SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report:
February 19, 1998
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(Date of earliest event reported)
Electric Lightwave, Inc.
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(Exact name of Registrant as specified in charter)
Delaware 0-23393 93-1035711
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
8100 NE Parkway Drive, Suite 150, Vancouver, Wa 98662
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(Address of principal executive offices) (Zip Code)
(360)892-1000
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(Registrant's telephone number, including area code)
No change since last report
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(Former name or address, if changed since last report)
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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(c) Exhibits
10.7 Administrative Services Agreement between the Company
and Citizens Utilities Company.
10.8 Tax Sharing Agreement between the Company
and Citizens Utilities Company.
10.9 Indemnification Agreement between the Company
and Citizens Utilities Company.
10.10 Registration Rights Agreement between the Company
and Citizens Utilities Company.
10.11 Customers and Service Agreement between the Company
and Citizens Utilities Company.
10.12 Guaranty Fee Agreement between the Company
and Citizens Utilities Company.
10.15 Bank Credit Agreement.
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Electric Lightwave, Inc.
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Registrant
By:/s/ Kerry Rea
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Vice President and Controller
Date: February 19, 1998
Exhibit 10.7
ADMINISTRATIVE SERVICES AGREEMENT
THIS ADMINISTRATIVE SERVICES AGREEMENT (this "Agreement") is executed
as of December 1, 1997, by and between Citizens Utilities Company, a Delaware
corporation ("Citizens"), and Electric Lightwave, Inc., a Delaware corporation
("ELI").
W I T N E S S E T H:
WHEREAS, ELI is in the Telecommunications Business;
WHEREAS, Citizens owns all of the issued and outstanding Class B Common
Stock, par value $.01 per share, of ELI, and, as parent of ELI, Citizens has
been providing ELI certain management, administrative and other services;
WHEREAS, ELI is effecting an initial public offering (the "Offering")
of shares of its Class A Common Stock, par value $.01 per share (the "Class A
Common Stock"), and, upon completion of the Offering, ELI will cease to be a
wholly owned subsidiary of Citizens and Citizens and ELI will be separate
public companies; and
WHEREAS, in order continue to enjoy the benefits of Citizens'
experience and skills after the Offering in the operation of ELI's business
which would not be available to ELI on a cost effective basis, ELI desires to
retain Citizens to continue to provide (or cause to provide) certain Services
(as defined herein) to ELI, and Citizens desires to accept such retention, all
on the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and for other good and valuable consideration, receipt of
which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
RETENTION OF CITIZENS; LIMITATIONS OF AUTHORITY
1.1 Retention of Citizens.
ELI hereby retains Citizens to provide the Services to ELI, and
Citizens hereby accepts such retention by ELI, all in accordance with the
terms and conditions of this Agreement. Citizens may utilize employees of its
Affiliates or consultants in providing Services hereunder. ELI may request
that Citizens expand, reduce or terminate the Services provided by Citizens to
ELI, in which case the parities will discuss, without obligation, such
expansion, reduction or termination as well as an additional charge or
deduction in charges for such Services. As used in this Agreement:
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(a) "Affiliate" shall mean any person or entity that, directly
or indirectly, alone or through one or more intermediaries, controls, is
controlled by or is under common control with Citizens; provided, that for the
purposes of this Agreement ELI shall not be considered to be an Affiliate of
Citizens.
(b) "Operating Company" shall mean the operating companies,
divisions and operational centers of Citizens and its controlled companies
which receive services from Citizens' Stamford Administrative Offices and
other Responsibility Centers. Each Operating Company is allocated an
appropriate portion of the total cost of such services.
(c) "Responsibility Center" shall mean the Stamford
Administrative Offices and any other Responsibility Center of Citizens from
which services are rendered to the Operating Companies. The cost of such
services are charged out to each Operating Company in accordance with the
Allocation Formula.
(d) "Services" shall mean the various services provided
hereunder from time to time by Citizens and its Affiliates to ELI, as further
described in Section 2.2 hereof.
(e) "Telecommunications Business" shall mean the business of
ELI in providing telecommunications services as a competitive local exchange
carrier and otherwise.
1.2 Performance of Services. (a) Citizens shall perform the Services
with the same degree of care, skill and prudence customarily exercised for its
own operations. Except as otherwise provided in this Section 1.2, it is
understood and agreed that the Services will be substantially identical in
nature and quality to the Services performed by Citizens for ELI during the
years prior to the execution of this Agreement, except with respect to any
modifications which may be necessary to ELI becoming a public company.
(b) Each party acknowledges that the Services will be provided only
with respect to the Telecommunications Business or as otherwise mutually
agreed by the parties. ELI agrees to use the Services in accordance with all
applicable federal, state and local laws, regulations and tariffs and in
accordance with reasonable conditions, rules, regulations and specifications
which are or may be set forth in any manuals, materials, documents or
instructions of Citizens. Citizens reserves the right to take all actions in
order to assure that the Services are provided in accordance with any
applicable laws, regulations and tariffs.
(c) ELI shall provide any input or information needed by Citizens to
perform the Services pursuant to the provisions of this Agreement in a manner
consistent with the practices employed by the parties during the year prior to
the execution of this Agreement. Should the failure to provide such input or
information render the performance of the Services impossible or unreasonably
difficult, Citizens may, upon reasonable notice to ELI, refuse to provide such
Services.
1.3 Authority of ELI. Citizens understands that discretion and control
over the Telecommunications Business of ELI shall remain vested in ELI.
Accordingly, operational control and management over the Telecommunications
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Business including, without limitation, (i) the oversight of the management of
the Telecommunications Business, (ii) the formulation and implementation of
policy decisions for the Telecommunications Business, (iii) the supervision of
the employment of personnel of ELI, (iv) the payment of all financial
obligations and expenses arising from the operation of the Telecommunications
Business, and (v) the receipt of all monies and profits derived from the
operation of such Telecommunications Business, shall be vested in ELI.
1.4 Limitation of Authority. Except as otherwise stated herein, without
the prior written consent of ELI as evidenced by a resolution of its Board of
Directors, Citizens shall not be authorized or required under this Agreement
on behalf of ELI to:
(a) purchase or acquire, or sell, lease, trade, exchange or
otherwise dispose of any assets of ELI;
(b) incur any expense or any obligation which could result in
a liability in excess of $250,000 not set forth in a construction or operating
budget approved by ELI (or otherwise approved by ELI in writing) nor, upon
adoption by ELI of any such budget, incur any expenses in amounts greater than
110% of approved amounts;
(c) cancel or compromise any claim or debt owed to ELI in
excess of $100,000; or
(d) create or consent to the creation of any lien or charge on
any assets of ELI.
1.5 Powers of Officers and Directors. Nothing herein shall be construed
to release the officers and directors of ELI from the performance of their
respective duties or limit the exercise of their powers as prescribed by law
or otherwise.
ARTICLE II
THE SERVICES
2.1 Services Provided by Citizens. During the term of this Agreement
and subject to the terms and provisions hereof, Citizens shall provide, or
cause its Affiliates or consultants to provide, such of the Services as ELI
(acting through its Board of Directors) and Citizens mutually may consider
necessary or desirable or as Citizens determines may be appropriate for the
normal operation of the Telecommunications Business of ELI.
2.2 Description of the Services. The Services to be provided to ELI, as
determined in accordance with Section 2.1 hereof, consist of various services
required in the conduct of ELI's Telecommunications Business, including, by
way of illustration and not limitation, the following:
(a) Financial management, including:
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(i) Accounting and reporting services - accounting
policies and procedures, billing and time reporting support,
fixed asset, construction accounting, capital asset recovery
and analysis, accounting internal auditing and internal and
external reporting and analysis;
(ii) Taxes - including federal, state and local tax
filings compliance and audit, tax research and planning,
benefit plan compliance and tax policy;
(iii) Treasury - including cash management and
banking, investment management, corporate finance, risk
management and insurance services;
(iv) Financial Analysis and Planning-including
financial forecasting assistance, acquisition analysis,
actuarial services and financial analysis; and
(v) Investor Relation-includes assistance with the
establishment of an investor relation program.
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(b) Information Services, including negotiating
enterprise-wide purchase agreements, providing access to data bases and
enterprise application systems, procedures and processes relating to customer
satisfaction, enterprise management, deploy solutions and customer surveys.
(c) Legal and contract services, including the representation
of ELI in state and federal regulatory proceedings and before state and
federal courts. (ii) the drafting and review of relevant legislation; (iii)
the provision of advice and counsel regarding telecommunications matters
affecting ELI; (iv) the drafting, negotiation and interpretation of various
contracts; (v) the provision of advice, counsel and assistance regarding
mergers and acquisitions, antitrust, labor and employment matters; and (vi)
the supervision of outside counsel retained by ELI.
(d) Human resources services, including (i) the design of
benefit and compensation programs; (ii) the maintenance of human resource
systems (which systems will keep employee information that will be necessary
for benefit and compensation program design, for implementation of such design
and for insuring compliance with the Employee Retirement Income Security Act
of 1974, as amended, the Internal Revenue Service and the Securities and
Exchange Commission); (iii) equal employment opportunity compliance,
management training, union fee avoidance programs and interpretation of
corporate policies.
(e) Corporate planning services, including assistance with
corporate budgeting.
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ARTICLE III
COMPENSATION
3.1 Service Costs. ELI shall pay Citizens and its Affiliates, as the
case may be, for all reasonable costs incurred by Citizens or its Affiliates
attributable to the performance by Citizens or its Affiliates of the Services,
including without limitation (a) all costs incurred by Citizens or its
Affiliates to vendors or other third parties in providing Services and related
supplies and goods; (b) the directly allocated costs of employees of Citizens
and its Affiliates (based on the average salary and all other compensation and
costs of the relevant Responsibility Centers) allocated to ELI in accordance
with Citizens' then current practice in allocating the cost of services to its
Operating Companies to the extent that the same can be based on the time of
employees of Citizens and its Affiliates expended in providing such Services;
(c) a portion of the non-directly allocated costs (including direct costs of
employees of Citizens and its Affiliates at the relevant Responsibility
Centers and all other costs and expenses of the relevant Responsibility
Centers), which are not based on time expended, all based on Citizens' then
current procedure (hereinafter referred to as the "Allocation Formula") used
by Citizens for charging unallocated costs of Citizens' relevant
Responsibility Centers to the Citizens Operating Companies as a component of
the cost of services rendered; and (d) an amount equal to 25% of the aggregate
of (b) and (c) above; provided, however, that it is intended that the service
costs paid by ELI shall not exceed comparable payments that would be made if
such services were to be provided by an unaffiliated third party.
3.2 Billing Procedure. Citizens shall submit to ELI a quarterly
statement showing in reasonable detail the calculation for the Reimbursable
Costs and the Fee, which amounts shall be due and payable, except as expressly
provided herein, within thirty (30) days of receipt of such statement by ELI.
ARTICLE IV
CONFIDENTIALITY
Each party hereto may from time to time be provided information that is
confidential and proprietary to the other party hereto. Accordingly, each
party agrees that it will not reveal such information or any of it, which is
not otherwise in the public domain, to a third party without the consent of
the other party except as required by law or as necessary to perform
obligations or enforce rights hereunder; that such information will be
distributed only to those of its own employees and officers who have a
reasonable need for it in order to carry out the purposes of this Agreement;
that such information will not be used in any manner except for the purpose
for which provided; and that upon termination of this Agreement, all documents
containing such confidential and proprietary information upon request will be
returned promptly to the party to which such information belongs. Each party
shall take such steps as are reasonably necessary to protect the confidential
or proprietary information of the other. For purposes hereof, confidential or
proprietary information shall include customer lists and other customer
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information, and financial, technical or business information relating to one
party and provided by such party to the other.
ARTICLE V
INDEMNIFICATION
ELI shall indemnify, defend and hold Citizens and its Affiliates (and
their respective officers, directors, partners, employees and agents) harmless
from any claims, costs, damages (including consequential damages), losses or
expenses (including reasonable attorneys' fees) arising out of or relating to
this Agreement or the performance of Services under this Agreement except
where attributable to the gross negligence or willful misconduct of Citizens
or its Affiliates. Neither Citizens nor any of its Affiliates (nor any of
their respective officers, directors, partners, employees and agents) shall be
liable, in damages or otherwise, to ELI for any error or judgment or other act
or omission performed or omitted by Citizens or any of its Affiliates under or
otherwise in respect of this Agreement, except if such error of judgment or
other act or omission results from willful misconduct or gross negligence of
the party sought to be changed. All of the obligations of Citizens hereunder
have been undertaken by Citizens and its Affiliates solely for the benefit of
ELI and nothing set forth in this Agreement shall (or shall be deemed to)
grant to any other person any interest (whether as a third party beneficiary
or otherwise) herein.
ARTICLE VI
TERM AND TERMINATION
6.1 Term. This Agreement shall commence on the date hereof and shall
terminate on December 31, 2005, unless earlier extended or terminated in
accordance with the terms of this Agreement.
6.2 Renewal-Termination upon Notice. This Agreement will automatically
renew for additional terms of two (2) years each, unless either party provides
written notice to the other party not less than six (6) months prior to the
end of the initial term or any such renewal term of its intent to terminate
this Agreement.
6.3 Termination upon Bankruptcy, Etc. Each party shall have the right
to terminate this Agreement immediately upon written notice to the other party
if the other party: (1) makes an assignment for the benefit of creditors; (2)
has an Order for Relief under Titles 7 or 11 of the United States Code entered
by any United States court against such party; (3) has a trustee or receiver
appointed by any court for a substantial part of such party's assets; or (4)
attempts to make an unauthorized assignment of this Agreement.
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6.4 Termination upon Material Breach. In the event of material breach
of any provision of this Agreement by a party, the non-defaulting party shall
give the defaulting party written notice, and:
(a) If such breach is for ELI's non-payment, ELI shall cure
the breach within thirty (30) calendar days of such notice. If ELI does
not cure such breach by such date, Citizens may, at its sole option,
elect to terminate this Agreement by giving written notice of such
election to ELI.
(b) If such breach is for any other material failure to
perform in accordance with this Agreement, the defaulting party shall
cure such breach within ninety (90) calendar days of the date of such
notice. If the defaulting party does not cure such breach within such
period (or is not working diligently in good faith to cure such breach
in cases where a breach cannot reasonably be expected to be cured
within ninety (90) days), the non-defaulting party may, at its sole
option, elect to terminate this Agreement by giving written notice to
the breaching party no earlier than ninety (90) calendar days after the
date of its notice of breach to the defaulting party (or immediately
upon such further notice to the defaulting party if the defaulting
party is not working diligently in good faith to cure such breach in
cases where a breach cannot be reasonably be expected to be cured
within ninety (90) days).
6.5 Termination upon Change of Control. Citizens may terminate this
Agreement by written notice to ELI upon a Change of Control (as defined below)
with respect to ELI. A "Change in Control" shall be deemed to have occurred
if: (i) Citizens or its Affiliates shall own shares representing less than a
majority of the voting power of the then outstanding common stock of ELI; (ii)
a majority of the seats (other than vacant seats) on the Board of Directors of
ELI shall at any time be occupied by persons who were neither (1) nominated by
Citizens or by the Board of Directors of ELI, nor (2) appointed by directors
of ELI so nominated; or (iii) any person or group, other than Citizens or its
Affiliates, shall otherwise directly or indirectly have the power to exercise
a controlling influence over ELI.
6.6 Survival upon Termination. Notwithstanding the foregoing, the
provisions of Article IV (Confidentiality) and Article V (Indemnification)
shall survive the termination or expiration of this Agreement, and shall
remain in full force and effect for a period of three years following
termination or expiration.
6.7 Waiver. The failure of either party to exercise any right to elect
to terminate this Agreement shall not constitute a waiver of the rights
granted herein with respect to any subsequent default.
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ARTICLE VII
GENERAL
7.1 Relationship; Self-Dealing. Nothing contained in this Agreement
shall be construed as creating a partnership, joint venture or similar
arrangement of or between Citizens and ELI. Citizens and its Affiliates may
engage in, acquire or possess an interest in other business ventures of any
nature or description, independently or with others, whether currently
existing or hereafter created, which may be in direct or indirect competition
with ELI, and ELI shall not have any rights in or to such independent ventures
or the income or profits derived therefrom, or to any opportunities offered or
created thereby. Such activities or arrangements shall not constitute a breach
of this Agreement.
7.2 Entire Agreement. This Agreement constitutes the entire
understanding between the parties and supersedes any prior understandings
respecting the subject matter thereof.
7.3 Amendment; Waiver. This Agreement shall not be amended, modified,
waived, released or discharged except by a writing signed by an officer or
authorized representative of each of the parties.
7.4 Successors and Assigns. No party hereto shall assign its rights and
obligations under this Agreement or any part thereof, nor shall any party
assign or delegate any of its rights or duties hereunder without the prior
written consent of the other party, and any assignment made without such
consent shall be void; provided, that the rights and obligations of Citizens
hereunder may be assigned to and assumed by an Affiliate of Citizens without
the consent or approval of ELI.
7.5 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and
permitted assigns. Nothing in this Agreement, expressed or implied, is
intended or shall be construed to confer upon any person other than the
parties and successors and assigns permitted by Section 7.4 hereof any right,
remedy or claim under or by reason of this Agreement.
7.6 Further Assurances. The parties shall execute and deliver such
further instruments and perform such further acts as may reasonably be
required to carry out the intent and purposes of this Agreement.
7.7 Headings. All article, section and paragraph titles or captions
contained in this Agreement are for convenience only and shall not be deemed
part of the text of this Agreement.
7.8 Pronouns. All pronouns and any variations thereof shall be deemed
to refer to the masculine, feminine, neuter, singular or plural as the context
may require.
7.9 Counterparts. This Agreement may be executed in one or more
counterparts, and each of such counterparts shall for all purposes be deemed
to be an original, but all such counterparts together shall constitute but one
instrument.
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7.10 Notices. Any notice, request, instruction or other document to be
given hereunder by any party to the others shall be in writing and shall be
deemed to have been duly given on the next business day after the same is
sent, if delivered personally or sent by telecopy or overnight delivery, or
five calendar days after the same is sent, if sent by registered or certified
mail return receipt requested, postage prepaid, as set forth below, or to such
other persons or addresses as may be designated in writing in accordance with
the terms hereof by the party to receive such notice.
(a) If to Citizens, to:
Citizens Utilities Company
High Ridge Park
Stamford, CT 06905
Facsimile No.: (203) 329-4651
Attn: Robert J. DeSantis
(b) If to ELI, to:
Electric Lightwave, Inc.
8100 N.E. Parkway Drive, Suite 150
Vancouver, Washington 98662
Facsimile No.: (360-604-5333)
Attn: David B. Sharkey
7.11 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without giving effect to
the principles of conflict of laws thereof.
7.12 Force Majeure. In the event that either party hereto shall be
delayed, hindered in, or prevented from the performance of any act required
hereunder by reason of failure of power, riots, insurrection, war, labor
disputes, Acts of God or other reasons of a similar nature not the fault of
the party delayed in performing the work or doing the acts required under the
terms of this Agreement, then performance of such work or act shall be excused
for the period of said delay and the period for the performance of any such
work or act shall be extended for a period equivalent to the period of such
delay. In the event that either party shall be indefinitely prevented from the
performance of any work or act required hereunder by reason of an such cause,
performance of such work or act shall be indefinitely excused.
7.13 Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if one or more of the provisions of this Agreement is
subsequently declared invalid or unenforceable, such invalidity or
unenforceability shall not in any way affect the validity or enforceability of
the remaining provisions of this Agreement. In the event of such declaration
of invalidity or unenforceability, this Agreement, as so modified, shall be
applied and construed so as to reflect substantially the intent of the parties
and achieve the same economic effect as originally intended by the terms
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hereof. In the event that the scope of any provision to this Agreement is
deemed unenforceable by a court of competent jurisdiction, the parties agree
to the reduction of the scope of such provision as such court shall deem
reasonably necessary to make such provision enforceable under the
circumstances.
7.14 No Agency. This Agreement shall not be deemed expressly or by
implication to create an agency, employee, or servant relationship between or
among any of the parties hereto, or any Affiliates of the parties hereto for
any purpose whatsoever.
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the date
hereinabove indicated.
ELECTRIC LIGHTWAVE, INC.
By:/s/ David B. Sharkey
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Name: David B. Sharkey
Title: President
CITIZENS UTILITIES COMPANY
By:/s/Robert J. DeSantis
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Name: Robert J. DeSantis
Title: Vice President and Treasurer
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Exhibit 10.8
TAX-SHARING AGREEMENT
THIS AGREEMENT is entered into as of the 1st day of December, 1997,
between Citizens Utilities Company, a Delaware corporation ("Citizens"), and
Electric Lightwave, Inc., a Delaware corporation ("Lightwave").
RECITALS
(A) Citizens owns all of the issued and outstanding Class B Common
Stock of Lightwave.
(B) Lightwave is effecting an initial public offering (the "Offering")
of shares of Class A Common Stock of Lightwave (the "Class A Common Stock").
(C) Upon completion of the Offering, Lightwave will cease to be a
wholly-owned subsidiary of Citizens and Lightwave may or may not cease, for
United States federal income tax purposes, to be a member of Citizens'
consolidated group.
(D) For state or local franchise or income tax purposes Lightwave may
in any event continue to be a member of certain unified, combined or
consolidated groups which include Citizens notwithstanding the results of the
Offering.
(E) The parties wish to address certain tax matters which may arise as
a result of the Offering.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth, and for other good and valuable consideration, and intending to be
legally bound hereby, the parties hereby agree as follows:
1.1 As used in this Agreement, in addition to the terms defined in the
Preamble and Recitals, the following terms will have the following meanings,
applicable to both the singular and plural forms of the terms described:
"CONSOLIDATED PERIODS":shall mean, with respect to Lightwave, the
taxable periods or portions thereof in which Lightwave will be a member of the
Citizens Federal Consolidated Group.
"COMBINED PERIODS":shall mean, with respect to Lightwave, the taxable
periods or portions thereof in which Lightwave will be a member of the relevant
Citizens State Group.
"EFFECTIVE DATE":means the date of this Agreement.
"CITIZENS FEDERAL CONSOLIDATED GROUP":means the affiliated group of
corporations as defined in Section 1504 of the Internal Revenue Code of 1986, as
amended (the "Code"), which includes Citizens as the common parent.
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"CITIZENS STATE GROUP":shall mean any unified, combined or consoli-
dated groups for state or local franchise or income tax purposes which include
Citizens as the common parent.
1.2 INTERNAL REFERENCES. Unless the context indicates otherwise,
references to articles, sections and paragraphs shall refer to the corresponding
articles, sections and paragraphs in this Agreement, and references to the
parties shall mean the parties to this Agreement.
