar Loan, as the context may require.
23
"UTILICORP INDENTURE" shall mean the General Mortgage Indenture and
Deed of Trust, dated September 15, 1988, of UtiliCorp United Inc. to
Commerce Bank of Kansas City, N.A., as Trustee.
"WAIVER AND CONSENT" shall mean a Waiver and Consent among the
Borrower and the lenders party thereto under the Citibank 3-Year Revolving
Credit Agreement, pursuant to which, among other things, such lenders waive
obligations of the Borrower to comply with certain covenants under the
Citibank 3-Year Revolving Credit Agreement, in form and substance
satisfactory to the Administrative Agent.
"WHOLLY-OWNED SUBSIDIARY" of any Person shall mean any Subsidiary 100%
of whose Capital Stock (other than qualifying directors' shares) is at the
time owned by such Person directly or indirectly through other Wholly Owned
Subsidiaries.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have their respective defined
meanings when used in the Notes or any certificate or other document made or
delivered pursuant hereto.
(b) As used herein, in the Notes and in any certificate or other
document made or delivered pursuant hereto, accounting terms relating to
the Borrower or any Subsidiary not defined in SECTION 1.1 and accounting
terms partly defined in SECTION 1.1, to the extent not defined, shall have
the respective meanings given to them under GAAP.
(c) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as
a whole and not to any particular provision of this Agreement, and Article,
Section, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(e) The words "include," "includes" and "including" shall be
deemed to be followed by the phrase "without limitation". The word "or"
shall not be exclusive. The word "will" shall be construed to have the same
meaning and effect as the word "shall".
(f) Unless the context requires otherwise (i) any definition of
or reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as
from time to time amended, supplemented or otherwise modified (subject to
any restrictions on such amendments, supplements or modifications set forth
herein), (ii) any reference herein to any Person shall be construed to
include such Person's successors and assigns, and (iii) the words "asset"
and "property" shall be construed to have the same meaning and effect and
to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
24
1.3 FAIR VALUE OF COLLATERAL UTILITY BUSINESS. For the purposes of
determining fair value of the Collateral Utility Business as of any date (other
than as set forth in SECTION 2.7(b) and other than for lines of business
additions pursuant to SECTION 5.13(a)), the fair value of the Collateral Utility
Business shall be the fair value thereof as set forth in the most recent
appraisal delivered to the Administrative Agent in accordance with SECTION
2.7(b), 4.1(j) OR 5.13(a) as adjusted after the date of such appraisal for
property additions to and releases from the Lien of the First Mortgage Indenture
(such adjustment to be as agreed to between the Borrower and the Administrative
Agent). For purposes of determining fair value of the Collateral Utility
Business as of any date (including without limitation Sections 2.7(b) and
5.13(a)), but without duplication, fair value shall include the aggregate amount
of cash then deposited with the Indenture Trustee (regardless of when deposited
including with the Net Cash Proceeds of the transaction to which the
determination of the Collateral utility Business relates); provided that at the
time such cash was deposited with the Indenture Trustee, such cash was deposited
for the express purpose of determining fair value hereunder (and not for any
other purpose under the First Mortgage Indenture, including any Authorized
Purpose) and (ii) at the time of such deposit, the Borrower shall have expressly
and irrevocably waived, in a written notice to the Indenture Trustee and the
Administrative Agent, any right to use such cash for any Authorized Purpose
subject to Section 7.05(a) of the First Mortgage Indenture (except that "seventy
percent (70%) of the Cost or Fair Value to the Company (whichever is less)" set
forth in such Section 7.05(a) shall instead be "sixty percent (60%) of the Fair
Value to the Company" for purposes of any cash deposited for these purposes and
the written notice referred to above shall set out this restriction to such
Section 7.05(a) and contain a covenant of the Borrower to comply with this
restriction).
ARTICLE 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 TERM LOANS. Subject to the terms and conditions hereof
(including, without limitation, the conditions precedent set forth in SECTION
4.1 hereof), each Lender severally agrees to make a term loan (each, a "TERM
LOAN") to the Borrower in a principal amount not to exceed such Lender's
Commitment Percentage of $430,000,000 on the Closing Date. The Loans (i) at the
option of the Borrower may be incurred and maintained as, or converted into,
Alternate Base Rate Loans or Eurodollar Loans in accordance with the provisions
hereof and (ii) shall be repaid or prepaid in accordance with the provisions
hereof, but once repaid or prepaid, may not be reborrowed.
2.2 REPAYMENT OF LOANS; EVIDENCE OF DEBT. (a) The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
each Lender the then unpaid principal amount of each Loan on the Maturity Date.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower
to such Lender resulting from each Loan made by such Lender, including the
date and the amounts of principal and interest payable and paid to such
Lender from time to time hereunder.
(c) The Administrative Agent shall maintain accounts in which it
shall record (i) the date and the amount of each Loan made hereunder, the
Type thereof and the Interest Period applicable thereto, (ii) the amount of
any principal or interest due and payable or to become due and
25
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.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that
the failure of any 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 the Loans in accordance with the terms of this
Agreement.
(e) Any Lender may request that Loans made by it be evidenced by
a promissory note. In such event, the Borrower shall prepare, execute and
deliver to such Lender a promissory note payable to the order of such
Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in a form approved by the Administrative Agent. Thereafter,
the Loans evidenced by such promissory note and interest thereon shall at
all times (including after assignment pursuant to SECTION 9.6) be
represented by one or more promissory notes in such form payable to the
order of the payee named therein (or, if such promissory note is a
registered note, to such payee and its registered assigns).
2.3 PROCEDURE FOR BORROWING. As a condition precedent to borrowing
of Term Loans hereunder, the Borrower shall give the Administrative Agent an
irrevocable notice substantially in the form of EXHIBIT A-1 on or prior to the
Closing Date (which notice must be received by the Administrative Agent prior to
10:00 a.m.,
New York City time on the Closing Date), specifying (1) that a Term
Loan is requested, (2) the aggregate amount to be borrowed, (3) the requested
Closing Date, (4) whether the borrowing is to be of Eurodollar Loans, Alternate
Base Rate Loans or a combination thereof, (5) if the borrowing is to be entirely
or partly of Eurodollar Loans, the amounts of such Eurodollar Loans and the
lengths of the initial Interest Periods therefor and (6) the number and the
location of the account to which the proceeds are to be disbursed (consistent
with the provisions of hereof). Upon receipt of any such notice from the
Borrower, the Administrative Agent shall promptly notify each Lender thereof.
Each Lender will make the amount of its pro rata share of each borrowing
available to the Administrative Agent for the account of the Borrower at the
office of the Administrative Agent specified in SECTION 9.2 prior to 11:00 a.m.,
New York City time, on the date requested by the Borrower in funds immediately
available to the Administrative Agent. Such borrowing will then be made
available to the Borrower by the Administrative Agent in the manner specified by
the Borrower in such Notice of Borrowing in the aggregate of the amounts made
available to the Administrative Agent by the Lenders and in like funds as
received by the Administrative Agent. If the Borrower fails to indicate the
initial Interest Periods in such notice, the Interest Period shall be one month.
2.4 FEES. (a) The Borrower agrees to pay to the Administrative
Agent, for the account of CSFB, the Administrative Agent or the Issuing Banks,
each for its own account, fees payable in the amounts and at the times
separately agreed upon by the Borrower and such Persons.
26
(b) The Borrower agrees to pay (i) to the Administrative Agent
for the account of each Lender a participation fee with respect to its
agreement to participate in Letters of Credit, which participation fee
shall accrue at the rate of 5.75% per annum (subject to a reduction from
5.75% to 5.00% from and after the Rate Reduction Date (if any)), on the
average daily amount of such Lender's Credit-Linked Deposit during the
period from and including the Closing Date to but excluding the date on
which such Lender's Credit-Linked Deposit is withdrawn from the
Credit-Linked Deposit Account in accordance with the terms hereof, (ii) to
the Administrative Agent for the account of each Lender a make-whole fee
with respect to each Interest Period applicable to such Lender's
Credit-Linked Deposit, which make-whole fee shall accrue at the rate of the
Eurodollar Rate for such Interest Period MINUS the LIBID Rate for such
Interest Period, on the average daily amount of such Lender's Credit-Linked
Deposit during such Interest Period, for each such Interest Period from and
including the Closing Date to but excluding the date on which such Lender's
Credit-Linked Deposit is withdrawn from the Credit-Linked Deposit Account
in accordance with the terms hereof, and (iii) to each Issuing Bank a
fronting fee, which shall accrue at the rate of 0.125% per annum on the
average daily aggregate face amount of the outstanding Letters of Credit of
such Issuing Bank, as well as such Issuing Bank's standard fees with
respect to the issuance, amendment, renewal or extension of any Letter of
Credit or processing of drawings thereunder. Accrued participation fees,
make-whole fees and fronting fees shall be due and payable on the last day
of each Interest Period applicable to interest accruing on the
Credit-Linked Deposits, commencing on the first such date to occur after
the Closing Date; PROVIDED that all such fees shall be payable on the date
on which the Credit-Linked Deposits are returned to the Lenders and any
such fees accruing after the date on which the Credit-Linked Deposits are
returned to the Lenders shall be payable on demand. Any other fees payable
to any Issuing Bank pursuant to this paragraph shall be payable within ten
(10) days after demand. All participation fees, make-whole fees and
fronting fees shall be computed on the basis of a year of 360 days and
shall be payable for the actual number of days elapsed (including the first
day but excluding the last day).
(c) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent for the benefit of
the parties entitled thereto. Fees paid shall not be refundable under any
circumstances.
2.5 LETTERS OF CREDIT. THE BORROWER HAS EXERCISED ITS RIGHT TO
REQUEST BORROWINGS OF TERM LOANS IN THE AGGREGATE PRINCIPAL AMOUNT OF
$430,000,000 ON THE CLOSING DATE. AS A RESULT THEREOF, AND ANYTHING HEREIN TO
THE CONTRARY NOTWITHSTANDING, (i) NO LETTER OF CREDIT MAY BE ISSUED HEREUNDER,
(ii) NO ENTITY MAY BE DESIGNATED AS AN ISSUING BANK HEREUNDER, AND (iii) THE
OTHER PROVISIONS OF THIS SECTION 2.5 AND SECTION 2.6 RELATING TO THE ISSUANCE OF
A LETTER OF CREDIT, ANY RISK PARTICIPATIONS THEREIN AND THE CREATION OF
27
CREDIT-LINKED DEPOSITS ARE OF NO FURTHER FORCE OR EFFECT. (a) ISSUANCE AND
AMENDMENT. Subject to the terms and conditions hereof, the Borrower may request
the issuance of, and each Issuing Bank agrees to issue, one or more Letters of
Credit, in a form reasonably acceptable to the applicable Issuing Bank, at any
time and from time to time during the Availability Period on a revolving basis.
At the request of the Borrower, any Letter of Credit may be issued designating a
Subsidiary of the Borrower as a nominal account party in respect of such Letter
of Credit, but no such designation shall in any manner limit or impair, or
relieve the Borrower of, the obligations of the Borrower hereunder and in
respect of such Letter of Credit, it being understood and agreed that, as among
the several parties to this Agreement, the Borrower shall at all times have all
of the rights and be subject to all of the obligations, duties and
responsibilities of an account party in respect thereof. This Section shall not
be construed to impose an obligation upon any Issuing Bank to issue any Letter
of Credit that is inconsistent with the terms and conditions of this Agreement.
In order to request the issuance of a Letter of Credit, the Borrower shall hand
deliver or telecopy to an Issuing Bank and the Administrative Agent (reasonably
in advance of the requested date of issuance) a notice requesting the issuance
of a Letter of Credit and setting forth the date of issuance, the date on which
such Letter of Credit is to expire (which shall comply with paragraph (c)
below), the amount of such Letter of Credit, the name and address of the
beneficiary thereof and such other information as shall be necessary to prepare
such Letter of Credit. If requested by any Issuing Bank, the Borrower shall
submit a letter of credit application on such Issuing Bank's standard form in
connection with the issuance of any Letter of Credit to be issued by such
Issuing Bank. In the event of any inconsistency between the terms and conditions
of this Agreement and the terms and conditions of any form of letter of credit
application or other agreement submitted by the Borrower to, or entered into by
the Borrower with, any Issuing Bank relating to any Letter of Credit, the terms
and conditions of this Agreement shall control. Any Letter of Credit may be
amended by the applicable Issuing Bank at the request of the Borrower; provided,
that no such amendment shall increase the stated amount of a Letter of Credit or
extend the expiration date thereof beyond the last permissible date referred to
in PARAGRAPH (c) below. To request an amendment to an outstanding Letter of
Credit, the Borrower shall hand deliver or telecopy to the applicable Issuing
Bank and the Administrative Agent (reasonably in advance of the requested date
of amendment) a notice identifying the Letter of Credit to be amended and
specifying the date of amendment (which shall be a Business Day), the amount of
such Letter of Credit, the name and address of the beneficiary thereof and such
other information as shall be necessary to amend such Letter of Credit.
(b) LIMITATION OF AMOUNT; NO DEFAULT. A Letter of Credit shall
be issued, amended or extended only if (and upon issuance, amendment or
extension of each Letter of Credit, the Borrower shall be deemed to
represent and warrant that), after giving effect to such issuance,
amendment or extension, (A) no Event of Default has occurred and is then
continuing, (B) the LC Exposure will not exceed the Total Credit-Linked
Deposits and (C) the portion of the LC Exposure attributable to Letters of
Credit of the Issuing Bank requested to issue, amend or extend such Letter
of Credit shall not exceed the LC Commitment of such Issuing Bank.
(c) EXPIRATION DATE. Each Letter of Credit shall expire not
later than the close of business on the fifth Business Day prior to the
Maturity Date.
28
(d) (i) PARTICIPATIONS OF LENDERS. On the date of issuance
thereof, without any further action on the part of any Issuing Bank or the
Lenders, each Issuing Bank issuing one or more Letters of Credit hereby
grants to each Lender, and each Lender hereby acquires from such Issuing
Bank, a participation in each such Letter of Credit equal to such Lender's
Commitment Percentage of the aggregate maximum amount available to be drawn
under such Letter of Credit. The aggregate purchase price for the
participations of each Lender in all Letters of Credit shall equal the
amount of the Credit-Linked Deposit of such Lender. Each Lender shall
deposit with the Administrative Agent its Credit-Linked Deposit in full on
the Closing Date. Except as expressly provided for herein, such deposits
shall be irrevocable and no Lender shall have any right to withdraw any
amount from its Credit-Linked Deposit. Each Lender hereby absolutely and
unconditionally agrees that if an Issuing Bank makes a LC Disbursement
which is not reimbursed by the Borrower when due as provided in PARAGRAPH
(e)(i) of this Section or is required to refund any reimbursement payment
in respect of a LC Disbursement to the Borrower for any reason, the
Administrative Agent shall reimburse the applicable Issuing Bank for such
Lender's Commitment Percentage of the amount of such LC Disbursement from
such Lender's Credit-Linked Deposit on deposit in the Credit-Linked Deposit
Account.
(ii) OBLIGATIONS UNCONDITIONAL. Each Lender acknowledges and
agrees that its obligation to acquire and fund participations in respect of
Letters of Credit pursuant to the preceding subparagraph (i) is absolute,
unconditional and irrevocable and shall not be affected by any circumstance
whatsoever, including any amendment, renewal or extension of any Letter of
Credit or the occurrence and continuance of a Default or the return of the
Credit-Linked Deposits, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever. Without
limiting the foregoing, each Lender irrevocably authorizes the
Administrative Agent to apply amounts of its Credit-Linked Deposit as
provided in the preceding subparagraph (i).
(e) REIMBURSEMENT. (i) If any Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Issuing Bank will
promptly give notice to the Borrower and the Administrative Agent. The
Borrower shall reimburse such LC Disbursement by paying to the
Administrative Agent an amount equal to such LC Disbursement not later than
1:00 p.m.,
New York City time, on the third Business Day following the date
such LC Disbursement is made, if the Borrower shall have received notice of
such LC Disbursement prior to 11:00 a.m.,
New York City time, on the date
of such LC Disbursement, or, if such notice has not been received by the
Borrower prior to such time on the date of such LC Disbursement, then not
later than 1:00 p.m., New York City time, on the fourth Business Day
immediately following the day that the Borrower receives such notice, in
each case together with interest accrued on such LC Disbursement from the
date such LC Disbursement is made to the date of reimbursement at the rate
set forth in SECTION 2.5(h). Alternatively, the Borrower may give notice to
the Administrative Agent (with a copy to such Issuing Bank) that the
Borrower has elected to fund such reimbursement obligation as an LC Loan as
provided in subparagraph (ii) below; provided that the Borrower shall
remain obligated to pay interest on such LC Disbursement until the LC
Issuer is reimbursed for such LC Disbursement.
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(ii) If the Borrower fails to make any payment due under subparagraph
(i) above with respect to a LC Disbursement (or if the Borrower has given
notice electing to fund such reimbursement obligation as an LC Loan as
provide in this subparagraph), the Administrative Agent shall notify each
Lender of the applicable LC Disbursement and such Lender's Commitment
Percentage thereof, and the Administrative Agent shall pay to the
applicable Issuing Bank each Lender's Commitment Percentage of such LC
Disbursement from such Lender's Credit-Linked Deposit prior to 1:00 p.m.
New York City time on the Business Day immediately following the date such
payment was due (or if the Borrower gave notice of its election to fund
such reimbursement as an LC Loan, 1:00 p.m. New York City time on the
Business Day following receipt of such Notice). Promptly following receipt
by the Administrative Agent of any payment pursuant to subparagraph (i)
above in respect of any LC Disbursement, the Administrative Agent shall
distribute such payment to the applicable Issuing Bank. Upon the payment
made from the Credit-Linked Deposit Account pursuant to this subparagraph
to reimburse an Issuing Bank for any LC Disbursement, the Borrower shall be
deemed to have reimbursed the Issuing Bank as of such date and the Lenders
shall be deemed to have extended, and the Borrower shall be deemed to have
accepted, a loan (each, an "LC LOAN") in the aggregate principal amount of
such payment without any further action on the part of any party.
(iii) Notwithstanding the foregoing, to the extent any funds are on
deposit in the Cash Collateral Account pursuant to subparagraph (ii) of
SECTION 2.5(j), upon receipt by the Administrative Agent of notice of any
LC Disbursement, the Administrative Agent shall (A) notify each Lender of
the applicable LC Disbursement and such Lender's Commitment Percentage
thereof, (B) promptly pay to the applicable Issuing Bank each Lender's
Commitment Percentage of such LC Disbursement from such Lender's
Credit-Linked Deposit by 1:00 p.m. on the date such payment is due and (C)
promptly pay to each Lender each Lender's Commitment Percentage of such LC
Disbursement from amounts on deposit in the Cash Collateral Account, in
each case solely up to the amount then on deposit Cash Collateral Account
pursuant to subparagraph (ii) of SECTION 2.5(j).
(f) OBLIGATIONS ABSOLUTE. The Borrower's obligation to reimburse LC
Disbursements (or to repay the LC Loans with respect thereto) as provided in
paragraph (e) above shall be absolute, unconditional and irrevocable, and shall
be performed strictly in accordance with the terms of this Agreement under any
and all circumstances whatsoever and irrespective of (i) any lack of validity or
enforceability of any Letter of Credit or this Agreement, or any term or
provision therein, (ii) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect, (iii) payment by an
Issuing Bank under a Letter of Credit against presentation of a draft or other
document that does not comply with the terms of such Letter of Credit, or (iv)
any other event or circumstance whatsoever, whether or not similar to any of the
foregoing, that might, but for the provisions of this Section, constitute a
legal or equitable discharge of, or provide a right of setoff against, the
Borrower's obligations hereunder. None of the
30
Administrative Agent, the Lenders, the Issuing Banks or any of their Affiliates,
and their respective directors, trustees, officers, employees, agents and
attorneys-in-fact, shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
applicable Issuing Bank; provided that the foregoing shall not be construed to
excuse such Issuing Bank from liability to the Borrower to the extent of any
direct damages (as opposed to consequential damages, claims in respect of which
are hereby waived by the Borrower to the extent permitted by applicable law)
suffered by the Borrower that are caused by such Issuing Bank's failure to
exercise care when determining whether drafts and other documents presented
under a Letter of Credit comply with the terms thereof. The parties hereto
expressly agree that, in the absence of gross negligence, bad faith or willful
misconduct on the part of an Issuing Bank (as finally determined by a court of
competent jurisdiction), such Issuing Bank shall be deemed to have exercised
care in each such determination. In furtherance of the foregoing and without
limiting the generality thereof, the parties agree that, with respect to
documents presented which appear on their face to be in substantial compliance
with the terms of a Letter of Credit, the applicable Issuing Bank may, in its
sole discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.
(g) DISBURSEMENT PROCEDURES. Each Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. Such Issuing Bank shall promptly
notify the Administrative Agent and the Borrower by telephone (confirmed by
telecopy) of such demand for payment and whether such Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the Borrower of its obligation to
reimburse such Issuing Bank and the Lenders with respect to any such LC
Disbursement nor the Lenders' obligations to participate in such Letter of
Credit.
(h) INTERIM INTEREST. If an Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrower reimburses such LC Disbursement
(or if the Borrower shall have elected or been deemed to have elected to fund
such reimbursement as an LC Loan, the date the Administrative Agent reimburses
such LC Disbursement), at the Eurodollar Rate for the Interest Period at the
time in effect for the Credit-Linked Deposits plus 5.75% per annum (subject to a
reduction from 5.75% to 5.00% from and after the Rate Reduction Date (if any));
provided that, if the Borrower fails to reimburse such LC Disbursement (directly
or through an LC Loan) when due pursuant to PARAGRAPH (e) of
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this Section, then such LC Disbursement shall thereafter bear interest at the
rate specified in SECTION 2.10(c) until such payment is made. Interest accrued
pursuant to this paragraph shall be for the account of the applicable Issuing
Bank, except that interest accrued on and after the date of payment from the
Credit-Linked Deposit of any Lender to reimburse an Issuing Bank shall be for
the account of such Lender to the extent of such payment.
(i) REPLACEMENT OF AN ISSUING BANK. All or a portion of the LC
Commitment of any Issuing Bank may be replaced at any time by written agreement
among the Borrower, a new Issuing Bank and the Administrative Agent (with notice
to such replaced Issuing Bank); PROVIDED, HOWEVER, that the Administrative Agent
shall review any such proposed agreement for form only and not with respect to
the identity of any successor Issuing Bank or the identity of the Issuing Bank
to be replaced; PROVIDED FURTHER that at no time shall the aggregate amount of
LC Commitments of all Issuing Banks exceed the then Total Credit-Linked Deposits
(any reduction in the Total Credit-Linked Deposit to be allocated among the
Issuing Banks by the Borrower in a written notice to the Administrative Agent
and the Issuing Banks; provided no Issuing Bank shall have an LC Commitment less
than the aggregate undrawn face amount of its then outstanding Letters of
Credit). The Administrative Agent shall notify the Lenders of any such
replacement of the LC Commitment of an Issuing Bank. At the time any such
replacement shall become effective, the Borrower shall pay all unpaid fees
accrued for the account of the replaced Issuing Bank pursuant to SECTION 2.4(b)
and shall return to such Issuing Bank any Letter of Credit issued by such
Issuing Bank (to the extent the aggregate undrawn face amount of its then
outstanding Letters of Credit would exceed its revised LC Commitment). From and
after the effective date of any such replacement, (i) the successor Issuing Bank
shall have all the rights and obligations of an Issuing Bank under this
Agreement with respect to its LC Commitment (and its Letters of Credit to be
issued by it on such effective date or thereafter) and (ii) references herein to
the term "Issuing Bank" shall be deemed to refer to such successor or to any
previous Issuing Bank, or to such successor and all previous Issuing Banks, as
the context shall require. After the replacement of an Issuing Bank hereunder,
the replaced Issuing Bank shall remain a party hereto and shall continue to have
all the rights and obligations of an Issuing Bank under this Agreement with
respect to Letters of Credit issued by it prior to such replacement, but shall
not be required to issue additional Letters of Credit in excess of its remaining
LC Commitment (if any).