2. With respect to the Consolidated Periods and each of the Combined
Periods:
(a) Lightwave shall be responsible for any and all liabilities
arising as a result of federal income tax, or state or local income, franchise,
excise, single business, gross receipts or withholding tax, returns filed by, or
on behalf of, Lightwave on a separate-return basis.
(b) With respect to the portions of the Citizens Federal
Consolidated Group or Citizens State Group tax liabilities that are allocable to
Lightwave, Lightwave shall pay to Citizens an amount equal to the aggregate
relevant federal, state or local income, franchise or similar taxes which
Lightwave would have been required to pay for such period if Lightwave had filed
a separate federal, state or local income or franchise tax return in such
jurisdictions at such time. For purposes of the preceding sentence, Lightwave
shall take into account all items of gain, income, deductions, losses, credits,
carryovers of losses and credits from prioR taxable years, and all other tax
attributes of Lightwave, which attributes may be subject to limitations under
the Code and applicable Treasury Regulations or analogous provisions of state or
local law, that would have been taken into account had Lightwave actually filed
a separate return.
(c) Lightwave shall be responsible for any tax liability due
any foreign jurisdiction arising as a result of its business activities and/or
domicile.
(d) Except as set forth below, payments required pursuant to
Paragraph 2(b) of this Agreement shall be billed to Lightwave by Citizens based
upon estimated payments made by Citizens to taxing authorities, with final
billing being made after filing of the returns. Such payments will be due within
thirty (30) days of receipt of the bill therefore. If income tax deficiencies or
tax refunds relating to Lightwave or its subsidiaries result from a tax audit,
amended return, claim, final determination by any court or otherwise are related
to the relevant tax returns for the Consolidated or Combined Periods, the
amounts due under Paragraph 2(b) of this Agreement shall be recalculated by
Citizens' Tax Department in accordance with the terms of such Paragraph, and an
appropriate adjustment to payments due under that Paragraph shall be made.
3. Citizens shall be obligated to pay over to Lightwave the amount of
any refund of, or in respect of, taxes to the extent such amount is attributable
to taxes paid (or deemed to have been paid) by Lightwave pursuant to this
Agreement or otherwise.
4. Notwithstanding anything to the contrary herein, neither party
shall be entitled to duplicate payments from the other party hereunder.Citizens'
Vice President of Taxes, in his sole discretion, may net any payments due to
Citizens from Lightwave pursuant to this Agreement against any amount due
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from Citizens to Lightwave pursuant to this Agreement or otherwise.
5. Interest shall accrue on payments due or advances made under this
Agreement at the interest rate then being charged by the Internal Revenue
Service on United States federal income tax deficiencies.
6. Citizens agrees that it will indemnify and hold Lightwave
harmless from and against any federal income tax, or state or local unitary,
combined or consolidated income or franchise tax, liabilities (including
interest, penalties, additions to tax, legal fees, court costs and any other
reasonable costs of defense) with respect to the portion of the Citizens'
Federal Consolidated Group or Citizens' State Group tax liability which is
allocable to members of the Citizens' Federal Consolidated Group or Citizens'
State Group, respectively, other than Lightwave.
7. Lightwave agrees to: (i) provide Citizens access to Lightwave
books and records; (ii) provide Citizens with papers, schedules and any other
information or assistance necessary to prepare tax returns or make computations
pursuant to this Agreement; (iii) maintain and preserve books, records and other
information as may be needed by Citizens pursuant to this Agreement or pursuant
to the preparation of any required tax return or the conduct of any tax audit by
a governmental authority for at least such time as has been customary; (iv)
cooperate in any audit or investigation of tax returns and execute appropriate
powers of attorney in connection therewith in favor of Citizens; and (v) sign
all documents, including settlement agreements, relating to the tax returns for
Consolidated Periods and/or Combined Periods.
8. With respect to all taxable periods during a Consolidated
Period or Combined Period, Citizens shall have sole and exclusive authority and
responsibility for: (i) preparing any federal income tax, or state and local
income, franchise, excise, single business, gross receipts or withholding tax,
returns (including any amended returns or claims for refund) of Lightwave; (ii)
representing Lightwave with respect to any federal income tax, or state and
local income, franchise, excise, single business, gross receipts or withholding
tax, audit or contest (including, without limitation, any litigation regarding
either the relevant taxes or refunds of the same); (iii) engaging outside
counsel and accountants with respect to tax matters regarding Lightwave; and
(iv) performing such other acts and duties with respect to Lightwave tax returns
as Citizens determines is appropriate. Citizens' Vice President of Taxes shall
have the discretion to reasonably determine the intent of, and resolve any
ambiguities under this Agreement. Payments due under this Agreement may, in
Citizens' discretion, be evidenced by a demand promissory note bearing interest
as provided in Paragraph 4.
9. This Agreement is entered into by the parties hereto on their
own behalf as well as on behalf of Citizen's other subsidiaries. This Agreement
shall be deemed to have been joined in and consented to by all such
subsidiaries, without further action of them or the parties hereto. The parties
hereto hereby guarantee the performance by such subsidiaries of all the terms of
this Agreement. This Agreement shall also be binding upon, and inure to the
benefit of, the successors and assigns of the parties hereto.
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10. This Agreement may be executed in several counterparts, each of
which shall be an original, but all of which shall constitute one document.
11. This Agreement will be governed by, and construed in accordance
with, the laws of the State of Delaware.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first above written.
ELECTRIC LIGHTWAVE, INC.
By:/s/ David B. Sharkey
--------------------
Name: David B. Sharkey
Title: President
CITIZENS UTILITIES COMPANY
By:/s/ Robert J. DeSantis
----------------------
Name: Robert J. DeSantis
Title: Vice President and Treasurer
5
Exhibit 10.9
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (this "Agreement") is made and entered
into this 1st day of December, 1997, by and between Citizens Utilities Company,
a Delaware corporation ("Citizens"), and Electric Lightwave Inc., a Delaware
corporation ("ELI")
RECITALS
A. Citizens owns all of the issued and outstanding Class B Common
Stock, par value $.01 per share, of ELI.
B. ELI is effecting an initial public offering (the "Offering") of
shares of its Class A Common Stock, par value $.01 per share (the "Class A
Common Stock").
C. Upon completion of the Offering, ELI will cease to be a wholly owned
subsidiary of Citizens.
D. In connection with the Offering, ELI has filed a registration
statement with the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "1933 Act").
E. Each of Citizens and ELI desires to indemnify the other, and to be
indemnified by the other, against certain liabilities relating to, arising out
of or resulting from their respective businesses, operations and assets and the
above-mentioned registration statement, on the terms set forth in this
Agreement.
NOW, THEREFORE, the parties hereto agree, intending to be legally bound
hereby, as follows:
DEFINITIONS
Section 1.01 DEFINITIONS. As used in this Agreement, in addition to the
terms defined in the Preamble and Recitals hereof, the following terms shall
have the following meanings, applicable to both the singular and plural forms of
the terms described:
"1933 ACT" shall have the meaning ascribed to it in Recital D.
"1934 ACT" means the Securities and Exchange Act of 1934, as amended.
"AGREEMENT" shall have the meaning ascribed to it in the Preamble.
"BUSINESS DAY" means any calendar day which is not a Saturday, Sunday
or public holiday under the laws of the State of New York.
<PAGE>
"CITIZENS" shall have the meaning ascribed to it in the Preamble.
"CITIZENS COMPANIES" means (unless otherwise expressly provided)
Citizens and each of its direct and indirect subsidiaries other than ELI.
"CITIZENS EMPLOYEES" means all employees or former employees of any of
the Citizens Companies other than the current or former ELI Employees.
"CITIZENS GUARANTEE" means any guarantee, surety or performance bond,
letter of credit or other contractual arrangement in effect as of the Closing
pursuant to which any Citizens Company has guaranteed or secured, or caused a
Third-Party to guarantee or secure, any liability or obligation of ELI.
"CITIZENS LIABILITIES" means all Liabilities (other than any
Liabilities for Taxes which are allocated pursuant to the Tax Agreement)
relating to, resulting from or arising out of the businesses or operations
conducted or assets owned by any of the Citizens Companies.
"CITIZENS SECURITIES LIABILITIES" means any Liability under the 1933
Act, the 1934 Act or any other federal or state securities law or regulation
resulting from or arising out of the Offering, including, without limitation,
any such Liabilities arising out of or based upon: (i) any untrue statement or
alleged untrue statement of a material fact contained in a Registration
Statement or in any Prospectus; or (ii) the omission or alleged omission to
state in a Registration Statement or Prospectus a material fact required to be
stated therein or necessary to make the statements made therein not misleading;
but only to the extent that such Liability arises out of or is based upon any
such untrue statement or alleged untrue statement or omission or alleged
omission concerning the business and operations of any of the Citizens
Companies.
"CLASS A COMMON STOCK" shall have the meaning ascribed to it in Recital
B.
"CLOSING" means the consummation of the first purchase and sale of
shares of the Class A Common Stock pursuant to the Offering.
"CLOSING DATE" means the date on which the Closing occurs.
"CODE" means the Internal Revenue Code of 1986.
"EFFECTIVE DATE" means the date on which the purchase and sale of
shares of Class A Common Stock pursuant to the Offering first occurs.
"INDEMNIFIABLE LOSSES" shall have the meaning ascribed to it
in Section 2.
"INDEMNIFYING PARTY" shall have the meaning ascribed to it
in Section 5(a).
"INDEMNITEE" shall have the meaning ascribed to it in Section 5(a).
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"ELI" shall have the meaning ascribed to it in the Preamble.
"ELI EMPLOYEES" means all employees or former employees of ELI other
than any person who as of the Closing is an employee of any of the Citizens
Companies.
"ELI LIABILITIES" means all Liabilities (other than Liabilities for
Taxes that are allocated pursuant to the Tax Agreement) relating to, resulting
from or arising out of the businesses or operations conducted or formerly
conducted or assets owned or formerly owned by ELI.
"ELI SECURITIES LIABILITIES" means any Liability under the 1933 Act,
the 1934 Act, or any other federal or state securities law or regulation
resulting from or arising out of the Offering, including, without limitation,
any such Liability arising out of or based upon: (i) any untrue statement or
alleged untrue statement of a material fact contained in a Registration
Statement or in any Prospectus; or (ii) the omission or alleged omission to
state in a Registration Statement or Prospectus a material fact required to be
stated therein or necessary to make the statements made therein not misleading,
but only to the extent that such Liability arises out of or is based upon any
such untrue statement or alleged untrue statement or any such omission or
alleged omission concerning the businesses and operations of ELI.
"LIABILITIES" means all liabilities and obligations, actual or
contingent, liquidated or unliquidated, accrued or unaccrued, known or unknown,
whenever and however arising, including all costs and expenses (including
reasonable fees and disbursements of counsel) relating thereto, and including
without limitation liabilities and obligations arising in connection with any
actual or threatened claim, action, suit or proceeding by or before any court or
regulatory or administrative agency or commission or any arbitration panel.
"OFFERING" shall have the meaning ascribed to it in Recital B.
"PROSPECTUS" means any prospectus relating to the Offering or any
amendment or supplement thereto.
"REGISTRATION RIGHTS AGREEMENT" means that certain Registration Rights
Agreement by and between Citizens and ELI dated as of the date hereof.
"REGISTRATION STATEMENT" means any registration statement filed with
the SEC in connection with the Offering or any amendment or supplement thereto.
"SEC" shall have the meaning ascribed to it in Recital D.
"TAX AGREEMENT" means that certain Tax Sharing Agreement between
Citizens and ELI dated as of the date hereof.
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"TAXES" means any and all taxes (including interest, penalties and
additions to tax), fees and charges (including sales, use, excise, value added,
personal property and other taxes) imposed by any federal, state or local or
government tax authority in the United States of America or by any foreign
government or taxing authority.
"THIRD-PARTY CLAIM" shall have the meaning ascribed to it in
Section 5(a). "UNDERWRITING AGREEMENT" means, collectively, that certain U.S.
Underwriting Agreement between and among Lehman Brothers Inc., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated and
Deutsche Morgan Grenfell Inc. (as representatives of the several U. S.
underwriters), Citizens and ELI dated November 24, 1997, and that certain
International Underwriting Agreement between and among Lehman Brothers
International (Europe), Merrill Lynch International, Morgan Stanley & Co.
International Limited and Morgan Grenfell & Co. Limited, Citizens and ELI dated
November 24, 1997.
Section 1.02 INTERNAL REFERENCES. Unless the context indicates
otherwise, references to Articles, Sections and paragraphs shall refer to the
corresponding articles, sections and paragraphs in this Agreement, and
references to the parties shall mean the parties to this Agreement.
INDEMNIFICATION BY ELI
Section 2.01 INDEMNIFICATION BY ELI. ELI shall indemnify, defend and
hold harmless the Citizens Companies and the respective past, present and future
directors, officers, partners, employees, agents and representatives thereof
(regardless in each case of whether any such person serves in one or more
similar capacities for ELI) from and against any and all losses, claims,
damages, liabilities, demands, suits and actions, including all reasonable
attorneys' fees and disbursements and other costs and expenses incurred in
connection therewith (collectively, "Indemnifiable Losses"), relating to,
resulting from or arising out of: (a) any ELI Liabilities; (b) any ELI
Securities Liabilities; or (c) any misrepresentation or material breach by ELI
of any covenant of ELI or any failure by ELI to satisfy any condition required
to be satisfied by ELI or any liability of ELI for taxes arising prior to the
Offering determined to be owing by ELI for which Citizens or its consolidated
Affiliates may have a secondary liability, contained in this Agreement, the
Underwriting Agreement or any other agreement executed by ELI in connection with
the Offering, including, without limitation, the Registration Rights Agreement
and the Tax Agreement, and in addition to and notwithstanding any other
indemnification between the parties hereto as provided in any such agreement,
except to the extent that such misrepresentation, breach or failure was caused
by or resulted from any statement, act or omission within the exclusive
knowledge or control of Citizens.
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<PAGE>
ARTICLE III
INDEMNIFICATION BY CITIZENS
Section 3.01 INDEMNIFICATION BY CITIZENS. Citizens shall indemnify,
defend and hold harmless ELI and the respective past, present and future
directors, officers, employees, partners, agents and representatives thereof
(regardless in each case of whether any such person serves in one or more
similar capacities for the Citizens Companies) from and against any and all
Indemnifiable Losses relating to, resulting from or arising out of: (a) any
Citizens Liabilities; (b) any Citizens Securities Liabilities; or (c) any
misrepresentation or material breach by Citizens of any covenant of Citizens or
any failure of Citizens to satisfy any condition required to be satisfied by
Citizens or any liability of Citizens for taxes arising prior to the Offering
determined to be owing by Citizens for which ELI may have a secondary liability,
contained in this Agreement, the Underwriting Agreement, or any other agreement
executed by Citizens in connection with the Offering, including, without
limitation, the Registration Rights Agreement and the Tax Agreement, and in
addition to and notwithstanding any other indemnification between the parties
hereto as provided in any such agreement, except to the extent that such
misrepresentation, breach or failure was caused by or resulted from any
statement, act or omission within the exclusive knowledge or control of ELI.
ARTICLE IV
GUARANTEE.
Section 4.01 GUARANTEE. ELI shall indemnify, defend and hold harmless
the Citizens Companies, and their respective directors, officers, employees,
agents and representatives, from and against any Indemnifiable Losses relating
to, resulting from, or arising out of any Citizens Guarantee, except as
prohibited by, or would conflict with, the terms of the Guaranty dated as of
April 28, 1995, of Citizens in favor of Shawmut Bank Connecticut, National
Association, BA Leasing & Capital Corporation and other Beneficiaries. Citizens
shall not terminate unilaterally or withdraw any Citizens Guarantee and shall
abide by the terms of the Citizens Guarantee. ELI shall reimburse each Citizens
Company for its direct costs (or, in the case of any Citizens Guarantee that
relates to both liabilities or obligations of ELI and one or more third parties,
a pro rata share of such direct costs), if any, of maintaining the Citizens
Guarantee.
ARTICLE V
THIRD-PARTY CLAIMS
Section 5.01 THIRD PARTY CLAIMS. (a) If any person entitled to
indemnification under this Agreement (an "Indemnitee") receives notice of
the assertion of any claim or of the commencement of any action or proceeding
by any person that is not a party to this Agreement or a subsidiary of any such
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<PAGE>
party (a "Third-Party Claim") against such Indemnitee, the Indemnitee shall
promptly provide written notice thereof (including a description of the Third-
Party Claim and an estimate of any Indemnifiable Losses (which estimate shall
not be conclusive as to the final amount of such Indemnifiable Losses) to the
party required tO provide indemnification under this Agreement (the
"Indemnifying Party") within ten (10) Business Days after the Indemnitee's
receipt of notice of such Third-Party Claim. Any delay by the Indemnitee in
providing such written notice shall not relieve the Indemnifying Party of any
liability for indemnification hereunder except to the extent that the rights
of the Indemnifying Party are materially prejudiced by such delay.
(b) The Indemnifying Party shall have the right to participate in
or, by giving written notice to the Indemnitee, to assume the defense of any
Third-Party Claim at such Indemnifying Party's expense and by such Indemnifying
Party's own counsel (which shall be reasonably satisfactory to the Indemnitee),
and the Indemnitee will cooperate in good faith in such defense. The
Indemnifying Party shall not be liable for any legal expenses incurred by the
Indemnitee after the Indemnitee has received notice of the Indemnifying Party's
intent to assume the defense of a Third-Party Claim; provided, however, that if
the Indemnifying Party fails to take steps reasonably necessary to diligently
pursue the defense of such Third-Party Claim within ten (10) Business Days of
receipt of notice from the Indemnitee that such steps are not being taken, the
Indemnitee may assume its own defense and the Indemnifying Party shall be liable
for the reasonable costs thereof.
(c) The Indemnifying Party may settle any Third-Party Claim which
it has elected to defend so long as the written consent of the Indemnitee to
such settlement is first obtained (which consent shall not be unreasonably
withheld). The Indemnitee shall not settle any Third-Party Claim without the
written consent of the Indemnifying Party (which consent shall not be
unreasonably withheld).
In the event that a Third-Party Claim involves a proceeding as
to which both Citizens and ELI may be Indemnifying Parties, the parties hereto
agree to cooperate in good faith in a joint defense of such Third-Party Claim.
ARTICLE VI
CONTRIBUTION
Section 6.01 CONTRIBUTION. If the indemnification provided for in this
Agreement with respect to ELI Securities Liabilities or Citizens Securities
Liabilities is for any reason held by a court or other tribunal to be
unavailable on policy grounds or otherwise, Citizens and ELI shall contribute to
any Indemnifiable Losses relating to, resulting from or arising out of the ELI
Securities Liabilities or the Citizens Securities Liabilities in such proportion
as to reflect each party's relative fault in connection with such Indemnifiable
Losses. The relative fault of the parties shall be determined by reference to,
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<PAGE>
among other things, whether the conduct or information giving rise to the
Indemnifiable Losses is attributable to Citizens or ELI and each party's
relative intent, access to information and opportunity to prevent or correct the
Indemnifiable Losses. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
from any person who is not guilty of fraudulent misrepresentation.
ARTICLE VII
COOPERATION
Section 7.01 COOPERATION. So long as any books, records and files
retained after the Closing Date by Citizens (or any of the other Citizens
Companies), on the one hand, or ELI on the other hand, relating to the
businesses, operations or assets of the other party and its subsidiaries
(including any books, records and files retained by ELI relating to the conduct
of its businesses or operations or the ownership of its assets prior to the
Closing) remain in existence and are available, such other party shall have the
right upon prior written notice to inspect and copy the same at any time during
business hours for any proper purpose, provided that such right will not extend
to any books, records or files the disclosure of which in accordance herewith
would result in a waiver of the attorney-client, work-product or other
privileges which permit non-disclosure of otherwise relevant material in
litigation or other proceedings, or which are subject on the date hereof and at
the time inspection is requested to a non-disclosure agreement with a
Third-Party and a waiver cannot reasonably be obtained. Citizens and ELI agree
that neither they nor any of their subsidiaries shall destroy any such books,
records or files without reasonable notice to the other party or if such party
receives within ten (10) Business Days of such notice any reasonable objection
from the other party to such destruction. Except in the case of dispute between
the parties hereto, Citizens and ELI shall cooperate with one another in a
timely manner in any administrative or judicial proceeding involving any matter
affecting the actual or potential liability of either party hereunder. Such
cooperation shall include, without limitation, making available to the other
party during normal business hours all books, records and information, and
officers and employees (without substantial disruption of operations or
employment) necessary or useful in connection with any inquiry, audit,
investigation or dispute, any litigation or any other matter requiring any such
books, records, information, officers or employees for any reasonable business
purpose. The party requesting or otherwise entitled to any books, records,
information, officers or employees pursuant to this Section 7 shall bear all
reasonable out-of-pocket costs and expenses (except for salaries, employee
benefits and general overhead) incurred in connection with providing such books,
records, information, officers or employees.
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ARTICLE VIII
EFFECTIVENESS
Section 8.01 EFFECTIVENESS. This Agreement shall become effective at
Closing.
ARTICLE IX
SUCCESSORS AND ASSIGNS
Section 9.01 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon the parties hereto and their respective successors and permitted assigns
and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns. This Agreement may not be assigned by either
party hereto to any other person without the prior written consent of the other
party hereto.
ARTICLE X
NO THIRD-PARTY BENEFICIARIES
Section 10.01 NO THIRD-PARTY BENEFICIARIES. Except forn the persons
entitled to indemnification pursuant to Section 2 or Section 3 hereof, each of
whom is an intended third-party beneficiary hereunder, nothing expressed or
implied in this Agreement shall be construed to give any person or entity other
than the parties hereto any legal or equitable rights hereunder.
ARTICLE XI
ENTIRE AGREEMENT
Section 11.01 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof.
ARTICLE XII
AMENDMENT
Section 12.01 AMENDMENT. This Agreement may not be amended except by an
instrument signed by the parties hereto.
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ARTICLE XIII
WAIVERS
Section 13.01 WAIVERS. No waiver of any term shall be construed as a
subsequent waiver of the same term, or a waiver of any other term, of this
Agreement. The failure of any party to assert any of its rights hereunder will
not constitute a waiver of any such rights.
ARTICLE XIV
SEVERABILITY
Section 14.01 SEVERABILITY. If any provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, such provision shall be deemed severable and all other provisions of
this Agreement shall nevertheless remain in full force and effect.
ARTICLE XV
HEADINGS
Section 15.01 HEADINGS. Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.
ARTICLE XVI
NOTICES
Section 16.01 NOTICES. All notices given in connection with this
Agreement shall be in writing. Service of such notices shall be deemed complete:
(i) if hand delivered, on the date of delivery; (ii) if by mail, on the fourth
business day following the day of deposit in the United States mail, by
certified or registered mail, first-class postage prepaid; (iii) if sent by
Federal Express or equivalent courier service, on the next business day; or (iv)
if by telecopier, upon receipt by the sender of confirmation of successful
transmission. Such notices shall be addressed to the parties at the following
addresses or at such other address for a party as shall be specified by like
notice (except that notices of change of address shall be effective upon
receipt):
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IF TO CITIZENS:
Citizens Utilities Company
High Ridge Park
P. O. Box 3801
Stamford, Connecticut 06905
Attn: Robert J. DeSantis
Fax No.: (203) 329-4625
IF TO ELI:
Electric Lightwave Inc.
8100 N.E. Parkway Drive, Suite 200
Vancouver, Washington 98662
Attn: David Sharkey
Fax No.: (360) 243-4425
ARTICLE XVII
GOVERNING LAW
Section 17.01 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with, the laws of the State of New York, without giving
effect to the principles of conflict of laws of such State or any other
jurisdiction.
ARTICLE XVIII
COUNTERPARTS
Section 18.01 COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be an original, but all of which together
shall constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties have duly executed this Indemnification
Agreement as of the date first above written.
ELECTRIC LIGHTWAVE, INC.
By:/s/ David B. Sharkey
----------------------
Name: David B. Sharkey
Title: President
CITIZENS UTILITIES COMPANY
By:/s Robert J. DeSantis
--------------------------
Name: Robert J. DeSantis
Title: Vice President and Treasurer
11
Exhibit 10.10
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is made and entered
into this 1st day of December, 1997, by and between Citizens Utilities Company,
a Delaware corporation ("Citizens"), and Electric Lightwave Inc., a Delaware
corporation ("ELI").
RECITALS
A. Citizens owns all of the issued and outstanding Class B Common
Stock, par value $0.01 per share, of ELI ("Class B Common Stock").
B. ELI is effecting an initial public offering (the "Initial Public
Offering") of its shares of Class A Common Stock, par value $.01 per share
("Class A Common Stock").
C. Upon completion of the Initial Public Offering, ELI will cease to be
a wholly-owned subsidiary of Citizens.
D. The parties desire to enter into this Agreement to set forth their
agreement regarding (i) certain registration rights with respect to Class A
Common Stock and Class B Common Stock (and any other securities issued in
respect thereof or in exchange therefor); and (ii) certain representations,
warranties, covenants and agreements applicable to ELI and Citizens.
AGREEMENTS
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound
hereby, Citizens and ELI, for themselves, their successors and assigns, hereby
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS. As used in this Agreement, the following
terms will have the following meanings, applicable both to the singular and
the plural forms of the terms described:
"AFFILIATE" means, with respect to any Person, any Person controlling,
controlled by or under common control with such Person. For purposes of this
definition, "control" means the possession, directly or indirectly, of the power
to vote a majority of the securities having voting power for the election of
directors of such Person or otherwise to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
<PAGE>
securities, by contract or otherwise; provided, however, that for the purposes
of this Agreement, ELI shall not be deemed to be an Affiliate of Citizens, and
Citizens and its subsidiaries (other than ELI) shall not be deemed to be an
Affiliate of ELI.
"AGREEMENT" has the meaning ascribed hereto in the preamble, as such
agreement may be amended and supplemented from time to time in accordance with
its terms.
"CITIZENS" has the meaning ascribed thereto in the preamble hereto.
"CITIZENS TRANSFEREE" has the meaning ascribed thereto in Section 2.9.
"CLASS A COMMON STOCK" has the meaning ascribed thereto in the recitals
to this Agreement.
"CLASS B COMMON STOCK" has the meaning ascribed thereto in the recitals
to this Agreement.
"COMMON STOCK" means the Class B Common Stock, the Class A Common
Stock, any other class of ELI capital stock having the right to vote generally
for the election of directors.
"COMPANY SECURITIES" has the meaning ascribed thereto in
Section 2.2(b).
"DISADVANTAGEOUS CONDITION" has the meaning ascribed thereto in
Section 1.1(a).
"ELI" has the meaning ascribed thereto in the preamble hereto.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
or any successor statute.
"HOLDER" means Citizens and any Transferee.
"HOLDER SECURITIES" has the meaning ascribed thereto in Section 2.2(b).
"INITIAL PUBLIC OFFERING" has the meaning ascribed thereto in the
recitals to this Agreement.
"INITIAL PUBLIC OFFERING DATE" means the date of completion of the sale
of Class A Common Stock in the Initial Public Offering.
"OTHER HOLDERS" has the meaning ascribed thereto in Section 2.2(c).
"OTHER SECURITIES" has the meaning ascribed thereto in Section 2.2.
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"PERSON" means any individual, partnership, limited liability company,
joint venture, corporation, trust, unincorporated organization, government (and
any department or agency thereof) or other entity.
"REGISTRABLE SECURITIES" means Class A Common Stock, Class B Common
Stock, and any stock or other securities into which or for which such Class A
Common Stock or Class B Common Stock may hereafter be changed, converted or
exchanged and any other shares or securities issued to Holders of such Class A
Common Stock or Class B Common Stock (or such shares or other securities into
which or for which such shares are so changed, converted or exchanged) upon any
reclassification, share combination, share subdivision, share dividend, share
exchange, merger, consolidation or similar transaction or event. As to any
particular Registrable Securities, such Registrable Securities shall cease to be
Registrable Securities when (i) a registration statement with respect to the
sale by the Holder thereof shall have been declared effective under the
Securities Act and such securities shall have been disposed of in accordance
with such registration statement; (ii) they shall have been distributed to the
public in accordance with Rule 144; (iii) they shall have been otherwise
transferred, new certificates for them not bearing a legend restricting further
transfer shall have been delivered by ELI and subsequent disposition of them
shall not require registration or qualification of them under the Securities Act
or any state securities or blue sky law then in effect; or (iv) they shall have
ceased to be outstanding.
"REGISTRATION EXPENSES" means any and all expenses incident to
performance of or compliance with any registration of securities pursuant to
Article II, including, without limitation: (i) the fees, disbursements and
expenses of ELI's counsel and accountants and the reasonable fees and expenses
of counsel selected by the Holders in accordance with this Agreement in
connection with the registration of the securities to be disposed of; (ii) all
expenses, including filing fees, in connection with the preparation, printing
and filing of the registration statement, any preliminary prospectus or final
prospectus, any other offering document and amendments and supplements thereto
and the mailing and delivering of copies thereof to any underwriters and
dealers; (iii) the cost of printing or producing any agreements among
underwriters, underwriting agreements, and blue sky or legal investment
memoranda, any selling agreements and any other documents in connection with the
offering, sale or delivery of the securities to be disposed of; (iv) all
expenses in connection with the qualification of the securities to be disposed
of for offering and sale under state securities laws, including the fees and
disbursements of counsel for the underwriters or the Holders of securities in
connection with such qualification and in connection with any blue sky and legal
investment surveys; (v) the filing fees incident to securing any required review
of the terms of the sale of the securities to be disposed of by each securities
exchange and automated inter-dealer quotation system which a class of common
equity securities of ELI is listed; (vi) transfer agents' and registrars' fees
and expenses and the fees and expenses of any other agent or trustee appointed
in connection with such offering; (vii) all security engraving and security
printing expenses; (viii) all fees and expenses payable in connection with the
listing of the securities on any securities exchange or automated inter-dealer
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quotation system or the rating of such securities; (ix) any other fees and
disbursements of underwriters customarily paid by the issuers of securities, but
excluding underwriting discounts and commissions and transfer taxes, if any; and
(x) other reasonable out-of-pocket expenses of Holders other than legal fees and
expenses referred to in clause (i) and (iv) above.
"RULE 144" means Rule 144 (or any successor rule to similar effect)
promulgated under the Securities Act.
"RULE 415 OFFERING" means an offering on a delayed or continuous basis
pursuant to Rule 415 (or any successor rule to similar effect) promulgated under
the Securities Act.
"SEC" means the United States Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
successor statute.
"SELLING HOLDER" has the meaning ascribed thereto in Section 2.4(e).
"TRANSFEREE" has the meaning ascribed thereto in Section 2.9.
Section 1.2 INTERNAL REFERENCES. Unless the context indicates
otherwise, references to articles, sections and paragraphs shall refer
to the corresponding articles, sections and paragraphs in this Agreement, and
references to the parties shall mean the parties to this Agreement.
ARTICLE II
REGISTRATION RIGHTS
Section 2.1 DEMAND REGISTRATION/REGISTRABLE SECURITIES.
(a) Upon written notice provided at any time after the Initial
Public Offering Date from any Holder of Registrable Securities requesting that
ELI effect the registration under the Securities Act of any or all of the
Registrable Securities held by such Holder, which notice shall specify the
intended method or methods of disposition of such Registrable Securities, ELI
shall use its best efforts to effect the registration under the Securities Act
and applicable state securities laws of such Registrable Securities for
disposition in accordance with the intended method or methods of disposition
stated in such request (including in a Rule 415 Offering, if ELI is then
eligible to register such Registrable Securities on Form S-3 (or a successor
form) for such offering); provided that:
(i) (With respect to any registration statement filed, or
to be filed, pursuant to this Section 2.1, if ELI shall furnish to the
Holders of Registrable Securities that have made such request a
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certified resolution of the board of directors of ELI (adopted by the
affirmative vote of a majority of the directors) stating that in the
board of directors' good faith judgment it would, because of the
existence of, or in anticipation of, any acquisition or financing
activity, or the unavailability for reasons beyond ELI's reasonable
control of any required financial statements, or any other event or
condition of similar significance to ELI, be significantly
disadvantageous (a "Disadvantageous Condition") to ELI for such a
registration statement to be maintained effective, or to be filed and
become effective, and setting forth the general reasons for such
judgment, ELI shall be entitled to cause such registration statement
not to be filed or to be withdrawn and the effectiveness of such
registration statement terminated. In the event no registration
statement has yet been filed, ELI shall be entitled not to file any
such registration statement, until such Disadvantageous Condition no
longer exists (notice of which ELI shall promptly deliver to such
Holders). Upon receipt of any such notice of a Disadvantageous
Condition, such Holders shall forthwith discontinue use of the
prospectus contained in such registration statement and, if so directed
by ELI, each such Holder will deliver to ELI all copies, other than
permanent file copies then in such Holder's possession, of the
prospectus then covering such Registrable Securities current at the
time of receipt of such notice; provided, that the filing of any such
registration statement may not be delayed for a period in excess of two
(2) months due to the occurrence of any particular Disadvantageous
Condition;
(ii) After Citizens ceases to beneficially own (within
the meaning of Rule 13d-3 of the Exchange Act or any successor
provision) less than 40% of the outstanding Common Stock, the
Holders of Registrable Securities may collectively exercise their
rights under this Section 2.1 on not more than three (3) occasions
(it being acknowledged that prior thereto there shall be no limit to
the number of occasions on which such Holders (other than any of the
Citizens Transferees and their Affiliates (and any subsequent direct or
indirect Transferees of Registrable Securities from such Citizens
Transferee and any of its Affiliates) may exercise such rights);
(iii) The Holders of Registrable Securities shall not
have the right to exercise registration rights pursuant to this Section
2.1 in any six-month period following the registration and sale of
Registrable Securities effected pursuant to a prior exercise of the
registration rights provided in this Section 2.1; and
(iv) ELI shall be under no obligation to include any
Registrable Securities in a registration statement unless ELI shall
have received from the Holders of Registrable Securities a request for
inclusion of not less than 75,000 Registrable Securities.
(b) Notwithstanding any other provision of this Agreement to
the contrary, a registration requested by a Holder of Registrable Securities
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pursuant to this Section 2.1 shall not be deemed to have been effected (and,
therefore, not requested for purposes of paragraph (a), above): (i) unless it
has become effective; (ii) if after it has become effective such registration is
interfered with by any stop order, injunction or other order or requirement of
the SEC or other governmental agency or court for any reason other than a
misrepresentation or an omission by such Holder and, as a result thereof, the
Registrable Securities requested to be registered cannot be completely
distributed in accordance with the plan of distribution set forth in the related
registration statement; or (iii) if the conditions to closing specified in the
purchase agreement or underwriting agreement entered into in connection with
such registration are not satisfied or waived other than by reason of some act
or omission by such Holder of Registrable Securities.
(c) In the event that any registration pursuant to this Section
2.1 shall involve, in whole or in part, an underwritten offering, the Holders of
a majority of the Registrable Securities to be registered shall have the right
to designate an underwriter or underwriters, reasonably acceptable to ELI, as
the lead or managing underwriters of such underwritten offering and, in
connection with each registration pursuant to this Section 2.1, such Holders may
select one legal counsel to represent all such Holders.
(d) ELI shall have the right to cause the registration of
additional equity securities for sale for the account of any Person (including,
without limitation, ELI and any existing or former directors, officers or
employees of ELI) in any registration of Registrable Securities requested by the
Holders pursuant to paragraph (a), above; provided, that if such Holders are
advised in writing (with a copy to ELI) by a nationally recognized investment
banking firm selected by such Holders reasonably acceptable to ELI (which shall
be the lead underwriter or a managing underwriter in the case of an underwritten
offering) that, in such firm's good faith view, all or a part of such additional
equity securities cannot be sold and the inclusion of such additional equity
securities in such registration would be likely to have an adverse effect on the
price, timing or distribution of the offering and sale of the Registrable
Securities then contemplated by any Holder, the registration of such additional
equity securities or part thereof shall not be permitted. The Holders of the
Registrable Securities to be offered may require that any such additional equity
securities be included in the offering proposed by such Holders on the same
conditions as the Registrable Securities that are included therein. In the event
that the number of Registrable Securities requested to be included in a
registration statement by the Holders thereof exceeds the number which, in the
good faith view of such investment banking firm, can be sold without adversely
affecting the price, timing, distribution or sale of securities in the offering,
the number shall be allocated pro rata among the requesting Holders on the basis
of the relative number of Registrable Securities then held by each such Holder
(provided that any number in excess of a Holder's request may be reallocated
among the remaining requesting Holders in a like manner).
Section 2.2 PIGGYBACK REGISTRATION. In the event that ELI at any time
after the Initial Public Offering Date proposes to register any of its Common
Stock, any other of its equity securities or securities convertible into or
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exchangeable for its equity securities (collectively, including Common Stock,
"Other Securities") under the Securities Act, whether or not for sale for its
own account, in a manner that would permit registration of Registrable
Securities for sale for cash to the public under the Securities Act, it shall at
each such time give prompt written notice to each Holder of Registrable
Securities of its intention to do so and of the rights of such Holder under this
Section 2.2. Subject to the terms and conditions hereof, such notice shall offer
each such Holder the opportunity to include in such registration statement such
number of Registrable Securities as such Holder may request. Upon the written
request of any such Holder made within 15 days after the receipt of ELI's notice
(which request shall specify the number of Registrable Securities intended to be
disposed of and the intended method of disposition thereof), ELI shall use its
best efforts to effect, in connection with the registration of the Other
Securities, the registration under the Securities Act of all Registrable
Securities which ELI has been so requested to register, to the extent required
to permit the disposition (in accordance with such intended methods thereof) of
the Registrable Securities so requested to be registered; provided, that:
(a) If, at any time after giving such written notice of its
intention to register any Other Securities and prior to the effective date of
the registration statement filed in connection with such registration, ELI shall
determine for any reason not to register the Other Securities, ELI may, at its
election, give written notice of such determination to such Holders and
thereupon ELI shall be relieved of its obligation to register such Registrable
Securities in connection with the registration of such Other Securities, without
prejudice, however, to the rights of the Holders of Registrable Securities
immediately to request that such registration be effected as a registration
under Section 2.1 to the extent permitted thereunder;
(b) If the registration referred to in the first sentence of
this Section 2.2 is to be an underwritten registration on behalf of ELI, and a
nationally recognized investment banking firm selected by ELI advises ELI in
writing that, in such firm's good faith view, the inclusion of all or a part of
such Registrable Securities in such registration would be likely to have an
adverse effect upon the price, timing or distribution of the offering and sale
of the Other Securities then contemplated, ELI shall include in such
registration:
(i) first, all Other Securities which ELI proposes to sell
for its own account ("Company Securities");
(ii) second, up to the full number of Registrable
Securities held by Citizens or its Affiliates that are requested to be
included in such registration (Registrable Securities that are so held
being sometimes referred to herein as "Holder Securities") in excess of
the number of Company Securities to be sold in such offering which, in
the good faith view of such investment banking firm, can be sold
without adversely affecting such offering and the sale of the Other
Securities then contemplated (and (x) if such number is less than the
full number of such Holder Securities, such number shall be allocated
by Citizens or (y) in the event that such investment banking firm
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advises that less than all of such Holder Securities may be included
in such offering, Citizens and its Affiliates may withdraw its or
their request for registration of their Registrable Securities under
this Section 2.2 and 90 days subsequent to the effective date of the
registration statement for the registration of such Other Securities
request that such registration be effected as a registration under
Section 2.1 to the extent permitted thereunder);
(iii) third, up to the full number of the Other Securities
(other than Company Securities), if any, in excess of the number of
Company Securities and Registrable Securities to be sold in such
offering which, in the good faith view of such investment banking firm,
can be so sold without so adversely affecting such offering (and, if
such number is less than the full number of such Other Securities, such
number shall be allocated pro rata among the holders of such Other
Securities (other than Company Securities) on the basis of the number
of securities requested to be included therein by each such holder);
(c) If the registration referred to in the first sentence of
this Section 2.2 is to be an underwritten secondary registration on behalf of
holders of Other Securities (the "Other Holders"), and the lead underwriter or
managing underwriter advises ELI in writing that in their good faith view, all
or a part of such additional securities cannot be sold and the inclusion of such
additional securities in such registration would be likely to have an adverse
effect on the price, timing or distribution of the offering and sale of the
Other Securities then contemplated, ELI shall include in such registration the
number of securities (including Registrable Securities) that such underwriters
advise can be so sold without adversely affecting such offering, allocated pro
rata among the Other Holders and the Holders of Registrable Securities on the
basis of the number of securities (including Registrable Securities) requested
to be included therein by each Other Holder and each Holder of Registrable
Securities; provided, that if such registration statement is to be filed at any
time after Citizens ceases to beneficially own less than 40% of the outstanding
Common Stock, and if such Other Holders have requested that such registration
statement be filed pursuant to demand registration rights granted to them by
ELI, ELI shall include in such registration:
(i) first, Other Securities sought to be included therein
by the Other Holders pursuant to the exercise of such demand
registration rights; and
(ii) second, the number of Holder Securities sought to be
included in such registration in excess of the number of Other
Securities sought to be included in such registration by the Other
Holders which in the good faith view of such investment banking firm,
can be so sold without so adversely affecting such offering (and (x) if
such number is less than the full number of such Holder Securities,
such number shall be allocated by Citizens or (y) in the event that
such investment banking firm advises that less than all of such Holder
Securities may be included in such offering, Citizens and its
Affiliates may withdraw its or their request for registration of
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their Registrable Securities under this Section 2.2 and 90 days
subsequent to the effective date of the registration statement for the
registration of such Other Securities request that such registration be
effected as a registration under Section 2.1 to the extent permitted
thereunder).
(d) ELI shall not be required to effect any registration of
Registrable Securities under this Section 2.2 incidental to the
registration of any of its securities in connection with mergers,
acquisitions, exchange offers, subscription offers, dividend
reinvestment plans or stock option or other executive or employee
benefit or compensation plans;
(e) ELI shall be under no obligation to include any
Registrable Securities in a registration statement unless ELI shall
have received from the Holders of Registrable Securities a request for
inclusion of not less than 75,000 Registrable Securities; and
(f) No registration of Registrable Securities effected under
this Section 2.2 shall relieve ELI of its obligation to effect a
registration of Registrable Securities pursuant to Section 2.1.
Section 2.3 EXPENSES. Except as provided herein, ELI shall pay all
Registration Expenses with respect to a particular offering (or proposed
offering). Notwithstanding the foregoing, each Holder and ELI shall be
responsible for its own internal administrative and similar costs, which shall
not constitute Registration Expenses.
Section 2.4 REGISTRATION AND QUALIFICATION. If and whenever ELI is
required to effect the registration of any Registrable Securities under the
Securities Act as provided in Section 2.1 or 2.2, and subject to Section 2.1(a)
(i), as applicable, ELI shall as promptly as practicable:
(a) Prepare, file and use its best efforts to cause to become
effective a registration statement under the Securities Act relating to the
Registrable Securities to be offered;
(b) Prepare and file with the SEC such amendments and supple-
ments to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
to comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities until the earlier of: (A) such
time as all of such Registrable Securities have been disposed of in accordance
with the intended methods of disposition set forth in such registration
statement; (B) the expiration of six-months after such registration statement
becomes effective; provided, that such six-month period shall be extended for
such number of days that equals the number of days elapsing from (x) the date
the written notice contemplated by paragraph (f) below is given by ELI to (y)
the date on which ELI delivers to the Holders of Registrable Securities the
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supplement or amendment contemplated by paragraph (f) below;
(c) Furnish to the Holders of Registrable Securities and to
any underwriter of such Registrable Securities such number of conformed copies
of such registration statement and of each such amendment and supplement thereto
(in each case including all exhibits), such number of copies of the prospectus
included in such registration statement (including each preliminary prospectus
and any summary prospectus), in conformity with the requirements of the
Securities Act, such documents incorporated by reference in such registration
statement or prospectus, and such other documents, as the Holders of Registrable
Securities or such underwriter may reasonably request, and a copy of any and all
transmittal letters or other correspondence to or received from, the SEC or any
other governmental agency or self-regulatory body or other body having
jurisdiction (including any domestic or foreign securities exchange) relating to
such offering;
(d) Use its best efforts to register or qualify all
Registrable Securities covered by such registration statement under the
securities or blue sky laws of such jurisdictions as the Holders of such
Registrable Securities or any underwriter of such Registrable Securities shall
request, and use its best efforts to obtain all appropriate registrations,
permits and consents in connection therewith, and do any and all other acts
and things which may be necessary or advisable to enable the Holders of
Registrable Securities or any such underwriter to consummate the disposition
in such jurisdictions of its Registrable Securities covered by such registration
statement; provided, that ELI shall not for any such purpose be required to
qualify generally to do business as a foreign corporation in any such
jurisdiction wherein it is not so qualified or to consent to general service of
process in any such jurisdiction;
(e) Use its best efforts to: (i) furnish to each Holder of
Registrable Securities included in such registration (each, a "Selling Holder")
and to any underwriter of such Registrable Securities an opinion of counsel for
ELI addressed to each Selling Holder and dated the date of the closing under the
underwriting agreement (if any) (or if such offering is not underwritten, dated
the effective date of the registration statement); and (ii) furnish to each
Selling Holder a "cold comfort" letter addressed to each Selling Holder and
signed by the independent public accountants who have audited the financial
statements of ELI included in such registration statement; in each such case
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) as are customarily covered in
opinions of issuer's counsel and in accountants' letters delivered to
underwriters in underwritten public offerings of securities and such other
matters as the Selling Holders may reasonably request and, in the case of such
accountants' letter, with respect to events subsequent to the date of such
financial statements;
(f) As promptly as practicable, notify the Selling Holders in
writing: (i) at any time when a prospectus relating to a registration pursuant
to Section 2.1 and 2.2 is required to be delivered under the Securities Act of
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the happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; and (ii) of any request by the SEC or any
other regulatory body or other body having jurisdiction for any amendment of or
supplement to any registration statement or other document relating to such
offering, and in either such case, at the request of the Selling Holders prepare
and furnish to the Selling Holders a reasonable number of copies of a supplement
to or an amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus
shall not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they are made, not
misleading;
(g) If reasonably requested by the lead or managing under-
writers, use its best efforts to list all such Registrable Securities covered by
such registration on each securities exchange and automated inter-dealer
quotation system on which the Common Stock of ELI is then listed;
(h) To the extent reasonably requested by the lead or managing
underwriters, send appropriate officers of ELI to attend any "road shows"
scheduled in connection with any such registration, with all out-of-pocket costs
and expense incurred by ELI or such officers in connection with such attendance
to be paid by ELI;
(i) Furnish for delivery in connection with the closing of any
offering of Registrable Securities pursuant to a registration effected pursuant
to Section 2.1 or 2.2 unlegended certificates representing ownership of the
Registrable Securities being sold in such denominations as shall be requested by
the Selling Holders or the underwriters; and
(j) ELI may require each Selling Holder of Registrable
Securities as to which any registration is being effected to furnish ELI with
such information regarding such seller and pertinent to the disclosure
requirements relating to the registration and the distribution of such
securities as ELI may from time to time reasonably request in writing.