(j) CASH COLLATERALIZATION. (i) If (x) any Event of Default shall
occur and be continuing and the Borrower receives (or is deemed to have
received) a demand to cash collateralize the LC Exposure pursuant to SECTION 7.1
from the Administrative Agent or the Required Lenders (or, if the maturity of
the Loans has been accelerated, Lenders holding participations in outstanding
Letters of Credit representing greater than 50% of the LC Exposure) specifying
the amount of the LC Exposure, or (y) the Borrower is required to cash
collateralize the aggregate undrawn face amount of Letters of Credit pursuant to
SECTION 2.7(d), then the Borrower shall deposit in an account (the "CASH
COLLATERAL ACCOUNT") with the Collateral Agent, for the benefit of the Secured
Parties, an amount in cash equal to the aggregate undrawn face amount of all
outstanding Letters of
32
Credit on the date specified in such demand or the date specified in SECTION
2.7(d), as applicable.
(ii) If the Borrower shall be obligated to make any deposit cash
into the Cash Collateral Account pursuant to SECTION 2.7(b), the
Borrower shall on the date specified in SECTION 2.7(b), deposit in the
Cash Collateral Account, an amount in cash up to the lesser of the
aggregate undrawn face amount of all outstanding Letters of Credit on
the date and the balance of such Net Cash Proceeds, dividends or other
distributions being applied pursuant to such Section.
(iii) All such deposits shall be held by the Collateral Agent as
collateral for the payment and performance of the Obligations. The
Collateral Agent shall have exclusive dominion and control, including
the exclusive right of withdrawal, over the Cash Collateral Account.
Other than any interest earned on the investment of such deposits in
Cash Equivalents, which investments shall be made at the option and
sole discretion of the Collateral Agent, such deposits shall not bear
interest; PROVIDED, HOWEVER, that so long as no Event of Default shall
have occurred and be continuing, the Collateral Agent shall invest
such deposits in Cash Equivalents as directed by the Borrower in
writing (in no event shall the Collateral Agent be liable for the
selection of Cash Equivalents or for investment losses, if any,
incurred thereon, including losses incurred as a result of the
liquidation of any Cash Equivalents prior to stated maturity
(including, without limitation, any early withdrawal or liquidation
penalty); any and all commissions, broker fees or other charges,
penalties, fees or expenses incurred in connection with the investment
in, or liquidation of any Cash Equivalents shall be solely for the
account of the Borrower, and shall be debited against the cash balance
in the Collateral Account)). Interest or profits, if any, on such
investments shall accumulate in the Cash Collateral Account and be
held as additional collateral for the Obligations. Moneys in such
account shall be applied in the following order: (i) first,
automatically be applied by the Administrative Agent to reimburse the
Lenders for LC Disbursements for which they have not been reimbursed
pursuant to SECTION 2.5(e) above, (ii) second, be held for the
satisfaction of the reimbursement obligations of the Borrower for the
LC Exposure at such time and (iii) third, if the maturity of the Loans
has been accelerated (but subject to the consent of Lenders holding
participations in outstanding Letters of Credit representing greater
than 50% of the aggregate undrawn amount of all outstanding Letters of
Credit), be applied to satisfy the Obligations. If the Borrower is
required to provide an amount of cash collateral hereunder as a result
of the occurrence of an Event of Default, such amount (to the extent
not applied as aforesaid) shall be returned to the Borrower within
three Business Days after all Events of Default, together with all
earnings thereon, if any, have been cured or waived. If the Borrower
is required to provide an amount of cash collateral hereunder pursuant
to SECTION 2.7(b) AND (d), such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower, together with all
earnings thereon, if any, within three (3) Business Days after the
cancellation or other termination of a Letter of Credit up to the
undrawn amount of such Letter of Credit. In any event, all such
amounts (to the extent not applied as aforesaid)
33
shall be returned to the Borrower, together with all earnings thereon,
if any, within three (3) Business Days after the repayment in full of
all Obligations, the cancellation or other termination of all Letters
of Credit and the termination of the credit facilities evidenced
hereby.
(k) REPORTING REQUIREMENTS OF ISSUING BANK. Within two (2)
Business Days following the last day of each calendar month, each Issuing
Bank shall deliver to the Administrative Agent a report detailing all
activity during the preceding calendar month with respect to any Letters of
Credit issued by such Issuing Bank, including the face amount, the account
party, the beneficiary and the expiration date of each such Letter of
Credit and any other information with respect thereto as may be requested
by the Administrative Agent.
2.6 CREDIT-LINKED DEPOSIT ACCOUNT. (a) The Credit-Linked Deposits
shall be held by the Administrative Agent in the Credit-Linked Deposit Account,
and no party other than the Administrative Agent shall have a right of
withdrawal from the Credit-Linked Deposit Account or any other right or power
with respect to the Credit-Linked Deposits. Notwithstanding anything herein to
the contrary, the funding obligation of each Lender in respect of its
participation in Letters of Credit shall be satisfied in full upon the funding
of its Credit-Linked Deposit.
(b) Each of the Administrative Agent, each Issuing Bank issuing
any Letter of Credit and each Lender hereby acknowledges and agrees that
each Lender is funding its Credit-Linked Deposit to the Administrative
Agent for application in the manner contemplated by SECTION 2.5(d) and that
the Administrative Agent has agreed to invest the Credit-Linked Deposits so
as to earn a return (subject to SECTION 2.12) for the Lenders equal at any
time to the LIBID Rate for the Interest Period in effect for the
Credit-Linked Deposits at such time. Such Interest will be paid to the
Lenders by the Administrative Agent at the applicable LIBID Rate (or at an
amount determined in accordance with clause (iv) of SECTION 2.12, if
applicable) in arrears on the last day of each Interest Period applicable
to the Credit-Linked Deposits.
(c) The Borrower shall have no right, title or interest in or to
the Credit-Linked Deposits and no obligations with respect thereto, it
being acknowledged and agreed by the parties hereto that the making of the
Credit-Linked Deposits by the Lenders, the provisions of this Section 2.6
and the application of the Credit-Linked Deposits in the manner
contemplated by SECTION 2.5(d) constitute agreements among the
Administrative Agent, each Issuing Bank and each Lender with respect to the
funding obligations of each Lender in respect of its participation in
Letters of Credit and do not constitute any loan or extension of credit to
the Borrower.
(d) Any amount of Credit-Linked Deposits remaining on deposit in
the Credit-Linked Deposit Account will be returned to the Lenders on the
date on which all Obligations are paid in full, all Letters of Credit are
cancelled or otherwise terminated and the credit facilities provided hereby
are terminated.
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2.7 OPTIONAL AND MANDATORY PREPAYMENTS AND REDUCTIONS. (a) OPTIONAL
PREPAYMENT. (i) Subject to SECTION 2.17 and the provisions of this paragraph,
the Borrower may, at any time and from time to time prepay the Loans or direct
the Administrative Agent to reduce the then unused portion of the Total
Credit-Linked Deposits, in whole or in part, upon at least three Business Days'
irrevocable written notice, to the Administrative Agent, specifying the date and
amount of prepayment or reduction, whether it is a reduction or a prepayment,
and, if it is a prepayment of Loans, whether such prepayment is of Eurodollar
Loans, Alternate Base Rate Loans or a combination thereof, and, in each case of
a combination thereof, the amount allocable to each. If any such notice is
given, the amount specified in such notice shall be due and payable on the date
specified therein, together with the Make-Whole Premium, if any, due with
respect thereto. Partial prepayments and any reductions shall be in an aggregate
principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess
thereof. For the avoidance of doubt, the Borrower shall not direct the
Administrative Agent to reduce the Credit-Linked Deposits if, after giving
effect to such reduction, the aggregate LC Exposure would exceed the aggregate
Total Credit-Linked Deposits. In the event the Credit-Linked Deposits shall be
reduced as provided in this paragraph, the Administrative Agent will return all
amounts in the Credit-Linked Deposit Account in excess of the reduced
Credit-Linked Deposits to the Lenders, ratably in accordance with their
Commitment Percentages of the Total Credit-Linked Deposits.
(ii) In addition to the foregoing and subject to the terms
hereof, the Borrower may, at any time and from time to time, request
that any portion of the unused portion of the Total Credit-Linked
Deposits in an amount not in excess of the aggregate Total
Credit-Linked Deposits over the aggregate LC Exposure be converted
into Term Loans, in whole or in part, upon at least three Business
Days' irrevocable written notice, to the Administrative Agent,
specifying the date and amount of such conversion. If any such notice
of conversion is given, the Administrative Agent will fund the
requested amount in the Credit-Linked Deposit Account to the Borrower
as proceeds of Term Loans to the Borrower made on such date by the
Lenders ratably in accordance with their Commitment Percentages of the
Total Credit-Linked Deposit. Such conversions shall be in an aggregate
principal amount of $5,000,000 or a whole multiple of $1,000,000 in
excess thereof. For the avoidance of doubt, the Borrower shall not
direct the Administrative Agent to convert any amount of the Total
Credit-Linked Deposits if, after giving effect to such conversion, the
aggregate LC Exposure would exceed the aggregate Total Credit-Linked
Deposits.
(b) MANDATORY PREPAYMENTS. If, at any time, or from time to
time, after the date hereof:
(i) the Borrower or any of its Subsidiaries shall receive any
Net Cash Proceeds in respect of (a) any conveyance, sale,
lease, assignment, transfer or other disposition
(including any such transaction effected by way of merger
or consolidation) (any such transaction, a "DISPOSITION"),
by the Borrower, of any asset subject to the Lien of the
First Mortgage Indenture (other than any Disposition of
any asset released from the Lien of the First Mortgage
Indenture as described in clause (i) or (iii) of SECTION
6.16), or (b) receipt by the
35
Borrower or any of its Subsidiaries of any proceeds of
insurance, condemnation awards (or payments in lieu
thereof) or indemnity payments payable by reason of theft,
loss, physical destruction or damage, taking or similar
event with respect to any equipment, fixed asset, real
property or other asset subject to the Lien of the First
Mortgage Indenture (other than as permitted in clause
(iii) of SECTION 6.16) (any such foregoing event, an
"INDENTURE COLLATERAL EVENT"); provided that the Borrower
shall not be obligated to apply the first $10,000,000, in
the aggregate, of Net Cash Proceeds of Indenture
Collateral Events to the mandatory prepayment of the
Facilities; provided further that for purposes of this
clause (i), Net Cash Proceeds shall not include any cash
proceeds to the extent such cash proceeds are (and remain)
subject to the Lien of the First Mortgage Indenture and
are retained by the Indenture Trustee;
(ii) the Borrower, Aquila Canada Holdings, Inc. or ANCFC shall
receive (a) any cash dividend on or other distribution
with respect to the Capital Stock of either Canadian
Parent or ANCMC (other than dividends declared and made
during any fiscal year based upon (and not in excess of)
current consolidated earnings of such Canadian Parent or
ANCMC or the repayment of Investments made after the date
hereof pursuant to SECTION 6.8(i), (j) or (k)), (b) any
Net Cash Proceeds in respect of any Disposition of any
Pledged Equity Interest (as such term is defined in the
Canada Pledge Agreement or the ANCMC Canadian Pledge
Agreement) or Disposition of assets of any of either
Canadian Parent's Subsidiaries in excess of $10,000,000 in
the aggregate or (c) any Net Cash Proceeds from the
issuance of any Capital Stock of either Canadian Parent,
ANCMC or any of their respective Subsidiaries pursuant to
SECTION 6.15(b)(i) (any such foregoing event, a "CANADIAN
COLLATERAL EVENT"); or
(iii) (a) UtilCo Group, Inc. or any of its Subsidiaries shall
receive (1) any Net Cash Proceeds from the issuance of any
Capital Stock by UtilCo Group, Inc. or any of its
Subsidiaries pursuant to SECTION 6.15(c)(i) or (2) any
cash dividend on or other distribution with respect to its
equity or other ownership interests in any Independent
Power Project (other than (y) dividends or other
distributions declared and made during any fiscal year
based upon (and not in excess of) current consolidated
earnings of such Independent Power Project and (z) the
repayment of Investments made in Onondaga Cogeneration
Limited Partnership or Topsham Hydroelectric Generating
Facility Trust No. 2 after the date hereof pursuant to
SECTION 6.8 (j) or (k)), (b) Aquila Merchant Services,
Inc. shall have received any Net Cash Proceeds in respect
of any Disposition of any Pledged Equity Interest (as such
term is defined in the IPP Pledge Agreement), or (c) the
Borrower or any of its
36
Subsidiaries shall have received any Net Cash Proceeds in
respect of any Disposition by the Borrower or any of its
Subsidiaries any direct or indirect equity or other
ownership interests in any Independent Power Project
(including without limitation any Disposition of any
equity or other ownership interest in any intermediate
holding company Subsidiary) (any such foregoing event, an
"IPP COLLATERAL EVENT");
then, on or before the second Business Day immediately succeeding the date of
such receipt, such Net Cash Proceeds, dividends or other distributions (or, in
the case of a Subsidiary which is not a Wholly-Owned Subsidiary, the Borrower's
pro rata beneficial interest therein) shall be applied, FIRST, to the mandatory
prepayment of Loans then outstanding in an amount equal to such Net Cash
Proceeds, dividends or other distributions (or pro rata portion thereof, if
applicable), SECOND, to the permanent reduction of up to that portion of the
Total Credit-Linked Deposits in excess of the then aggregate LC Exposure and,
THIRD, as a deposit into the Cash Collateral Account (up to an aggregate amount
equal to the aggregate undrawn face amount of all outstanding Letters of Credit)
as provided in Section 2.5(j)(ii); PROVIDED that no Make-Whole Premium shall be
due as a result of such mandatory prepayment, reduction or deposit; PROVIDED
FURTHER that
(w) with respect to (ii) above, the Borrower shall not be obligated to
make such prepayment (or such reduction or deposit) if at such time the
Pledged Equity Interest (as such term is defined in the Canadian Pledge
Agreement) has been released from the Lien of the Canadian Pledge Agreement
as provided therein (or if the Borrower may at such time exercise its
option to request a release of such collateral as provided in SECTION
2.20);
(x) with respect to (iii) above, the Borrower shall not be obligated
to make such prepayment (or such reduction or deposit) if at such time the
Pledged Equity Interest (as such term is defined in the IPP Pledge
Agreement) has been released from the Lien of the IPP Pledge Agreement (or
if the Borrower may at such time exercise its option to request a release
of such collateral as provided in SECTION 2.20) or such Pledged Equity
Interest remains subject to the Lien of the IPP Pledge Agreement in favor
of the obligations under the 364-Day Agreement as provided therein;
(y) with respect to (i), (ii) and (iii) above, the Borrower shall not
be obligated to make such prepayment (or such reduction or deposit) with
respect to Net Cash Proceeds, dividends or other distributions which are in
excess of the amount which, if applied to the repayment of the Loans (or
the making of such reduction or deposit) would cause the ratio of (a) the
sum of the then appraised fair value of the Collateral Utility Business
(calculated after deducting an amount equal to 167% of the aggregate
principal amount of all outstanding first mortgage bonds issued thereunder
not held by the Collateral Agent) plus the then appraised value of any
Additional Collateral then pledged to the Collateral Agent and which is not
subject to a prior lien with respect to the 364-Day Credit Agreement
(unless the Borrower has the right at such time to exercise its option to
request a release of such collateral as provided in SECTION 2.20), to (b)
the aggregate principal amount of the Loans and the Total Credit-Linked
Deposits then
37
outstanding (after giving effect to such prepayment, reduction or deposit
(solely for the purposes of this clause (b), Total Credit-Linked Deposits
shall be deemed to have been reduced by the aggregate amount then on
deposit in the Cash Collateral Account)) to be at least 2.0 to 1.0 (or, if
at such time the Additional Collateral is not then pledged to the
Collateral Agent (or if the Borrower may at such time exercise its option
to request a release of such collateral as provided in SECTION 2.20), 1.67
to 1.0) (the "REQUIRED COLLATERAL VALUE RATIO"), so long as (1) no Default
or Event of Default shall exist at that time, (2) the Administrative Agent
shall receive written appraisals (dated within three months of such
required prepayment) of such collateral confirming such ratio, by an
appraiser and in form and substance reasonably satisfactory to the
Administrative Agent and the Lenders (and upon which appraisals the
Administrative Agent and the Lenders may expressly rely) and (3) no event,
condition or change shall have occurred since the date of such appraisals
which could reasonably be expected to have a material adverse effect on the
appraised value of such collateral; and
(z) with respect to (i) and (iii) above, the Borrower shall not be
obligated to make such prepayment (or deposit) with respect to Net Cash
Proceeds, dividends or other distributions which are in excess of the
amount which, if applied to the repayment of the Loans (or the making of
such reduction or deposit), would cause the ratio of (1) the sum of 60% of
the then appraised fair value of the Collateral Utility Business (after
deducting from such fair value an amount equal to 167% of the aggregate
principal amount of all outstanding first mortgage bonds issued thereunder
not held by the Collateral Agent) plus 50% of the appraised value of the
Borrower's or any of its Subsidiaries equity or other ownership interests
in the Independent Power Projects to (2) the aggregate principal amount of
the Loans and Total Credit-Linked Deposits then outstanding (after giving
effect to such prepayment, reduction or deposit (solely for the purposes of
this clause (2), Total Credit-Linked Deposits shall be deemed to have been
reduced by the aggregate amount then on deposit in the Cash Collateral
Account)) to be at least 1.0 to 1.0, so long as (1) the Pledged Equity
Interests (as such term is defined in the IPP Pledge Agreement) constitutes
the only Additional Collateral, (2) the Australian Assets (as such term is
defined in the 364-Day Credit Agreement) and the Canadian Assets have been
sold, (3) no Default or Event of Default shall exist at that time, (4) the
Administrative Agent shall receive written appraisals (dated within three
months of such required prepayment) of such collateral confirming such
ratio, by an appraiser and in form and substance reasonably satisfactory to
the Administrative Agent and the Lenders (and upon which appraisals the
Administrative Agent and the Lenders may expressly rely) and (5) no event,
condition or change shall have occurred since the date of such appraisals
which could reasonably be expected to have a material adverse effect on the
appraised value of such collateral;
PROVIDED FURTHER that the Borrower shall not be obligated to make any such
mandatory prepayment (or such reduction or deposit) unless and until the
aggregate principal amount of such Net Cash Proceeds, dividends or other
distributions required to be but not yet so applied equals at least $10,000,000.
For the avoidance of doubt, in any event after giving effect to such reduction,
the Total Credit-Linked Deposits shall not be less than the then aggregate LC
Exposure. In the event the Credit-Linked Deposits shall be reduced as provided
in this SECTION 2.7(b), the Administrative Agent will return all amounts in the
Credit-Linked Deposit Account in
38
excess of the reduced Credit-Linked Deposits to the Lenders, ratably in
accordance with their Commitment Percentages of the Total Credit-Linked
Deposits.
(c) SPECIAL MANDATORY OFFER OF PREPAYMENT. If (i) a Canadian
Collateral Event shall have occurred and the Borrower is not then obligated
to apply all or any portion of the Net Cash Proceeds, dividends or other
distributions with respect thereto to the mandatory repayment as provided
in SECTION 2.7(b) (such amount not so applied, the "CANADIAN NET
PROCEEDS"), (ii) the Pledged Equity Interest (as such term is defined in
the Canadian Pledge Agreement) is then subject to the Lien of the Canadian
Pledge Agreement and (iii) the Borrower may at such time exercise its
option to request a release of such collateral from the Lien of the
Canadian Pledge Agreement as provided in SECTION 2.20, then the Borrower
shall offer to apply such Canadian Net Proceeds to the prepayment of Loans
then outstanding to the extent and in the manner as provided below in this
SECTION 2.7(c). Within two (2) Business Days after such Canadian Collateral
Event, the Borrower shall give written notice to the Administrative Agent
stating the date of the proposed Canadian Collateral Event together with a
certificate signed by a Responsible Officer of the Borrower setting forth
in reasonable detail the calculation of the Net Cash Proceeds, dividends or
other distributions therefrom and shall offer to prepay the outstanding
principal amounts of the Loans in an amount equal to 100% of the Net Cash
Proceeds, dividends or other distributions therefrom, as applicable,
together with accrued interest to the date of such prepayment on the
principal amount prepaid; PROVIDED, HOWEVER, that no Lender shall be
obligated to accept such offer. Any Lender may in its discretion accept
such offer by written notice to the Administrative Agent (which notice
shall also state the maximum principal amount of prepayment such Lender is
willing to accept). To the extent one or more Lenders accepts any such
offer and one or more Lenders rejects such offer, the amounts that would
have been allocable to the rejecting Lenders may (if and to the extent
accepted by the accepting Lenders) be paid to accepting Lenders in
accordance with their Commitment Percentages. Any Lender that shall have
failed to respond to an offer described in this SECTION 2.7(c) shall be
deemed to have rejected such offer. No Make-Whole Premium shall be due as a
result of such mandatory offer to prepayment.
(d) SPECIAL MANDATORY PREPAYMENT. If (a) the Borrower does not
consummate an exchange offer, tender offer, refinancing or otherwise
consummate retirement transactions with respect to, or otherwise
economically or legally defease (i) at least 80% in aggregate principal
amount outstanding on March 21, 2003 of the 7.00% Senior Notes on or before
July 1, 2004 or (ii) at least 80% in aggregate principal amount outstanding
on March 21, 2003 of the 6.875% Senior Notes on or before September 15,
2004, and (b) the Borrower does not extend the maturities of such Senior
Notes to at least six months after the Maturity Date prior to July 1, 2004
or September 15, 2004, as applicable, then (w) the Loans shall become due
and payable in full on July 1, 2004 or September 15, 2004, as applicable,
(x) the Borrower shall prepay the Loans and deposit into the Cash
Collateral Account an amount in cash equal to the aggregate undrawn face
amount of all outstanding Letters of Credit on such date, and shall pay the
Lenders on such date a prepayment fee equal to two percent (2%) of the
aggregate principal amount of the Loans and the Total Credit-Linked
Deposits then outstanding, (y) that portion of the Total Credit-Linked
Deposits in excess of the then aggregate LC Exposure shall be
39
permanently reduced and (z) the Lenders' and the Issuing Banks' obligations
hereunder to extend any additional credit shall terminate in full. No other
Make-Whole Premium shall be due as a result of such mandatory prepayment.
For the avoidance of doubt, in any event after giving effect to such
reduction, the Total Credit-Linked Deposits shall not be less than the then
aggregate LC Exposure. In the event the Credit-Linked Deposits shall be
reduced as provided in this SECTION 2.7(d), the Administrative Agent will
return all amounts in the Credit-Linked Deposit Account in excess of the
reduced Credit-Linked Deposits to the Lenders, ratably in accordance with
their Commitment Percentages of the Total Credit-Linked Deposits.
(e) ADDITIONAL AMOUNTS. Each prepayment of Loans pursuant to this
SECTION 2.7 shall be accompanied by payment in full of, with respect to
Eurodollar Loans, accrued interest to such date on the amount prepaid,
together with any additional amounts owing pursuant to SECTION 2.17 and any
outstanding fees and expenses due and owing with respect to the amount
prepaid.