Section 2.5 CONVERSION OF OTHER SECURITIES, ETC. In the event that any
Holder offers any options, rights, warrants or other securities issued by it or
any other Person that are offered with, convertible into or exercisable or
exchangeable for any Registrable Securities, the Registrable Securities
underlying such options, rights, warrants or other securities shall continue to
be eligible for registration pursuant to Sections 2.1 and 2.2.
Section 2.6 UNDERWRITING; DUE DILIGENCE.
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(a) If requested by the underwriters for any underwritten
offering of Registrable Securities pursuant to a registration requested under
this Article II, ELI shall enter into an underwriting agreement with such
underwriters for such offering, which agreement will contain such
representations and warranties by ELI and such other terms and provisions as are
customarily contained in underwriting agreements with respect to secondary
distributions, including, without limitation, indemnification and contribution
provisions substantially to the effect and to the extent provided in Section
2.7, and agreements as to the provision of opinions of counsel and accountants'
letters to the effect and to the extent provided in Section 2.4(e). The Selling
Holders on whose behalf the Registrable Securities are to be distributed by such
underwriters shall be parties to any such underwriting agreement and the
representations and warranties by, and the other agreements on the part of, ELI
to and for the benefit of such underwriters, shall also be made to and for the
benefit of such Selling Holders. Such underwriting agreement shall also contain
such representations and warranties by such Selling Holders and such other terms
and provisions as are customarily contained in underwriting agreements with
respect to secondary distributions, including, without limitation,
indemnification and contribution provisions substantially to the effect and to
the extent provided in Section 2.7.
(b) In connection with the preparation and filing of each
registration statement registering Registrable Securities under the Securities
Act pursuant to this Article II, ELI shall give the Holders of such Registrable
Securities and the underwriters, if any, and their respective counsel and
accountants, such reasonable and customary access to its books and records and
such opportunities to discuss the business of ELI with its officers and the
independent public accountants who have certified the financial statements of
ELI as shall be necessary, in the opinion of such Holders and such underwriters
or their respective counsel, to conduct a reasonable investigation within the
meaning of the Securities Act; provided, that such Holders and the underwriters
and their respective counsel and accountants shall use their reasonable best
efforts to coordinate any such investigation of the books and records of ELI and
any such discussions with ELI's officers and accountants so that all such
investigations occur at the same time and all such discussions occur at the same
time.
Section 2.7 INDEMNIFICATION AND CONTRIBUTION. In the case of each
offering of Registrable Securities made pursuant to this Article II, ELI agrees
to indemnify and hold harmless, to the extent permitted by law, each Selling
Holder, each underwriter of Registrable Securities so offered and each Person,
if any, who controls any of the foregoing Persons within the meaning of the
Securities Act and the officers, directors, affiliates, employees and agents
of each of the foregoing, against any and all losses, liabilities, costs
(including reasonable attorney's fees and disbursements), claims and damages,
joint or several, to which they or any of them may become subject, under the
Securities Act or otherwise, including any amount paid in settlement of any
litigation commenced or threatened, insofar as such losses, liabilities, costs,
claims and damages (or actions or proceedings in respect thereof, whether or not
such indemnified Person is a party thereto) arise out of or are based upon any
untrue statement by ELI or alleged untrue statement by ELI of a material fact
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contained in the registration statement (or in any preliminary or final
prospectus included therein) or in any offering memorandum or other offering
document relating to the offering and sale of such Registrable Securities
prepared by ELI or at its direction, or any amendment thereof or supplement
thereto, or in any document incorporated by reference therein, or any omission
by ELI or alleged omission by ELI to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading;
provided, that ELI shall not be liable to any Person in any such case to the
extent that any such loss, liability, cost, claim or damage arises out of or
relates to any untrue statement or alleged untrue statement, or any omission, if
such statement or omission shall have been made in reliance upon and in
conformity with information relating to a Selling Holder or another holder of
securities included in such registration statement and furnished to ELI by or
on behalf of such Selling Holder, other holder or underwriter, as the case may
be, specifically for use in the registration statement (or in any preliminary
or final prospectus included therein), offering memorandum or other offering
document, or any amendment thereof or supplement thereto. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of any Selling Holder or any other holder and shall survive the transfer
of such securities. The foregoing indemnity agreement is in addition to any
liability that ELI may otherwise have to each Selling Holder, other holder or
underwriter of the Registrable Securities or any controllinG person of the
foregoing and the officers, directors, affiliates, employees and agents of each
of the foregoing; provided, further, that, in the case of an offering with
respect to which a Selling Holder has designated the lead or managing
underwriters (or a Selling Holder is offering Registrable Securities directly,
without an underwriter), this indemnity does not apply to any loss,
liability, cost, claim or damage arising out of or relating to any untrue
statement or alleged untrue statement or omission or alleged omission in any
preliminary prospectus or offering memorandum if a copy of a final prospectus or
offering memorandum was not sent or given by or on behalf of any underwriter (or
such Selling Holder or other holder, as the case may be) to such Person
asserting such loss, liability, cost, claim or damage at or prior to the written
confirmation of the sale of the Registrable Securities as required by the
Securities Act and such untrue statement or omission had been corrected in such
final prospectus or offering memorandum.
(b) In the case of each offering made pursuant to this
Agreement, each Selling Holder, by exercising its registration rights hereunder,
agrees to indemnify and hold harmless, and to cause each underwriter of
Registrable Securities included in such offering (in the same manner and to the
same extent as set forth in Section 2.7(a)) to agree to indemnify and hold
harmless as follows: (i) each Selling Holder agrees to indemnify and hold harm-
less ELI, each underwriter who participates in such offering, each other Selling
Holder or other holder with securities included in such offering; and, (ii) each
underwriter agrees to indemnify and hold harmless ELI, each Selling Holder or
other holder with securities included in such offering. The foregoing
indemnified parties shall include, and each Selling Holder and each underwriter
shall indemnify and hold harmless, each Person, if any, who controls any of the
foregoing within the meaning of the Securities Act and the officers, directors,
affiliates, employees and agents of each of the foregoing, against any and all
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losses, liabilities, costs (including reasonable attorneys' fees and
disbursements), claims and damages to which they or any of them may become
subject, under the Securities Act or otherwise, including any amount paid in
settlement of any litigation commenced or threatened, insofar as such losses,
liabilities, costs, claims and damages (or actions or proceedings in respect
thereof, whether or not such indemnified Person is a party thereto) arise out of
or are based upon any untrue statement or alleged untrue statement by such
Selling Holder or underwriter, as the case may be, of a material fact contained
in the registration statement (or in any preliminary or final prospectus
included therein) or in any offering memorandum or other offering document
relating to the offering and sale of such Registrable Securities prepared by
ELI, or at its direction, or any amendment thereof or supplement thereto, or any
omission by such Selling Holder or underwriter, as the case may be, or alleged
omission by such Selling Holder or underwriter, as the case may be, of a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but in each case only to the extent that such untrue
statement of a material fact is contained in, or such material fact is omitted
from, information relating to such Selling Holder or underwriter, as the case
may be, and was furnished to ELI by or on behalf of such Selling Holder or
underwriter, as the case may be, specifically for use in such registration
statement (or in any preliminary or final prospectus included therein), offering
memorandum or other offering document. The foregoing indemnity is in addition to
any liability which such Selling Holder or underwriter, as the case may be, may
otherwise have to ELI, or controlling persons or the officers, directors,
affiliates, employees, and agents of each of the foregoing; provided, that, in
the case of an offering made pursuant to the Agreement with respect to which ELI
has designated the lead or managing underwriters (or ELI is offering securities
directly, without an underwriter), this indemnity does not apply to any loss,
liability, cost, claim, or damage arising out of or based upon any untrue
statement or alleged untrue statement or omission or alleged omission in any
preliminary prospectus or offering memorandum if a copy of a final prospectus or
offering memorandum was not sent or given by or on behalf of any underwriter (or
ELI, as the case may be ) to such Person asserting such loss, liability, cost,
claim or damage at or prior to the written confirmation of the sale of the
Registrable Securities as required by the Securities Act and such untrue
statement or omission had been corrected in such final prospectus or offering
memorandum.
(c) Each party indemnified under paragraph (a) or (b), above,
shall, promptly after receipt of notice of a claim or action against such
indemnified party in respect of which indemnity may be sought hereunder, notify
the indemnifying party in writing of the claim or action; provided, that the
failure to notify the indemnifying party shall not relieve it from any liability
that it may have to an indemnified party on account of the indemnity agreement
contained in paragraph (a) or (b), above, except to the extent that the
indemnifying party was actually prejudiced by such failure, and in no event
shall such failure relieve the indemnifying party from any other liability that
it may have to such indemnified party. If any such claim or action shall be
brought against an indemnified party, and it shall have notified the
indemnifying party thereof, unless in such indemnified party's reasonable
judgment a conflict of interest between such indemnified party and indemnifying
parties may exist in respect of such claim, the indemnifying party shall be
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entitled to participate therein, and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 2.7 for any legal or other expenses of
the defense subsequently incurred by the indemnified party in connection with
the defense thereof other than (i) if a conflict of interest between the
indemnifying party and an indemnified party exists, in which case, the
indemnifying party shall pay the costs of one legal counsel to the indemnified
party and (ii) the reasonable costs of investigation. Any indemnifying party
against whom indemnity may be sought under this Section 2.7 shall not be liable
to indemnify an indemnified party if such indemnified party settles such claim
or action without the consent of the indemnifying party. The indemnifying party
may not agree to any settlement of any such claim or action, other than solely
for monetary damages for which the indemnifying party shall be responsible
hereunder, the result of which any remedy or relief shall be applied to or
against the indemnified party, without the prior written consent of the
indemnified party, which consent shall not be unreasonably withheld. In any
action hereunder as to which the indemnifying party has assumed the defense
thereof with counsel satisfactory to the indemnified party, the indemnified
party shall continue to be entitled to participate in the defense thereof, with
counsel of its own choice, but the indemnifying party shall not be obligated
hereunder to reimburse the indemnified party for the costs thereof.
(d) If the indemnification provided for in this Section 2.7
shall for any reason be unavailable (other than in accordance with its terms) to
an indemnified party in respect of any loss, liability, cost, claim or damage
referred to therein, then each indemnifying party shall, in lieu of indemnifying
such indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, cost, claim or damage (i)
as between ELI and the Selling Holders on the one hand and the underwriters on
the other, in such proportion as shall be appropriate to reflect the relative
benefits received by ELI and the Selling Holders on the one hand and the
underwriters on the other hand or, if such allocation is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits but also the relative fault of ELI and the Selling Holders on
the one had and the underwriters on the other with respect to the statements or
omissions which resulted in such loss, liability, cost, claim or damage as well
as any other relevant equitable considerations; and (ii) as between ELI on the
one hand and each Selling Holder on the other, in such proportion as is
appropriate to reflect the relative fault of ELI and of each Selling Holder in
connection with such statements or omissions as well as any other relevant
equitable considerations. The relative benefits received by ELI and the Selling
Holders on the one hand and the underwriters on the other shall be deemed to be
in the same proportion as the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses) received
by ELI and the Selling Holders bear to the total underwriting discounts and
commissions received by the underwriters, in each case as set forth in the table
on the cover page of the prospectus. The relative fault of ELI and the Selling
Holders on the one hand and of the underwriters on the other shall be determined
15
<PAGE>
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact relates to
information supplied by ELI and the Selling Holders or by the underwriters. The
relative fault of ELI on the one hand and of each Selling Holder on the other
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by such party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission, but not by reference to any
indemnified party's stock ownership in ELI. The amount paid or payable by an
indemnified party as a result of the loss, cost, claim, damage or liability, or
action in respect thereof, referred to above in this paragraph (d) shall be
deemed to include, for purposes of this paragraph (d), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. ELI and the Selling Holders
agree that it would not be just and equitable if contribution pursuant to this
Section 2.7 were determined by pro rata allocation (even if the underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to in this paragraph. Notwithstanding any other provision of this Section 2.7,
no Selling Holder shall be required to contribute any amount in excess of the
amount by which the total price at which the Registrable Securities of such
Selling Holder were offered to the public exceeds the amount of any damages
which such Selling Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. Each Selling
Holder's obligations to contribute pursuant to this Section 2.7 are several in
proportion to the proceeds of the offering received by such Selling Holder bears
to the total proceeds of the offering received by all the Selling Holders and
not joint. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
(e) Indemnification and contribution similar to that specified
in the preceding paragraphs of this Section 2.7 (with appropriate modifications)
shall be given by ELI, the Selling Holders and underwriters with respect to any
required registration or other qualification of securities under any state law
or regulation or governmental authority.
(f) The obligations of the parties under this Section 2.7
shall be in addition to any liability which any party may otherwise have to
any other party.
Section 2.8 RULE 144 AND FORM S-3. Commencing 90 days after the Initial
Public Offering Date, ELI shall use its best efforts to ensure that the
conditions to the availability of Rule 144 set forth in paragraph (c) thereof
shall be satisfied. Upon the request of any Holder of Registrable Securities,
ELI will deliver to such Holder a written statement as to whether it has
complied with such requirements. ELI further agrees to use its reasonable
efforts to cause all conditions to the availability of Form S-3 (or any
16
<PAGE>
successor form) under the Securities Act for the filing of registration
statements under this Agreement to be met as soon as practicable after the
Initial Public Offering Date. Notwithstanding anything contained in this Section
2.8, ELI may deregister under Section 12 of the Exchange Act, if it then is
permitted to do so pursuant to the Exchange Act and the rules and regulations
thereunder.
Section 2.9 TRANSFER OF REGISTRATION RIGHTS. Any Holder may transfer,
sell or assign all or any portion of its registration rights under Article II to
any transferee of a number of Registrable Securities owned by such Holder
exceeding three percent (3%) of the outstanding class or series of such
securities at the time of transfer (each transferee that receives such minimum
number of Registrable Securities, a "Transferee"); provided, that each
Transferee of Registrable Securities to which Registrable Securities are
transferred, sold or assigned directly by Citizens or its Affiliates (such
Transferee, a "Citizens Transferee"), together with any Affiliate of such
Citizens Transferee (and any subsequent direct or indirect Transferees of
Registrable Securities from such Citizens Transferee and any of its Affiliates
(other than Citizens or its Affiliates) thereof), shall be entitled to request
the registration of Registrable Securities pursuant to Section 2.1 only once.
Any transfer of registration rights pursuant to this Section 2.9 shall be
effective upon receipt by ELI of (i) written notice from such Holder stating the
name and address of any Transferee and identifying the number of Registrable
Securities with respect to which the rights under this Agreement are being
transferred and the nature of the rights so transferred; and (ii) a written
agreement from such Transferee to be bound by the terms of this Article II and
Article IV of this Agreement as if an original party hereto. The Holders may
exercise their rights hereunder in such priority as they shall agree upon among
themselves.
Section 2.10 HOLDBACK AGREEMENT. If any registration pursuant to this
Article II shall be in connection with an underwritten public offering of
Registrable Securities, each Selling Holder agrees not to effect any public
sale or distribution, including any sale under rule 144, of any equity security
of ELI (otherwise than through the registered public offering then being made),
within seven (7) days prior to or 180 days (or such lesser period as the lead
or managing underwriters may permit)after the effective date of the registration
statement (or the commencement of the offering to the public of such
Registrable Securities in the case of Rule 415 offerings). ELI hereby also so
agrees and agrees to cause each other holder of equity securities or
securities convertible into or exchangeable or exercisable for such securities
(other than in the case of equity securities, under dividend reinvestment plans
or employee stock plans) purchased from ELI otherwise than in a public offering
to so agree.
ARTICLE III
CERTAIN COVENANTS AND AGREEMENTS
Section 3.1 NO VIOLATIONS.
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(a) Until Citizens beneficially owns less than 40% of the
outstanding Common Stock, ELI covenants and agrees that it will not take any
action or enter into any commitment or agreement which may reasonably be
anticipated to result, with or without notice and with or without lapse of time
or otherwise, in a contravention or event of default by Citizens of: (i) any
provisions of applicable law or regulation, including but not limited to
provisions pertaining to the Internal Revenue Code of 1986, as amended, or the
Employee Retirement Income Security Act of 1974, as amended; (ii) any provision
of Citizens' Articles of Incorporation or By-Laws; (iii) any credit agreement or
other material instrument binding upon Citizens; or (iv) any judgment, order or
decree of any governmental body, agency or court having jurisdiction over
Citizens or any of its Affiliates or any of their respective assets.
(b) ELI and Citizens agree to provide to the other any
information and documentation requested by the other for the purpose of
evaluating and ensuring compliance with Section 3.1(a) hereof.
(c) Notwithstanding the foregoing Sections 3.1(a) and 3.1(b),
nothing in this Agreement is intended to limit or restrict in any way the
ability of Citizens to effect, restrict or limit any action or proposed action
of ELI, including, but not limited to, the incurrence by ELI of indebtedness,
based upon Citizens' internal policies or other factors.
ARTICLE IV
MISCELLANEOUS
Section 4.1 LIMITATION OF LIABILITY. Neither Citizens nor ELI shall be
liable to the other for any special, indirect, incidental or consequential
damages of the other arising in connection with this Agreement.
Section 4.2 AMENDMENTS. This Agreement may not be amended or termin-
ated orally, but only by a writing duly executed by or on behalf of the parties
hereto. Any such amendment shall be validly and sufficiently authorized for
purposes of this Agreement if it is signed on behalf of Citizens and ELI.
Section 4.3 TERM. This Agreement shall remain in effect until all
Registrable Securities held by Holders have been transferred by them to Persons
other than Transferees; provided, that the provisions of Section 2.7 shall
survive any such expiration.
Section 4.4 SEVERABILITY. If any provision of this Agreement or the
application of any such provision to any party or circumstances shall be
determined by any court of competent jurisdiction to be invalid, illegal or
unenforceable to any extent, the remainder of this Agreement or such provision
of the application of such provision to such party or circumstances, other
than those to which it is so determined to be invalid, illegal or unenforceable,
shall remain in full force and effect to the fullest extent permitted by law
18
<PAGE>
and shall not be affected thereby, unless such a construction would be
unreasonable.
Section 4.5 NOTICES. All notices and other communications required or
permitted hereunder shall be in writing, shall be deemed duly given upon actual
receipt, and shall be delivered: (a)in person; (b) by registered or certified
mail, postage prepaid, return receipt requested; or (c) by facsimile or other
generally accepted means of electronic transmission (provided that a copy of
any notice delivered pursuant to this clause (c) shall also be sent pursuant
to clause (b), addressed as follows:
(a) IF TO ELI:
Electric Lightwave, Inc.
8100 N.E. Parkway Drive, Suite 150
Vancouver, Washington 98662
Attn: David B. Sharkey
Fax: (360) 243-4425
(b) IF TO CITIZENS:
Citizens Utilities Company.
High Ridge Park
Stamford, Connecticut 06905
Attn: Robert J. DeSantis
Fax: (203) 329-4625
or to such other addresses or telecopy numbers as may be specified by like
notice to the other parties.
Section 4.6 FURTHER ASSURANCES. Citizens and ELI shall execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered,
such instruments and take such other action as maY be necessary or advisable
to carry out their obligations under this Agreement and under any exhibit,
document or other instrument delivered pursuant hereto.
Section 4.7 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original instrument, but all
of which together shall constitute but one and the same agreement.
Section 4.8 GOVERNING LAW. This Agreement and the transactions
contemplated hereby shall be construed in accordance with, and governed by, the
laws of the State of New York without regard to the conflict of laws provisions
of any jurisdiction.
Section 4.9 ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding of the parties hereto with respect to the subject matter hereof.
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Section 4.10 SUCCESSORS. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective succes-
sors and assigns. Nothing contained in this Agreement, express or implied, is
intended to confer upon any other person or entity any benefits, rights or
remedies.
Section 4.11 SPECIFIC PERFORMANCE. The parties hereto acknowledge and
agree that irreparable damage would occuR in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. Accordingly, it is agreed that
they shall be entitled to an injunction or injunctions to prevent breaches
of the provisions of this Agreement and to enforce specifically the terms and
provisions hereof in any court of competent jurisdiction in the United States or
any state thereof, in addition to any other remedy to which they may be entitled
at law or equity.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written.
ELECTRIC LIGHTWAVE, INC.
By:/s/ David B. Sharkey
--------------------
Name: David B. Sharkey
Title: President
CITIZENS UTILITIES COMPANY
By:/s/ Robert J. DeSantis
-----------------------
Name: Robert J. DeSantis
Title: Vice President and Treasurer
21
Exhibit 10.11
CUSTOMERS AND SERVICE AGREEMENT
THIS CUSTOMERS AND SERVICE AGREEMENT (this "Agreement") is made as of
the 1st day of December, 1997, between Citizens Utilities Company, a Delaware
corporation ("Citizens"), and Electric Lightwave Inc., a Delaware corporation
("ELI").
RECITALS
A. Citizens owns all of the issued and outstanding Class B Common
Stock of ELI.
B. ELI is effecting an initial public offering (the "Offering")
of shares of its Class A Common Stock (the "Class A Common
Stock").
C. In order to preserve and continue to maximize the business
opportunities available to both ELI and Citizens after the
Offering, ELI and Citizens desire to execute and deliver this
Agreement.
AGREEMENTS
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and in consideration of their
mutual promises and obligations herein contained and intending to be legally
bound hereby, the parties do hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINITIONS. As used in this Agreement, in addition to the terms
defined in the Preamble and Recitals, the following terms will have the
following meanings, applicable to both the singular and plural forms of the
terms described.
"Affiliate" means any company, firm or person ("person") which directly
or indirectly controls, is controlled by, or is under common control with a
person. A person is regarded in control of another person if it owns, or
directly or indirectly controls, at least 50% of the voting power or other
ownership interest of the other person, or if it directly or indirectly
possesses the power to direct or cause the direction of the management and
policies of the other person by any means whatsoever; provided, however, that
for the purposes of this Agreement, ELI and its subsidiaries shall not be
Affiliates of Citizens, and Citizens and its subsidiaries (other than persons
which are subsidiaries of ELI) shall not be Affiliates of ELI.
"Citizens" shall include Citizens Affiliates.
<PAGE>
"Citizens Area" means a geographic area (designated by telephone
exchange or otherwise) in which Citizens is the Incumbent Local Exchange Carrier
(as defined by the Telecommunications Act of 1996).
"Citizens Potential Retail Customer" means a potential Citizens Retail
Customer with a place of business or residence in a Citizens Area.
"Citizens Retail Customer" as of any time means a retail customer of
Citizens at that time.
"Citizens Services" means telecommunications services offered or
rendered by Citizens.
"Citizens Wholesale Customer" as of any time means a wholesale customer
of Citizens at that time.
"Effective Date" means the date on which the first purchase and sale of
shares of Class A Common Stock by the Company pursuant to the Offering occurs.
"ELI" shall include ELI Affiliates.
"ELI Location" means a geographic location in which ELI is offering or
rendering telecommunications services and where, if a franchise, certificate,
permit or other governmental authorization is required by law, regulation or
order, the same shall have been obtained.
"ELI Potential Retail Customer" means a potential ELI Retail Customer
with a place of business or residence in an ELI Location.
"ELI Retail Customer" as of any time means a retail customer of ELI at
that time.
"ELI Services" means telecommunications services offered or rendered
by ELI.
"ELI Wholesale Customer" as of any time means a wholesale customer of
ELI at that time.
"Less Dense Area" shall mean the portion or portions of a Citizens
Area, which may be the entire Citizens Area, (a) that was not an ELI Location or
Citizens Area on the Effective Date and (b) that is, or is a part of, or
includes, a city, town, village or other metropolitan area with a population of
less than 50,000. If a Citizens Area acquired after the Effective Date is
predominately comprised of cities, towns, villages or other metropolitan areas
with a population of less than 50,000, the entire Citizens Area shall be deemed
to be a Less Dense Area. In addition, if a Citizens Area acquired after the
Effective Date is or is a part of, or includes, a city, town, village or other
metropolitan area with a population of 50,000 or more, the territory which is
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<PAGE>
within the city, town, village or other metropolitan area with a population of
more than 50,000 shall be included in the term Less Dense Area if such territory
was acquired by Citizens in a transaction ("Transaction") territory in which the
consideration allocated to such territories was less than 50% of the total
consideration paid in the Transaction.
"More Dense Area" shall mean a service territory that is not an ELI
Location or Citizens Area on the Effective Date and that is not a Less Dense
Area.
1.2 INTERNAL REFERENCES. Unless the context indicates otherwise,
references to articles, sections and paragraphs shall refer to the corresponding
articles, sections and paragraphs in this Agreement, and references to the
parties shall mean the parties to this Agreement.
ARTICLE 2
COMPETITION AND BUSINESS OPPORTUNITIES
2.1 SERVICES OF ELI. ELI agrees that, during the term of this
Agreement, ELI will not offer or sell ELI Services to a Citizens Retail Customer
or Citizens Potential Retail Customer located in (a) a Citizens Area that
existed on the Effective Date; or (b) a Less Dense Area which has become a
Citizens Area after the Effective Date and before it becomes an ELI Location,
provided that ELI may continue to provide ELI Services to any ELI Retail
Customer existing on the Effective Date pursuant to then existing contracts or
other customer agreements and any renewals or extensions thereof.
2.2 SERVICES OF CITIZENS. Citizens agrees that, during the term of this
Agreement, Citizens will not offer or sell Citizens Services to an ELI Retail
Customer or ELI Potential Retail Customer located in (a) an ELI Location that
existed on the Effective Date, or (b) a More Dense Area which has become an ELI
Location after the Effective Date and before it becomes a Citizens Area,
provided that Citizens may continue to provide Citizens Services to any Citizens
Retail Customer existing on Effective Date pursuant to then existing contracts
or other customer agreements and any renewals or extensions thereof.
2.3 OTHER AREAS. ELI may offer and sell ELI Services to a Citizens
possible future retail customer (but not to a then current retail customer or
retail customer under contract to Citizens) in any area not restricted by
Section 2.1. Citizens may offer and sell Citizens Services to an ELI possible
future retail customer (but not to a then current retail customer or retail
customer under contract to ELI) in any area not restricted by Section 2.2.
2.4 WHOLESALE CUSTOMERS. (a) During the term of this Agreement, ELI may
not offer or sell to a Citizens Wholesale Customer ELI Services of the same
nature and serving the same geographic area as the services which the customer
is then currently receiving under contract from Citizens.
3
<PAGE>
(b) During the term of this Agreement, Citizens may not offer or sell
to an ELI Wholesale Customer Citizens Services of the same nature and serving
the same geographic area as the services which the customer is then currently
receiving under contract from ELI.
2.5 EXTENT OF APPLICATION; WAIVER. The foregoing limitations on ELI's
and Citizen's offering or selling telecommunications services apply only to the
extent that both ELI and Citizens are offering or selling telecommunications
service of the same nature to the same customers or potential customers. Such
limitations shall not apply to the extent that both Citizens and ELI agree in
writing to waive such limitations in the case of specific customers, services or
geographic areas.
ARTICLE 3
TERM AND TERMINATION
3.1 TERM. The term of this Agreement shall commence on the Effective
Date and, unless terminated earlier pursuant to Section 3.2, shall continue
until the first to occur of (a) the date on which Citizens and its Affiliates
own shares representing less than a majority of the ordinary voting power of the
outstanding capital stock of ELI, or (b) the date on which the designees or
representatives of Citizens cease to constitute a majority of the board of
directors of ELI.
3.2 TERMINATION. Citizens shall have the right to terminate this
Agreement upon the occurrence of any material breach of this Agreement by ELI or
any of its Affiliates that is not cured within thirty (30) days after receipt of
written notice of such breach from Citizens.
ARTICLE 4
RESOLUTION OF DISPUTES
4.1 ARBITRATION. Any dispute, controversy or claim between Citizens and
ELI arising out of or relating to this Agreement or any agreements or
instruments relating hereto or delivered in connection herewith, will be
resolved by arbitration conducted in Stamford, Connecticut under the auspices
and according to the Commercial Arbitration Rules of the American Arbitration
Association. The arbitration shall be conducted in accordance with the United
States Arbitration Act (Title 9, U.S. Code), notwithstanding any choice of law
provision in this Agreement.
4
<PAGE>
ARTICLE 5
MISCELLANEOUS PROVISIONS
5.1 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of New York without regard to principles of
conflicts of laws of any jurisdiction.
5.2 NOTICES. Any notice permitted or required by this Agreement shall
be deemed given when sent by personal service, by certified or registered mail
return receipt requested, postage prepaid, by facsimile transmission or by
overnight delivery by a nationally recognized courier and addressed as follows:
IF TO CITIZENS: Citizens Utilities Company
High Ridge Park
Stamford, Connecticut 06905
Attn: Robert J. DeSantis
Fax No.: (203) 329-4651
IF TO ELI: Electric Lightwave Inc.
8100 N.E. Parkway Drive, Suite 150
Vancouver, Washington 98662
Attn: David B. Sharkey
Fax No.: (360) 243-4425
Actual receipt of notice or other communication shall overcome any deficiency in
manner of delivery thereof.
5.3 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which, when executed by both parties to this Agreement,
shall be deemed to be an original, and all of which counterparts together shall
constitute one and the same instrument.
5.4 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
of the parties with respect to its subject matter, superseding all prior oral
and written communications, proposals, negotiations, representations,
understandings, courses of dealing, agreements, contracts, and the like between
the parties.
5.5 AMENDMENTS. This Agreement may be changed, amended, modified, or
rescinded only by an instrument in writing signed by the party against which
enforcement of such change, amendment, modification or rescission is sought.
5.6 WAIVERS. No waiver by any party of any condition, or breach of any
provision of this Agreement, in any one or more instances, shall be deemed to be
or construed as a waiver of any other condition or of the breach of any other
provision of this Agreement.
5
<PAGE>
5.7 RELATIONSHIP. Nothing in this Agreement shall be deemed to create a
partnership, joint venture or agency relationship between the parties. Both
parties are independent contractors and neither party is to be considered the
agent or legal representative of the other for any purpose whatsoever under this
Agreement.
5.8 SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure to the
benefit of the parties and their respective successors and assigns, except that
no obligation under this Agreement may be delegated, nor may any rights under
this Agreement be assigned by either party, without the prior written consent of
the other party, except by operation of law. Any such purported assignment of
this Agreement by either party without the prior written consent of the other
party shall be void and without effect. Except as expressly provided in this
Agreement, the parties hereto intend that this Agreement shall not benefit or
create any right or cause of action in or on behalf of any person other than the
parties hereto.
6
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
ELECTRIC LIGHTWAVE, INC.
By:/s/David B. Sharkey
----------------------
Name: David B. Sharkey
Title: President
CITIZENS UTILITIES COMPANY
By:/s/ Robert J. DeSantis
------------------------
Name: Robert J. DeSantis
Title: Vice President and Treasurer
7
Exhibit 10.12
CITIZENS UTILITIES COMPANY
High Ridge Park
Stamford, Connecticut 06905
December 1, 1997
Electric Lightwave Inc.
8100 N.E. Parkway Drive
Suite 150
Vancouver, WA 98662
Re: Guaranty Fees
Dear Sir/Madam:
Reference is made to the Guaranty Agreement of Citizens Utilities
Company ("Citizens") in favor of Shawmut Bank Connecticut, National Association
("Shawmut"), BA Leasing & Capital Corporation ("BA") and the other Beneficiaries
named therein, dated as of April 28, 1995, pursuant to which Citizens has agreed
to guaranty certain obligations of Electric Lightwave, Inc. (the "Company")
under the Participation Agreement between the Company, Shawmut, the Certificate
Purchasers named therein, the Lenders named therein, BA an Citizens, dated as of
April 28, 1995 (the "Participation Agreement"), and the related operating
documents. For value received, the Company hereby agrees to pay Citizens a
guarantee fee at a rate of 3.25% per annum of the amount of the lessor's
investment in the leased assets.
Reference is made to the Bank Credit Agreement dated as of November 21,
1997 among the Company, Citizens, the Lenders named therein and Citibank, N.A.
(the "Bank Credit Agreement"), pursuant to which Citizens, indirectly through
certain subsidiaries and, after regulatory authorization has been obtained,
directly, has agreed to guaranty obligations of the Company under the Bank
Credit Agreement. For value received, the Company hereby agrees to pay Citizens
a guarantee fee at a rate of 3.25% per annum based on the balance outstanding of
the Company under the Bank Credit Agreement.
In the event that Citizens intends to reduce its economic interest in
the Company to less than 51%, Citizens will be entitled to request the Company
to refinance its obligations under the Participation Agreement and the Bank
Credit Agreement and the Company shall be obligated to use its best efforts to
do so. This refinancing would occur when Citizens reduces its economic interest
in the Company to less than 51%.
If you are in agreement with all of the above, please sign in the space
below.
Very truly yours,
CITIZENS UTILITIES COMPANY
By: /s/ Robert J. DeSantis
-------------------------
Name: Robert J. DeSantis
Title: Vice President and Treasurer
Agreed and Accepted:
Dated: December 1, 1997
ELECTRIC LIGHTWAVE, INC .
By:/s/ David B. Sharkey
-----------------------
Name: David B. Sharkey
Title: President
Exhibit 10.15
$400,000,000
CREDIT AGREEMENT
Dated as of November 21, 1997
Among
ELECTRIC LIGHTWAVE, INC.
as Borrower
CITIZENS UTILITIES COMPANY
as Parent Guarantor
and
THE LENDERS NAMED HEREIN
as Lenders
and
CITIBANK, N.A.
as Administrative Agent
<PAGE>
T A B L E O F C O N T E N T S
Section Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms................................ 1
SECTION 1.02. Computation of Time Periods.......................... 14
SECTION 1.03. Accounting Terms..................................... 14
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The A Advances....................................... 14
SECTION 2.02. Making the A Advances................................ 15
SECTION 2.03. The B Advances....................................... 17
SECTION 2.04. Certain Fees......................................... 21
SECTION 2.05. Changes in and Extensions of the
Commitments............................ 21
SECTION 2.06. Repayment of A Advances.............................. 23
SECTION 2.07. Interest............................................. 23
SECTION 2.08. Additional Interest on Eurodollar
Rate Advances.......................... 24
SECTION 2.09. Interest Rate Determinations; Changes
in Rating Systems...................... 25
SECTION 2.10. Voluntary Conversion and Continuation
of A Advances.......................... 27
SECTION 2.11. Prepayments of A Advances............................ 28
SECTION 2.12. Increased Costs...................................... 28
SECTION 2.13. Illegality........................................... 29
SECTION 2.14. Payments and Computations............................ 30
SECTION 2.15. Taxes................................................ 32
SECTION 2.16. Sharing of Payments, Etc............................. 35
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. All Borrowings....................................... 35
SECTION 3.02. First Borrowing...................................... 36
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Organization; Powers; Governmental
Approvals.............................. 37
SECTION 4.02. Financial Statements. .............................. 38
SECTION 4.03. No Material Adverse Change........................... 38
SECTION 4.04. Title to Properties; Possession Under Leases......... 39
SECTION 4.05. Ownership of Subsidiaries............................ 39
(i)
<PAGE>
Section Page
SECTION 4.06. Litigation; Compliance with Laws..................... 39
SECTION 4.07. Agreements........................................... 40
SECTION 4.08. Federal Reserve Regulations.......................... 40
SECTION 4.09. Investment Company Act; Public
Utility Holding Company Act............ 40
SECTION 4.10. Use of Proceeds...................................... 40
SECTION 4.11. Tax Returns.......................................... 40
SECTION 4.12. No Material Misstatements............................ 40
SECTION 4.13. Employee Benefit Plans............................... 41
SECTION 4.14. Insurance............................................ 41
ARTICLE V
AFFIRMATIVE COVENANTS
SECTION 5.01. Existence, Businesses and Properties................. 42
SECTION 5.02. Financial Statements, Reports, etc................... 43
SECTION 5.03. Litigation and other Notices......................... 44
SECTION 5.04. Maintaining Records.................................. 45
SECTION 5.05. Use of Proceeds...................................... 45
ARTICLE VI
NEGATIVE COVENANTS
SECTION 6.01. Liens................................................ 46
SECTION 6.02. Ownership of the Principal Subsidiaries.............. 46
SECTION 6.03. Asset Sales.......................................... 46
SECTION 6.04. Mergers.............................................. 47
SECTION 6.05. Restrictions on Dividends............................ 47
SECTION 6.06. Transactions with Affiliates......................... 48
SECTION 6.07. Minimum Consolidated Net Worth....................... 48
SECTION 6.08. Subsidiary Guarantors................................ 48
ARTICLE VII
EVENTS OF DEFAULT
ARTICLE VIII
THE ADMINISTRATIVE AGENT
SECTION 8.01. Authorization and Action............................. 51
SECTION 8.02. Administrative Agent's Reliance, Etc................. 52
SECTION 8.03. Citibank and Affiliates.............................. 53
SECTION 8.04. Lender Credit Decision............................... 53
SECTION 8.05. Indemnification...................................... 53
SECTION 8.06. Successor Administrative Agent....................... 54
(ii)
<PAGE>
Section Page
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendments, Etc...................................... 54
SECTION 9.02. Notices, Etc......................................... 55
SECTION 9.03. No Waiver; Remedies.................................. 56
SECTION 9.04. Costs, Expenses and Indemnification.................. 56
SECTION 9.05. Right of Set-off..................................... 57
SECTION 9.06. Binding Effect....................................... 58
SECTION 9.07. Assignments, Designations and
Participations......................... 58
SECTION 9.08. Governing Law; Submission to
Jurisdiction........................... 63
SECTION 9.09. Severability......................................... 63
SECTION 9.10. Execution in Counterparts............................ 64
SECTION 9.11. Survival............................................. 64
SECTION 9.12. Waiver of Jury Trial................................. 64
SECTION 9.13. Substitution of Lender............................... 64
SECTION 9.14. Confidentiality...................................... 65
ARTICLE X
GUARANTEE......................................... 66
SECTION 10.01 The Guarantee........................................ 66
SECTION 10.02 Obligations Unconditional............................ 66
SECTION 10.03 Reinstatement........................................ 67
SECTION 10.04 Subrogation.......................................... 67
SECTION 10.05 Remedies............................................. 68
SECTION 10.07 Continuing Guarantee................................. 68
SECTION 10.08 General Limitation on Guarantee
Obligations............................ 68
SECTION 10.09 Effectiveness of Guarantee........................... 69
(iii)
<PAGE>
EXHIBITS
Exhibit A-1 - Form of A Note
Exhibit A-2 - Form of B Note
Exhibit B-1 - Form of Notice of A Borrowing
Exhibit B-2 - Form of Notice of B Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Designation Agreement
Exhibit E - Form of Opinion of Assistant General
......... Counsel of the Borrower
Exhibit F - Form of Opinion of Special New York
Counsel to the Administrative Agent
(iv)
<PAGE>
CREDIT AGREEMENT, dated as of November 21, 1997, among
ELECTRIC LIGHTWAVE, INC., a Delaware corporation (the "Borrower"), CITIZENS
UTILITIES COMPANY, a Delaware corporation (the "Parent Guarantor"), the
subsidiaries of the Parent Guarantor (the "Subsidiary Guarantors" and, together
with the Parent Guarantor, the "Guarantors") listed on the signature pages
hereof under the caption the "SUBSIDIARY GUARANTORS", the banks (the "Banks")
listed on the signature pages hereof under the caption "BANKS", and CITIBANK,
N.A., a national banking corporation, as administrative agent (in such capacity,
the "Administrative Agent").
The Borrower and the Parent Guarantor have requested the Banks
to extend credit to the Borrower in order to enable the Borrower to borrow on a
revolving credit basis, on and after the date hereof and at any time and from
time to time prior to the Commitment Termination Date (as hereinafter defined) a
principal amount not in excess of $400,000,000 at any time outstanding. The
Borrower and the Parent Guarantor have also requested the Banks to provide a
procedure pursuant to which the Borrower may invite the Banks to bid on an
uncommitted basis on short-term borrowings by the Borrower. The proceeds of such
borrowings are to be used to repay certain intercompany indebtedness owing to
the Parent Guarantor, to provide working capital and for other general corporate
purposes of the Borrower. The Subsidiary Guarantors have agreed to guarantee the
Borrower's obligations hereunder until such time as the Parent Guarantor
receives regulatory approval to guarantee such obligations, at which time the
obligations of the Parent Guarantor hereunder shall become effective and the
Subsidiary Guarantors' obligations hereunder shall terminate. The Banks are
willing to extend such credit to the Borrower on the terms and subject to the
conditions herein set forth.
Accordingly, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined):
"A Advance" means an advance by a Lender to the Borrower as
part of an A Borrowing and refers to a Base Rate Advance or a
Eurodollar Rate Advance, each of which shall be a "Type" of A Advance.
Credit Agreement
<PAGE>
- 2 -
"A Borrowing" means (a) a borrowing consisting of simultaneous
A Advances of the same Type having the same Interest Period and (b)
other than for purposes of Sections 2.02 and 3.02, (i) the simultaneous
Conversion of A Advances of one Type to A Advances of the other Type
(having, in the case of Conversions into Eurodollar Rate Advances, the
same Interest Period) and (ii) the simultaneous Continuation of
Eurodollar Rate Advances as Eurodollar Rate Advances having the same
Interest Period.
"A Note" means a promissory note of the Borrower payable to
the order of any Lender, in substantially the form of Exhibit A-1
hereto, evidencing the aggregate indebtedness of the Borrower to such
Lender resulting from the A Advances made by such Lender.
"Advance" means an A Advance or a B Advance.
"Administrative Fees" has the meaning assigned to such term in
Section 2.04(b).
"Administrative Questionnaire" means an administrative
questionnaire furnished by each Bank to the Administrative Agent in
connection with the execution and delivery of this Agreement.
"Affiliate" means, when used with respect to a specified
person, another person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled or is under common Control
with the person specified.
"Applicable Facility Fee Rate" means:
(i) 5 basis points per annum at such times as (A) the Senior
Debt of the Parent Guarantor shall be rated at least Aa3 by Moody's or
at least AA- by S&P, or (B) the Parent Guarantor's outstanding
commercial paper shall be rated at least P1 by Moody's and at least A1
by S&P;
(ii) 8 basis points per annum at such time as (A) the Senior Debt
of the Parent Guarantor shall be rated less than Aa3 by Moody's and
less than AA- by S&P but at least Baa3 by Moody's and at least BBB- by
S&P, and (B) the Parent Guarantor's outstanding commercial paper shall
be rated P2 by Moody's or A2 by S&P; and
(iii) 22.5 basis points per annum at all other times.
Any change in the Applicable Facility Fee Rate shall be effective on
Credit Agreement
<PAGE>
- 3 -
the date on which the applicable rating agency announces the applicable
change in rating.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a Base
Rate Advance and such Lender's Eurodollar Lending Office in the case of
a Eurodollar Rate Advance and, in the case of a B Advance, the office
of such Lender notified by such Lender to the Administrative Agent as
its Applicable Lending Office with respect to such B Advance.