2.8 INTEREST RATE CONVERSION AND CONTINUATION OPTIONS. (a) The
Borrower may elect from time to time to convert Eurodollar Loans to Alternate
Base Rate Loans by giving the Administrative Agent prior irrevocable notice of
such election substantially in the form of EXHIBIT A-2 (a "NOTICE OF INTEREST
RATE CONVERSION") (which notice must be received by the Administrative Agent by
at least 10:00 a.m., New York City time, two (2) Business Days prior to such
election); PROVIDED that any such conversion of Eurodollar Loans may be made
only on the last day of an Interest Period with respect thereto. The Borrower
may elect from time to time to convert Alternate Base Rate Loans to Eurodollar
Loans by giving the Administrative Agent prior irrevocable notice of such
election (which notice must be received by the Administrative Agent by at least
10:00 a.m., New York City time, three Business Days prior to such election). Any
such Notice of Interest Rate Conversion to Eurodollar Loans shall specify the
length of the initial Interest Period or Interest Periods therefor. Upon receipt
of any such notice, the Administrative Agent shall promptly notify each Lender
thereof. All or any part of the outstanding Eurodollar Loans and Alternate Base
Rate Loans may be converted as provided herein; PROVIDED that (i) no Loan may be
converted into a Eurodollar Loan when any Event of Default has occurred and is
continuing, (ii) no Loan may be converted into a Eurodollar Loan after the date
that is one (1) month prior to the Maturity Date and (iii) such conversion shall
be in an aggregate principal amount of $5,000,000 or a whole multiple of
$1,000,000 in excess thereof.
(b) Any Eurodollar Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving notice to the Administrative Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in SECTION
1.1 of the length of the next Interest Period to be applicable to such
Loans; PROVIDED that (i) no Eurodollar Loan may be continued as such when
any Event of Default has occurred and is continuing and (ii) no Eurodollar
Loan which is a Loan may be continued as a Eurodollar Loan after the date
that is one (1) month prior to the Maturity Date; PROVIDED, FURTHER, that
if the Borrower shall fail to give any required notice as described above
in this paragraph, or if such continuation is not permitted pursuant to the
preceding proviso, such Loans shall be automatically converted to Alternate
Base Rate Loans on the last day of such then expiring Interest Period. The
40
Administrative Agent agrees to notify the Lenders of any notice of
continuation referred to herein received by the Administrative Agent.
2.9 MAXIMUM AMOUNTS OF EURODOLLAR TRANCHES. All borrowings,
conversions and continuations of Loans hereunder and all selections of Interest
Periods hereunder shall be in such amounts and shall be made pursuant to such
elections so that, after giving effect thereto, the aggregate principal amount
of the Loans comprising each Eurodollar Tranche shall be equal to $5,000,000 or
a whole multiple of $1,000,000 in excess thereof. There shall not be more than
five (5) Eurodollar Tranches at any one time outstanding.
2.10 INTEREST RATES; DEFAULT RATE PAYMENT DATES. (a) Each Eurodollar
Loan shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for the
first day of such Interest Period (subject to daily adjustments, if any,
required by changes in the Eurodollar Reserve Requirements) PLUS 5.75% (subject
to a reduction from 5.75% to 5.00% from and after the Rate Reduction Date (if
any)).
(b) Each Alternate Base Rate Loan shall bear interest at a rate
per annum equal to the Alternate Base Rate PLUS 4.75% (subject to a
reduction from 4.75% to 4.00% from and after the Rate Reduction Date (if
any)).
(c) If an Event of Default has occurred and is continuing, the
Loans shall bear interest at a rate per annum equal to the rate that would
otherwise be applicable thereto pursuant to the foregoing provisions of
this Section PLUS 2% from the date of occurrence of such Event of Default
until the date such Event of Default is cured or waived (after as well as
before judgment). In addition, should any interest on such Loans or any
fees or other amount (other than principal) payable hereunder not be paid
when due (whether at the stated maturity, by acceleration or otherwise),
such overdue amount shall bear interest (to the extent permitted by law in
the case of interest on interest) at a rate per annum as determined
pursuant to the preceding sentence which would be applicable to an
Alternate Base Rate Loan, in each case, from the date of such non-payment
until such amount is paid in full (after as well as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment
Date; PROVIDED that interest accruing pursuant to Section 2.10(c) shall be
payable from time to time on demand.
2.11 COMPUTATION OF INTEREST. (a) The Alternate Base Rate interest
(when calculated based upon the prime rate) shall be calculated on the basis of
a 365/366 day year and all other interest shall be calculated on the basis of a
360-day year for the actual days elapsed. The Administrative Agent shall as soon
as practicable notify the Borrower and the Lenders of each determination of a
Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the Alternate Base Rate or the Eurodollar Reserve Requirements shall
become effective as of the opening of business on the day on which such change
becomes effective. The Administrative Agent shall, as soon as practicable,
notify the Borrower and the Lenders of the effective date and the amount of each
such change in interest rate.
41
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrower and the Lenders in the absence of manifest error.
The Administrative Agent, at the request of the Borrower, shall deliver to
the Borrower a statement showing in reasonable detail the supporting
calculations used by the Administrative Agent in determining any interest
rate determined by the Administrative Agent.
2.12 INABILITY TO DETERMINE INTEREST RATE. If prior to the first day
of any Interest Period:
(a) the Administrative Agent shall have reasonably determined
(which determination shall be conclusive and binding upon the Borrower)
that, by reason of circumstances affecting the relevant market, adequate
and reasonable means do not exist for ascertaining the Eurodollar Rate for
such Interest Period, or
(b) the Administrative Agent shall have received notice from the
Required Lenders that the Eurodollar Rate determined or to be determined
for such Interest Period will not adequately and fairly reflect the cost to
such Lenders (as certified by such Lenders) of making or maintaining its
affected Loans during such Interest Period,
(c) the Administrative Agent shall give telecopy or telephonic
notice thereof to the Borrower and the Lenders as soon as practicable
thereafter (which notice shall include supporting calculations in
reasonable detail). If such notice is given, (i) any Eurodollar Loans
requested to be made on the first day of such Interest Period shall be made
as Alternate Base Rate Loans, (ii) any Loans that were to have been
converted on the first day of such Interest Period to Eurodollar Loans
shall be continued as Alternate Base Rate Loans, (iii) any outstanding
Eurodollar Loans shall be converted, on the first day of such Interest
Period, to Alternate Base Rate Loans and (iv) the Credit-Linked Deposits
shall be invested so as to earn a return equal to the greater of the
Federal Funds Rate and a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation. Until
such notice has been withdrawn by the Administrative Agent, no further
Eurodollar Loans shall be made or continued as such, nor shall the Borrower
have the right to convert Alternate Base Rate Loans to Eurodollar Loans nor
Eurodollar Rate shall apply to the Credit-Linked Deposits.
2.13 PRO RATA TREATMENT AND PAYMENTS; FUNDING RELIANCE. (a) The
borrowing by the Borrower of Loans from the Lenders hereunder and any reduction
of the Commitments of the Lenders shall be made pro rata according to the
respective Commitment Percentages of the Lenders. Except as provided in SECTION
2.7(c), each payment (including each prepayment) by the Borrower on account of
principal of and interest on the Loans of any one Type shall (except as may be
required as a result of SECTION 2.16) be made pro rata according to the
respective outstanding principal amounts of the Loans of such Type then held by
the Lenders. Except as provided in Section 2.7(c), each withdrawal from
Credit-Linked Deposits shall be made pro rata according to the respective
outstanding principal amounts of Credit-Linked Deposits then outstanding of all
Lenders. All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim, subject to Section 2.16 hereof, and
shall, except as provided in
42
Section 2.5, be made prior to 12:00 noon, New York City time, on the due date
thereof to the Administrative Agent, for the account of the Lenders, at the
Administrative Agent's office specified in SECTION 9.2, in Dollars and in
immediately available funds. The Administrative Agent shall distribute such
payments to the Lenders promptly upon receipt in like funds as received. If any
payment hereunder (other than payments on the Eurodollar Loans) becomes due and
payable on a day other than a Business Day, such payment shall be extended to
the next succeeding Business Day, and, with respect to payments of principal and
interest thereon, shall be payable at the then applicable rate during such
extension.
(b) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to the borrowing that such Lender will not make
available to the Administrative Agent the amount that would constitute its
Commitment Percentage of such borrowing on the Closing Date, the
Administrative Agent may assume that such Lender is making such amount
available to the Administrative Agent, and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower a
corresponding amount. If the Administrative Agent makes such amount
available to the Borrower and if such amount is not made available to the
Administrative Agent by the required time on the Borrowing Date therefor,
such Lender shall pay to the Administrative Agent, on demand, such amount
with interest thereon at a rate equal to the daily average Federal Funds
Rate for the period until such Lender makes such amount immediately
available to the Administrative Agent. A certificate of the Administrative
Agent submitted to any Lender with respect to any amounts owing under this
Section shall be conclusive in the absence of manifest error. If such
Lender pays such amount to the Administrative Agent, then such amount shall
constitute such Lender's Loan included in such borrowing. If such Lender's
Commitment Percentage of such borrowing is not made available to the
Administrative Agent by such Lender within three Business Days of such
Borrowing Date, the Administrative Agent shall also be entitled to recover
such amount with interest thereon at the rate per annum applicable to the
applicable Loan, on demand, from the Borrower. The obligations of the
Lenders hereunder are several and no Lender shall be responsible for any
other Lender's failure to make Loans as required hereunder.
2.14 ILLEGALITY. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law after the date hereof or in
the interpretation or application thereof shall make it unlawful for any Lender
to make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the
commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert Alternate Base Rate Loans to Eurodollar
Loans shall forthwith be suspended until such condition shall cease to exist and
(b) such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be
converted automatically to Alternate Base Rate Loans on the respective last days
of the then current Interest Periods with respect to such Loans or within such
earlier period as required by law. If any such conversion of a Eurodollar Loan
occurs on a day which is not the last day of the then current Interest Period
with respect thereto, the Borrower shall pay to such Lender such amounts, if
any, as may be required pursuant to SECTION 2.16.
2.15 REQUIREMENTS OF LAW. (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender
43
or Issuing Bank with any request or directive (whether or not having the force
of law) from any central bank or other Governmental Authority made subsequent to
the date hereof:
(i) shall subject any Lender or Issuing Bank to any tax of any
kind whatsoever with respect to this Agreement, any Letter of Credit,
its Notes, any Eurodollar Loan, or its obligation to make Eurodollar
Loans or issue (or participate in) Letters of Credit, or change the
basis of taxation of payments to such Lender in respect thereof
(except for Non-Excluded Taxes covered by SECTION 2.16 and changes in
the rate of tax on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Eurodollar Rate
hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender or
Issuing Bank, by an amount which such Lender or Issuing Bank reasonably deems to
be material, of making, converting into, continuing or maintaining Eurodollar
Loans, of participating in, issuing or maintaining any Letter of Credit or
Credit-Linked Deposit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender or
Issuing Bank, upon its demand, any additional amounts necessary to compensate
such Lender or Issuing Bank for such increased cost or reduced amount
receivable. If any Lender or Issuing Bank becomes entitled to claim any
additional amounts pursuant to this Section, it shall promptly notify the
Borrower through the Administrative Agent, of the event by reason of which it
has become so entitled. A certificate as to any additional amounts payable
pursuant to this Section submitted by such Lender or Issuing Bank through the
Administrative Agent to the Borrower shall be in writing and accompanied by
calculations in reasonable detail demonstrating the basis for such Lender's or
Issuing Bank's claim and shall be considered conclusive in the absence of
manifest error. This covenant shall survive the termination of this Agreement
and the payment of the Obligations hereunder.
(b) If any Lender or Issuing Bank shall have determined that the
adoption of or any change in any Requirement of Law regarding capital
adequacy or in the interpretation or application thereof or compliance by
such Lender or Issuing Bank or any corporation controlling such Lender or
Issuing Bank with any request or directive regarding capital adequacy
(whether or not having the force of law) from any Governmental Authority
made subsequent to the date hereof has or shall have the effect of reducing
the rate of return on such Lender's or Issuing Bank's or the corporation's
capital as a consequence of the Loans, the Letters of Credit, the
Credit-Linked Deposits, or its obligations hereunder to a level below that
which such Lender or Issuing Bank or such corporation could have achieved
but for such change or compliance (taking into consideration such Lender's
or Issuing Bank's or such corporation's policies with respect to capital
adequacy) by an amount deemed by such Lender or Issuing Bank to be
44
material, then from time to time, after submission by such Lender to the
Borrower (with a copy to the Administrative Agent) of a written request
therefor accompanied by calculations in reasonable detail demonstrating the
basis for such Lender's or Issuing Bank's claims, the Borrower shall pay to
such Lender or Issuing Bank the additional amount or amounts as will
compensate such Lender or Issuing Bank for such reduction. This covenant
shall survive the termination of this Agreement and the payment of the
Obligations hereunder.
2.16 TAXES. (a) Except as otherwise provided in this SECTION 2.16,
any and all payments made by the Borrower to or for the account of the
Administrative Agent, the Issuing Banks or any Lender under this Agreement, the
Notes or the other Loan Documents shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future income,
stamp or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, and all liabilities with respect thereto, now or hereafter
imposed, levied, collected, withheld or assessed by any Governmental Authority,
excluding net income taxes and franchise taxes (imposed in lieu of net income
taxes) imposed on the Administrative Agent or any Lender or Issuing Bank by a
jurisdiction under the Laws of which such Lender or its applicable lending
office or Issuing Bank, or the Administrative Agent, as the case may be, is
organized or maintained (any taxes, levies, imposts, duties, charges, fees,
deductions, withholdings or liabilities other than such excluded net income
taxes and franchise taxes imposed in lieu of income taxes are referred to herein
as "NON-EXCLUDED TAXES"). If Non-Excluded Taxes are required to be deducted or
withheld from or in respect of any amounts payable to the Administrative Agent
or any Lender or Issuing Bank hereunder or under the Notes, (i) the amounts so
payable to the Administrative Agent or such Lender or Issuing Bank shall be
increased to the extent necessary, so that after making all required deductions
or withholdings (including deductions or withholdings applicable to additional
sums payable under this SECTION 2.16), the Administrative Agent or such Lender
or Issuing Bank receives an amount equal to the sum it would have received had
no such deductions or withholdings been made, (ii) the Borrower shall make such
deductions or withholdings, and (iii) the Borrower shall pay the full amount
deducted or withheld to the relevant Governmental Authority in accordance with
applicable law; PROVIDED that the Borrower shall not be required to increase any
such amounts payable to any Lender or Issuing Bank if such Lender or Issuing
Bank fails to comply with the applicable requirements of paragraph (b) of this
Section, unless such failure is the result of an event (including, without
limitation, any change in treaty, law, or regulation) (a "CHANGE IN TAX LAW")
occurring subsequent to the date that such person became a Lender or Issuing
Bank and prior to the date on which such Lender or Issuing Bank would otherwise
have been required to comply with such requirements. Whenever any Non-Excluded
Taxes are payable by the Borrower, as promptly as possible thereafter, the
Borrower shall send to the Administrative Agent for its own account or for the
account of such Lender or Issuing Bank, as the case may be, a certified copy of
an original official receipt received by the Borrower showing payment thereof.
The Borrower agrees to indemnify and hold harmless each Lender, each Issuing
Bank and the Administrative Agent, within 10 days of a written demand therefor,
from the full amount of Non-Excluded Taxes paid or incurred by such Lender or
Issuing Bank or the Administrative Agent (as the case may be) on or with respect
to any payment made by or on account of any obligation of Borrower hereunder
(including Non-Excluded Taxes imposed or asserted or attributable to amounts
payable under this SECTION 2.16) and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such
Non-Excluded
45
Taxes were correctly or legally imposed or asserted by the relevant Governmental
Authority, but only if the applicable Lender or Issuing Bank has complied with
the requirements of paragraph (b) of this Section (or has been excused from
compliance as a result of a Change in Tax Law occurring subsequent to the date
such person became a Lender or Issuing Bank and prior to the date on which such
Lender or Issuing Bank would otherwise have been required to comply with such
requirements). A certificate as to the amount of such payment of liability
delivered to the Borrower by a Lender, or by the Administrative Agent on its
behalf or on behalf of a Lender, shall be conclusive absent manifest error. The
covenants in this Section shall survive the termination of this Agreement and
the payment of the Notes and payment of the Obligations hereunder.
(b) Each Lender and Issuing Bank shall:
(i) at the time it first becomes a Lender or Issuing Bank (A)
in the case of a Lender that is not incorporated under the laws of the
United States or any state thereof ("FOREIGN LENDER") certify to the
Borrower and Administrative Agent that it is entitled to an exemption
from withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a
party, with respect to payments under this Agreement, at the time or
times prescribed by applicable law, by providing two copies of such
properly completed and executed form or certification prescribed by
applicable law or reasonably requested by the Borrower as will permit
such payments to be made without withholding and (B) in the case of
any other Lender, certify to the Borrower and Administrative Agent
that it is entitled to an exemption from United States backup
withholding tax with respect to payments under this Agreement by
providing two copies of a properly completed and executed Internal
Revenue Service Form W-9, as applicable, or successor applicable form,
as the case may be;
(ii) deliver to the Borrower and the Administrative Agent two
further copies of any such form or certification on or before the date
that any such form or certification expires or becomes obsolete and
after the occurrence of any event requiring a change in the most
recent form previously delivered by it to the Borrower; and
(iii) obtain such extensions of time for filing and complete
such forms or certifications as may reasonably be requested by the
Borrower or the Administrative Agent;
unless in any such case a Change in Tax Law has occurred subsequent to the date
that such person became a Lender or Issuing Bank and prior to the date on which
any such delivery would otherwise be required which renders such form
inapplicable or which would prevent such Lender from duly completing and
delivering any such form with respect to it and such Lender so advises the
Borrower and the Administrative Agent. Each Person that shall become a Lender or
a Participant pursuant to SECTION 9.6 shall, upon the effectiveness of the
related transfer, be required to provide all the applicable forms and statements
required pursuant to this Section;
46
PROVIDED that, in the case of a Participant, such Participant shall furnish all
such required forms and statements to the Lenders from which the related
participation shall have been purchased.
(c) In addition, the Borrower shall pay any and all stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made under this Agreement, the Notes or the
other Loan Documents or from the execution, delivery or enforcement of, or
otherwise with respect to, any such document.
2.17 INDEMNITY. The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss or expense which such Lender may sustain
or incur as a consequence of (a) default by the Borrower in payment when due of
the principal amount of or interest on any Eurodollar Loan, (b) default by the
Borrower in making the borrowing of, a conversion into or a continuation of,
Eurodollar Loans after the Borrower has given a notice requesting the same, (c)
default by the Borrower in making any prepayment or reduction after the Borrower
has given a notice thereof, (d) the making of a prepayment or conversion of
Eurodollar Loans on a day which is not the last day of an Interest Period with
respect thereto, (e) failure of the Borrower to reimburse any Issuing Bank with
respect to any L/C Disbursement (beyond the applicable grace period, if any,
therefore) prior to the withdrawal of Credit-Linked Deposits with respect to
such LC Disbursement, (f) default by the Borrower in making any reduction or
conversion of Credit-Linked Deposits after the Borrower has given a notice
thereof, or (g) the making of a reduction or conversion of Credit-Linked
Deposits on a day which is not the last day of an Interest Period with respect
thereto, including, without limitation, in each case, any such loss or expense
arising from the redeployment of funds obtained by it or from fees payable to
terminate the deposits from which such funds were obtained (but excluding loss
of the margin above the Eurodollar Rate). This covenant shall survive the
termination of this Agreement and the payment of the Obligations hereunder.
2.18 DISCRETION OF LENDER AS TO MANNER OF FUNDING. Notwithstanding
any other provisions of this Agreement (but subject to SECTION 2.19), each
Lender shall be entitled to fund and maintain its funding of all or any part of
its Loans or its Credit Linked Deposit in any manner it sees fit, it being
understood that for the purposes of Section 2.17 all determinations thereunder
shall be made assuming each Lender had actually funded and maintained each
Eurodollar Loan through the purchase of deposits of Dollars in the London
interbank market having a maturity corresponding to each Loan's Interest Period
and bearing an interest rate equal to the Eurodollar Rate for such Interest
Period.
2.19 CHANGE OF LENDING OFFICE; REPLACEMENT LENDER. (a) Each Lender
agrees that if it makes any demand for payment under SECTION 2.15 or SECTION
2.16 or if any adoption or change of the type described in SECTION 2.14 shall
occur with respect to it, such Lender will use reasonable efforts (consistent
with its internal policy and legal and regulatory restrictions and so long as
such efforts would not be disadvantageous to it as determined in its sole
discretion) to designate a different lending office if the making of such a
designation would reduce or obviate the need for the Borrower to make payments
under SECTION 2.15 or SECTION 2.16, or would eliminate or reduce the effect of
any adoption or change described in SECTION 2.14.
47
(b) In determining the amount of any claim for reimbursement or
compensation hereunder, each Lender will use reasonable methods of
calculation consistent with such methods customarily employed by such
Lender in similar situations.
(c) Each Lender will notify the Borrower and the Administrative
Agent of any event giving rise to a claim under SECTIONS 2.14, 2.15, 2.16
or 2.17 promptly after the occurrence thereof, which notice shall be
accompanied by a certificate of such Lender setting forth in reasonable
detail the circumstances of such claim.
(d) If any Lender, other than (in its capacity as a Lender) the
Administrative Agent (an "AFFECTED LENDER"), seeks payment or
indemnification from the Borrower pursuant to SECTION 2.15 or SECTION
2.16(a) (without prejudice to any amounts then due to such Lender under
such Sections) that are not applicable to all Lenders, then the Borrower
may designate another Lender or another bank or financial institution
acceptable to the Administrative Agent to assume, in accordance with
SECTION 9.6, all (but not less than all) the Commitments, Loans,
Credit-Linked Deposits and other rights and obligations of such Affected
Lender hereunder (a "REPLACEMENT LENDER"), in each case, on a date mutually
acceptable to the Replacement Lender, the Affected Lender, the Borrower and
the Administrative Agent, without recourse upon, warranty by, or expense
to, such Affected Lender or the Administrative Agent, for a purchase price
equal to the outstanding principal amount of the Loans and Credit-Linked
Deposits of such Affected Lender PLUS all interest accrued thereon and all
other amounts owing to such Affected Lender hereunder, or such other
purchase price as may be mutually agreed upon between the Affected Lender
and the Replacement Lender, upon such assumption and purchase by the
Replacement Lender, such Replacement Lender shall be deemed a "Lender" for
purposes of this Agreement and the other Loan Documents and such Affected
Lender shall cease to be a "Lender" for such purposes and shall no longer
have any obligations hereunder.
2.20 COLLATERAL.
(a) On the Closing Date (and in addition to the First Mortgage
Bonds), the Borrower shall grant to the Collateral Agent, for the benefit
of the Secured Parties (as defined therein, including the Lenders), a
security interest in the collateral described in the ANCMC Canadian Pledge
Agreement, the Canadian Pledge Agreement and the IPP Pledge Agreement. The
Lien of the ANCMC Canadian Pledge Agreement and the Canadian Pledge
Agreement securing the Obligations shall be senior to the Lien therein
securing the 364-Day Credit Agreement obligations. The Lien of the IPP
Pledge Agreement securing the Obligations shall be junior to the Lien
therein securing the 364-Day Credit Agreement obligations.
(b) In the event that (i) an Investment in a Collateral
Subsidiary is made in compliance with SECTION 6.8(k), (ii) such Investment
is pledged to the Collateral Agent pursuant to SECTION 6.15 and the
applicable Collateral Document, and (iii) such Investment is subsequently
repaid in compliance with SECTION 6.8(k), the Lien of the applicable
Collateral Document may be released upon request by the Borrower to the
extent covering such Investment and the proceeds of such Investment (if
then in the
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possession of the Collateral Agent) shall be turned over to the pledgor so
long as no Event of Default then exists or would occur. The Collateral
Agent is hereby authorized by each of the Lenders to take any action
requested by the Borrower and reasonably acceptable to the Collateral Agent
in order to effect such release.