"Applicable Margin" means:
(i) 13 basis points per annum with respect to Eurodollar Rate
Advances at such times as (A) the Senior Debt of the Parent Guarantor
shall be rated at least Aa3 by Moody's or at least AA- by S&P, or (B)
the Parent Guarantor's outstanding commercial paper shall be rated at
least Pl by Moody's and at least Al by S&P;
(ii) 17 basis points per annum with respect to Eurodollar Rate
Advances at such times as (A) the Senior Debt of the Parent Guarantor
shall be rated less than Aa3 by Moody's and less than AA- by S&P but
shall be rated at least Baa3 by Moody's and at least BBB- by S&P, and
(B) the Parent Guarantor's outstanding commercial paper shall be rated
P2 by Moody's or A2 by S&P; and
(iii) 52.5 basis points per annum with respect to Eurodollar Rate
Advances at all other times.
Any change in the Applicable Margin shall be effective on the date on
which the applicable rating agency announces the applicable change in
rating.
"Approval Date" means the date on which the Parent Guarantor
delivers to the Administrative Agent evidence reasonably satisfactory
to the Administrative Agent that the Parent Guarantor has received the
FERC Approval and the VPSB Approval.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by the
Administrative Agent, in substantially the form of Exhibit C hereto.
"B Advance" means an advance by a Lender to the Borrower as
part of a B Borrowing resulting from the auction bidding procedure
described in Section 2.03.
Credit Agreement
<PAGE>
- 4 -
"B Borrowing" means a borrowing consisting of simultaneous B
Advances from each of the Lenders whose offer to make one or more B
Advances as part of such borrowing has been accepted by the Borrower
under the auction bidding procedure described in Section 2.03.
"B Note" means a promissory note of the Borrower payable to
the order of any Lender, in substantially the form of Exhibit A-2
hereto, evidencing the indebtedness of the Borrower to such Lender
resulting from a B Advance made by such Lender.
"B Reduction" has the meaning specified in Section 2.01.
"Base Rate" means, for any period, a fluctuating interest rate
per annum in effect from time to time which rate per annum shall at all
times be equal to the higher of:
(a) the rate of interest announced publicly by
Citibank in New York, New York from time to time as Citibank's
base rate; and
(b) 1/2 of one percent per annum above the Federal
Funds Rate for such period.
"Base Rate Advance" means an A Advance which bears interest as
provided in Section 2.07(a)(i) or 2.07(b)(i)(x).
"Board" means the Board of Governors of the Federal Reserve
System of the United States.
"Borrowing" means an A Borrowing or a B Borrowing.
"Business Day" means a day of the year on which banks are not
required or authorized to close in New York City and, if the applicable
Business Day relates to any Eurodollar Rate Advance, on which dealings
are carried on in the London interbank market.
"Capital Lease Obligations" of any person means the
obligations of such person to pay rent or other amounts under any lease
of (or other arrangement conveying the right to use) real or personal
property, or a combination thereof, which obligations are required to
be classified and accounted for as capital leases on a balance sheet of
such person under GAAP and, for the purposes of this Agreement, the
amount of such obligations at any time shall be the capitalized amount
thereof at such time determined in accordance with GAAP.
Credit Agreement
<PAGE>
- 5 -
A "Change in Control" shall be deemed to have occurred if (a)
any person or group (within the meaning of Rule 13d-5 of the Securities
and Exchange Commission as in effect on the date hereof) shall own
directly or indirectly, beneficially or of record, shares representing
more than 49% of the aggregate ordinary voting power represented by the
issued and outstanding capital stock of the Parent Guarantor; or (b) a
majority of the seats (other than vacant seats) on the board of
directors of the Parent Guarantor shall at any time have been occupied
by persons who were neither (i) nominated by the management of the
Parent Guarantor nor (ii) appointed by directors so nominated; or (c)
any person or group shall otherwise directly or indirectly Control the
Parent Guarantor.
"Closing Date" means the date of the first Borrowing hereunder
or such earlier date as the parties may agree.
"Code" means the Internal Revenue Code of 1986, as the same
may be amended from time to time.
"Commitment" has the meaning specified in Section 2.01.
"Commitment Termination Date" means the fifth anniversary of
the date hereof or such later date to which the Commitment Termination
Date is extended pursuant to Section 2.05(c), provided in each case
that if such date is not a Business Day, then the Commitment
Termination Date shall be the immediately preceding Business Day.
"Consolidated Net Worth" means, as at any date of
determination, the consolidated stockholders' equity of the Parent
Guarantor and its consolidated Subsidiaries, as determined on a
consolidated basis in conformity with GAAP consistently applied.
"Consolidated Tangible Assets" of any person means total
assets of such person and its consolidated Subsidiaries, determined on
a consolidated basis, less goodwill, patents, trademarks and other
assets classified as intangible assets in accordance with GAAP.
"Continuation", "Continue" and "Continued" each refers to a
continuation of Eurodollar Rate Advances from one Interest Period to
the next Interest Period pursuant to Section 2.10.
"Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of
Credit Agreement
<PAGE>
- 6 -
a person, whether through the ownership of voting securities, by
contract or otherwise, and "Controlling" and "Controlled" shall have
meanings correlative thereto.
"Convert", "Conversion" and "Converted" each refers to a
conversion of Advances of one Type into Advances of the other Type
pursuant to Section 2.09 or 2.10.
"Default" means any event or condition which upon notice,
lapse of time, or both would constitute an Event of Default.
"Designated Bidder" means (a) an Eligible Assignee or (b) a
special purpose corporation which is engaged in making, purchasing or
otherwise investing in commercial loans in the ordinary course of its
business and that issues (or the parent of which issues) commercial
paper rated at least P-1 by Moody's or A-1 by S&P (or a comparable
rating from a successor of either of them), that, in either case, (i)
is organized under the laws of the United States or any State thereof,
(ii) shall have become a party hereto pursuant to Section 9.07(d), (e)
and (f), and (iii) is not otherwise a Lender.
"Designation Agreement" means a designation agreement entered
into by a Lender (other than a Designated Bidder) and a Designated
Bidder, and accepted by the Administrative Agent, in substantially the
form of Exhibit D hereto.
"Domestic Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Domestic Lending Office" in
the Administrative Questionnaire of such Lender or in the Assignment
and Acceptance pursuant to which it became a Lender, or such other
office of such Lender as such Lender may from time to time specify to
the Borrower and the Administrative Agent.
"Effective Date" means the earliest date as of which the
conditions precedent to effectiveness set forth in Section 3.01 shall
have been satisfied or waived.
"Eligible Assignee" means:
(a) a commercial bank organized under the laws of the United
States, or any State thereof, and having total assets in excess of
$100,000,000;
(b) a savings and loan association or savings bank organized
under the laws of the United States, or any State thereof, and having
Credit Agreement
<PAGE>
- 7 -
total assets in excess of $100,000,000;
(c) a commercial bank organized under the laws of any other
country which is a member of the OECD or has concluded special lending
arrangements with the International Monetary Fund associated with its
General Arrangements to Borrow or of the Cayman Islands, or a political
subdivision of any such country, and having total assets in excess of
$100,000,000, provided that such bank is acting through a branch or
agency located in the United States or the Cayman Islands;
(d) the central bank of any country which is a member of the
OECD;
(e) a finance company, insurance company or other financial
institution or fund (whether a corporation, partnership or other
entity) which is engaged in making, purchasing or otherwise investing
in commercial loans in the ordinary course of its business, and having
total assets in excess of $100,000,000;
(f) a Lender; and
(g) an Affiliate of a Lender;
provided that neither the Borrower nor any Affiliate of the Borrower
shall qualify as an Eligible Assignee.
"ERISA" means the Employee Retirement Income Security Act of
1974, as the same may be amended from time to time, and the regulations
promulgated and the rulings issued thereunder.
"ERISA Affiliate" means each trade or business (whether or not
incorporated) which together with the Parent Guarantor or a Subsidiary
of the Parent Guarantor would be deemed to be a "single employer"
within the meaning of Section 4001(b)(1) of ERISA.
"ERISA Termination Event" means (i) a "Reportable Event"
described in Section 4043 of ERISA (other than a "Reportable Event" not
subject to the provision for 30-day notice to the PBGC under such
regulations), or (ii) the withdrawal of the Parent Guarantor or any of
its ERISA Affiliates from a Plan during a plan year in which it was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA, or
(iii) the filing of a notice of intent to terminate a Plan or the
treatment of a Plan amendment as a termination under Section 4041 of
Credit Agreement
<PAGE>
- 8 -
ERISA, or (iv) the institution of proceeding to terminate a Plan by the
PBGC or (v) any other event or condition which might constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Plan.
"Eurocurrency Liabilities" has the meaning assigned to that
term in Regulation D of the Board of Governors of the Federal Reserve
System, as in effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Eurodollar Lending Office"
in the Administrative Questionnaire of such Lender or in the Assignment
and Acceptance pursuant to which it became a Lender (or, if no such
office is specified, its Domestic Lending Office), or such other office
of such Lender as such Lender may from time to time specify to the
Borrower and the Administrative Agent.
"Eurodollar Rate" means, with respect to any Eurodollar Rate
Advance for any Interest Period, the rate (rounded upward to the
nearest 1/16 of 1%) appearing on Page 3750 of the Dow Jones Markets
Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Administrative Agent from time to time for purposes
of providing quotations of interest rates applicable to dollar deposits
in the London interbank market) at approximately 11:00 a.m., London
time, two Business Days prior to the commencement of such Interest
Period, as the rate for dollar deposits with a maturity comparable to
such Interest Period. In the event that such rate is not available at
such time for any reason, then the "Eurodollar Rate" with respect to
such Eurodollar Rate Advance for such Interest Period shall be the
average (rounded upward to the nearest 1/16 of 1%) of the rates at
which dollar deposits of $5,000,000 and for a maturity comparable to
such Interest Period are offered by the principal London offices of the
Reference Banks in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days
prior to the commencement of such Interest Period.
"Eurodollar Rate Advance" means an A Advance which bears
interest as provided in Section 2.07(a)(ii) or 2.07(b)(i)(y).
"Eurodollar Rate Reserve Percentage" of any Lender for any
Interest Period for any Eurodollar Rate Advance means the effective
Credit Agreement
<PAGE>
- 9 -
rate (expressed as a percentage) at which reserve requirements
(including, without limitation, emergency, supplemental and other
marginal reserve requirements) are imposed on such Lender during such
Interest Period (or if more than one such percentage shall be so
applicable, the daily average of such percentages for those days in
such Interest Period during which any such percentage shall be so
applicable) under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) with respect
to liabilities or assets consisting of or including Eurocurrency
Liabilities having a term equal to such Interest Period.
"Event of Default" has the meaning assigned to such term in
Article VII.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
"Excluded Period" means, with respect to any additional amount
payable under Section 2.12, the period falling prior to the applicable
Lender's delivery of a certificate referenced in Section 2.12(a) or
2.12(b), as applicable, with respect to such additional amount.
"Facility Fee" has the meaning assigned to such term in
Section 2.04(a).
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is
a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by it.
"Fees" means the Facility Fee and the Administrative Fees.
"FERC Approval" means the approval by the Federal Energy
Regulatory Commission required for the obligations of the Parent
Guarantor's obligations under Article X to be effective.
Credit Agreement
<PAGE>
- 10 -
"Financial Officer" of any corporation shall mean the
President, Chief Financial Officer, Chief Executive Officer or
Treasurer of such corporation.
"First Mortgage Bond Indenture" means the First Mortgage and
Collateral Trust Indenture, dated as of March 1, 1947, from the Parent
Guarantor to The Marine Midland Trust Company of New York, as Trustee,
as the same has been and may from time to time be amended or
supplemented and in effect.
"GAAP" means generally accepted accounting principles,
applied on a consistent basis.
"Governmental Approval" means any authorization, consent,
approval, license, franchise, lease, ruling, tariff, rate, permit,
certificate, exemption of, or filing or registration with, any
Governmental Authority required in connection with the execution,
delivery or performance by any Obligor of this Agreement or the Notes.
"Governmental Authority" means any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Indebtedness" of any person means, without duplication, (a)
all obligations of such person for borrowed money or with respect to
deposits or advances of any kind, (b) all obligations of such person
evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such person upon which interest charges are customarily
paid, (d) all obligations of such person under conditional sale or
other title retention agreements relating to property or assets
purchased by such person, (e) all obligations of such person issued or
assumed as the deferred purchase price of property or services, (f) all
Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on property owned or acquired by such person,
whether or not the obligations secured thereby have been assumed, (g)
all Capital Lease Obligations of such person, (h) all obligations of
such person in respect of interest rate protection agreements, foreign
currency exchange agreements or other interest or exchange rate hedging
arrangements, (i) all obligations of such person as an account party in
respect of letters of credit and bankers' acceptances and (j) any
obligation, contingent or otherwise, of such person guaranteeing or
having the economic effect of guaranteeing any Indebtedness of any
other person (the "primary obligor") in any manner, whether directly or
Credit Agreement
<PAGE>
- 11 -
indirectly, and including any obligation of such person, direct or
indirect (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or to purchase (or to advance
or supply funds for the purchase of) any security for the payment of
such Indebtedness, (ii) to purchase property, securities or services
for the purpose of assuring the owner of such Indebtedness of the
payment of such Indebtedness or (iii) to maintain working capital,
equity capital or other financial statement condition or liquidity of
the primary obligor so as to enable the primary obligor to pay such
Indebtedness; provided, however, that the term Indebtedness shall not
include endorsements for collection or deposit, in either case in the
ordinary course of business.
"Interest Period" means, with respect to any Eurodollar Rate
Advance, the period beginning on the date such Eurodollar Rate Advance
is made or Continued, or Converted from a Base Rate Advance, and ending
on the last day of the period selected by the Borrower pursuant to the
provisions below. The duration of each such Interest Period shall be
one, two, three or six or (with the consent of all of the Lenders) nine
or twelve months, as the Borrower may, upon notice received by the
Administrative Agent not later than 11:00 A.M. (New York City time) on
the third Business Day prior to the first day of such Interest Period,
select; provided, however, that:
(i) the Borrower may not select any Interest Period
that ends after the Termination Date;
(ii) each Interest Period that begins on the last Business
Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent
calendar month) shall end on the last Business Day of the
appropriate subsequent calendar month; and
(iii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last
day of such Interest Period shall be extended to occur on the
next succeeding Business Day, provided that, if such extension
would cause the last day of such Interest Period to occur in
the next following calendar month, the last day of such
Interest Period shall occur on the next preceding Business
Day.
"Lenders" means the Banks listed on the signature pages
hereof, each person that shall become a party hereto pursuant to
Section 9.07(a), (b) and (c), and, except when used in reference to an
Credit Agreement
<PAGE>
- 12 -
A Advance, an A Borrowing, an A Note, a Commitment or a related term,
each Designated Bidder.
"Lien" means, with respect to any asset (a) any mortgage, deed
of trust, lien, pledge, encumbrance, charge, or security interest in or
on such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease, or title retention agreement
relating to such asset and (c) in the case of securities, any purchase
option, call, or similar right of a third party with respect to such
securities.
"Loan Documents" shall mean this Agreement and the Notes.
"Majority Lenders" means at any time Lenders holding more than
50% of the then aggregate unpaid principal amount of the A Advances
held by Lenders, or, if no such principal amount is then outstanding,
Lenders having more than 50% of the Commitments.
"Margin Regulations" means Regulations G, U and X of the
Board.
"Material Adverse Effect" means a materially adverse effect on
the business, assets, operations, condition, financial or otherwise, or
results of operations of (i) prior to the Approval Date, the Obligors
taken as a whole or (ii) on and after the Approval Date, the Parent
Guarantor and the Subsidiaries taken as a whole.
"Moody's" means Moody's Investors Service, Inc., or any suc-
cessor thereto.
"Note" means an A Note or a B Note.
"Notice of A Borrowing" has the meaning specified in Section
2.02(a).
"Notice of B Borrowing" has the meaning specified in Section
2.03(a).
"Obligors" means the Borrower and the Guarantors.
"OECD" means the Organization for Economic Cooperation and
Development.
"PBGC" means the Pension Benefit Guaranty Corporation referred
to and defined in ERISA.
Credit Agreement
<PAGE>
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"person" means any natural person, corporation, business,
trust, joint venture, association, company, partnership, or government,
or any agency or political subdivision thereof.
"Plan" means any pension plan (including a multiemployer plan)
subject to the provisions of Title IV of ERISA or Section 412 of the
Code which is maintained for or to which contributions are made for
employees of the Parent Guarantor or any ERISA Affiliate.
"Principal Subsidiaries" means any Subsidiary of the Parent
Guarantor whose Consolidated Tangible Assets comprise in excess of 40%
of the Consolidated Tangible Assets of the Parent Guarantor and its
consolidated Subsidiaries as of the date hereof or at any time
hereafter. In any event, the term "Principal Subsidiaries" includes (a)
the Borrower and (b) prior to the Approval Date, the Subsidiary
Guarantors.
"Rating Agencies" means S&P, Moody's and, if either or both of
the foregoing rating agencies shall not rate any long-term senior
indebtedness of any Principal Subsidiary, a nationally-recognized
securities rating agency or agencies selected by the Parent Guarantor
and approved by the Lenders.
"Reference Banks" means Citibank, Bank of America NT&SA and
The Fuji Bank, Limited.
"Register" has the meaning specified in Section 9.07(g).
"S&P" means Standard & Poor's Ratings Services or any success-
or thereto.
"Senior Debt" means so long as any bonds issued pursuant to
the First Mortgage Bond Indenture shall be outstanding and rated by a
Rating Agency, such bonds, and at all other times, the most senior,
unsecured, non-credit enhanced, long-term Indebtedness of the Parent
Guarantor then outstanding.
"subsidiary" means, with respect to any person (herein
referred to as the "parent"), any corporation, partnership,
association, or other business entity (a) of which securities or other
ownership interests representing more than 50% of the equity or more
than 50% of the ordinary voting power or more than 50% of the general
partnership interests are, at the time any determination is being made,
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owned, Controlled, or held, or (b) which is, at the time any
determination is made, otherwise Controlled by the parent or one or
more subsidiaries of the parent or by the parent and one or more
subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Parent Guarantor.
"Termination Date" means the Commitment Termination Date or
the earlier date of termination in whole of the Commitments pursuant to
Section 2.05(a) or Article VII.
"VPSB Approval" means the approval by the Vermont Public
Service Board required for the obligations of the Parent Guarantor's
obligations under Article X to be effective.
SECTION 1.02. Computation of Time Periods. In this Agreement
in the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each means "to but excluding".
SECTION 1.03. Accounting Terms. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided,
however, that, for purposes of determining compliance with any covenant set
forth in Articles V and VI, such terms shall be construed in accordance with
GAAP as in effect on the date of this Agreement applied on a basis consistent
with the application used in preparing the Parent Guarantor's audited financial
statements referred to in Section 4.02.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The A Advances.
(a) Each Lender severally agrees, on the terms and conditions
hereinafter set forth, to make A Advances to the Borrower from time to time on
any Business Day during the period from the date hereof until the Termination
Date in an aggregate amount not to exceed at any time outstanding the amount set
opposite such Lender's name on the signature pages hereof or, if such Lender has
entered into any Assignment and Acceptance, set forth for such Lender in the
Register, as such amount may be reduced pursuant to Section 2.05(a) (such
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Lender's "Commitment"), provided that the aggregate amount of the Commitments of
the Lenders shall be deemed used from time to time to the extent of the
aggregate amount of the B Advances then outstanding and such deemed use of the
aggregate amount of the Commitments shall be deemed applied to the Lenders
ratably according to their respective Commitments (such deemed use of the
aggregate amount of the Commitments being a "B Reduction").
(b) Each A Borrowing (i) shall (except as otherwise provided
in Sections 2.09(f) and (g)) be in an aggregate amount not less than $10,000,000
or an integral multiple of $1,000,000 in excess thereof and (ii) shall consist
of A Advances of the same Type (and, if such Advances are Eurodollar Rate
Advances, having the same Interest Period) made, Continued or Converted on the
same day by the Lenders ratably according to their respective Commitments.
Within the limits of each Lender's Commitment, the Borrower may from time to
time borrow, prepay pursuant to Section 2.11(b) and reborrow under this Section
2.01.
SECTION 2.02. Making the A Advances.
(a) Each A Borrowing shall be made on notice, given not later
than 11:00 A.M. (New York City time) on the third Business Day prior to the date
of the proposed A Borrowing (in the case of an A Borrowing consisting of
Eurodollar Rate Advances) or given not later than 11:00 A.M. (New York City
time) on the Business Day of the proposed A Borrowing (in the case of an A
Borrowing consisting of Base Rate Advances), by the Borrower to the
Administrative Agent, which shall give to each Lender prompt notice thereof by
telecopier, telex or cable. Each such notice of an A Borrowing (a "Notice of A
Borrowing") shall be by telecopier, telex or cable, in substantially the form of
Exhibit B-1 hereto, specifying therein the requested (i) date of such A
Borrowing, (ii) Type of A Advances comprising such A Borrowing, (iii) aggregate
amount of such A Borrowing, and (iv) in the case of an A Borrowing consisting of
Eurodollar Rate Advances, initial Interest Period for each such A Advance. Each
Lender shall, before 1:00 P.M. (New York City time) on the date of such A
Borrowing, make available for the account of its Applicable Lending Office to
the Administrative Agent at its address referred to in Section 9.02, in same day
funds, such Lender's ratable portion of such A Borrowing. After the
Administrative Agent's receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article III, the Administrative Agent will
make such funds available to the Borrower at the Administrative Agent's
aforesaid address.
(b) Anything in subsection (a) above to the contrary
notwithstanding, the Borrower may not select Eurodollar Rate Advances for any A
Borrowing unless the aggregate principal amount of such is $10,000,000 or an
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integral multiple of $1,000,000 in excess thereof.
(c) Each Notice of A Borrowing shall be irrevocable and
binding on the Borrower. In the case of any A Borrowing which the related Notice
of A Borrowing specifies is to be comprised of Eurodollar Rate Advances, the
Borrower shall indemnify each Lender against any loss, cost or expense incurred
by such Lender as a result of any failure to fulfill, on or before the date
specified in such Notice of A Borrowing, the applicable conditions set forth in
Article III, including, without limitation, any loss (excluding loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund the A
Advance to be made by such Lender as part of such A Borrowing. The Borrower
shall pay amounts owing to any Lender pursuant to this Section 2.02(c) within 30
days after receipt from such Lender of a certificate setting forth in reasonable
detail the calculation of the amount such Lender is entitled to claim under this
Section 2.02(c) (which certificate shall be conclusive and binding for all
purposes, absent manifest error).
(d) Unless the Administrative Agent shall have received notice
from a Lender prior to the date of any A Borrowing that such Lender will not
make available to the Administrative Agent such Lender's ratable portion of such
A Borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the date of such A Borrowing in
accordance with subsection (a) of this Section 2.02 and the Administrative Agent
may, in reliance upon such assumption, make available to the Borrower on such
date a corresponding amount. If and to the extent that such Lender shall not
have so made such ratable portion available to the Administrative Agent, such
Lender and the Borrower severally agree to repay to the Administrative Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to the Borrower until
the date such amount is repaid to the Administrative Agent, at (i) in the case
of the Borrower, the interest rate applicable at the time to A Advances
comprising such A Borrowing and (ii) in the case of such Lender, the Federal
Funds Rate. If such Lender shall repay to the Administrative Agent such
corresponding amount, such amount so repaid shall constitute such Lender's A
Advance as part of such A Borrowing for purposes of this Agreement (and such A
Advance shall be deemed to have been made by such Lender on the date on which
such amount is so repaid to the Administrative Agent).
(e) The failure of any Lender to make the A Advance to be made
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by it as part of any A Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its A Advance on the date of such A
Borrowing, but no Lender shall be responsible for the failure of any other
Lender to make the A Advance to be made by such other Lender on the date of any
A Borrowing.
SECTION 2.03. The B Advances.
(a) Each Lender severally agrees that the Borrower may request
B Borrowings under this Section 2.03 from time to time on any Business Day
during the period from the date hereof until the date occurring 30 days prior to
the Termination Date in the manner set forth below; provided that, following the
making of each B Borrowing, the aggregate amount of the Advances then
outstanding shall not exceed the aggregate amount of the Commitments of the
Lenders (computed without regard to any B Reduction). The following procedures
shall apply:
(i) The Borrower may request a B Borrowing under this Section
2.03 by delivering to the Administrative Agent, by telecopier, telex or
cable, a notice of a B Borrowing (a "Notice of B Borrowing"), in
substantially the form of Exhibit B-2 hereto, specifying the date and
aggregate amount of the proposed B Borrowing, the maturity date for
repayment of each B Advance to be made as part of such B Borrowing
(which maturity date may not be earlier than the date occurring 30 days
after the date of such B Borrowing or later than the Termination Date),
the interest payment date or dates relating thereto, and any other
terms to be applicable to such B Borrowing, not later than 10:00 A.M.
(New York City time):
(A) at least one Business Day prior to the date of
the proposed B Borrowing, if the Borrower shall specify in the
Notice of B Borrowing that the rates of interest to be offered
by the Lenders shall be fixed rates per annum (such Borrowing,
a "Fixed Rate B Borrowing") and
(B) at least four Business Days prior to the date of
the proposed B Borrowing, if the Borrower shall instead
specify in the Notice of B Borrowing the basis to be used by
the Lenders in determining the rates of interest to be offered
by them (such Borrowing, a "Specified Basis B Borrowing").
Simultaneously with each such request, the Borrower shall pay to the
Administrative Agent, for the Administrative Agent's account, a
non-refundable fee in the amount heretofore agreed between the Borrower
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and the Administrative Agent. Promptly following the Administrative
Agent's receipt of such request and the fee referred to in the
preceding sentence, the Administrative Agent shall notify each Lender
of such request for a B Borrowing received by it from the Borrower by
sending such Lender a copy of the related Notice of B Borrowing.
(ii) Each Lender may, if, in its sole discretion, it elects to do
so, irrevocably offer to make one or more B Advances to the Borrower as
part of such proposed B Borrowing at a rate or rates of interest
specified by such Lender in its sole discretion, by notifying the
Administrative Agent (which shall give prompt notice thereof to the
Borrower), before 10:00 A.M. (New York City time) (A) on the date of
such proposed B Borrowing (in the case of a Fixed Rate B Borrowing) and
(B) three Business Days before the date of such proposed B Borrowing
(in the case of a Specified Basis B Borrowing), of the minimum amount
and maximum amount of each B Advance which such Lender would be willing
to make as part of such proposed B Borrowing (which amounts may,
subject to the proviso to the first sentence of this Section 2.03(a),
exceed such Lender's Commitment, if any), the rate or rates of interest
therefor and such Lender's Applicable Lending Office with respect to
such B Advance; provided that if the Administrative Agent in its
capacity as a Lender shall, in its sole discretion, elect to make any
such offer, it shall notify the Borrower of such offer before 9:30 A.M.
(New York City time) on the date on which notice of such election is to
be given to the Administrative Agent by the other Lenders. If any
Lender shall elect not to make such an offer, such Lender shall so
notify the Administrative Agent, before 10:00 A.M. (New York City time)
on the date on which notice of such election is to be given to the
Administrative Agent by the other Lenders, and such Lender shall not be
obligated to, and shall not, make any B Advance as part of such B
Borrowing; provided that the failure by any Lender to give such notice
shall not cause such Lender to be obligated to make any B Advance as
part of such proposed B Borrowing.
(iii) The Borrower shall, in turn, (A) before 11:00 A.M. (New York
City time) on the date of such proposed B Borrowing (in the case of a
Fixed Rate B Borrowing) and (B) before 1:00 P.M. (New York City time)
three Business Days before the date of such proposed B Borrowing (in
the case of a Specified Basis B Borrowing), either:
(x) cancel such B Borrowing by giving the
Administrative Agent notice to that effect, or
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(y) in its sole discretion, (1) accept one or more of
the offers made by any Lender or Lenders pursuant to paragraph
(ii) above by giving notice to the Administrative Agent of the
amount of each B Advance to be made by each Lender as part of
such B Borrowing (provided that (I) the amount of each such B
Advance shall be equal to or greater than the minimum amount,
and equal to or less than the maximum amount, notified to the
Borrower by the Administrative Agent on behalf of such Lender
for such B Advance pursuant to paragraph (ii) above and (II)
such offers, if accepted, must be accepted in ascending order
of the rates of interest specified by the offering Lenders in
their respective notices delivered pursuant to paragraph (ii)
above (in each case beginning with the lowest rate so offered)
and, if offers are made by two or more Lenders with the same
rates of interest for a greater aggregate principal amount
than the amount in respect of which offers are accepted, then
the principal amount of B Advances in respect of which such
offers are accepted shall be allocated by the Borrower among
such Lenders as nearly as possible (in integral multiples of
$1,000,000) in proportion to the aggregate maximum principal
amount of such offers by such Lenders), and (2) reject any
remaining offers made by Lenders pursuant to paragraph (ii)
above by giving the Administrative Agent notice to that
effect.
(iv) If the Borrower notifies the Administrative Agent that such B
Borrowing is canceled pursuant to paragraph (iii)(x) above, the
Administrative Agent shall give prompt notice thereof to the Lenders
and such B Borrowing shall not be made.
(v) If the Borrower accepts one or more of the offers made by any
Lender or Lenders pursuant to paragraph (iii)(y) above, the
Administrative Agent shall in turn promptly notify (A) each Lender that
has made an offer as described in paragraph (ii) above, of the date and
aggregate amount of such B Borrowing and whether or not any offer or
offers made by such Lender pursuant to paragraph (ii) above have been
accepted by the Borrower, (B) each Lender that is to make a B Advance
as part of such B Borrowing, of the amount of each B Advance to be made
by such Lender as part of such B Borrowing, and (C) each Lender that is
to make a B Advance as part of such B Borrowing, upon receipt, that the
Administrative Agent has received forms of documents appearing to
fulfill the applicable conditions set forth in Article III. Each Lender
that is to make a B Advance as part of such B Borrowing shall, before
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12:00 noon (New York City time) on the date of such B Borrowing
specified in the notice received from the Administrative Agent pursuant
to clause (A) of the preceding sentence or any later time when such
Lender shall have received notice from the Administrative Agent
pursuant to clause (C) of the preceding sentence, make available for
the account of its Applicable Lending Office to the Administrative
Agent at its address referred to in Section 9.02 such Lender's portion
of such B Borrowing, in same day funds. Upon fulfillment of the
applicable conditions set forth in Article III and after receipt by the
Administrative Agent of such funds, the Administrative Agent will make
such funds available to the Borrower at the Administrative Agent's
aforesaid address. Promptly after each B Borrowing the Administrative
Agent will notify each Lender of the amount of the B Borrowing, the
consequent B Reduction and the dates upon which such B Reduction
commenced and will terminate.
(b) On or before the date of (but prior to) such B Borrowing
(in the case of a Specified Basis B Borrowing) or as promptly as practicable
after the date of such B Borrowing (in the case of a Fixed Rate B Borrowing),
the Borrower shall execute and deliver to the Administrative Agent a B Note
payable to the order of each Lender participating in such Borrowing for each of
the B Advances to be made by such Lender as part of such B Borrowing, in a
principal amount equal to the principal amount of the B Advance to be evidenced
thereby and otherwise on such terms as were agreed to for such B Advance in
accordance with this Section 2.03. The indebtedness of the Borrower resulting
from each B Advance made to the Borrower as part of a B Borrowing shall be
evidenced by a separate B Note of the Borrower payable to the order of the
Lender making such B Advance.
(c) Each B Borrowing shall be in an aggregate amount not less
than $10,000,000 or an integral multiple of $1,000,000 in excess thereof, but no
B Borrowing shall be made if, following the making of such B Borrowing, the
Borrower would not be in compliance with the limitation set forth in the proviso
to the first sentence of subsection (a) above.
(d) Within the limits and on the conditions set forth in this
Section 2.03, the Borrower may from time to time borrow under this Section 2.03,
repay pursuant to subsection (e) below, and reborrow under this Section 2.03.
(e) The Borrower shall repay to the Administrative Agent for
the account of each Lender which has made a B Advance, or each other holder of a
B Note, on the maturity date of each B Advance (such maturity date being that
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specified by the Borrower for repayment of such B Advance in the related Notice
of B Borrowing delivered pursuant to subsection (a)(i) above and provided in the
B Note evidencing such B Advance), the then unpaid principal amount of such B
Advance. The Borrower shall have no right to prepay any principal amount of any
B Advance.
(f) The Borrower shall pay interest on the unpaid principal
amount of each B Advance from the date of such B Advance to the date the
principal amount of such B Advance is repaid in full, at the rate of interest
for such B Advance specified by the Lender making such B Advance in its notice
with respect thereto delivered pursuant to subsection (a)(ii) above, payable on
the interest payment date or dates specified by the Borrower for such B Advance
in the related Notice of B Borrowing delivered pursuant to subsection (a)(i)
above, as provided in the B Note evidencing such B Advance.
SECTION 2.04. Certain Fees.
(a) Facility Fee. The Borrower agrees to pay to the
Administrative Agent for the account of each Lender (other than the Designated
Bidders) a facility fee (the "Facility Fee") on the average daily amount
(whether used or unused) of such Lender's Commitment from the date on which the
Borrower signs this Agreement (in the case of each Bank) and from the effective
date specified in the Assignment and Acceptance pursuant to which it became a
Lender (in the case of each such Lender) until the Termination Date at a rate
per annum equal to the Applicable Facility Fee Rate as in effect from time to
time. Accrued Facility Fee shall be paid on the last Business Day of each March,
June, September and December and on the Termination Date.
(b) Administrative Agent's Fee. The Borrower acknowledges its
agreement to pay to the Administrative Agent, for the Administrative Agent's own
account, administrative fees (the "Administrative Fees") at the times and in the
amounts heretofore agreed between the Borrower and the Administrative Agent.
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SECTION 2.05. Changes in and Extensions of the Commitments.
(a) Commitment Reductions. The Borrower shall have the right,
upon at least three Business Days' notice to the Administrative Agent, to
terminate in whole or reduce ratably in part the unused portions of the
respective Commitments of the Lenders, provided that the aggregate amount of the
Commitments of the Lenders shall not be reduced to an amount which is less than
the aggregate principal amount of the Advances then outstanding, and provided
further that each partial reduction shall be in an aggregate amount of
$10,000,000 or an integral multiple of $1,000,000 in excess thereof.
(b) The Borrower shall have the right from time to time,
without the consent of the Lenders, to effect an increase in the aggregate
Commitments hereunder by adding as parties to this Agreement one or more other
banks satisfactory to the Administrative Agent (each such added bank being
herein called an "Additional Lender") and/or by allowing one or more Lenders to
increase their Commitments hereunder (so that such added and increased
Commitments shall in the aggregate equal the aggregate amount of the increase in
Commitments effected pursuant hereto). Notwithstanding the foregoing, no
increase in the aggregate Commitments hereunder pursuant to this paragraph (b)
shall be effective unless:
(i) each Additional Lender shall have entered into an
agreement in form and substance satisfactory to the Borrower and the
Administrative Agent pursuant to which such Additional Lender
undertakes a Commitment and, upon the effectiveness of such agreement
(the date of the effectiveness of any such agreement being hereinafter
referred to as the "Increased Commitment Date"), such Additional Lender
shall be a "Lender" for all purposes of this Agreement;
(ii) the Borrower shall have given the Administrative
Agent notice of such increase at least five Business Days prior to the
relevant Increased Commitment Date;
(iii) any increase in the Commitments hereunder, and
any Commitment of an Additional Lender, shall be in a minimum amount of
$25,000,000 or an integral multiple of $25,000,000 in excess thereof;
(iv) no increase in the Commitments hereunder shall
result in the aggregate amount of the Commitments exceeding
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$400,000,000;
(v) no Lender's Commitment shall be increased without
the prior express written consent of such Lender;
(vi) on such Increased Commitment Date, either (i) no
A Advances shall be outstanding hereunder and no Notice of A Borrowing
shall be pending or (ii) any outstanding A Advances shall be converted
to B Advances and no notice of borrowing of A Advances shall be
pending;
(vii) no Event of Default shall have occurred and be
continuing on and as of the date of the notice referred to in clause
(ii) above or on such Increased Commitment Date;
(viii) no Lender may increase its Commitment
hereunder unless all of the Lenders shall have been given the same
opportunity to increase their Commitments, and the aggregate amount of
the increase offered to all of the Lenders shall be allocated among
them pro rata according to the respective increases that they have
agreed to accept; and
(ix) there shall not have occurred any ratable
reduction of the Commitments pursuant to Section 2.05(a) hereof on or
prior to such Increased Commitment Date.
(c) Commitment Extensions. The Borrower may, by notice to the
Administrative Agent (which shall promptly notify the Lenders) not less than 60
days and not more than 180 days prior to each anniversary of the Effective Date,
request that the Lenders (other than the Designated Bidders) extend the
Commitment Termination Date for an additional one-year period from the
Commitment Termination Date then in effect hereunder (the "Existing Commitment
Termination Date"). Each such Lender, acting in its sole discretion, shall, by
notice to the Borrower and the Administrative Agent given no later than the date
(herein, the "Consent Date") that is 20 days after the date of such extension
request (or, if such date is not a Business Day, the next succeeding Business
Day), advise the Borrower and the Administrative Agent whether or not such
Lender agrees to such extension; provided that each Lender that determines not
to extend the Commitment Termination Date (a "Non-Extending Lender") shall
notify the Administrative Agent (which shall notify the Lenders) of such fact
promptly after such determination (but in any event no later than the Consent
Date) and any Lender that does not advise the Borrower on or before the Consent
Date shall be deemed to be a Non-Extending Lender. The election of any Lender to
agree to such extension shall not obligate any other Lender to so agree. If and
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only if each of the Lenders has advised the Borrower and the Administrative
Agent of its agreement to extend the Commitment Termination Date as aforesaid on
or prior to the Consent Date, then the Commitment Termination Date shall be
extended automatically, without any other action by any person, to the date that
is one year after the Existing Commitment Termination Date. The Administrative
Agent will promptly notify the Borrower and the Lenders of each extension of the
Commitment Termination Date pursuant to this Section 2.05(b).
SECTION 2.06. Repayment of A Advances. The Borrower hereby
promises to pay to the Administrative Agent for account of each Lender the
entire outstanding principal amount of such Lender's A Advances, and each A
Advance shall mature, on the Termination Date.
SECTION 2.07. Interest.
(a) Ordinary Interest. The Borrower shall pay interest on the
unpaid principal amount of each A Advance made by each Lender, from the date of
such A Advance until such principal amount shall be paid in full, at the
following rates per annum:
(i) Base Rate Advances. If such A Advance is a Base Rate
Advance, a rate per annum equal to the Base Rate in effect from time to
time, payable quarterly in arrears on the last Business Day of each
March, June, September and December and on the date such Base Rate
Advance shall be Converted or paid in full.
(ii) Eurodollar Rate Advances. If such A Advance is a Eurodollar
Rate Advance, a rate per annum for each Interest Period for such A
Advance equal to the sum of the Eurodollar Rate for such Interest
Period plus the Applicable Margin for Eurodollar Rate Advances as in
effect from time to time, payable on the last day of such Interest
Period and, if such Interest Period has a duration of more than three
months, on the day which occurs three months after the first day of
such Interest Period, and on the date such Eurodollar Rate Advance
shall be Continued, Converted or paid in full.
(b) Default Interest. The Borrower shall pay interest on the
unpaid principal amount of each A Advance and B Advance that is not paid when
due (whether at stated maturity, by acceleration or otherwise), and on the
unpaid amount of any interest, fee or other amount payable hereunder that is not
paid when due, payable on demand, at a rate per annum during the period from the
due date thereof to the date on which such amount is paid in full equal to:
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(i) in the case of any amount of principal of such Advance:
(x) in the case of any Base Rate Advance, 2% plus the
rate which would otherwise be applicable to such Advance, and
(y) in the case of any Eurodollar Rate Advance, for
the balance of the then current Interest Period, 2% plus the
rate which would otherwise be applicable to such Advance for
such Interest Period and, thereafter, 2% plus the Base Rate as
in effect from time to time, and
(ii) in the case of all other amounts, 2% plus the Base Rate
as in effect from time to time.
----
SECTION 2.08. Additional Interest on Eurodollar Rate Advances.
The Borrower shall pay to each Lender, so long as such Lender shall be required
under regulations of the Board to maintain reserves with respect to liabilities
or assets consisting of or including Eurocurrency Liabilities (or the
equivalent), additional interest on the unpaid principal amount of each
Eurodollar Rate Advance of such Lender, from the date of such Eurodollar Rate
Advance until such principal amount is paid in full, at an interest rate per
annum equal at all times to the remainder obtained by subtracting (i) the
Eurodollar Rate for the then-current Interest Period for such Eurodollar Rate
Advance from (ii) the rate obtained by dividing such Eurodollar Rate by a
percentage equal to 100% minus the Eurodollar Rate Reserve Percentage of such
Lender for such Interest Period, payable on each date on which interest is
payable on such Eurodollar Rate Advance. Any Lender wishing to require payment
of such additional interest shall so notify the Borrower and the Administrative
Agent and shall furnish to the Borrower at least five Business Days prior to
each date on which interest is payable on the Eurodollar Rate Advances of such
Lender a certificate (which certificate shall be conclusive and binding for all
purposes, absent manifest error) setting forth the basis for such assertion and
the amount to which such Lender is then entitled under this Section (which shall
be consistent with such Lender's good faith estimate of the level at which the
related reserves are being maintained by it).
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SECTION 2.09. Interest Rate Determinations; Changes in Rating
Systems.
(a) If the second sentence of the definition of "Eurodollar
Rate" in Section 1.01 is applicable, each Reference Bank agrees to furnish to
the Administrative Agent timely information for the purpose of determining each
Eurodollar Rate. If any one or more of the Reference Banks shall not furnish
such timely information to the Administrative Agent for the purpose of
determining any such interest rate, the Administrative Agent shall determine
such interest rate on the basis of timely information furnished by the remaining
Reference Banks (subject to clause (c) below).
(b) The Administrative Agent shall give prompt notice to the
Borrower and the Lenders of the applicable interest rate determined by the
Administrative Agent for the purpose of Section 2.07 and the applicable rate, if
any, furnished by each Reference Bank for the purpose of determining the
applicable interest rate under Section 2.07(a)(ii).
(c) If the second sentence of the definition of "Eurodollar
Rate" in Section 1.01 is applicable and fewer than two Reference Banks furnish
timely information to the Administrative Agent for determining the Eurodollar
Rate for any Interest Period for any Eurodollar Rate Advances,
(i) the Administrative Agent shall forthwith notify the
Borrower and the Lenders that the interest rate cannot be determined
for such Eurodollar Rate Advances for such Interest Period,
(ii) each Eurodollar Rate Advance will automatically, on the last
day of the then existing Interest Period therefor, Convert into a Base
Rate Advance, and
(iii) the obligation of the Lenders to make or Continue, or to
Convert A Advances into, Eurodollar Rate Advances shall be suspended
until the Administrative Agent shall notify the Borrower and the
Lenders that the circumstances causing such suspension no longer exist.
(d) If, with respect to any Eurodollar Rate Advances, the
Majority Lenders notify the Administrative Agent that the Eurodollar Rate for
any Interest Period for such Advances will not adequately reflect the cost to
such Majority Lenders of making, funding or maintaining their respective
Eurodollar Rate Advances for such Interest Period, the Administrative Agent
shall forthwith so notify the Borrower and the Lenders, whereupon
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(i) each Eurodollar Rate Advance will automatically, on the
last day of the then existing Interest Period therefor, Convert into a
Base Rate Advance, and
(ii) the obligation of the Lenders to make or Continue, or to
Convert A Advances into, Eurodollar Rate Advances shall be suspended
until the Administrative Agent shall notify the Borrower and such
Lenders that the circumstances causing such suspension no longer exist.
(e) If the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Administrative Agent will forthwith so notify the Borrower and the Lenders and
such Advances will automatically, on the last day of the then existing Interest
Period therefor, Convert into Base Rate Advances.
(f) On the date on which the aggregate unpaid principal amount
of Eurodollar Rate Advances comprising any A Borrowing shall be reduced, by
prepayment or otherwise, to less than $5,000,000, such A Advances shall
automatically Convert into Base Rate Advances.
(g) Upon the occurrence and during the continuance of any
Event of Default and upon notice from the Administrative Agent to the Borrower
at the request of the Majority Lenders, (x) each Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period therefor,
Convert into a Base Rate Advance and (y) the obligation of the Lenders to make
or Continue, or to Convert Advances into, Eurodollar Rate Advances shall be
suspended.
(h) If the rating system of either Moody's or S&P shall
change, or if either such rating agency shall cease to be in the business of
rating corporate debt obligations, the Borrower and the Administrative Agent (on
behalf of the Lenders) shall negotiate in good faith to amend the references to
specific ratings in this Agreement to reflect such changed rating system or the
non-availability of ratings from such rating agency (provided that any such
amendment to such specific ratings shall in no event be effective without the
approval of the Majority Lenders).
SECTION 2.10. Voluntary Conversion and Continuation of A
Advances.