(c) If the Borrower (or the applicable pledgor) shall request the
release under any Collateral Document of any Subsidiary or of any
Collateral to be sold or otherwise disposed of (including through the sale
or Disposition of any Subsidiary owning any such Subsidiary or Collateral)
to a Person in a transaction permitted under the terms of SECTION 6.7 and
shall deliver to the Collateral Agent a certificate to the effect that such
sale or other Disposition and the application of the proceeds thereof will
comply with the terms of this Agreement, the Collateral Agent, if satisfied
that the applicable certificate is correct, shall, without the consent of
any Lender or Agent, execute and deliver all such instruments, releases,
financing statements or other agreements, and take all such further
actions, as shall be necessary to effectuate the release of such Subsidiary
or such Collateral substantially simultaneously with (or such later date as
the Borrower requests after) completion of such sale or other Disposition;
PROVIDED that any proceeds of such sale or other Disposition shall remain
subject to the Lien of the Collateral Documents.
(d) In the event that (i) ANCMC shall have merged, consolidated
or amalgamated into, or ANCFC shall have sold or otherwise (directly or
indirectly) transferred all of the assets of ANCMC to either Canadian
Parent or any Wholly-Owned Subsidiary of either Canadian Parent, in
compliance with SECTION 6.2(b) or (ii) the Lien of the Canadian Pledge
Agreement shall have been terminated in accordance with the terms thereof,
the Lien of the ANCMC Canadian Pledge Agreement shall be released and the
ANCFC Guaranty shall be terminated so long as, after giving effect to such
release, no Event of Default then exists or would occur. The Collateral
Agent is hereby authorized by each of the Lenders to take any action
requested by the Borrower and reasonably acceptable to the Collateral Agent
in order to effect such release.
(e) The Borrower shall have the right, at any time on and after
the Rate Reduction Date (by written notice to the Collateral Agent), to
request the release from the Lien of the Collateral Documents any
Additional Collateral specified in such written request (such release to be
solely to extent such Lien secures the Obligations; it being understood
that such Lien may continue to the extent for the benefit of obligations
under the 364-Day Credit Agreement); provided that the Borrower may not
exercise such right at a time that any Event of Default then exists.
Promptly after receipt of such written notice, the Collateral Agent shall
return such Additional Collateral in its physical possession to the
Borrower, and shall execute such releases and termination statements
necessary to terminate such security interest as the Borrower may
reasonably request which are in form and substance reasonably acceptable to
the Collateral Agent.
(f) Notwithstanding the foregoing, in no event shall any release
contemplated hereby effect the Lien of any Collateral Document to the
extent securing obligations under the 364-Day Credit Agreement without
compliance with the terms thereof.
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(g) Any such release shall be without recourse to, or
representation or warranty by, the Collateral Agent or any Lender and shall
not require the consent of any Lender. Without limiting the provisions of
SECTION 9.5, the Borrowers shall reimburse the Collateral Agent and the
Administrative Agent for all reasonable costs and expenses, including
reasonable attorney's fees and disbursements, incurred by any of them in
connection with any action contemplated by this SECTION 2.20.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into this
Agreement and to make or participate in extensions of credit hereunder, the
Borrower hereby represents and warrants to the Administrative Agent and each
Lender:
3.1 FINANCIAL CONDITION. The unaudited consolidated balance sheet of
the Borrower as of December 31, 2002 and the related consolidated statements of
income, retained earnings and cash flows for the fiscal year ended on such date,
copies of which have heretofore been furnished to the Lenders, present fairly
the consolidated financial condition of the Borrower and its Consolidated
Subsidiaries as at such date, and the results of their operations and their
retained earnings and cash flows for each of the fiscal periods then ended. All
such financial statements, including the related schedules and notes thereto
relating to the unaudited financials, have been prepared in accordance with GAAP
applied consistently throughout the periods involved.
3.2 NO CHANGE. Since December 31, 2002, except as disclosed to the
Lenders through documents posted on the INTRALINKS internet website for this
transaction prior to the date hereof, or described in the SEC Reports filed
prior to the date hereof, there has been no development or event which has had,
or could reasonably be expected to have, a Material Adverse Effect.
3.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each of the Borrower
and its Subsidiaries (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has the
corporate or limited liability company power and authority, and the legal right
to own and operate its property, to lease the property it operates as lessee and
to conduct the business in which it is currently engaged, (c) is duly qualified
as a foreign corporation or limited liability company and in good standing under
the laws of each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such qualification except to
the extent that the failure to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect and (d) is in
compliance with all Requirements of Law, except to the extent that the failure
to comply therewith could not reasonably be expected to have a Material Adverse
Effect.
3.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. The
Borrower has the corporate power and authority, and the legal right, to make,
deliver and perform the First Mortgage Indenture and the Loan Documents and to
authorize the execution, delivery and performance of the First Mortgage
Indenture and the Loan Documents, and to borrow hereunder. The Borrower has
taken all necessary corporate action to authorize the borrowings on the terms
and conditions set forth in this Agreement and in the Notes and to execute,
deliver and perform
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its obligations under the First Mortgage Indenture and the Loan Documents. Set
forth on SCHEDULE 3.4a are all consents or authorizations of, filings with,
notices to or other acts by or in respect of, any Governmental Authority or any
other Person required in connection with the authorization, execution, or
issuance of any First Mortgage Bond, the authorization, delivery or performance
or validity of the First Mortgage Indenture and the Supplemental Indenture, or
the execution, delivery or performance by any Credit Party, or the validity or
enforceability against any Credit Party, of the Bond Collateral Agreement or any
Collateral Document related thereto, and in each case any application therefor
(collectively, the "FIRST MORTGAGE APPROVALS"). No consent or authorization of,
filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the borrowings
hereunder, or with the execution, delivery or performance by any Credit Party,
or with the validity or enforceability against any Credit Party of the Loan
Documents other than (x) First Mortgage Approvals, (y) as set forth on SCHEDULE
3.4b, or (z) any consents, authorizations and filings in connection with the
foregoing that, if not obtained, could not reasonably be expected to have a
Material Adverse Effect. On the Closing Date, the Administrative Agent and each
Lender shall have received complete and current copies of all consents,
authorizations and filings listed on SCHEDULES 3.4a and 3.4b. This Agreement and
the First Mortgage Indenture have been, and each other Loan Document when
executed and delivered will be, duly executed and delivered on behalf of the
Borrower. This Agreement and the First Mortgage Indenture constitute, and each
other Loan Document when executed and delivered will constitute, a legal, valid
and binding obligation of the Borrower enforceable against the Borrower, in
accordance with their respective terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
3.5 NO LEGAL BAR. The execution, delivery and performance of the
Loan Documents and the First Mortgage Indenture, the borrowings hereunder and
the use of the proceeds thereof, will not violate any Requirement of Law or
Contractual Obligation of the Borrower or any Subsidiary which violation could
reasonably be expected to have a Material Adverse Effect, will not accelerate or
result in the acceleration of any payment obligations of the Borrower or such
Subsidiary and will not result in, or require, the creation or imposition of any
Lien on any of the respective properties or revenues of the Borrower or any such
Subsidiary pursuant to any such Requirement of Law or Contractual Obligation
(other than Liens pursuant to the First Mortgage Indenture or the Collateral
Documents).
3.6 NO MATERIAL LITIGATION. Except as disclosed to the Lenders
through documents posted on the INTRALINKS internet website for this transaction
prior to the date hereof or described in the SEC Reports filed prior to the date
hereof, no litigation, investigation or proceeding of or before any arbitrator
or Governmental Authority is pending or, to the knowledge of the Borrower,
threatened by or against the Borrower or any Subsidiary or against any of the
respective properties or revenues of the Borrower or any Subsidiary which could
reasonably be expected to have a Material Adverse Effect.
3.7 NO DEFAULT. No Default or Event of Default has occurred and is
continuing.
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3.8 OWNERSHIP OF PROPERTY; LIENS. Each of the Borrower and its
Subsidiaries has good and marketable title in fee simple to, or a valid
leasehold, easement, license or other interest in, all its real property, and
good title to, or a valid leasehold, easement, license or other interest in, all
its other property, except for defects in title which could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect. The
property of the Borrower and its Subsidiaries is subject to no Lien other than
Permitted Liens.
3.9 SUBSIDIARIES. Set forth on SCHEDULE 3.9 are all Material
Subsidiaries and Collateral Subsidiaries. SCHEDULE 3.9 correctly sets forth, as
of the date hereof, (i) all of the issued and outstanding capital stock or other
equity interests of each Canadian Parent, ANCMC and UtiliCo Group and also
identifies the direct owner thereof and (ii) the percentage ownership (direct
and indirect) of the Borrower in voting capital stock or other voting equity
interests of each Material Subsidiary and Collateral Subsidiary and also
identifies the direct owner thereof. The Canadian Parents own, direct or
indirect, all of the issued and outstanding capital stock (whether or not voting
capital stock) of each of their respective Subsidiaries. ANCFC owns, direct or
indirect, all of the issued and outstanding capital stock (whether or not voting
capital stock) of each of its Subsidiaries. Aquila Merchant Services, Inc. owns,
direct or indirect, all of the issued and outstanding capital stock (whether or
not voting capital stock) of each of its Subsidiaries. All outstanding shares of
capital stock of each Subsidiary of the Borrower has been duly and validly
issued, are fully paid and non-assessable and have been issued free of any
preemptive rights. Except as set forth on SCHEDULE 3.9, no Material Subsidiary
or Collateral Subsidiary has outstanding any securities convertible into or
exchangeable for its Capital Stock or outstanding any right to subscribe for or
to purchase, or any options or warrants for the purchase or, or any agreement
providing for the issuance (contingent or otherwise) of or any calls,
commitments or claims of any character relating to, its Capital Stock or any
stock appreciation or similar rights.
3.10 INTELLECTUAL PROPERTY. Each of the Borrower and its Subsidiaries
owns, or is licensed to use, all patents, trademarks, trade names, copyrights,
and other intellectual property material to the conduct of its business as
currently conducted except for those which the failure to own or license could
not reasonably be expected to have a Material Adverse Effect (the "INTELLECTUAL
PROPERTY"). The use of such Intellectual Property by the Borrower or any
Subsidiary does not infringe on the rights of any Person, except for such claims
and infringements that, in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.
3.11 TAXES. Each of the Borrower and the Subsidiaries has filed or
caused to be filed all federal, state and other material tax returns which are
required to be filed and has paid or caused to be paid all taxes (including
interest and penalties) shown to be due and payable on said returns or on any
assessments made against it or any of its property and all other taxes, fees or
other charges imposed on it or any of its property by any Governmental Authority
(other than any tax, fee or other charge the amount or validity of which is
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of the Borrower or such Subsidiary, as the case may be) other then such
taxes described herein of which the failure to pay or file a return with respect
thereto could reasonably be expected to result in a Material Adverse Effect; and
no tax Lien has been filed, and, to the knowledge of the Borrower, no claim is
being asserted, with respect to any such tax, fee or other charge.
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3.12 MARGIN STOCK. (a) The Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulation U), and no proceeds of any extension of credit
hereunder will be used to purchase or carry any margin stock or to extend credit
to others for the purpose of purchasing or carrying any margin stock, except in
compliance with applicable law and regulations.
(b) Following application of the proceeds of each extension of
credit hereunder, not more than 25% of the value of the consolidated assets
of the Borrower and its Subsidiaries that are subject to the provisions of
SECTION 6.4 will be comprised of margin stock.
3.13 ERISA. Neither the Borrower nor any Subsidiary maintains,
contributes to or has material obligations with respect to, any welfare plan (as
defined in SECTION (3)(1) of ERISA) which provides benefits to employees after
termination of employment other than as required by Part 6 of Title I of ERISA
or similar state laws regarding continuation of benefits and which in the
aggregate is not unduly expensive. Each Plan has complied and is in compliance
in all respects with the applicable provisions of ERISA and the Code except
where failure to do so could not reasonably be expected to have a Material
Adverse Effect. The Borrower and each Subsidiary have not breached any of the
responsibilities, obligations or duties imposed on it by ERISA, the Code, or
regulations promulgated thereunder with respect to any Plan, which breach could
reasonably be expected to have a Material Adverse Effect. Neither the Borrower
nor any Subsidiary nor any fiduciary of any Plan who is an officer or an
employee of the Borrower or any Subsidiary has engaged in a nonexempt prohibited
transaction described in Section 406 of ERISA or 4975 of the Code with respect
to a Plan which could reasonably be expected to have a Material Adverse Effect.
With respect to any employee benefit plan (as defined in Section 3(3) of ERISA)
currently or formerly maintained or contributed to by any Commonly Controlled
Entity, no liability exists and no event has occurred which could reasonably be
expected to subject the Borrower or any Subsidiary to any liability which could
reasonably be expected to have a Material Adverse Effect. None of the Borrower
or any Subsidiary has any liability, direct or indirect, contingent (including,
without limitation, any such liability in connection with a Multiemployer Plan)
or otherwise, under Title IV of ERISA or under Section 412 of the Code which
could reasonably be expected to have a Material Adverse Effect.
3.14 HOLDING COMPANY; INVESTMENT COMPANY ACT; OTHER REGULATIONS. The
Borrower is not (a) an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended, or (b) a "holding company", a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company", as each such term is defined
in the Public Utility Holding Company Act of 1935, as amended.
3.15 PURPOSE OF LOANS. The proceeds of Loans will be used solely (i)
first to repay in full the Existing Credit Agreements and (ii) thereafter for
general corporate purposes and as permitted hereunder (in compliance with all
applicable legal and regulatory requirements). The Letters of Credit will be
used solely for general corporate purposes. The Borrower does not intend to
treat the Loans and the related transactions as being a "reportable transaction"
(within the meaning of Treasury Regulation Section 1.6011-4). In the event the
53
Borrower determines to take any action inconsistent with such intention, it will
promptly notify the Administrative Agent thereof.
3.16 ENVIRONMENTAL MATTERS. Except as described by the Borrower in
the SEC Reports filed prior to the date hereof or as disclosed to the Lenders
through documents posted on the INTRALINKS internet website for this transaction
prior to the date hereof,
(a) The facilities and properties owned, leased or operated by
the Borrower or its Subsidiaries (the "PROPERTIES") and all operations at
the Properties are in, and have been in, compliance in all material
respects with all applicable Environmental Laws, and there is no
contamination in, at, under, from or about the Properties or violation of
any Environmental Law or other circumstance or condition, with respect to
the Properties or the business operated by the Borrower or its
Subsidiaries, or to the knowledge of the Borrower, any predecessor of any
of them (the "BUSINESS") which in either case could reasonably be expected
to result in any claims, liability, investigation or cost pursuant to any
Environmental Law and to have a Material Adverse Effect.
(b) None of the Borrower or any Subsidiary, or to the knowledge
of the Borrower, any predecessor of any of them, has received any notice of
violation, alleged violation, non-compliance, liability or potential
liability regarding environmental matters or compliance with Environmental
Laws with regard to any of the Properties or the Business, nor do the
Borrower or any Subsidiary have knowledge or reason to believe that any
such notice will be received or is being threatened, in each case which
could reasonably be expected to have a Material Adverse Effect.
(c) There has been no Release or threat of Release of Materials
of Environmental Concern at or from any of the Properties, or arising from
or related to the operations of the Borrower or any Subsidiary, or to the
knowledge of the Borrower, any predecessor of any of them, in connection
with any of the Properties or otherwise in connection with the Business
that could reasonably be expected to have a Material Adverse Effect.
3.17 INSURANCE. All policies of insurance of any kind or nature
maintained by or issued to the Borrower or any Subsidiary, including, without
limitation, policies of life, fire, theft, product liability, public liability,
property damage, other casualty, employee fidelity, worker's compensation,
employee health and welfare, title, property and liability insurance, are in
full force and effect in all material respects and are of a nature and provide
such coverage as is customarily carried by companies of similar size and
character.
3.18 ACCURACY AND COMPLETENESS OF INFORMATION. The Borrower has filed
as exhibits to SEC Reports, or disclosed to the Lenders through documents posted
on the INTRALINKS internet website for this transaction, in each case prior to
the date hereof, all agreements, instruments and corporate or other restrictions
existing on the date hereof that are or, but for the lapse of time, would be
required to be filed by the Borrower as exhibits to any report on Form 10-Q or
10-K under the Exchange Act. Except as described by the Borrower in the SEC
Reports filed prior to the date hereof or as disclosed to the Lenders through
documents posted on the INTRALINKS internet website for this transaction prior
to the date hereof, there are no facts or other
54
matters known to the Borrower that are or, but for the lapse of time, would be
required to be disclosed by the Borrower on a report on Form 8-K under the
Exchange Act. No reports, financial statements, certificates or other
information furnished by or on behalf of the Borrower to the Administrative
Agent or any Lender (whether contained in the Confidential Information
Memorandum dated March 2003, disclosed to the Lenders through documents posted
on the INTRALINKS internet website for this transaction, or otherwise) in
connection with the negotiation of this Agreement or any other Loan Document or
delivered hereunder (as modified or supplemented by, and taken together with
other information so furnished) contains any misstatement of a material fact or
omits to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
PROVIDED that, with respect to forward looking statements, the Borrower
represents only that such information was prepared in good faith based upon
assumptions believed to be reasonable at the time and notes that there can be no
assurance that such expectations, beliefs or projections will be achieved or
accomplished and that such projections are subject to an increasing degree of
uncertainty as they relate to later periods of time.
3.19 LEASEHOLDS, PERMITS, ETC. The Borrower possesses or has the
right to use, all leaseholds, easements, franchises and permits and all
authorizations and other rights which are material to and necessary for the
conduct of the Business, except where the failure to obtain such authorizations
and other rights is unlikely to result in a Material Adverse Effect. All the
foregoing are in full force and effect, and each of the Borrower and the
Subsidiaries is in substantial compliance with the foregoing without any known
conflict with the valid rights of others, except for such noncompliance with the
foregoing which could not reasonably be expected to have a Material Adverse
Effect. No event has occurred which permits, or after notice or lapse of time or
both would permit, the revocation or termination of any such leasehold,
easement, franchise, license or other right, which termination or revocation,
considered as a whole, could reasonably be expected to have a Material Adverse
Effect.
3.20 NO RESTRICTIVE COVENANTS. No Collateral Subsidiary of the
Borrower is party to, or otherwise bound by, any agreement or other arrangement
that prohibits such Collateral Subsidiary from making any payments, directly or
indirectly, to the Borrower, by way of dividends, advances, repayment of loans
or advances, reimbursements of management or other intercompany charges,
expenses and accruals or other returns on investment, or any other agreement or
arrangement that restricts the ability of such Collateral Subsidiary to make any
payment, directly or indirectly, to the Borrower, other than prohibitions and
restrictions permitted to exist under SECTION 6.12.
3.21 FIRST MORTGAGE INDENTURE.
(a) The First Mortgage Bonds to be issued under the First
Mortgage Indenture, as supplemented by the First Supplemental Indenture
(the "Supplemental Indenture"), when delivered to the Collateral Agent,
will be duly executed, authenticated, issued and delivered, and will
constitute valid and legally binding obligations of the Borrower, entitled
to the security and benefits provided by the lien of such Indenture (except
to the extent that enforceability of such lien may be limited by the effect
of certain laws of the jurisdictions in which the physical properties
covered thereby are located upon the remedies provided in such Indenture,
which limitations, however, do not
55
make the remedies afforded inadequate for the realization of the security
and benefits provided by such Indenture, and except as enforceability of
such lien may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors'
rights).
(b) On the Closing Date, the First Mortgage Indenture shall
constitute, and such Indenture, when the Supplemental Indenture shall have
been duly filed for recording and recorded, will constitute, a legally
valid and directly enforceable mortgage lien for the equal and
proportionate security of the first mortgage bonds issued or to be issued
thereunder, upon the Mortgaged Property (as defined in the First Mortgage
Indenture) free from all prior liens other than Permitted Liens or
Permitted Liens (as defined in the First Mortgage Indenture), charges or
encumbrances (except to the extent that enforceability of such lien may be
limited by the effect of certain laws of the jurisdictions in which the
physical properties covered thereby are located upon the remedies provided
in such Indenture as to be supplemented by the Supplemental Indenture,
which limitations, however, do not make the remedies afforded inadequate
for the realization of the security and benefits provided by such
Indenture, and except as enforceability of such lien may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights) and the after-acquired
property clause in such Indenture subjects to the lien thereof all
after-acquired Mortgaged Property as provided therein (except such thereof
as is expressly excepted from the lien of such Indenture).
(c) The First Mortgage Indenture (including any necessary related
financing statements), has been filed and recorded wherever and to the
extent necessary to perfect the lien thereof (other than with respect to an
interest in real property not owed in fee by the Borrower) upon the
properties now owned by the Borrower and intended to be subject thereto;
all fees or taxes in connection therewith have been paid and no other
filing or recordation is presently necessary in order to perfect the lien
of such Indenture on such properties.
(d) No re-recording or refiling of such Indenture or any other
instruments or documents (except for periodic filings which extend the
effectiveness of financing statements) is required to preserve and protect
the lien of such Indenture upon the properties intended to be subject
thereto; and under the present laws of the States in which the property
intended to be subject to the lien of such Indenture is located, no further
supplemental indentures or other instruments or documents are required to
be executed, filed and/or recorded to extend the lien of such Indenture to
after-acquired property in such States; PROVIDED, however, the Borrower is
required by the terms of the First Mortgage Indenture to promptly record
and file the Supplemental Indenture.
(e) The Borrower has good and marketable title to all properties
owned by it which are subject to the First Mortgage Indenture, subject only
(a) to the lien of such Indenture, (b) to Permitted Liens (as defined in
such Indenture) which are Permitted Liens hereunder and (c) to minor
exceptions and defects which do not, in the aggregate, materially interfere
with the use by the Borrower of such properties for the
56
purposes for which they are held, materially detract from the value of said
properties or in any material way impair the security afforded by such
Indenture.
ARTICLE 4. CONDITIONS PRECEDENT
4.1 CONDITIONS TO CLOSING DATE. The obligations of the Lenders to
make Loans and to fund their Credit-Linked Deposits and the obligations of the
Issuing Banks to issue Letters of Credit hereunder shall not become effective
until the date on which each of the following conditions is satisfied (or waived
in accordance with Section 9.1):
(a) DOCUMENTS. The Administrative Agent shall have received
each of the following documents, each of which shall be satisfactory to the
Administrative Agent (and to the extent specified below, to each Lender) in
form and substance:
(i) EXECUTED COUNTERPARTS. From each party hereto either (i)
multiple counterparts of this Agreement, signed on behalf of such
party or (ii) written evidence satisfactory to the Administrative
Agent (which may include telecopy transmission of a signed signature
page to this Agreement) that such party has signed a counterpart of
this Agreement;
(ii) CORPORATE DOCUMENTS. Such documents and certificates as
the Administrative Agent or its counsel may reasonably request,
certified as of the Closing Date as complete and correct copies
thereof by the Secretary or an Assistant Secretary of the Borrower,
relating to (i) the organization, existence and good standing of the
Borrower, (ii) the authorization of the execution, delivery and
performance by the Borrower of this Agreement, and of the borrowings
hereunder by the Borrower, and (iii) certificates as to the incumbency
and signature of each individual signing this Agreement and any other
agreement or document contemplated hereby on behalf of the applicable
Credit Party;
(iii) FINANCIAL STATEMENTS. Copies of the unaudited consolidated
balance sheets of the Borrower as of December 31, 2002 and the related
statement of earnings and cash flows for the period ending as of such
date;
(iv) FIRST MORTGAGE INDENTURE. A certified copy of the First
Mortgage Indenture;
(v) COLLATERAL DOCUMENTS. The Administrative Agent shall have
received the Collateral Documents together with all documentation
necessary and appropriate to convey (and confirm) a valid and
perfected first-priority security interest in the Collateral, to the
extent and as more specifically enumerated in the Collateral
Documents, executed by a duly authorized officer of the Borrower;
(vi) CREDIT RATINGS. The Administrative Agent shall have
received evidence of Borrower's obtaining pro forma private letter
ratings of the credit facilities provided hereby from ▇▇▇▇▇'▇ and
Standard & Poor's;
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(vii) REPAYMENT OF DEBT. The Administrative Agent shall have
received documentation satisfactory to the Administrative Agent and
the Lenders evidencing that the Clay County Synthetic Lease, the ▇▇▇▇▇
County Synthetic Lease, Turbine Warehouse Synthetic Lease and ANCL
Credit Facility shall have been repaid in full and such facilities
shall have been terminated, and in each case, all commitments
thereunder shall have been terminated and all amounts outstanding
thereunder and the liens granted thereunder shall have been released
pursuant to;
(viii) WAIVER AND CONSENT. The Administrative Agent shall have
received documentation satisfactory to the Administrative Agent that
the Waiver and Consent has been executed and delivered and all
conditions precedents and other requirement thereto to the
effectiveness thereof (other than the funding of the cash collateral
account) have been satisfied and such agreement shall have become
effective (or shall simultaneously with the funding of the Term Loans
become effective); and
(ix) OTHER DOCUMENTS. Such other documents as the
Administrative Agent or any Lender (acting through the Administrative
Agent) may reasonably request.
(b) CONSENTS, LICENSES AND APPROVALS. The Administrative Agent
shall have received, with a counterpart for each Lender, a certificate of a
Responsible Officer of the Borrower (i) attaching copies of all consents,
authorizations and filings referred to in SCHEDULE 3.4b, including without
limitation, the orders of the FERC referred to in item 1 thereof and the
Borrower's applications to the FERC for each such order, and (ii) stating
that, except as shown in SCHEDULE 3.4b, such consents, licenses and filings
are in full force and effect; and each such consent, authorization and
filing shall be in form and substance satisfactory to the Administrative
Agent.
(c) CLOSING FEES AND EXPENSES. The Administrative Agent shall
have received the fees to be received on the Closing Date separately agreed
to between the Administrative Agent and the Borrower and shall have
received reimbursement of all costs and expenses (including the fees and
expenses of counsel to the Administrative Agent to the extent invoiced).
(d) LEGAL OPINIONS. The Administrative Agent shall have
received, with a counterpart for each Lender, the executed legal opinions
of counsel to the Borrower and special Canadian counsel to the
Administrative Agent, which opinions shall be satisfactory in form and
substance to the Administrative Agent.
(e) CLOSING CERTIFICATE. The Administrative Agent shall have
received, with a counterpart for each Lender, a closing certificate of the
Borrower substantially in the form of EXHIBIT B, dated as of the Closing
Date and satisfactory in form and substance to the Administrative Agent.
(f) [INTENTIONALLY OMITTED].
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(g) [INTENTIONALLY OMITTED].
(h) EXISTING CREDIT AGREEMENTS. The Administrative Agent shall
have received documentation satisfactory to the Administrative Agent
evidencing that (i) the Citibank 364-Day Revolving Credit Agreement shall
have been terminated and all amounts outstanding thereunder shall have been
repaid in full and the liens granted thereunder (if any) shall have been
released, and (ii) all obligations under the Citibank 3-Year Revolving
Credit Agreement shall have been paid in full (other than LC Outstandings
on the Closing Date) and the liens granted thereunder (if any) shall have
been released (other than the cash collateral lien with respect to the LC
Outstandings).
(i) ISSUANCE OF FIRST MORTGAGE BONDS. (i) All First Mortgage
Approvals shall have been obtained and shall be in full force and effect;
(ii) the First Mortgage Indenture and the Supplemental Indenture shall have
been validly authorized, executed and delivered and the First Mortgage
Bonds in an aggregate principal amount of $430 million, shall have been
validly authorized, executed and authenticated and validly issued and
delivered to the Collateral Agent; and (iii) the Administrative Agent and
each Lender shall have received (I) copies of all opinions, certificates,
orders, consents and other documents that are delivered to the trustees
under the First Mortgage Indenture as conditions precedent to (or otherwise
in connection with) the issuance of the First Mortgage Bonds under the
First Mortgage Indenture (together with, in the case of each such opinion
that is not addressed to the Collateral Agent, a letter from the counsel
rendering such opinion to the effect that the Collateral Agent is entitled
to rely on such opinion as if such opinion were addressed to the Collateral
Agent), (II) copies of all First Mortgage Approvals and (III) such other
opinions, certificates and documents reasonably related to the First
Mortgage Bonds, the First Mortgage Indenture (including the Supplemental
Indenture) and the liens and security interests of the First Mortgage
Indenture as the Administrative Agent shall have reasonably requested, and
all of the foregoing documents (including without limitation the First
Mortgage Approvals, the First Mortgage Indenture, the Supplemental
Indenture and the First Mortgage Bonds) shall be in form and substance
reasonably satisfactory to the Administrative Agent.
(j) APPRAISALS. The delivery to the Administrative Agent at
least two (2) days prior to the Closing Date of a written appraisal, by an
appraiser and in form reasonably satisfactory to the Administrative Agent,
dated within thirty days of the Closing Date and covering the assets of the
Borrower subject to the lien of the First Mortgage Indenture and the
Additional Collateral, in each case upon which appraisals Administrative
Agent and the Lenders may expressly rely.
(k) OUTSIDE CLOSING DATE. The Closing Date shall have occurred
and each of conditions precedent set forth in this SECTION 4.1 shall have
been satisfied on or prior to May 15, 2003.
(l) REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties made by the Borrower in or pursuant to the
Loan Documents (except to the extent applicable to an earlier date) shall
be true and correct in all material respects on
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and as of such date as if made on and as of such date (both before and
after giving effect to such Transactions as shall be required to occur on
or prior to the Closing Date).
(m) NO DEFAULT. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
Transactions to be consummated on such date.
(n) NOTICE OF BORROWING. In the case of Loans made pursuant to
SECTION 2.1, the Administrative Agent shall have received a Notice of
Borrowing in compliance with the terms hereof.
(o) ADDITIONAL MATTERS. All corporate and other proceedings,
and all documents, instruments and other legal matters in connection with
the Transactions and the other transactions contemplated by this Agreement,
the other Loan Documents and the First Mortgage Indenture shall be
reasonably satisfactory in form and substance to the Administrative Agent,
and the Administrative Agent shall have received such other documents,
instruments and legal opinions in respect of any aspect or consequence of
the Transactions and the other transactions contemplated hereby or thereby
as it shall reasonably request.
ARTICLE 5. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that for so long as any of the Commitments
remains in effect, any Loan remains outstanding and unpaid, any Letter of Credit
remains outstanding, or any Obligation is owing to any Lender, any Issuing Bank,
the Collateral Agent or the Administrative Agent hereunder or under any other
Loan Document, the Borrower shall and shall cause each of its Subsidiaries to:
5.1 FINANCIAL STATEMENTS. Furnish to each Lender:
(a) as soon as available, but in any event within one hundred
twenty (120) days after the end of each fiscal year of the Borrower, a copy
of the consolidated balance sheet of the Borrower and its Subsidiaries as
at the end of such year and the related consolidated and consolidating
statements of income, retained earnings and cash flows for such year,
setting forth in each case in comparative form the figures as of the end of
and for the previous year, reported on without qualification by KPMG LLP or
other independent certified public accountants of nationally recognized
standing; PROVIDED that the submission of the Borrower's report on Form
10-K shall satisfy the foregoing requirements; and
(b) as soon as available, but in any event not later than
forty-five (45) days after the end of each quarterly period for each of the
fiscal quarters of each fiscal year of the Borrower, the unaudited
consolidated balance sheet of the Borrower and its Subsidiaries as at the
end of such quarter and the related unaudited consolidated statements of
income, retained earnings and cash flows of the Borrower and its
Subsidiaries for such quarter and the portion of the fiscal year through
the end of such quarter and setting forth the actual figures for the
corresponding date or period in the
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previous year, certified by the chief financial officer or treasurer of the
Borrower as being fairly stated in all material respects (subject to normal
year-end audit adjustments); PROVIDED that the submission of the Borrower's
report on Form 10-Q shall satisfy the foregoing requirements,
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
5.2 CERTIFICATES; OTHER INFORMATION. Furnish to the Administrative
Agent:
(a) concurrently with the delivery of the financial statements
referred to in SECTION 5.1(a), a certificate of the independent certified
public accountants reporting on such financial statements stating that in
making the examination necessary therefor no knowledge was obtained of any
Event of Default resulting from the Borrower's failure to comply with
SECTION 6.1, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements
referred to in SECTION 5.1(a) OR (b), a compliance certificate of the chief
financial officer or treasurer of the Borrower, in form and substance
satisfactory to the Administrative Agent (the "COMPLIANCE CERTIFICATE"),
(i) showing compliance by the Borrower with the covenants contained in
SECTION 6.1 and (ii) setting forth the description of any Reduction Event
occurring during such period and the aggregate amount of Net Cash Proceeds,
dividends or other distributions received during such period with respect
to any Reduction Event;
(c) within ten (10) days after the filing thereof, copies of all
reports which the Borrower sends to any of its stockholders, and copies of
all registration statements, SEC Reports (or, in each case, any successor
form) which the Borrower or any Subsidiary files with the SEC (and such
similar filings with authorities in Canada, to the extent Canadian Assets
constitute a portion of Additional Collateral) or any successor or
analogous Governmental Authority (other than public offerings of securities
under employee benefit plans or dividend reinvestment plans); PROVIDED that
the Borrower shall have satisfied the foregoing requirement as to any
report upon the Administrative Agent receiving such report from the
Borrower in an electronic notification thereof to the Administrative Agent;
(d) promptly after either of Moody's or Standard & Poor's has
raised or lowered its credit rating of any of the First Mortgage Bonds or
the credit facilities evidenced by the Loan Documents a notice as to such
effect;
(e) concurrently with the delivery thereof or promptly after
receipt thereof, a copy of all notices to the trustee or the Borrower under
the First Mortgage Indenture; and
(f) promptly, such additional financial and other information as
the Administrative Agent or any Lender may from time to time reasonably
request.
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5.3 PAYMENT AND PERFORMANCE OF OBLIGATIONS. Perform in all respects
all of its obligations under the terms of agreements, indentures, mortgages,
security agreements and other debt instruments to which it is party or bound,
including, without limitation, pay, discharge or otherwise satisfy at or before
maturity or before they become delinquent, as the case may be, all taxes, fees
or other charges imposed on it or on any of its properties by any Governmental
Authority and all its other obligations of whatever nature except, in each case,
where the amount or validity thereof is currently being diligently contested in
good faith and reserves in conformity with GAAP with respect thereto have been
provided on the books of the Borrower or any of its Subsidiaries, as the case
may be, or where the failure to perform such obligations could not reasonably be
expected to result in a Material Adverse Effect.
5.4 MAINTENANCE OF EXISTENCE. Renew and keep in full force and
effect its corporate existence, take all reasonable action to maintain all
rights, privileges and franchises necessary or desirable in the normal conduct
of its business except to the extent such failure to maintain could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect and comply
with all Contractual Obligations and Requirements of Law except to the extent
that failure to comply therewith could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect; provided that any
Subsidiary may merge, consolidate or amalgamate in accordance with SECTION 6.2
(and such transaction shall not constitute a breach of this SECTION 5.4).
5.5 MAINTENANCE OF PROPERTY; INSURANCE. Keep all property useful and
necessary in its business in good working order and condition (ordinary wear and
tear, and casualties, excepted), maintain with financially sound and reputable
insurance companies insurance on all its property in at least such amounts and
against at least such risks as are usually insured against in the same general
area by companies engaged in the same or a similar business, and furnish to the
Administrative Agent, upon request, full information as to the insurance carried
including certified copies of policies and certificates of insurance from a
nationally recognized insurance broker.
5.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. Keep
proper books of records and accounts, in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and permit after
reasonable notice representatives of the Administrative Agent or any Lender to
visit and inspect any of its properties and examine and make abstracts from any
of its books and records at any reasonable time and as often as may reasonably
be desired, and to discuss the business, operations, properties and financial
and other condition of the Borrower and each Subsidiary with officers and
employees of the Borrower and such Subsidiary and with their independent
certified public accountants. All costs and expenses relating to any such
visitation and inspection (i) in the case of a Lender, shall be borne by such
Lender, and (ii) in the case of the Administrative Agent, shall be borne by the
Administrative Agent unless a Default or an Event of Default shall have occurred
and be continuing.
5.7 NOTICES. (a) Within five (5) days after the Borrower knows with
respect to any notice under clause (i) or within ten (10) days with respect to
any other notice under this SECTION 5.7(a), give notice to the Administrative
Agent and each Lender of:
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(i) the occurrence of any Default or Event of Default;
(ii) any (i) default or event of default under any Contractual
Obligation of the Borrower or any Subsidiary, or (ii) litigation,
investigation or proceeding which may exist at any time between the
Borrower or any such Subsidiary and any Governmental Authority, which
in either case, if not cured or if adversely determined, as the case
may be, could reasonably be expected to have a Material Adverse
Effect;
(iii) any material labor dispute to which the Borrower or any
Subsidiary may become a party and which involves any group of
employees, any strikes or walkouts relating to any of its plants or
facilities and the expiration or termination of any labor contract to
which the Borrower or such Subsidiary is a party or by which the
Borrower or such Subsidiary is bound and which dispute could
reasonably be expected to have a Material Adverse Effect on the
operations of the Borrower or such Subsidiary.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower proposes to take with respect thereto. For
the purposes of this SECTION 5.7(a), the Borrower shall be deemed to have
knowledge when any officer of the Borrower charged with responsibility for any
matter that is the subject of such notice requirement knows or should have known
that such notice was required.
(b) At least two (2) days prior to such event (to the extent
practicable), give notice to the Administrative Agent of the occurrence of
any Reduction Event (i) the Net Cash Proceeds, dividends or other
distributions of which are (or are scheduled to be) in excess of $5,000,000
or (ii) together with any other concurrent or prior Reduction Event for
which notice has not been given hereunder the aggregate Net Cash Proceeds,
dividends or other distributions of which are (or are scheduled to be) in
excess of $10,000,000.
5.8 ENVIRONMENTAL LAWS. (a) Comply and cause its Subsidiaries to
comply in all material respects with all applicable Environmental Laws and
obtain and comply and cause its Subsidiaries to obtain and comply in all
material respects with and maintain and cause its Subsidiaries to maintain any
and all licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws except to the extent that failure to do so could
not be reasonably expected to have a Material Adverse Effect.
(b) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all
lawful orders and directives of all Governmental Authorities regarding
Environmental Laws except to the extent that the same are being contested
in good faith by appropriate proceedings and the pendency of such
proceedings could not reasonably be expected to have a Material Adverse
Effect.
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5.9 ERISA. Establish, maintain and operate and cause each of its
Subsidiaries to establish, maintain and operate all Plans to comply in all
material respects with the applicable provisions of ERISA, the Code, and all
other applicable laws, and the regulations and interpretations thereunder and
the respective requirements of the governing documents for such Plans except to
the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect.
5.10 USE OF PROCEEDS. Use the proceeds of each extension of credit
hereunder solely for the purposes set forth in SECTION 3.15. The Borrower
acknowledges that one or more of the Lenders may treat its Loans as part of a
transaction that is subject to Treasury Regulation Section 301.6112-1, and such
Lender or Lenders, as applicable, will maintain the lists and other records
required by such Treasury Regulation.
5.11 MARGIN STOCK. Not permit the aggregate value of margin stock (as
defined in Regulation U) at any time owned or held by the Borrower or any of its
Subsidiaries to exceed an amount equal to 25% of the value of all consolidated
assets subject at such time to any "arrangement" (as such term is used in the
definition of "indirectly secured" in Section 221.2 of Regulation U).
5.12 MAINTAIN OWNERSHIP OF DOMESTIC UTILITY BUSINESS. (a) Maintain
ownership, directly (and not through any Subsidiary), of all or substantially
all of the assets of the Domestic Utility Business and (b) maintain the Lien of
the First Mortgage Indenture on the Mortgaged Property (as defined in the First
Mortgage Indenture) after the date the Lien of the First Mortgage Indenture is
first applicable thereto.
5.13 POST-CLOSING MATTERS. (a) Use its commercially reasonable efforts
to, as promptly as practicable, obtain all necessary governmental and regulatory
approvals (x) to add as additional property under the First Mortgage Indenture
the tangible assets of each of the Borrower's operating divisions, to the extent
necessary to cause the fair value of the Collateral Utility Business (including
the fair value of such additional property (as evidenced by an appraisal dated
within three months (or sooner if there has been a material adverse change
affecting such additional property)) to be equal to or exceed 167% of the
outstanding aggregate principal amount of First Mortgage Bonds then held by the
Collateral Agent (such commercially reasonable efforts by the Borrower shall not
require it or any of its subsidiaries to, among other things, (i) modify the
conduct of its ordinary course of business in any material respect, (ii) divest
itself of any significant assets or businesses, (iii) refund any amounts to any
customers, or (iv) reduce its rates or other charges to its customers) (once the
Borrower shall have caused such additional property to be added and caused such
ratio described in clause (x) above to have been first met, the Borrower shall
have no further obligation to add additional property under this clause).
(b) Upon obtaining such governmental and regulatory approval,
promptly cause such additional property to become subject to the lien of
the First Mortgage Bond Indenture (on the same conditions as the conditions
set forth in SECTION 4.1(i) AND (j) with respect to the initial Collateral
Utility Business).
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(c) As soon as available, but in any event within five (5)
Business Days after the Closing Date, deliver to the Administrative Agent
audited consolidated balance sheets of the Borrower as of December 31, 2002
and the related consolidated statements of income, retained earnings and
cash flows for the fiscal year ended December 31, 2002, with accompanying
notes thereon and reported on without qualification by KPMG LLP, in each
case, such financial statements shall be identical, in all material
respects, to the unaudited financial statements for the same periods
delivered by the Borrower pursuant to SECTION 4.1 other than changes to the
footnotes to reflect adjustment of short-term Debt to long-term Debt and to
the footnotes to reflect changes resulting from the consummation of the
transactions contemplated by the Loan Documents.
(d) As soon as practicable, but in any event within sixty (60)
Business Days after the Closing Date, deliver to the Administrative Agent
copies of duly filed and recorded instruments of discharge and satisfaction
relating to the Michigan Gas Utilities Indenture.
5.14 CREDIT RATINGS. Maintain ratings by both Moody's and Standard &
Poor's with respect to the credit facilities provided hereby (in each case, on a
pro forma basis if prior to the issuance of the First Mortgage Bonds).
ARTICLE 6. NEGATIVE COVENANTS
The Borrower hereby agrees that for so long as the Commitments remain
in effect, any Loan remains outstanding and unpaid, any Letter of Credit remains
outstanding, or any Obligation is owing to any Lender, any Issuing Bank, the
Collateral Agent or the Administrative Agent hereunder or under any other Loan
Document, the Borrower shall not:
6.1 FINANCIAL COVENANTS.
(a) TOTAL CAPITALIZATION. Permit the ratio (expressed as a
percentage) of Debt to Total Capital on the last day of any fiscal quarter
to exceed 75% for the period ending September 30, 2003 or the period ending
December 31, 2003 and 70% for any period after December 31, 2003.
(b) COLLATERAL EBITDA TO INTEREST EXPENSE. Permit the ratio of
(y) Collateral EBITDA to (z) the aggregate amount of interest expense
(including participation fees with respect to Letters of Credit, but
excluding the amortization of capitalized debt issuance costs associated
with this Agreement) accrued on Debt relating to the assets constituting
Indenture Collateral, including, without limitation, first mortgage bonds
under the First Mortgage Indenture, in each case on the last day of any
fiscal quarter of the Borrower for the period of four consecutive fiscal
quarters then ending, to be less than (1) for the period ending September
30, 2003 or December 31, 2003, 1.05 to 1.00, (2) for the periods ending
March 31, 2004 and June 30, 2004, 1.15 to 1.00, (3) for the period ending
on September 30, 2004, 1.50 to 1.00, (4) for the period ending on December
31, 2004, 1.75 to 1.00, and (5) for any period ending thereafter, 2.00 to
1.00 (notwithstanding the foregoing, (I) the aggregate amount of interest
expense for
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any period prior to March 31, 2004 shall be deemed to be equal to four
times the aggregate amount of interest expense for most recently ended
fiscal quarter and (II) with respect to any line of business which becomes
a portion of the Collateral Utility Business after the date hereof,
interest expense related thereto for any period prior to first anniversary
of such line becoming a part of the Collateral Utility Business shall be
deemed to be equal to four times the aggregate amount of such interest
expense for most recently ended fiscal quarter).
(c) DEBT TO EBITDA. Permit the ratio of (y) the aggregate
principal amount of Debt relating to the assets constituting Indenture
Collateral, including, without limitation, first mortgage bonds outstanding
under the First Mortgage Bond Indenture, in each case on the last day of
any fiscal quarter to (z) Collateral EBITDA for the period of four
consecutive fiscal quarters then ending, to be more than (1) for the period
ending September 30, 2003, 10.5 to 1.0; (2) for any period ending after
October 1, 2003 to and including June 30, 2004, 9.5 to 1.0; and (3) for any
period thereafter, 5.5 to 1.0.
6.2 LIMITATION ON FUNDAMENTAL CHANGES. (a) Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all its property, business or
assets or all or substantially all of the mortgaged property under the First
Mortgage Indenture, except any Wholly-Owned Subsidiary (other than any
Collateral Subsidiary) may be merged or consolidated with or into the Borrower
(PROVIDED that the Borrower shall be the continuing or surviving corporation).
(b) So long as the Pledged Equity Interest (as such term is
defined in the Canadian Pledge Agreement or the ANCMC Canadian Pledge
Agreement) remains subject to the Lien of the Canadian Pledge Agreement or
the ANCMC Canadian Pledge Agreement, as applicable, permit either Canadian
Parent or ANCFC or any of their respective Subsidiaries to enter into any
merger, consolidation or amalgamation, or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution), or convey, sell, lease,
assign, transfer or otherwise dispose of, all or any material portion of
its property, business or assets, or sell, assign, transfer or otherwise
dispose of any of the Capital Stock of any Subsidiary, except that (i) (A)
any Subsidiary of a Canadian Parent or any Subsidiary of ANCMC may merge
with or consolidate or amalgamate into, or sell or otherwise transfer
assets to, either Canadian Parent or ANCMC or any other Wholly-Owned
Subsidiary of either Canadian Parent or ANCMC (provided, in the case of a
merger, consolidation or amalgamation, such Canadian Parent, ANCMC or
Wholly-Owned Subsidiary, as applicable, is the surviving entity) or (B)
ANCMC may merge with or consolidate or amalgamate into, or sell or
otherwise transfer assets to (or ANCFC may sell all of the Capital Stock of
ANCMC to), either Canadian Parent or any other Wholly-Owned Subsidiary of
either Canadian Parent (provided, in the case of a merger, consolidation or
amalgamation, such Canadian Parent or Wholly-Owned Subsidiary, as
applicable, is the surviving entity), (ii) any Subsidiary of either
Canadian Parent may sell inventory in the ordinary course of business,
(iii) any Subsidiary of either Canadian Parent may sell, lease or otherwise
dispose of machinery and equipment which has become uneconomic, obsolete or
worn out and which is disposed of in the ordinary course of business and
(iv) so long as (1) no Event of Default then exists, (2) each such
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transaction is an arm's length transaction for fair value, (3) at least
eighty percent (80%) of the purchase price therefor is in cash (or such
lower percentage if such cash portion is sufficient to terminate the credit
facilities provided hereby in full)(and such cash portion of the purchase
price shall be payable at (or prior to) the time of such Disposition) and
(4) the Net Cash Proceeds thereof are applied to the prepayment or
reduction of or deposit as security for the credit facilities hereunder as
provided in SECTION 2.7(b), if applicable, either Canadian Parent, ANCMC or
any of their respective Subsidiaries may convey, sell, lease, assign,
transfer or otherwise dispose of, all or any portion of its property,
business or assets (including without limitation any Capital Stock of any
Subsidiary).
(c) So long as the Pledged Equity Interest (as such term is
defined in the IPP Pledge Agreement) remains subject to the Lien of the IPP
Pledge Agreement, permit UtilCo Group Inc. or any of its Subsidiaries to
enter into any merger, consolidation or amalgamation, or liquidate, wind up
or dissolve itself (or suffer any liquidation or dissolution), or convey,
sell, lease, assign, transfer or otherwise dispose of, all or any portion
of its property, business or assets, sell, assign, transfer or otherwise
dispose of any of the Capital Stock of any Subsidiary, except that (i) any
Subsidiary of UtilCo Group Inc. may merge with or consolidate or amalgamate
into, or sell or otherwise transfer assets to, UtilCo Group Inc. or any
other Wholly-Owned Subsidiary of UtilCo Group Inc. (provided, in the case
of a merger, consolidation or amalgamation, UtilCo Group Inc. or such
Wholly-Owned Subsidiary, as applicable, is the surviving entity), (ii)
Onondaga Cogeneration Limited Partnership or Topsham Hydroelectric
Generating Facility Trust No. 2 may sell inventory in the ordinary course
of business or sell, lease or otherwise dispose of machinery and equipment
which has become uneconomic, obsolete or worn out and which is disposed of
in the ordinary course of business, (iii) so long as (1) no Event of
Default then exists, (2) such transaction is an arm's length transactions
for fair value, (3) at least eighty percent (80%) of the purchase price
therefor is in cash (and such cash portion of the purchase price shall be
payable at (or prior to) the time of such Disposition) and (4) the Net Cash
Proceeds thereof are applied to the prepayment or reduction of or deposit
as security for the credit facilities hereunder as provided in SECTION
2.7(b), if applicable, UtilCo Group Inc. or any of its Subsidiaries may
convey, sell, lease, assign, transfer or otherwise dispose of, all or any
portion of its property, business or assets (including without limitation
any Capital Stock of any Subsidiary), (iv) so long as MEP Pleasant Hill,
LLP is not then a Subsidiary of the Borrower, this clause (c) shall not
apply to the sale or other Disposition of any Capital Stock or other
Investment in, or any of the assets of, MEP Pleasant Hill, LLP, and (v) if
MEP Pleasant Hill, LLP is then a Subsidiary of the Borrower, MEP Pleasant
Hill, LLP may merge with and into, and its assets may be sold or otherwise
transferred (directly or in a series of related transactions) to, the
Borrower.
6.3 LIMITATION ON TRANSACTIONS WITH AFFILIATES. Except for
transactions providing services (including, without limitation, group purchases
of equipment or energy) at cost to any Subsidiary or Affiliate, enter into, or
permit any Subsidiary to enter into, any transaction, including, without
limitation, any purchase, sale, lease or exchange of property or the rendering
of any service, with any Affiliate unless such transaction is upon fair and
reasonable terms no less favorable to the Borrower (or such Subsidiary) than it
would have obtained in a comparable arm's-length transaction with a Person which
is not an Affiliate.
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6.4 LIMITATION ON LIENS. Create, incur, assume or suffer to exist,
and shall not permit any Subsidiary to create, incur, assume or suffer to exist,
any Lien upon any of its properties, assets or revenues, whether now owned or
hereafter acquired, except for Permitted Liens.
6.5 AMENDMENTS OF ORGANIZATIONAL DOCUMENTS. (a) Amend, modify or
change its articles of incorporation or bylaws in any manner that could
reasonably be expected to result in a Material Adverse Effect.
(b) So long as the Pledged Equity Interest (as such term is
defined in the Canadian Pledge Agreement or the ANCMC Canadian Pledge
Agreement) remains subject to the Lien of the Canadian Pledge Agreement or
the ANCMC Canadian Pledge Agreement, as applicable, permit either Canadian
Parent or ANCMC or any of their respective Subsidiaries to amend, modify or
change its articles of incorporation or bylaws in any manner that could
reasonably be expected to result in an adverse effect on the validity or
enforceability of the Canadian Pledge Agreement or the ANCMC Canadian
Pledge Agreement or the value of the Pledged Equity Interest (as such term
is defined in the Canadian Pledge Agreement or the ANCMC Canadian Pledge
Agreement); or
(c) So long as Pledged Equity Interest (as such term is defined
in the IPP Pledge Agreement) remains subject to the Lien of the IPP Pledge
Agreement, permit UtilCo Group Inc. or any of its Subsidiaries to amend,
modify or change its articles of incorporation or bylaws in any manner that
could reasonably be expected to result in an adverse effect on the validity
or enforceability of the IPP Pledge Agreement or the value of the Pledged
Equity Interest (as such term is defined in the IPP Pledge Agreement).
6.6 LIMITATION ON GUARANTEE OBLIGATIONS. Create, incur, assume or
suffer to exist, and shall not permit any Subsidiary to create, incur, assume or
suffer to exist, any Guarantee Obligation except:
(a) guarantees of obligations to third parties made in the
ordinary course of business not relating to Debt;
(b) Guarantee Obligations existing on the date hereof;
(c) Guarantee Obligations which by their terms (either
mandatorily or at the unfettered option of the Borrower) are payable solely
in Capital Stock (other than Mandatory Redeemable Stock) of the Borrower
PROVIDED that the Borrower agrees that so long as this Agreement is in
effect to cause any payment under any such outstanding obligation to be
made only in such Capital Stock; and
(d) Guaranteed Obligations permitted pursuant to SECTION 6.10(g)
or (j);
provided that (y) so long as Pledged Equity Interest (as such term is defined in
the IPP Pledge Agreement) remains subject to the Lien of the IPP Pledge
Agreement, neither UtilCo Group Inc. nor any of its Subsidiaries shall create,
incur or assume any Guarantee Obligations in respect of the Borrower or any of
its Subsidiaries other than UtilCo Group Inc. or any of its Subsidiaries or
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Affiliates and (z) so long as the Pledged Equity Interest (as such term is
defined in the Canadian Pledge Agreement or the ANCMC Canadian Pledge Agreement)
remains subject to the Lien of the Canadian Pledge Agreement or the ANCMC
Canadian Pledge Agreement, neither Canadian Parent, ANCMC nor any of their
respective Subsidiaries shall create, incur or assume any Guarantee Obligations
in respect of the Borrower or any of its Subsidiaries other than either Canadian
Parent, ANCMC and their respective Subsidiaries.
6.7 LIMITATION ON SALE OF ASSETS. Convey, sell, lease, assign,
transfer or otherwise dispose of, and shall not permit any Subsidiary to convey,
sell, lease, assign, transfer or otherwise dispose of any of, its property,
business or assets (including, without limitation, tax benefits, receivables and
leasehold interests), whether now owned or hereafter acquired except:
(a) for the sale or other disposition of any property that, in
the reasonable judgment of the Borrower, has become uneconomic, obsolete or
worn out, and which is disposed of in the ordinary course of business;
(b) for sales of inventory made in the ordinary course of
business;
(c) that (i) any Subsidiary of the Borrower (other than a
Collateral Subsidiary) may sell, lease, transfer or otherwise dispose of
any or all of its assets (upon voluntary liquidation or otherwise) to the
Borrower or a Subsidiary of the Borrower and any Subsidiary of the Borrower
(other than a Collateral Subsidiary) may sell or otherwise dispose of, or
part with control of any or all of, the stock of any Subsidiary to a
Subsidiary of the Borrower or a Subsidiary of the Borrower may merge with
the Borrower or another Subsidiary (so long as the Borrower or such
Subsidiary, as applicable, is the surviving corporation) and (ii) any
Collateral Subsidiary may convey, sell, lease, assign, transfer or
otherwise dispose of any of its property, business or assets to the extent
expressly permitted pursuant to SECTION 6.2(b) OR (c), as applicable;
(d) for sales or dispositions by the Borrower or any of its
Subsidiaries (other than any Collateral Subsidiaries) after the date
hereof, PROVIDED that (i) no Event of Default then exists or would result
therefrom, (ii) such sale or other disposition shall be made for fair sale
value on an arm's-length basis, (iii) in the case of Indenture Collateral,
at least eighty percent (80%) of the purchase price therefor shall be paid
in cash (and such cash portion of the purchase price shall be payable at
(or prior to) the time of such Disposition), and (iv) the Borrower shall
comply with SECTION 2.7, if applicable; and
(e) cancel or make changes or alterations in or substitutions for
any and all easements, servitudes, rights of way and similar rights or
interests;
(f) grant easements, ground leases or rights-of-way in, upon,
over or across property or rights-of-way, PROVIDED such grant shall not
materially impair the use of the property or rights-of-way for the purposes
for which such property or rights-of-way are held, or
(g) for operating leases entered into ordinary course of business
with respect to surplus machinery and equipment or office space.
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6.8 LIMITATION ON INVESTMENTS, LOANS AND ADVANCES. Make, and shall
not permit any Subsidiary to make, any advance, loan, extension of credit
(excluding Guarantee Obligations but including any payment by a guarantor
thereunder) or capital contribution to, or purchase any Capital Stock,
bonds, notes, debentures or other securities of, or purchase all or a
material part of a business unit or line of business of (or all or
substantially all the assets of), or make any other investment in, any
Person (any of the foregoing, an "INVESTMENT"), except:
(a) (i) extensions of trade credit in the ordinary course of
business and (ii) Investments (including reinvestments thereof by any
intermediate Subsidiary) to the extent the ultimate proceeds thereof are
applied to maintenance capital expenditures required to comply with SECTION
5.5 for merchant generation plants of any Wholly-Owned Subsidiary;
(b) Investments of the Borrower or any Subsidiary existing on the
date hereof in any Subsidiary (and (i) the Borrower or any Wholly-Owned
Subsidiary may acquire such Investment in any Subsidiary (other than a
Collateral Subsidiary) and (ii) any Collateral Subsidiary may acquire any
Investment in a Collateral Subsidiary to the extent expressly permitted
pursuant to SECTION 6.2(b) or (c), as applicable);
(c) the Borrower may acquire all or a material part of any
domestic regulated business, provided that the aggregate principal amount
of Debt incurred or assumed by the Borrower and its Subsidiaries in
connection with such acquisition (together with the aggregate principal
amount of Indebtedness of such acquired Person) shall not exceed fifty
percent (50%) of the lesser of the fair value or cost of such acquired
assets (and, to the extent such Debt is incurred in connection with such
acquisition or in contemplation of such acquisition, such Debt shall not
have a scheduled maturity, or require any principal payment (other than
scheduled amortization payments of not more than $10,000,000 in the
aggregate for all such Debt), prior to six months after the Maturity Date);
(d) the Borrower and its Subsidiaries may invest in, acquire and
hold Cash Equivalents;
(e) the Borrower or any of its Subsidiaries may make travel and
entertainment advances, relocation loans and payroll advances in the
ordinary course of business to officers and employees of the Borrower or
any such Subsidiary;
(f) Investments of the Borrower or any Subsidiary existing on the
date hereof and the receipt of any additional securities constituting
payments in kind on such existing Investments;
(g) Investments in obligations arising out of bankruptcy of
customers and suppliers;
(h) subject to SECTIONS 6.2 and 6.7, (as applicable) Investments
consisting of non-cash consideration received in connection with sales of
assets;
(i) any of the following,
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(i) Investments by either Canadian Parent, ANCMC or any of
their respective Subsidiaries in either Canadian Parent, ANCMC or
any of their respective Subsidiaries,
(ii) Investments in either Canadian Parent, ANCMC or any of
their respective Subsidiaries to the extent that the proceeds
thereof are applied to refinance the principal amount of any
Indebtedness of such entity owing to an un-Affiliated entity
existing on the date hereof,
(iii) Investments in either Canadian Parent, ANCMC or any of
their respective Subsidiaries the proceeds of which are used for
Capital Expenditures with respect to utility assets of any
Subsidiary of Canadian Parent to the extent that the aggregate
amount of such Investments made pursuant to this clause (iii)
plus the aggregate principal amount of Debt incurred under clause
(f) of Section 6.10 does not exceed (1) from the period from the
date hereof to and including December 31, 2003, $75,000,000, (2)
for the fiscal year ending December 31, 2004, $95,000,000, and
(3) thereafter $95,000,000 (provided that if the aggregate amount
of Capital Expenditures for any fiscal year is less than the
amount of related Investments permitted for such fiscal year,
then the shortfall may be added to the amount permitted for the
immediately succeeding (but not any other) fiscal year), and
(iv) any other Investments in either Canadian Parent, ANCMC
or any of their respective Subsidiaries;
provided that if an Investment may fall within clause (iii) or (iv) above, the
Borrower may designate which clause applies to such Investment (which
designation may be changed from time to time);
(j) Investments in a Wholly-Owned Subsidiary of Borrower in
furtherance of the winding down or exiting of the operations of the
unregulated merchant energy business or operations of Borrower and its
Subsidiaries;
(k) in connection with cash management and tax efficient
financing of the Borrower and its Subsidiaries in the ordinary course of
business consistent with past practice, Investments by the Borrower or any
Subsidiary of the Borrower in the Borrower or any Subsidiary of the
Borrower (other than UCS Holdings LLC or any of its Subsidiaries), PROVIDED
that the proceeds thereof shall not be used to finance any capital
expenditure; and PROVIDED FURTHER that:
(i) so long as the Pledged Equity Interest (as such term
is defined in the Canadian Pledge Agreement or the ANCMC Canadian
Pledge Agreement) remains subject to the Lien of the Canadian
Pledge Agreement or the ANCMC Canadian Pledge Agreement, as
applicable, (x) in the case of Investments made by either
Canadian Parent, ANCMC or any Subsidiary of any thereof in
Borrower or any Subsidiary of Borrower which is not either
Canadian Parent, ANCMC or any of their respective Subsidiaries,
the then aggregate outstanding amount of
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such Investments shall not exceed the then aggregate outstanding
amount of Investments made after the date hereof in the Canadian
Parent, ANCMC and their respective Subsidiaries pursuant to this
subparagraph by the Borrower or a Subsidiary of Borrower which is
not either Canadian Parent, ANCMC or any of their respective
Subsidiaries, (y) such Investments (taken as a whole) shall not
materially adversely affect the collateral value of the Canadian
Parent and their respective Subsidiaries taken as a whole (or
materially adversely effect the rights and remedies of the
Collateral Agent with respect thereto) and (z) such Investment
made in either Canadian Parent, ANCMC or any Subsidiary shall not
be repaid unless, after giving effect to such repayment, at least
one dollar of additional Investments may be made by the Canadian
Parent, ANCMC and their respective Subsidiaries in compliance
with clause (x) above and no Event of Default then exists; and
(ii) so long as the Pledged Equity Interest (as such term
is defined in the IPP Pledge Agreement) remains subject to the
Lien of the IPP Pledge Agreement, (x) in the case of Investments
made by UtilCo Group Inc. or any of its Subsidiaries in Borrower
or any Subsidiary of Borrower which is not UtilCo Group Inc. or
any of its Subsidiaries, the then aggregate outstanding amount of
such Investments shall not exceed the then aggregate outstanding
amount of Investments made after the date hereof in UtilCo Group
Inc. and its Subsidiaries pursuant to this subparagraph by the
Borrower or a Subsidiary of Borrower which is not UtilCo Group
Inc. or any of its Subsidiaries, (y) such Investments (taken as a
whole) shall not materially adversely affect the collateral value
of UtilCo Group Inc. and its Subsidiaries taken as a whole (or
materially adversely effect the rights and remedies of the
Collateral Agent with respect thereto) and (z) such Investment
made in UtilCo Group Inc. or any of its Subsidiaries shall not be
repaid unless, after giving effect to such repayment, at least
one dollar of additional Investments may be made by UtilCo Group
Inc. and its Subsidiaries in compliance with clause (x) above and
no Event of Default then exists;
(l) other Investments of the Borrower or any Subsidiary after the
date hereof of not more than $10,000,000 in the aggregate;
(m) Investments required to complete the construction of the
electric generating facility located in ▇▇▇▇▇ County, Illinois in an amount
not to exceed $25,000,000;
(n) Investments in an amount not to exceed $15,000,000 in the
aggregate with respect to UCS Holdings, LLC and its Subsidiaries;
(o) Investments the Borrower or any Subsidiary is contractually
obligated to make on the date hereof;
(p) Investments of the Borrower or any Subsidiary (other than any
Collateral Subsidiary) in UtiliCorp Australia Inc. provided that the
proceeds thereof are
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applied to the repayment of the obligations of UtiliCorp Australia Inc.
under the 364-Day Credit Agreement; and
(q) Investments of the Borrower or any of its Subsidiaries (other
than any Collateral Subsidiary (other than Investments from proceeds
received by Collateral Subsidiaries from Investments to Collateral
Subsidiaries for such purpose)) to the extent such proceeds are used to
cause MEP Pleasant Hill, LLC to become a Subsidiary of the Borrower;
PROVIDED that the Borrower shall promptly cause substantially all of the
assets of MEP Pleasant Hill, LLC to be transferred to the Borrower (either
directly or through a series of related transactions) for the purpose of
causing such assets to become utility assets.
6.9 LIMITATION ON DIVIDENDS AND STOCK REPURCHASES. Declare any
dividends other than dividends paid in kind on any shares of any class of
Capital Stock, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, retirement or
other acquisition of any shares of any class of Capital Stock of the Borrower,
whether now or hereafter outstanding, or make any other distribution in respect
thereof, either directly or indirectly, whether in cash or property or in
obligations of the Borrower or any of its Subsidiaries (all of the foregoing
being referred to herein as "RESTRICTED PAYMENTS"); except that the Borrower may
make Restricted Payments on or with respect to its Capital Stock so long as,
after giving effect to such Restricted Payments, (i) no Default or Event of
Default shall have occurred and be continuing or shall result therefrom and (ii)
the Borrower's senior unsecured credit rating is at least Ba2 from Moody's and
BB from Standard & Poor's.
6.10 LIMITATION ON INDEBTEDNESS OR MANDATORY REDEEMABLE STOCK. Create,
incur, issue, assume or suffer to exist, and shall not permit any Subsidiary to
create, incur, issue, assume or suffer to exist, any Indebtedness or Mandatory
Redeemable Stock (including any Indebtedness or Mandatory Redeemable Stock of
any of its Subsidiaries), except:
(a) Debt of the Borrower under this Agreement;
(b) Debt of UtiliCorp Australia, Inc. under the 364-Day Credit
Agreement;
(c) Indebtedness of the Borrower or any Subsidiary to the extent
such Investment is permitted to exist under SECTION 6.8;
(d) Indebtedness consisting of reimbursement obligations under
surety, indemnity, performance, release and appeal bonds and guarantees
thereof and letters of credit required in the ordinary course of business
or in connection with the enforcement of rights or claims of the Borrower
or its Subsidiaries (but not in connection with Debt);
(e) Non-Recourse Debt of any Subsidiary (other than so long as
the Pledged Equity Interest (as such term is defined in the Canadian Pledge
Agreement or the ANCMC Canadian Pledge Agreement) remains subject to the
Lien of the Canadian Pledge Agreement or the ANCMC Canadian Pledge
Agreement, as applicable, the Canadian Parents, ANCMC or any of their
respective Subsidiaries);
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(f) Debt of either Canadian Parent or any of their respective
Subsidiaries, in excess of amounts outstanding on the date hereof, the
proceeds of which are used for Capital Expenditures with respect to utility
assets of any Subsidiary of Canadian Parent; PROVIDED that the aggregate
principal amount of such incremental Debt, together with the aggregate
amount of Investments made pursuant to clause (iii) of Section 6.8(i), does
not exceed (1) from the period from the date hereof to and including
December 31, 2003, $75,000,000, (2) for the fiscal year ending December 31,
2004, $95,000,000, and (3) thereafter $95,000,000 (provided that if the
aggregate amount of Capital Expenditures for any fiscal year is less than
the amount of related Investments permitted for such fiscal year, then the
shortfall may be added to the amount permitted for the immediately
succeeding (but not any other) fiscal year);
(g) [Intentionally Omitted];
(h) Indebtedness outstanding on the date hereof, provided that,
to the extent constituting Debt or Mandatory Redeemable Stock, such
Indebtedness is set forth on SCHEDULE 6.10 hereto;
(i) Debt of the Borrower evidenced by additional first mortgage
bonds under the First Mortgage Indenture PROVIDED that (i) such first
mortgage bonds shall not be issued until after the Rate Reduction Date and
(ii) such first mortgage bonds are issued (y) in compliance with SECTION
4.02 or 4.04 of the First Mortgage Indenture or (z) in a refinancing of
existing First Mortgage Bonds pursuant to SECTION 4.03 of the First
Mortgage Indenture;
(j) Debt incurred to provide all or a portion of the purchase
price or costs of construction of fixed assets; PROVIDED that (i) such
Indebtedness when incurred shall not exceed the purchase price or cost of
construction of such asset and (ii) the aggregate outstanding principal
amount of all such Indebtedness shall not exceed $10,000,000 at any one
time;
(k) Debt of the Borrower secured by accounts receivable of the
Borrower in an aggregate outstanding principal amount not to exceed $200
million at any one time;
(l) Debt incurred or assumed in connection with a transaction
expressly permitted pursuant to SECTION 6.8(c); PROVIDED such Indebtedness
complies with the terms of SECTION 6.8(c);
(m) Refinancings, replacements and extensions by the obligor
thereof of any Debt under clause (e), (f), (g), (h), (i), (j) or (l) above
so long as (i) the principal of the Debt so refinanced, replaced or
extended is not increased as a result thereof (plus any premiums required
to be paid to such existing debtholders in connection with such
refinancing) and (ii) in the case of any refinancing or replacement of
Non-Recourse Debt, after giving effect thereto, such Indebtedness
constitutes Non-Recourse Debt; and
(n) Indebtedness not otherwise permitted by the preceding clauses
of this SECTION 6.10 not exceeding $50,000,000 in aggregate principal
amount at any one
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time outstanding (and which may include Guaranteed Obligations of the
Borrower with respect to Indebtedness of a Subsidiary);
PROVIDED that, notwithstanding the foregoing, the Borrower shall not incur,
issue or assume any Debt or Mandatory Redeemable Stock after the date hereof
pursuant to clauses (i), (l) (to the extent required pursuant to SECTION 6.8),
or (m) (other than with respect to either Canadian Parent, ANCMC or any of their
Subsidiaries) above which has a scheduled maturity, or requires any principal
payment (other than scheduled amortization payments of not more than $10,000,000
in the aggregate for all such Debt), prior to six months after the Maturity
Date.
6.11 LIMITATION ON SALES AND LEASEBACKS. Enter into any arrangement
with any Person providing for the leasing by the Borrower of real or personal
property, in an aggregate amount for all such property exceeding $10,000,000,
which has been or is to be sold or transferred by the Borrower to such Person or
to any other Person to whom funds have been or are to be advanced by such Person
on the security of such property or rental obligations of the Borrower.
6.12 PAYMENT RESTRICTIONS. Enter into or suffer to exist, and shall
not permit any Collateral Subsidiary to enter into or suffer to exist, any
agreement or other consensual encumbrance or restriction (i) which constitutes a
loss of control by any Credit Party in its Subsidiaries (to the extent such
Subsidiaries are Collateral Subsidiaries) or by any Collateral Subsidiary of any
of its Subsidiaries in which it has such control as of the date hereof (for
purposes of this clause (i), "CONTROL" shall mean the ability to direct the
daily operations of such entity, including the ability to direct that such
entity take the any action contemplated in clause (ii) hereof) or (ii) which
prohibits or limits the ability of any of the Borrower or any Collateral
Subsidiary to make loans, payments or dividends to or investments in, or to
transfer assets to, the Borrower or any of its Collateral Subsidiaries, other
than (a) any such agreement, encumbrance or restriction contained in this
Agreement, the Collateral Documents, the First Mortgage Indenture or the Bond
Collateral Agreement, (b) any such agreement, encumbrance or restriction
contained in any industrial revenue bonds, purchase money mortgages, development
financing, operating leases entered into in the ordinary course of business,
acquisition agreements or Financing Leases, in each case permitted by this
Agreement (in which cases, any prohibition or limitation shall only be effective
against the assets financed, acquired or leased thereby), (c) any such
agreement, encumbrance or restriction contained in any loan agreement or other
financing document entered into with respect to Non-Recourse Debt or Debt of
Subsidiaries (other than industrial revenue bonds, purchase money mortgages,
development financing or Financing Leases) permitted to be incurred pursuant to
SECTION 6.10, (d) customary provisions in any contract entered into in the
ordinary course of business (including any licensing agreement, management
agreement or franchise agreement) restricting assignments of such contract; or
(e) restrictions existing on the date hereof.
6.13 LIMITATION ON BUSINESSES. Enter into or engage in any business,
either directly or through any Subsidiary, except for businesses of the same
general type as those in which the Borrower and its Subsidiaries are engaged on
the date hereof or other business activities reasonably incidental or related to
any of the foregoing.
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6.14 LIMITATION ON CERTAIN AMENDMENTS. Amend, modify or change, or
consent to any amendment, modification or change to any of the terms relating to
the payment or prepayment of principal of or interest on, any such Indebtedness
in any manner which would (i) create or accelerate any amortization of the
principal thereof prior to the sixth month after the Maturity Date, (ii) result
in the maturity being earlier than six months after the Maturity Date, or (iii)
increase the amount of any payment or prepayment of principal thereof (to
earlier than six months after the Maturity Date) or increase the rate of
interest thereon.
6.15 LIMITATIONS ON SUBSIDIARIES' EQUITY INTERESTS. (a) Permit any
Subsidiary to issue any preferred Capital Stock or any redeemable common stock
other than (i) issuances of preferred Capital Stock in payment of regularly
accruing dividends on theretofore outstanding shares of such preferred Capital
Stock, (ii) in connection with Investments made pursuant to SECTION 6.8(i), (j)
or (k) and (iii) as permitted under this Section 6.15 below.
(b) so long as the Pledged Equity Interests (as such term is
defined in the Canadian Pledge Agreement or the ANCMC Canadian Pledge
Agreement) remains subject to the Lien of the Canadian Pledge Agreement or
the ANCMC Canadian Pledge Agreement, permit either Canadian Parent, ANCMC
or any Subsidiary thereof (i) to issue Capital Stock (preferred or
otherwise) to any Person other than the Borrower or any of its Subsidiaries
unless such issuance is in an arm's length transaction for fair value and
the Net Cash Proceed thereof received by the Borrower, Aquila Canada
Holdings, Inc. or ANCFC are received at (or prior to) the time of such
issuance and are concurrently applied to the repayment of the Term Loans in
an amount sufficient to cause, after giving effect to such payment, the
fair value of the Collateral Utility Business to be equal to or exceed 167%
of the outstanding aggregate principal amount of First Mortgage Bonds then
held by the Collateral Agent, (ii) to issue any Capital Stock to the
Borrower or any Subsidiary of Borrower which is not either Canadian Parent,
ANCMC or a Subsidiary thereof unless such Capital Stock shall be pledged to
the Collateral Agent pursuant to the Canadian Pledge Agreement or the ANCMC
Canadian Pledge Agreement or (iii) other than Debt incurred pursuant to
SECTION 6.8(i) (but including, however, Debt incurred pursuant to clause
(iv) thereof), SECTION 6.8(l) or SECTIONS 6.10(f), to incur any Debt owing
to the Borrower or any Subsidiary of Borrower which is not either Canadian
Parent, ANCMC or a Subsidiary thereof in excess of $15,000,000, in the
aggregate for all such entities, unless such Debt shall be pledged to the
Collateral Agent pursuant to the Canadian Pledge Agreement or the ANCMC
Canadian Pledge Agreement.
(c) so long as the Pledged Equity Interests (as such term is
defined in the IPP Pledge Agreement) remains subject to the Lien of the IPP
Pledge Agreement, permit UtilCo Group Inc. or any Subsidiary thereof (i) to
issue Capital Stock (preferred or otherwise) to any Person other than the
Borrower or any of its Subsidiaries unless such issuance is in an arm's
length transaction for fair value and the Net Cash Proceeds thereof
received by the Borrower or any of its Subsidiaries are received at (or
prior to) the time of such issuance and are concurrently applied to the
repayment of the Term Loans (to the extent not applied to the loans under
the 364-day Credit Agreement), (ii) to issue any Capital Stock to the
Borrower or any Subsidiary of Borrower which is not UtilCo Group Inc. or a
Subsidiary thereof unless such Capital Stock shall be pledged to the
Collateral Agent pursuant to the IPP Pledge Agreement or (iii) other than
Debt incurred pursuant to
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SECTION 6.8(l), to incur any Debt owing to the Borrower or any Subsidiary
of Borrower which is not UtilCo Group Inc. or a Subsidiary thereof in
excess of $10,000,000, in the aggregate for all such entities, unless such
Debt shall be pledged to the Collateral Agent pursuant to the IPP Pledge
Agreement.
6.16 LIMITATION ON RELEASE OF MORTGAGED PROPERTY; LIMITATION IN
RESPECT OF INSURANCE. Release Mortgaged Property (as defined in the First
Mortgage Indenture) from the lien of the First Mortgage Indenture if the
Required Collateral Value Ratio is not met, other than (i) releases of such
Mortgaged Property pursuant to and in accordance with Section 7.02 of the First
Mortgage Indenture, (ii) releases of property or other assets that are disposed
of in accordance with SECTION 6.7(d) and, if in connection with any such
disposition and the related release, the Borrower deposits with the trustee
under the First Mortgage Indenture cash that would otherwise constitute Net Cash
Proceeds, releases of such cash pursuant to and in accordance with the First
Mortgage Indenture, (iii) releases of proceeds of insurance (and/or moneys of
the Borrower in lieu thereof or in addition thereto and for the purposes
thereof) held under the First Mortgage Indenture in accordance with the First
Mortgage Indenture which reimburse the Borrower for amounts spent in the
rebuilding or renewal of property destroyed or damaged (including, without
limitation, for property rebuilt, restored or replaced) and, if following the
completion of any such rebuilding or renewal, any of such insurance proceeds
(and/or such moneys of the Borrower) remain unspent, releases of such unspent
proceeds (and/or such unspent money of the Borrower) pursuant to and in
accordance with the First Mortgage Indenture, or (iv) releases of such Mortgaged
Property pursuant to and in accordance with Section 7.05, 7.06 or 7.08(g) of the
First Mortgage Indenture provided that such cash (or Net Cash Proceeds) are
applied to the prepayment of the credit facilities as required pursuant to
SECTION 2.7(b).
6.17 HEDGING ARRANGEMENTS; FORWARD SALE OR PURCHASE CONTRACTS. (a)
Enter into, and shall not permit any Subsidiary to enter into, any interest rate
protection agreement, interest rate future, interest rate option, interest rate
swap, or other interest rate hedge or arrangement, or any other agreement or
arrangement designed to limit or eliminate the risk or exposure to fluctuations
in currency exchange rates, or fuel or other commodity prices, other than (i)
(A) any such agreement or arrangement entered into in the ordinary course of
business to hedge or mitigate risks to such which the Borrower or any Subsidiary
is exposed in the conduct of its business or the management of its liabilities
and (B) not for speculative purposes or (ii) in the case of agreements or
arrangements relating to interest rates, entered into to take advantage of
reduced interest rates by converting fixed rate obligations into floating rate
obligations; or (b) enter into, and shall not permit any Subsidiary to enter
into, any forward purchase and/or sale, or other forward acquisition or
disposition, of energy or transmission rights, or any energy tolling
transactions, as seller of tolling services, in each case, other than any
purchase, sale or other transaction entered into in the ordinary course of the
Borrower's or any Subsidiary's business and not for speculative purposes.
6.18 LIMITATION ON AMENDMENTS OR SUPPLEMENTS TO THE FIRST MORTGAGE
INDENTURE. Amend, modify or supplement the First Mortgage Indenture, except to
(a) supplement such Indenture to establish the terms of any series of first
mortgage bonds to be issued thereunder that are permitted to be issued under
SECTION 6.10(i), (b) amend or supplement such Indenture for the purpose of
conveying, transferring or assigning to the trustee thereunder
77
additional property for the purpose of subjecting such property to the lien of
such Indenture subject to the terms of Section 6.16, or (c) amend or supplement
the First Mortgage Indenture pursuant to and as permitted by Section 13.01(h)
thereof, PROVIDED that in each such case such amendment or supplement will not
adversely affect the First Mortgage Bonds or (d) amend or supplement the First
Mortgage Indenture pursuant to Section 13.02 thereof.
6.19 PROHIBITION ON LIENS ON INDENTURE COLLATERAL AND ADDITIONAL
COLLATERAL. Grant any Lien on (a) any Indenture Collateral other than Permitted
Liens (as defined in such Indenture) which are Permitted Liens hereunder or (b)
any Additional Collateral other than Permitted Liens of the type set forth in
clauses (a) or (r) of the definition of Permitted Liens herein; PROVIDED that,
in either case, the Borrower may grant a nonpossessory lien on any such
Collateral subordinate to the Lien of the First Mortgage Indenture, the Canadian
Pledge Agreement, the ANCMC Canadian Pledge Agreement or the IPP Pledge
Agreement in order to secure any gas prepayments outstanding as of the date
hereof so long as the holder of such lien (for itself and its successors and
assigns) irrevocably agrees not to take any action with respect to such lien
(including, without limitation, any enforcement, collection or realization on
collateral action, but excluding filing of financing statements to the extent
necessary to perfect such lien) until after the Loans, LC Disbursements and all
other Obligations are repaid in full, all Letters of Credit are terminated or
otherwise cancelled and the credit facilities hereunder are terminated (such
forbearance agreement to be pursuant to a written agreement in form and
substance reasonably satisfactory to the Administrative Agent).
6.20 OTHER INDENTURES. (a) Subject any additional assets (other than
pursuant to the any after-acquired or similar clause) to the Lien of, or issue
additional bonds under, the St. ▇▇▇▇▇▇ Power & Light Indenture.
(b) Subject any additional assets (other than pursuant to the any
after-acquired or similar clause) to the Lien of, or issue additional bonds
under, the Michigan Gas Utility Light Indenture.
(c) Subject any additional assets (other than pursuant to the any
after-acquired or similar clause) to the Lien of, or issue additional bonds
under, the UtiliCorp Indenture.
6.21 LIMITATION ON OTHER LIENS. Subject any Indenture Collateral to
any lien securing Debt other than (i) the Lien of the First Mortgage Indenture,
(i) the Lien of the St. ▇▇▇▇▇▇ Power & Light Indenture listed in Schedule 6.4,
and (ii) Liens with respect to purchase money Indebtedness, PROVIDED that the
aggregate outstanding amount of all such Indebtedness shall not exceed
$10,000,000.
6.22 MEP PLEASANT HILL, LLC. Create, incur, assume, or make, and shall
not permit any Subsidiary to create, incur, assume or make, any Guaranteed
Obligation or Investment in or with respect to MEP Pleasant Hill, LLC or any of
its Subsidiaries, other than pursuant to SECTION 6.8(l), unless such entity
becomes a Subsidiary of the Borrower.
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ARTICLE 7. EVENTS OF DEFAULT
7.1 EVENTS OF DEFAULT. If any of the following events shall occur and
be continuing:
(a) The Borrower shall fail to pay any principal of any Loan when
due in accordance with the terms hereof; the Borrower shall fail to pay any
LC Disbursement (directly or through an LC Loan) within ten (10) Business
Days after such amount becomes due in accordance with SECTION 2.5(e); or
the Borrower shall fail to pay any interest on any Loan, or any fee or any
other amount payable hereunder or any other Loan Document, within three (3)
days after any such interest, fee or other amount becomes due in accordance
with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by any
Credit Party herein or in any other Loan Document or in any certificate,
document or other instrument delivered by any Credit Party under this
Agreement or any other Loan Document shall prove to have been incorrect in
any material respect on or as of the date made or deemed made; or
(c) The Borrower shall default in the observance or performance
of any agreement contained in Article 6; or
(d) Any Credit Party shall default in the observance or
performance of any other agreement contained in this Agreement, any other
Loan Document or the First Mortgage Indenture, and such default shall
continue unremedied for a period of thirty (30) days after the earlier of
notice thereof being provided by the Administrative Agent or the Required
Lenders or discovery thereof by a Responsible Officer of the Borrower; or
(e) Any Credit Party or any Material Subsidiary shall (A) default
in any payment (regardless of amount) of principal of, premium, if any, or
interest on any Debt having an aggregate principal amount in excess of
$40,000,000 (other than the Loans) beyond the grace period, if any,
provided in the instrument or agreement under which such Indebtedness was
created or (B) default in the observance or performance of any other
agreement or condition relating to any such Debt or contained in any
instrument or agreement evidencing, securing or relating thereto, 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 Debt (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice, if
required, such Indebtedness to become due prior to its stated maturity;
PROVIDED that any such default by any Credit Party or any Material
Subsidiary under Non-Recourse Debt will not constitute an Event of Default
unless such default also constitutes a default under other recourse
Indebtedness of any Credit Party or such Material Subsidiary in an
aggregate outstanding principal amount of $40,000,000 or more; or
(f) (i) Any Credit Party or any Material Subsidiary shall
commence any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or
79
relief of debtors, seeking to have an order for relief entered with respect
to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts,
or (B) seeking appointment of a receiver, trustee, custodian, conservator
or other similar official for it or for all or any substantial part of its
assets, or any Credit Party or any such Material Subsidiary shall make a
general assignment for the benefit of its creditors; or (ii) there shall be
commenced against any Credit Party or any such Material Subsidiary any
case, proceeding or other action of a nature referred to in clause (i)
above which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
un-bonded for a period of 60 days; or (iii) there shall be commenced
against any Credit Party or any such Material Subsidiary any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distrait or similar process against all or any substantial part
of its assets which results in the entry of an order for any such relief
which shall not have been vacated, discharged, or stayed or bonded pending
appeal within 60 days from the entry thereof; or (iv) any Credit Party or
any such Material Subsidiary shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts
set forth in clause (i), (ii), or (iii) above; or (v) any Credit Party or
any such Material Subsidiary shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as they become due;
or
(g) (i) Any Person shall engage in any nonexempt "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist with
respect to any Pension Plan or any Lien in favor of the PBGC or a Plan
shall arise on the assets of the Borrower, any Subsidiary or any Commonly
Controlled Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee shall
be appointed, to administer or to terminate, any Pension Plan, which
Reportable Event or commencement of proceedings or appointment of a trustee
is, in the reasonable opinion of the Required Lenders, likely to result in
the termination of such plan for purposes of Title IV of ERISA, (iv) any
Pension Plan shall terminate for purposes of Title IV of ERISA, (v) the
Borrower, any Subsidiary or any Commonly Controlled Entity shall, or in the
reasonable opinion of the Required Lenders is likely to, incur any
liability in connection with a withdrawal from, or the Insolvency or
Reorganization of, a Multiemployer Plan or (vi) any other event or
condition shall occur or exist with respect to a Pension Plan; and in each
case in clauses (i) through (vi) above, such event or condition, together
with all other such events or conditions, if any, could reasonably be
expected to have a Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against any
Credit Party or any Material Subsidiary involving in the aggregate a
liability (to the extent not covered by third-party insurance as to which
the insurer has acknowledged coverage) of $40,000,000 or more and
sufficient judgments or decrees shall not have been vacated, discharged,
stayed or bonded pending appeal within thirty (30) days from the entry
thereof to reduce such amount to less than $40,000,000; or
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(i) (x) The Canadian Pledge Agreement, the ANCMC Canadian Pledge
Agreement, the IPP Pledge Agreement, the Bond Collateral Agreement, the
First Mortgage Indenture or the Supplemental Indenture shall cease, for any
reason, to be, or shall be asserted in writing by any Credit Party not to
be, in full force and effect, other than pursuant to the terms thereof and
hereof, (y) the Lien created thereby shall cease to be, or shall be
asserted in writing by any Credit Party not to be, enforceable and of the
same effect as to perfection and priority purported to be created thereby
with respect to any significant portion of the collateral thereunder, other
than pursuant to the terms thereof and hereof, or (z) there shall occur an
"Event of Default" under the First Mortgage Indenture;
(j) Any Event of Default (as such term is defined in the 364-Day
Credit Agreement ) shall occur; or
(k) A Change of Control shall occur;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate, the Loans and LC
Disbursements hereunder (with accrued interest thereon) and all other amounts
owing under this Agreement, the Notes shall immediately become due and payable,
and the Borrower shall without further action be obligated to fund the Cash
Collateral Account as set forth in Section 2.5(j), and (B) if such event is any
other Event of Default, either or both of the following actions may be taken:
(i) with the consent of the Required Lenders, the Administrative Agent may, by
notice to the Borrower, declare the Commitments to be terminated forthwith,
whereupon the Commitments shall immediately terminate; and (ii) with the consent
of the Required Lenders, the Administrative Agent may, or upon the request of
the Required Lenders the Administrative Agent shall, by notice to the Borrower,
declare the Loans, LC Disbursements hereunder and the Notes to be due and
payable forthwith, whereupon the same shall immediately become due and payable.
Except as expressly provided above in this Section, presentment, demand, protest
and all other notices of any kind are hereby expressly waived. Without limiting
any other right or remedy, upon the occurrence and during the continuation of an
Event of Default, the Collateral Agent shall have the right to request, and the
Borrower shall promptly, and in any event within thirty (30) days of such
request, cause to be delivered, an appraisal of all or any portion of collateral
securing the credit facilities hereunder as the Collateral Agent may designate,
in form and substance and by an appraiser acceptable to the Collateral Agent.
ARTICLE 8. THE AGENTS
8.1 APPOINTMENT. Each Lender hereby irrevocably designates and
appoints CSFB as Administrative Agent and as Collateral Agent (for purposes of
this Article 8, collectively, the "AGENTS"), and to act as its agent under this
Agreement and the other Loan Documents. Each such Lender irrevocably authorizes
each Agent, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to each Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Each Lender further authorizes and directs each
Agent to execute
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and deliver releases (or similar agreements) to give effect to the provisions of
this Agreement and the other Loan Documents, including specifically, without
limitation, the provisions of SECTION 6.7 hereof. Notwithstanding any provision
to the contrary elsewhere in this Agreement, no Agent shall have any duties or
responsibilities, except those expressly set forth herein or in therein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against either Agent.
Without limiting the generality of the foregoing, the Agents are hereby
expressly authorized to execute any and all documents (including releases) with
respect to the Collateral and the rights of the Secured Parties with respect
thereto, as contemplated by and in accordance with the provisions of this
Agreement or any other Loan Document.
8.2 DELEGATION OF DUTIES. Each Agent may execute any of its duties
under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
8.3 EXCULPATORY PROVISIONS. No Agent nor any of its 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 Loan Document (except
for its 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 officer or any of them contained in this
Agreement or any other Loan Document or in any certificate, report, statement or
other document referred to or provided for in, or received by either Agent under
or in connection with, this Agreement or any other Loan Document or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or the Notes or any other Loan Document or for any failure of the
Borrower to perform its obligations hereunder or thereunder. No Agent shall 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 any other Loan Document, or to inspect the properties,
books or records of the Borrower or any Subsidiary.
8.4 RELIANCE BY AGENTS. Each Agent shall be entitled to rely, and
shall be fully protected in relying, upon any Note, writing, resolution, notice,
consent, certificate, affidavit, letter, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrower), independent accountants and other experts
selected by such Agent. Each Agent may deem and treat the payee of any Note or
any loan account in the Register as the owner thereof for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have been
filed with the Administrative Agent. Each Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
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 which may
be incurred by it by reason of taking or continuing to take any such action.
Each Agent shall in all cases be fully protected in acting, or in refraining
82
from acting, under this Agreement, the Notes and the other Loan Documents in
accordance with a request of the Required Lenders, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders and all future holders of the amounts owing hereunder.
8.5 NOTICE OF DEFAULT. No Agent shall be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default unless such 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". In the event that the Administrative Agent receives such a
notice, the Administrative Agent shall give notice thereof to the Lenders. Each
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 such Agent shall have received such directions, such 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.
8.6 NON-RELIANCE ON AGENTS AND OTHER LENDERS. Each Lender expressly
acknowledges that no Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates has made any representations or
warranties to it and that no act by either Agent hereafter taken, including any
review of the affairs of the Borrower, shall be deemed to constitute any
representation or warranty by either Agent to any Lender. Each Lender represents
to each Agent that it has, independently and without reliance upon either 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, operations, property, financial and other condition and
creditworthiness of the Borrower and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon either 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 the other Loan Documents,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder or furnished to the Administrative Agent for the
account of, or with a counterpart or copy for, each Lender, no Agent shall have
any duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, condition (financial
or otherwise), prospects or creditworthiness of the Borrower or any of its
Subsidiaries which may come into the possession of either Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates.
8.7 INDEMNIFICATION. The Lenders agree to indemnify each Agent and
Issuing Bank in its capacity as such (to the extent not reimbursed by the
Borrower and without limiting the obligation of the Borrower to do so) and their
respective directors, officers, employees and agents, ratably according to their
respective Commitment Percentages in effect on the date on which indemnification
is sought under this Section (or, if indemnification is sought after the date
upon which the Commitments shall have terminated and the Loans shall have been
paid in full, ratably in accordance with their Commitment Percentages
immediately prior to such date), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
83
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment of all
amounts owing hereunder) be imposed on, incurred by or asserted against such
Agent or Issuing Bank in any way relating to or arising out of this Agreement,
any of the other Loan Documents or any documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by such Agent or Issuing Bank under or in connection
with any of the foregoing; PROVIDED that no Lender shall be liable for the
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
solely from such Agent's or Issuing Bank's gross negligence, willful misconduct
or bad faith. The agreements in this Section shall survive the payment of the
Obligations hereunder.
8.8 AGENT IN ITS INDIVIDUAL CAPACITY. Each Agent and its Affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with the Borrower or any Subsidiary as though such Agent were not an
Agent hereunder and under the other Loan Documents. With respect to Loans made
or renewed by it and any Note issued to it, each Agent shall have the same
rights and powers under this Agreement and the other Loan Documents as any
Lender and may exercise the same as though it were not an Agent, and the terms
"Lender" and "Lenders" shall include each Agent in its individual capacity.
8.9 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign as Administrative Agent upon ten days' notice to the Lenders and the
Borrower. If the Administrative Agent shall resign as Administrative Agent under
this Agreement and the other Loan Documents, then the Required Lenders shall,
with the consent of the Borrower (which consent shall not be unreasonably
withheld and shall not be required if an Event of Default shall have occurred
that is continuing) appoint a successor administrative agent, whereupon such
successor Administrative Agent shall succeed to the rights, powers and duties of
the Administrative Agent, and the term "Administrative Agent" shall mean such
successor Administrative Agent effective upon such appointment and approval, and
the former Administrative Agent's rights, powers and duties as Administrative
Agent shall be terminated, without any other or further act or deed on the part
of such former Administrative Agent or any of the parties to this Agreement or
any holders of any amounts payable hereunder. After any retiring or terminated
Administrative Agent's resignation or termination, as the case may be, as
Administrative Agent, the provisions of this Section shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was Administrative
Agent under this Agreement and the other Loan Documents.
ARTICLE 9. MISCELLANEOUS
9.1 AMENDMENTS AND WAIVERS. Neither this Agreement or any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section. The Required
Lenders may, or, with the written consent of the Required Lenders, the
Administrative Agent may, from time to time, (a) enter into with the Borrower
written amendments, supplements or modifications hereto for the purpose of
adding any provisions to this Agreement or changing in any manner the rights of
the Lenders or of the Borrower hereunder, (b) enter into with the Borrower
written amendments, supplements or modifications to the other Loan Documents for
the purpose of adding provisions
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to such other Loan Documents or changing in any manner the rights of the Lenders
or the Borrower thereunder or (c) waive, on such terms and conditions as the
Required Lenders or the Administrative Agent, as the case may be, may specify in
such instrument, any of the requirements of this Agreement or the other Loan
Documents or any Default or Event of Default and its consequences; PROVIDED that
no such waiver and no such amendment, supplement or modification (i) shall
reduce the principal amount or extend the scheduled date of maturity of the Loan
or LC Disbursement of any Lender or of any installment thereof, or reduce the
stated rate of any interest or fee payable hereunder or extend the scheduled
date of any payment thereof or increase the amount or extend the expiration date
of any Lender's Commitment, in each case, without the consent of such Lender,
(ii) shall amend, modify or waive any provision of this Section, SECTION 2.13 in
a manner that would alter the pro rata sharing payments required by SECTION
2.13, SECTION 2.7(c) or 2.13 in a manner that would eliminate or limit a
Lender's right to reject prepayments under SECTION 2.7(c), or vary any provision
of this Agreement or any other Loan Document which specifically by its terms
requires the approval or consent of all the Lenders or reduce the percentage
specified in the definition of Required Lenders, or consent to the assignment or
transfer by the Borrower of any of its rights and obligations under this
Agreement and the other Loan Documents, or release any material portion of the
Collateral (other than in accordance with the terms of the Loan Documents), in
each case, without the written consent of all the Lenders, or (iii) shall amend,
modify or waive any provision of ARTICLE 8 or any other provision in any Loan
Document governing the rights or obligations of the Issuing Banks, the
Administrative Agent or the Collateral Agent without the written consent of the
then Administrative Agent, the Collateral Agent or such Issuing Bank, as
applicable. Any such waiver and any such amendment, supplement or modification
shall apply equally to each of the Lenders and shall be binding upon the
Borrower, the Lenders, the Administrative Agent, the Collateral Agent, the
Issuing Banks and all future holders of the Loans. In the case of any waiver,
the Borrower, the Lenders and the Administrative Agent shall be restored to
their former position and rights hereunder and under any other Loan Documents,
and any Default or Event of Default waived shall be deemed to be cured and not
continuing, but no such waiver shall extend to any subsequent or other Default
or Event of Default or impair any right consequent thereon.
9.2 NOTICE. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered by hand, or, in the case of notice
by mail, when received, or, in the case of telecopy notice, when received,
addressed as follows in the case of the Borrower or the Administrative Agent,
and as set forth in Schedule I in the case of any Lender, or to such other
address as may be hereafter notified by the respective parties hereto and any
future holders of the amounts payable hereunder:
Borrower: Aquila, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
Administrative Agent: Credit Suisse First Boston
Eleven Madison Avenue
85
New York, New York 10010-3629
Attention: Agency Department Manager
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
PROVIDED that any notice, request or demand to or upon the Administrative Agent
made under this Agreement may be made by telephone, with prompt written
confirmation thereafter of such telephonic notice, and the Administrative Agent
shall be entitled to rely on such telephonic notice; PROVIDED, FURTHER, that any
notice, request or demand to or upon the Administrative Agent and the Lenders
pursuant to SECTION 2.3, SECTION 2.7, or SECTION 2.8, shall not be effective
until received.
9.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Loan Documents
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the Notes and the
making of the Loans hereunder.
9.5 PAYMENT OF EXPENSES AND TAXES; INDEMNIFICATION. The Borrower
agrees (a) to pay or reimburse the Arranger, the Administrative Agent and the
Collateral Agent for all its reasonable out-of-pocket costs and expenses
incurred in connection with the arrangement and syndication of the credit
facilities provided for herein, any due diligence related hereto (including
without limitation any evaluation of collateral), the development, preparation
and execution of, and any amendment, supplement or modification to, this
Agreement, the Notes and the other Loan Documents and any other documents
prepared in connection herewith or therewith, and the consummation and
administration of the transactions contemplated hereby and thereby, including,
without limitation, the reasonable fees and disbursements of external counsel to
the Arranger, the Administrative Agent and the Collateral Agent, (b) all
reasonable out-of-pocket expenses incurred by any Issuing Bank in connection
with the issuance, amendment or extension of any Letter of Credit or any demand
for payment thereunder, (c) to pay or reimburse the Administrative Agent, the
Collateral Agent, each Issuing Bank and each Lender for all its costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the Notes, the other Loan Documents and any such
other documents, including, without limitation, the reasonable fees and
disbursements of counsel (including allocated costs of internal counsel) to the
Administrative Agent, the Collateral Agent, each Issuing Bank and each Lender,
(d) to pay, and indemnify and hold harmless the Administrative Agent, the
Collateral Agent, each Lender and each Issuing Bank from, any and all present or
future stamp, documentary or excise taxes or similar charges, any and all
recording and filing fees, and any and all liabilities with respect thereto,
which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation or administration of any of the
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transactions contemplated by, or payment under, or any amendment, supplement or
modification of, or any waiver or consent under or in respect of, this
Agreement, the Notes, the Letters of Credit, the other Loan Documents and any
such other documents, and (e) to pay, and indemnify and hold harmless the
Administrative Agent, the Collateral Agent, each Lender and each Issuing Bank
(including each of their respective parents, subsidiaries, officers, directors,
employees, agents, trustees and attorneys-in-fact) (each such Person being
called an "INDEMNITEE") from and against, any and all claims, demands,
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, settlements, expenses or disbursements of whatever kind or nature arising
from, in connection with or with respect to (i) the execution or delivery of any
Loan Document or the First Mortgage Indenture or any agreement or instrument
contemplated hereby or thereby, the performance by the parties to the Loan
Documents or the First Mortgage Indenture of their respective obligations
thereunder or the consummation of the Transactions or any other transactions
contemplated thereby, (ii) any Loan or Letter of Credit or the use of the
proceeds therefrom (including any refusal by any Issuing Bank to honor a demand
for payment under a Letter of Credit if the documents presented in connection
with such demand do not strictly comply with the terms of such Letter of
Credit), (iii) any actual or alleged presence or release of Materials of
Environmental Concern on or from any property owned or operated by the Borrower
or any of its Subsidiaries, or any Environmental Liability related in any way to
the Borrower or any of its Subsidiaries, or (iv) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto (all the foregoing in this clause (e),
collectively, the "INDEMNIFIED LIABILITIES"); PROVIDED that such indemnity shall
not, as to any Indemnitee, be available to the extent that such indemnified
liabilities are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence, willful
misconduct or bad faith of such Indemnitee (or such Indemnitee's parent,
subsidiaries, officers, directors, employees, agents, trustees or
attorneys-in-fact). To the extent permitted by applicable law, each party hereto
agrees not to assert, and hereby waives, any claim against any Indemnitee, on
any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement, any other Loan Document, the First
Mortgage Indenture or any agreement or instrument contemplated hereby or
thereby, the Transactions, any Loan or Letter of Credit or the use of the
proceeds thereof. The agreements in this SECTION 9.5 supercede the reimbursement
and indemnification provisions in the Commitment Letter, and shall survive
repayment of the Obligations hereunder.
9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS. (a) This
Agreement shall be binding upon and inure to the benefit of the Borrower, the
Lenders, the Administrative Agent, all future holders of the amounts owing
hereunder and their respective successors and assigns, except that the Borrower
may not assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time sell to
one or more banks or other entities ("PARTICIPANTS") participating
interests in any Loan owing to such Lender, any Note held by such Lender,
any Commitment, LC Exposure and Credit-Linked Deposit of such Lender and
any other interest hereunder and under the other Loan Documents without
notice to or the consent of the Borrower or the Administrative Agent.
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In the event of any such sale by a Lender of a participating interest to a
Participant, such Lender's obligations under this Agreement to the other
parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain
the holder of any such Note for all purposes under this Agreement and the
other Loan Documents, the Borrower and the Administrative Agent shall
continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and the other
Loan Documents and such Lender shall retain the sole right to enforce the
obligations of the Borrower relating to the Loans and other obligations
owing to such Lender and to approve any amendment, modification, or waiver
of any provision of this Agreement (other than amendments, modifications,
or waivers (i) decreasing the amount of principal of or the rate at which
interest is payable on such Loans or Notes or Credit-Linked Deposit, (ii)
extending any scheduled principal payment date or date fixed for the
payment of interest on such Loans or Notes or Credit-Linked Deposit, (iii)
extending its Commitment or LC Exposure, (iv) permitting any assignment or
transfer of any of the Borrower's rights or obligations under this
Agreement) or (v) releasing all or substantially all of the Collateral. The
Borrower agrees that if amounts outstanding under this Agreement and the
Notes are due or unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each
Participant shall be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement and any Note
to the same extent as if the amount of its participating interest were
owing directly to it as a Lender under this Agreement or any Note; PROVIDED
that, in purchasing such participating interest, such Participant shall be
deemed to have agreed to share with the Lenders the proceeds thereof as
provided in SECTION 9.7(a) as fully as if it were a Lender hereunder. The
Borrower also agrees that each Participant shall be entitled to the
benefits of SECTION 2.15, SECTION 2.16 and SECTION 2.17 with respect to its
participation in the Commitments and the Loans outstanding from time to
time as if it were a Lender; PROVIDED that, in the case of SECTION 2.16,
such Participant shall have complied with the requirements of said Section;
and PROVIDED, FURTHER, that no Participant shall be entitled to receive any
greater amount pursuant to any such Section than the transferor Lender
would have been entitled to receive in respect of the amount of the
participation transferred by such transferor Lender to such Participant had
no such transfer occurred.
(c) Any Lender, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time and from time
to time may assign to any Lender or any affiliate or Approved Fund thereof,
or, with the consent of the Administrative Agent (which consent shall not
be unreasonably withheld), to an additional bank, financial institution,
fund or commingled investment vehicle, or other Person (an "ASSIGNEE") all
or any pro rata portion of its rights and obligations under this Agreement
and the Notes pursuant to an assignment agreement, substantially in the
form of EXHIBIT C (or such other form approved by the Administrative
Agent's in its sole discretion) (an "ASSIGNMENT AND ASSUMPTION AGREEMENT"),
executed by such Assignee, such assigning Lender and, in the case of an
Assignee that is not then a Lender or an affiliate or Approved Fund
thereof, by the Administrative Agent and delivered to the Administrative
Agent for its acceptance and recording in the Register (such Assignment and
Assumption Agreement to be electronically execute and deliver to the
Administrative Agent via an electronic settlement system then acceptable to
the Administrative Agent
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(which initially shall be ClearPar, LLC) or, if no such system is then
acceptable to the Administrative Agent, by manual execution and delivery);
PROVIDED that (i) any such assignment must be (A) a pro rata assignment to
such assignee with respect to all of its rights and interests as a Lender
hereunder and (B) a pro rata assignment to such assignee with respect to
all of its rights and interests as a lender under the 364-Day Credit
Agreement, (ii) in a minimum amount equal to the lesser of $1,000,000 and
the aggregate Commitments and LC Exposure and outstanding Loans and
Credit-Linked Deposits of such Lender then in effect unless (y) otherwise
agreed to by each of the Borrower and the Administrative Agent or (z) such
assignment is to a Lender, an Affiliate of a Lender or an Approved Fund of
a Lender, and (iii) after giving effect to any such assignment, such Lender
shall have either (x) sold all its rights and obligations hereunder and
under the Notes or (y) retained at least $1,000,000 of the aggregate
Commitments and LC Exposure and outstanding Loans and Credit-Linked
Deposits. Upon such execution, delivery, acceptance and recording, from and
after the effective date determined pursuant to such Assignment and
Assumption Agreement, (1) the Assignee thereunder shall be a party hereto
and, to the extent provided in such Assignment and Assumption Agreement,
have the rights and obligations of a Lender hereunder with a Commitment and
LC Exposure and Loans and Credit-Linked Deposits as set forth therein and
(2) the assigning Lender thereunder, to the extent provided in such
Assignment and Assumption Agreement, shall be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption
Agreement covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such assigning Lender shall
cease to be a party hereto; PROVIDED that the provisions of SECTION 2.15,
SECTION 2.16, SECTION 2.17 and SECTION 9.5 shall continue to benefit such
assigning Lender to the extent required by such Sections). On or prior to
the effective date determined pursuant to such Assignment and Assumption
Agreement, (i) appropriate entries shall be made in the accounts of the
assigning Lender and the Register evidencing such assignment and releasing
the Borrower from any and all obligations to the assigning Lender in
respect of the assigned Loan or Loans and Credit-Linked Deposits and (ii)
appropriate entries evidencing the assigned Loan or Loans shall be made in
the accounts of the Assignee and the Register as required by Section
9.6(d). In the event that any Notes have been issued in respect of the
assigned Loan or Loans, such Notes shall be marked "cancelled" and
surrendered by the assigning Lender to the Administrative Agent for return
to the Borrower.
(d) The Administrative Agent, acting for this purpose as an agent
of the Borrower, shall maintain, at its address referred to in SECTION 9.2,
a copy of each Assignment and Assumption Agreement delivered to it and a
register (the "REGISTER") for the recordation of the names and addresses of
the Lenders and the Commitment and LC Exposure of, and principal amount of
the Loans owing to, and Credit-Linked Deposits of each Lender from time to
time. To the extent permitted by applicable law, the entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrower and the Administrative Agent may (and, in the case of any Loan not
evidenced by a Note, shall) treat each Person whose name is recorded in the
Register as the owner of the Loan recorded therein as the owner thereof for
all purposes of this Agreement and the other Loan Documents,
notwithstanding notice to the contrary. Any assignment of any Loan or other
obligation hereunder not evidenced by a Note shall be effective only upon
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appropriate entries with respect thereto being made in the Register. The
Register shall be available for inspection by the Borrower at any
reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Assumption Agreement
executed by the assigning Lender and an Assignee (and, in the case of an
Assignee that is not then a Lender or an affiliate thereof, by the
Administrative Agent ) together with payment by the assigning Lender or by
the Assignee to the Administrative Agent of a registration and processing
fee of $3,500, the Administrative Agent shall promptly accept such
Assignment and Assumption Agreement and, on the effective date determined
pursuant thereto, shall record the information contained therein in the
Register and give notice of such acceptance and recordation to the
Borrower.
(f) Notwithstanding anything to the contrary contained herein,
any Lender (a "GRANTING LENDER") may grant to a special purpose funding
vehicle (a "SPC"), identified as such in writing from time to time by the
Granting Lender to the Administrative Agent and the Borrower, the option to
provide to the Borrower all or any part of any Loan and Credit-Linked
Deposit that such Granting Lender would otherwise be obligated to make to
the Borrower pursuant to this Agreement; PROVIDED that (i) nothing herein
shall constitute a commitment by any SPC to make any advance hereunder,
(ii) if an SPC elects not to exercise such option or otherwise fails to
provide all or any part of such Loan, the Granting Lender shall be
obligated to make such Loan and Credit-Linked Deposit pursuant to the terms
hereof. The making of a Loan and Credit-Linked Deposit by an SPC hereunder
shall utilize the applicable Commitment and LC Exposure of the Granting
Lender to the same extent, and as if, such Loan were made by such Granting
Lender. Each party hereto hereby agrees that no SPC shall be liable for any
indemnity or similar payment obligation under this Agreement (all liability
for which shall remain with the Granting Lender). In furtherance of the
foregoing, each party hereto hereby agrees (which agreement shall survive
the termination of this Agreement) that, prior to the date that is one year
and one day after the payment in full of all outstanding commercial paper
or other senior indebtedness of any SPC, it will not institute against, or
join any other person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under
the laws of the United States or any State thereof. In addition,
notwithstanding anything to the contrary contained in this SECTION 9.6(f),
any SPC may (i) with notice to, but without the prior written consent of,
the Borrower and the Administrative Agent and without paying any processing
fee therefor, assign all or a portion of its interests in any Loans and
Credit-Linked Deposits to the Granting Lender or to any financial
institutions (consented to by the Borrower and the Administrative Agent)
providing liquidity and/or credit support to or for the account of such SPC
to support the funding or maintenance of Loans and Credit-Linked Deposits
and (ii) disclose on a confidential basis any non-public information
relating to its Loans and Credit-Linked Deposits to any rating agency,
commercial paper dealer or provider of any surety, guarantee or credit or
liquidity enhancement to such SPC. This section may not be amended without
the written consent of the SPC.
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(g) The Borrower authorizes the Lenders to disclose to any
Participant or Assignee (each, a "TRANSFEREE") and any prospective
Transferee, any and all financial information in the Lenders' possession
concerning the Borrower and its respective Affiliates which has been
delivered to the Administrative Agent or the Lenders by or on behalf of the
Borrower pursuant to this Agreement or which has been delivered to the
Administrative Agent or the Lenders by or on behalf of the Borrower in
connection with the Lender's credit evaluation of the Borrower and its
respective Affiliates prior to becoming a party to this Agreement; PROVIDED
that each such Transferee and prospective Transferee agrees in writing to
be bound by the provisions of Section 9.8.
(h) Nothing herein shall prohibit any Lender from pledging or
assigning any Note to any Federal Reserve Bank in accordance with
applicable law. In the case of any Lender that is a fund that invests in
bank loans, such Lender may, without the consent of the Borrower or
Administrative Agent, assign or pledge all or any portion of its rights
under this Agreement, including the Loans and Notes or any other instrument
evidencing its rights as a Lender under this Agreement, to any holder of,
trustee for, or any other representative of holders of, obligations owed or
securities issued, by such fund, as security for such obligations or
securities; PROVIDED that any foreclosure or similar action by such trustee
or representative shall be subject to the provisions of this SECTION 9.6
concerning assignments.
9.7 ADJUSTMENTS; SETOFF. (a) If any Lender (a "BENEFITED LENDER")
shall at any time receive any payment of all or part of its Loans and
Credit-Linked Deposits, or interest thereon, or receive any collateral in
respect thereof (whether voluntarily or involuntarily, by setoff, pursuant to
events or proceedings of the nature referred to in SECTION 7.1(f), or
otherwise), in a greater proportion than any such payment to or collateral
received by any other Lender, if any, in respect of such other Lender's Loans
and Credit-Linked Deposits, or interest thereon, such Benefited Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of each such other Lender's Loans and Credit-Linked Deposits, or shall
provide such other Lenders with the benefits of any such collateral, or the
proceeds thereof, as shall be necessary to cause such Benefited Lender to share
the excess payment or benefits of such collateral or proceeds ratably with each
of the Lenders; PROVIDED that if all or any portion of such excess payment or
benefits is thereafter recovered from such Benefited Lender, such purchase shall
be rescinded, and the purchase price and benefits returned, to the extent of
such recovery, but without interest.
(b) Upon the occurrence and during the continuance of an Event of
Default, in addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right, (without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the
extent permitted by applicable law), upon any amount becoming due and
payable by the Borrower hereunder or under the Notes (whether at the stated
maturity, by acceleration or otherwise), to setoff and appropriate and
apply against such amount any and all deposits (general or special, time or
demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender or any branch or agency thereof to or for the credit
or the account of the Borrower. Each Lender agrees promptly to notify
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the Borrower and the Administrative Agent after any such setoff and
application made by such Lender; PROVIDED that the failure to give such
notice shall not affect the validity of such setoff and application.
9.8 CONFIDENTIALITY. Each Lender agrees to exercise all reasonable
efforts (consistent with its customary methods for keeping information
confidential) to keep any information delivered or made available by the
Borrower (such information, "CONFIDENTIAL INFORMATION") confidential from anyone
other than persons employed or retained by such Lender who are or are expected
to become engaged in evaluating, approving, structuring or administering the
Loans; PROVIDED that nothing herein shall prevent any Lender from disclosing
such information (a) to any Affiliate of such Lender or to any other Lender, (b)
upon the order of any court or administrative agency, (c) upon the request or
demand of any regulatory agency or authority having jurisdiction over such
Lender, (d) that has been publicly disclosed, (e) in connection with any
litigation relating to the Loans and Credit-Linked Deposits, this Agreement or
any transaction contemplated hereby to which any Lender or the Administrative
Agent may be a party, (f) to the extent reasonably required in connection with
the exercise of any remedy hereunder, (g) to such Lender's legal counsel and
independent auditors, and (h) to any actual or proposed participant or assignee
of all or any part of its Loans hereunder, if such other Person, prior to such
disclosure, agrees, in writing, for the benefit of the Borrower to comply with
the provisions of this SECTION 9.8. Notwithstanding anything herein to the
contrary, Confidential Information shall not include, and each Lender and each
Agent (and each employee, representative or other agent of each Lender and each
Agent) may disclose to any and all persons without limitation of any kind, any
information with respect to the "tax treatment" and "tax structure" (in each
case, within the meaning of Treasury Regulation Section 1.6011-4) of the
transactions contemplated hereby and all materials of any kind (including
opinions or other tax analyses) that are provided to such Lender, Agent,
employee, representative or other agent relating to such tax treatment and tax
structure; PROVIDED that with respect to any document or similar item that in
either case contains information concerning the tax treatment or tax structure
of the transaction as well as other information, this sentence shall only apply
to such portions of the document or similar item that relate to the tax
treatment or tax structure of the Loans and the transactions contemplated
hereby.
9.9 EFFECTIVENESS. This Agreement shall become effective on the date
when counterparts hereof executed on behalf of the Borrower, the Administrative
Agent, each Lender and each Issuing Bank shall have been received by the
Administrative Agent and notice thereof shall have been given by the
Administrative Agent to the Borrower.
9.10 COUNTERPARTS. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts (including
by telecopy), and all said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Agreement
signed by all the parties shall be lodged with each of the Borrower and the
Administrative Agent.
9.11 SEVERABILITY. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any
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such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
9.12 INTEGRATION. This Agreement and the other Loan Documents
represent the agreement of the Borrower, the Administrative Agent, the Lenders
and the Issuing Banks with respect to the subject matter hereof and thereof, and
there are no promises, undertakings, representations or warranties by the
Administrative Agent or any Lender or Issuing Bank relative to subject matter
hereof or thereof not expressly set forth or referred to herein or in the other
Loan Documents. This Agreement and the other Loan Documents shall supercede the
Commitment Letter in its entirety.
9.13 GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF OTHER THAN
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK.
9.14 SUBMISSION TO JURISDICTION; WAIVERS. The Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the Courts of
the State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the Borrower, as the case may be, at its address set forth in
SECTION 9.2 or at such other address of which the Administrative Agent
shall have been notified pursuant thereto;
(d) agrees that nothing contained herein shall affect the right
to effect service of process in any other manner permitted by law or shall
limit the right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or
consequential damages.
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9.15 ACKNOWLEDGMENTS. The Borrower hereby acknowledges that:
(a) Neither the Administrative Agent nor any Issuing Bank or
Lender has any fiduciary relationship with or duty to the Borrower arising
out of or in connection with this Agreement or any of the other Loan
Documents, and the relationship between the Administrative Agent, the
Lenders and the Issuing Banks, on the one hand, and the Borrower, on the
other hand, in connection herewith or therewith is solely that of creditor
and debtor; and
(b) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated
hereby between the Administrative Agent, the Lenders, the Issuing Banks and
the Borrower.
9.16 WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT,
THE LENDERS AND THE ISSUING BANKS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR
THE NOTES OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
BORROWER:
AQUILA, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: President and Chief Executive Officer
ADMINISTRATIVE AGENT:
CREDIT SUISSE FIRST BOSTON,
CAYMAN ISLANDS BRANCH
By: /s/ S. ▇▇▇▇▇▇▇ ▇▇▇
------------------------------------------------
Name: S. ▇▇▇▇▇▇▇ ▇▇▇
Title: Director
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Associate
ISSUING BANK:
CREDIT SUISSE FIRST BOSTON
By: /S/ S. ▇▇▇▇▇▇▇ ▇▇▇
------------------------------------------------
Name: S. ▇▇▇▇▇▇▇ ▇▇▇
Title: Director
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Associate
1