(a) Optional Conversion. The Borrower may on any Business Day,
upon notice given to the Administrative Agent not later than 11:00 A.M. (New
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York City time) on the third Business Day prior to the date of the proposed
Conversion and subject to the provisions of Sections 2.09 and 2.13, Convert all
or any portion of the outstanding A Advances of one Type comprising part of the
same A Borrowing into A Advances of the other Type; provided that (i) any
Conversion of Base Rate Advances into Eurodollar Rate Advances shall be in an
amount not less than the minimum amount specified in Section 2.02(b) and (ii) in
the case of any such Conversion of a Eurodollar Rate Advance into a Base Rate
Advance on a day other than the last day of an Interest Period therefor, the
Borrower shall reimburse the Lenders in respect thereof pursuant to Section
9.04(c). Each such notice of a Conversion shall, within the restrictions
specified above, specify (x) the date of such Conversion, (y) the A Advances to
be Converted, and (z) if such Conversion is into Eurodollar Rate Advances, the
duration of the initial Interest Period for each such A Advance. Each notice of
Conversion shall be irrevocable and binding on the Borrower.
(b) Continuations. The Borrower may, on any Business Day, upon
notice given to the Administrative Agent not later than 11:00 A.M. (New York
City time) on the third Business Day prior to the date of the proposed
Continuation and subject to the provisions of Sections 2.09 and 2.13, Continue
all or any portion of the outstanding Eurodollar Rate Advances comprising part
of the same A Borrowing for one or more Interest Periods; provided that (i)
Eurodollar Rate Advances so Continued and having the same Interest Period shall
be in an amount not less than the minimum amount specified in Section 2.02(b)
and (ii) in the case of any such Continuation on a day other than the last day
of an Interest Period therefor, the Borrower shall reimburse the Lenders in
respect thereof pursuant to Section 9.04(c). Each such notice of a Continuation
shall, within the restrictions specified above, specify (x) the date of such
Continuation, (y) the Eurodollar Rate Advances to be Continued and (y) the
duration of the initial Interest Period (or Interest Periods) for the Eurodollar
Rate Advances subject to such Continuation. Each notice of Continuation shall be
irrevocable and binding on the Borrower.
SECTION 2.11. Prepayments of A Advances.
(a) The Borrower shall have no right to prepay any principal
amount of any A Advances other than as provided in subsection (b) below.
(b) The Borrower may, upon at least one Business Day's notice
to the Administrative Agent stating the proposed date and aggregate principal
amount of the prepayment, and if such notice is given the Borrower shall, prepay
the outstanding principal amounts of the Advances comprising part of the same A
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Borrowing in whole or ratably in part, together with accrued interest to the
date of such prepayment on the principal amount prepaid; provided, however, that
(x) each partial prepayment shall be in an aggregate principal amount not less
than $10,000,000 or integral multiples of $1,000,000 in excess thereof and (y)
in the case of any such prepayment of a Eurodollar Rate Advance on a day other
than the last day of an Interest Period therefor, the Borrower shall reimburse
the Lenders in respect thereof pursuant to Section 9.04(c).
SECTION 2.12. Increased Costs.
(a) If, due to either (i) the introduction of or any change
(other than any change by way of imposition or increase of reserve requirements
included in the Eurodollar Rate Reserve Percentage) in or in the interpretation
of (to the extent any such introduction or change occurs after the date hereof)
any law or regulation or (ii) the compliance with any guideline or request of
any central bank or other governmental authority adopted or made after the date
hereof (whether or not having the force of law), there shall be any increase in
the cost to any Lender of agreeing to make or making, funding or maintaining
Eurodollar Rate Advances, the Borrower shall from time to time, within 30 days
after delivery by such Lender to the Borrower (with a copy to the Administrative
Agent) of a certificate as to the amount of (and specifying in reasonable detail
the basis for) such increased cost, pay (subject to Section 2.12(c)) to the
Administrative Agent for the account of such Lender the amount of the increased
costs set forth in such certificate (which certificate shall be conclusive and
binding for all purposes, absent manifest error); provided that, before making
any such demand, each Lender agrees to use reasonable efforts (consistent with
its internal policy and legal and regulatory restrictions) to designate a
different Applicable Lending Office if the making of such a designation would
avoid the need for, or reduce the amount of, such increased cost and would not,
in the reasonable judgment of such Lender, be otherwise disadvantageous to such
Lender.
(b) If any Lender (other than a Designated Bidder) determines
that compliance with any law or regulation enacted or introduced after the date
hereof or any guideline or request of any central bank or other governmental
authority adopted or made after the date hereof (whether or not having the force
of law) affects or would affect the amount of capital required or expected to be
maintained by such Lender or any corporation controlling such Lender and that
the amount of such capital is increased by or based upon the existence of such
Lender's commitment to lend hereunder and other commitments of this type, then,
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within 30 days after delivery by such Lender to the Borrower (with a copy to the
Administrative Agent) of a certificate as to (and specifying in reasonable
detail the basis for) the Additional Amounts (as hereinafter defined) requested
by such Lender, the Borrower shall pay (subject to Section 2.12(c)) to the
Administrative Agent for the account of such Lender, from time to time as
specified by such Lender, the amount specified in such certificate (which
certificate shall be conclusive and binding for all purposes, absent manifest
error). For purposes hereof, the "Additional Amounts" that may be requested by
any Lender under this Section 2.12(b) means such amounts as such Lender shall
reasonably determine to be sufficient to compensate such Lender or any
corporation controlling such Lender for any costs that such Lender reasonably
determines are attributable to the maintenance by such Lender (or such
corporation) of capital in respect of its commitments to lend hereunder (such
compensation to include, without limitation, an amount equal to any reduction of
the rate of return on assets or equity of such Lender (or such corporation) to a
level below that which such Lender (or such corporation) could have achieved but
for the enactment or introduction of such law or regulation or the adoption or
making of such guideline or request).
(c) The Borrower shall not be obligated to pay any additional
amounts arising pursuant to clauses (a) and (b) of this Section 2.12 that are
attributable to the Excluded Period with respect to such additional amount;
provided, that if an applicable law, rule, regulation, guideline or request
shall be adopted or made on any date and shall be applicable to the period (a
"Retroactive Period") prior to the date on which such law, rule, regulation,
guideline or request is adopted or made, the limitation on the Borrower's
obligations to pay such additional amounts hereunder shall not apply to the
additional amounts payable in respect of such Retroactive Period.
SECTION 2.13. Illegality.
(a) Notwithstanding any other provision herein, if any
change in any law or regulation or in the interpretation thereof by any
governmental authority charged with the administration or interpretation
thereof shall make it unlawful for any Lender to make or maintain any
Eurodollar Rate Advance or to give effect to its obligations as contemplated
hereby with respect to any Eurodollar Rate Advance, then, by written notice to
the Borrower and to the Administrative Agent, such Lender may:
(i) declare that Eurodollar Rate Advances will not thereafter
be made by such Lender hereunder, whereupon any request by the
Borrower for a Eurodollar Rate Advance shall, as to such Lender
only, be deemed a request for a Base Rate Advance (or for a
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Conversion thereto pursuant to Section 2.10(a)) unless such
declaration shall be subsequently withdrawn; and
(ii) require that all outstanding Eurodollar Rate Advances
made by it be Converted to Base Rate Loans, in which event all
such Eurodollar Rate Advances shall be automatically Converted to
Base Rate Loans as of the effective date of such notice as
provided in paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal which would otherwise have been applied to
repay the Eurodollar Rate Advances that would have been made by such Lender or
the Converted Eurodollar Rate Advances of such Lender shall instead be applied
to repay the Base Rate Loans made by such Lender in lieu of, or resulting from
the Conversion of, such Eurodollar Rate Advances.
(b) For purposes of this Section 2.13, a notice to the Borrower by
any Lender shall be effective as to each Eurodollar Rate Advance, if lawful on
the last day of the Interest Period currently applicable to such Eurodollar Rate
Advance; in all other cases such notice shall be effective on the date of
receipt by the Borrower.
SECTION 2.14. Payments and Computations.
(a) The Borrower shall make each payment hereunder and under the
Notes without set-off or counterclaim not later than 11:00 A.M. (New York City
time) on the day when due in U.S. dollars to the Administrative Agent at its
address referred to in Section 9.02 in same day funds. The Administrative Agent
will promptly thereafter cause to be distributed like funds relating to the
payment of principal, interest or Facility Fees ratably (other than amounts
payable pursuant to Section 2.03, 2.08, 2.12 or 2.15) to the Lenders for the
account of their respective Applicable Lending Offices, and like funds relating
to the payment of any other amount payable to any Lender to such Lender for the
account of its Applicable Lending Office, in each case to be applied in
accordance with the terms of this Agreement. Upon its acceptance of an
Assignment and Acceptance and recording of the information contained therein in
the Register pursuant to Section 9.07(c), from and after the effective date
specified in such Assignment and Acceptance, the Administrative Agent shall make
all payments hereunder and under the Notes in respect of the interest assigned
thereby to the Lender assignee thereunder, and the parties to such Assignment
and Acceptance shall make all appropriate adjustments in such payments for
periods prior to such effective date directly between themselves.
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(b) All computations of interest based on Citibank's base rate and
of Facility Fees shall be made by the Administrative Agent on the basis of a
year of 365 or 366 days, as the case may be, and all computations of interest
based on the Eurodollar Rate or the Federal Funds Rate shall be made by the
Administrative Agent, and all computations of interest pursuant to Section 2.08
shall be made by a Lender, on the basis of a year of 360 days, in each case for
the actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest or Facility Fees are payable.
Each determination by the Administrative Agent of an interest rate hereunder
shall be conclusive and binding for all purposes, absent manifest error.
(c) Whenever any payment hereunder or under the Notes would be due
on a day other than a Business Day, such due date shall be extended to the next
succeeding Business Day, and any such extension of such due date shall in such
case be included in the computation of payment of interest or Facility Fee, as
the case may be; provided, however, if such extension would cause payment of
interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
(d) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the Lenders
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
extent that the Borrower shall not have so made such payment in full to the
Administrative Agent, each Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender together with
interest thereon, for each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to the Administrative
Agent, at the Federal Funds Rate.
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SECTION 2.15. Taxes.
(a) Any and all payments by the Borrower hereunder or under the
Notes shall be made, in accordance with Section 2.14, free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender and the Administrative Agent, taxes
imposed on its income, and franchise taxes imposed on it, by the jurisdiction
under the laws of which such Lender or the Administrative Agent (as the case may
be) is organized or any political subdivision thereof and, in the case of each
Lender, taxes imposed on its income, and franchise taxes imposed on it, by the
jurisdiction of such Lender's Applicable Lending Office or any political
subdivision thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as "Taxes").
If the Borrower shall be required by law to deduct any Taxes from or in respect
of any sum payable hereunder or under any Note to any Lender or the
Administrative Agent, (i) the sum payable shall be increased as may be necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.15) such Lender or the
Administrative Agent (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrower shall
make such deductions and (iii) the Borrower shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance with
applicable law. Each Lender represents and warrants that no Taxes will be
incurred on the date hereof in connection with the execution and delivery of the
Loan Documents.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or under the Notes or
from the execution, delivery or registration of, or otherwise with respect to,
this Agreement or the Notes (hereinafter referred to as "Other Taxes"). Each
Lender represents and warrants that no Other Taxes will be incurred on the date
hereof in connection with the execution and delivery of the Loan Documents.
(c) The Borrower will indemnify each Lender and the Administrative
Agent for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes and Other Taxes imposed by any jurisdiction on amounts
payable under this Section 2.15) paid by such Lender or the Administrative Agent
(as the case may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not such Taxes
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or Other Taxes were correctly or legally asserted. Such Lender will use
reasonable efforts to contest such a Tax or Other Tax that is, in its opinion,
incorrectly asserted. This indemnification shall be made within 30 days from the
date such Lender or the Administrative Agent (as the case may be) makes written
demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the
Borrower will furnish to the Administrative Agent, at its address referred to in
Section 9.02, the original or a certified copy of a receipt evidencing payment
thereof.
(e) Each Lender organized under the laws of a jurisdiction outside
the United States, on or prior to the date of its execution and delivery of this
Agreement (in the case of each Bank) and on the date of the Assignment and
Acceptance pursuant to which it becomes a Lender (in the case of each other
Lender), and from time to time thereafter if requested in writing by the
Borrower or the Administrative Agent (but only so long as such Lender remains
lawfully able to do so), shall provide the Borrower and the Administrative Agent
with Internal Revenue Service form 1001 or 4224, as appropriate, or any
successor form prescribed by the Internal Revenue Service, certifying that such
Lender is entitled to benefits under an income tax treaty to which the United
States is a party which reduces the rate of withholding tax on payments of
interest or certifying that the income receivable pursuant to this Agreement is
effectively connected with the conduct of a trade or business in the United
States. If the form provided by a Lender at the time such Lender first becomes a
party to this Agreement indicates a United States interest withholding tax rate
in excess of zero, withholding tax at such rate shall be considered excluded
from "Taxes" as defined in Section 2.15(a).
(f) For any period with respect to which a Lender has failed to
provide the Borrower or the Administrative Agent with the appropriate form
described in Section 2.15(e) (other than if such failure is due to a change in
law occurring subsequent to the date on which a form originally was required to
be provided, or if such form otherwise is not required under the first sentence
of subsection (e) above), such Lender shall not be entitled to indemnification
under Section 2.15(a) with respect to Taxes imposed by the United States;
provided, however, that should a Lender become subject to Taxes because of its
failure to deliver a form required hereunder, the Borrower shall take such steps
as the Lender shall reasonably request to assist the Lender to recover such
Taxes.
(g) Any Lender claiming any additional amounts payable pursuant to
this Section 2.15 shall use reasonable efforts (consistent with its internal
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policy and legal and regulatory restrictions) to change the jurisdiction of its
Applicable Lending Office(s) if the making of such a change would avoid the need
for, or reduce the amount of, any such additional amounts that may thereafter
accrue and would not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender.
(h) If a Lender or the Administrative Agent (as the case may be)
shall become aware that it is entitled to claim a Refund (as hereinafter
defined) from a taxing authority, such Lender or the Administrative Agent shall
promptly notify the Borrower of the availability of such Refund and shall,
within 30 days after receipt of a written request by the Borrower, make a claim
to such taxing authority for such Refund at the Borrower's expense if, in the
judgment of such Lender or the Administrative Agent (as the case may be), the
making such claim will not be otherwise disadvantageous to it; provided that
nothing in this Section 2.15(h) shall require any Lender or the Administrative
Agent to institute any administrative, judicial or other proceeding (other than
the filing of a claim for any such Refund) to obtain any such Refund. If a
Lender or the Administrative Agent (as the case may be) receives a Refund from a
taxing authority, it shall promptly pay to the Borrower the amount so received
(but only to the extent of indemnity payments made, or additional amounts paid,
by the Borrower under this Section 2.15 with respect to the Taxes or Other Taxes
giving rise to such Refund), net of all reasonable out-of-pocket expenses
(including the net amount of taxes, if any, imposed on such Lender or the
Administrative Agent with respect to such Refund) of such Lender or
Administrative Agent, and without interest (other than interest paid by the
relevant taxing authority with respect to such Refund); provided, however, that
the Borrower, upon the request of such Lender or the Administrative Agent, shall
repay the amount paid over to the Borrower (plus penalties, interest and other
charges) to such Lender or the Administrative Agent in the event such Lender or
the Administrative Agent is required to repay such Refund to such taxing
authority. Nothing contained in this Section 2.15 shall require any Lender or
the Administrative Agent to make available any of its tax returns (or any other
information that it deems to be confidential or proprietary). For purposes of
this Section 2.15(h), a "Refund" means a refund of Taxes or Other Taxes (other
than any such refund in the form of a tax credit) for which a Lender or the
Administrative Agent, as the case may be, has been indemnified by the Borrower
(or with respect to which the Borrower has paid additional amounts) pursuant to
this Section 2.15, provided that the entitlement to such refund arises solely
from a manifest error in the amount of such Taxes or Other Taxes so paid.
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SECTION 2.16. Sharing of Payments, Etc. If any Lender shall
obtain any payment (whether voluntary, involuntary, through the exercise of
any right of set-off, or otherwise) on account of the A Advances made by it
(other than pursuant to Section 2.08, 2.12 or 2.15) in excess of its ratable
share of payments on account of the A Advances obtained by all the Lenders,
such Lender shall forthwith purchase from the other Lenders such participations
in the A Advances made by them as shall be necessary to cause such purchasing
Lender to share the excess payment ratably with each of them, provided,
however, that if all or any portion of such excess payment is thereafter
recovered from such purchasing Lender, such purchase from each Lender shall
be rescinded and such Lender shall repay to the purchasing Lender the purchase
price to the extent of such recovery together with an amount equal to such
Lender's ratable share (according to the proportion of (i) the amount of
such Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 2.16 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect
to such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.
ARTICLE III
CONDITIONS OF LENDING
The obligations of the Lenders to make Advances hereunder are subject
to the satisfaction of the following conditions:
SECTION 3.01. All Borrowings. On the date of each Borrowing:`
(a) The Administrative Agent shall have received a notice of such
Borrowing as required by Section 2.02 or 2.03, as applicable;
(b) The representations and warranties set forth in Article IV
shall be true and correct in all material respects on and as of the
date of such Borrowing with the same effect as though made on and as of
such date, except to the extent such representations and warranties
expressly relate to an earlier date;
(c) The Borrower shall be in compliance with all of the terms and
provisions set forth herein and in each other Loan Document on its part
to be observed or performed, and at the time of, and immediately after
such Borrowing, no Event of Default or Default shall have occurred and
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be continuing; and
(d) Each Lender that shall not have previously received an
appropriate Note shall have received a duly executed B Note or A Note,
as applicable, payable to its order.
Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrower on the date of such Borrowing as to the matters specified in
paragraphs (b) and (c) of this Section 3.01.
SECTION 3.02. First Borrowing. On the Closing Date:
(a) Each Lender shall have received a duly executed A Note;
(b) The Administrative Agent shall have received a favorable
written opinion of either the general counsel or the corporate
secretary (provided that such corporate secretary is an attorney
admitted to practice law, and is in good standing, in a jurisdiction
within the United States of America) of the Parent Guarantor, dated the
Closing Date and addressed to the Lenders, to the effect set forth in
Exhibit E hereto, and the Parent Guarantor hereby instructs such
counsel to deliver such opinion to the Administrative Agent;
(c) The Administrative Agent shall have received a favorable
written opinion of Milbank, Tweed, Hadley & McCloy, counsel to the
Administrative Agent, to the effect set forth in Exhibit F hereto;
(d) All legal matters incident to this Agreement and the
borrowings hereunder shall be satisfactory to the Administrative Agent
and the Lenders;
(e) The Administrative Agent shall have received (i) a copy of the
certificate or articles of incorporation, including all amendments
thereto, of each Obligor, certified as of a recent date by the
Secretary of State of the state of its organization, and a certificate
as to the good standing of each Obligor as of a recent date, from such
Secretary of State; (ii) a certificate of the Secretary or Assistant
Secretary of each Obligor dated the Closing Date and certifying (A)
that attached thereto is a true and complete copy of the by-laws of
such Obligor as in effect on the Closing Date and at all times since a
date prior to the date of the resolutions described in clause (B)
below, (B) that attached thereto is a true and complete copy of
resolutions duly adopted by the Board of Directors of such Obligor
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authorizing the execution, delivery and performance of the Loan
Documents to which it is a party and (in the case of the Borrower) the
borrowings hereunder, and that such resolutions have not been modified,
rescinded, or amended and are in full force and effect, (C) that the
certificate or articles of incorporation of such Obligor have not been
amended since the date of the last amendment thereto shown on the
certificate of good standing furnished pursuant to clause (i) above,
and (D) as to the incumbency and specimen signature of each officer
executing any Loan Document or any other document delivered in
connection herewith on behalf of such Obligor; (iii) a certificate of
another officer as to the incumbency and specimen signature of the
Secretary or Assistant Secretary executing the certificate pursuant to
(ii) above; and (iv) such other documents as the Administrative Agent
or the Lenders may reasonably request;
(f) The Administrative Agent shall have received a certificate,
dated the Closing Date and signed by a Financial Officer of the Parent
Guarantor, confirming compliance with the conditions precedent set
forth in paragraphs (b) and (c) of Section 3.01; and
(g) The Administrative Agent shall have received all Fees and
other amounts due and payable on or prior to the Closing Date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Parent Guarantor represents and warrants to each of the Lenders
that:
SECTION 4.01. Organization; Powers; Governmental Approvals.
(a) The Parent Guarantor and each Principal Subsidiary (i) is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization, (ii) has all requisite power and
authority to own its property and assets and to carry on its business as now
conducted and (iii) is qualified to do business in every jurisdiction where such
qualification is required, except where the failure so to qualify would not
have a material adverse effect on the condition, financial condition or other-
wise, results of operations, business, assets, operations, or prospects of the
Parent Guarantor and its Subsidiaries taken as a whole. Each Obligor's
execution, delivery and performance of this Agreement are within its corporate
powers, have been duly authorized by all necessary action and do not violate
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or create a default underlaw, its constituent documents, or any contractual
provision binding upon it. This Agreement and (in the case of the Borrower) the
Notes constitute legal, valid and binding obligations of each Obligor
enforceable against it in accordance with their respective terms (except as
such enforceability may be limited by applicable bankruptcy, reorganization,
insolvency, moratorium and other laws affecting the rights of creditors
generally and general principles of equity).
(b) All Governmental Approvals (other than, until the Approval
Date, the FERC Approval and the VPSB Approval) have been duly obtained, are in
full force and effect without having been amended or modified in any manner that
may impair the ability of any Obligor to perform its obligations under this
Agreement or the Notes, and are not the subject of any pending or overtly
threatened appeal, stay or other challenge. No Interest Period requested with
respect to any Borrowing extends beyond the latest date permitted for Borrowings
by any Governmental Approval then in effect.
SECTION 4.02. Financial Statements. The Parent Guarantor has
furnished to the Lenders, for itself and its Principal Subsidiaries, their most
recent filings with the Securities and Exchange Commission on Forms 10-K and
10-Q. Such Forms 10-K and 10-Q, taken together with any subsequent filings by
the Parent Guarantor and its Principal Subsidiaries with the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended,
furnished to each Lender prior to the date hereof, do not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
any statement therein, in light of the circumstances under which it was made,
not misleading. Each of the financial statements in such Forms 10-K and 10-Q,
and each such subsequent filing, has been, and each of the financial statements
to be furnished pursuant to Section 5.02 will be, prepared in accordance with
GAAP applied consistently with prior periods, except as therein noted, and
fairly presents or will fairly present in all material respects the
consolidated financial position of the Parent Guarantor or Principal Sub-
sidiary, as the case may be, as of the date thereof and the results of the
operations of the Parent Guarantor and the Subsidiaries or Principal
Subsidiary, as the case may be, for the period then ended.
SECTION 4.03. No Material Adverse Change. From the date of
the Parent Guarantor's most recent financial statements contained in its
Annual Report on Form 10-K for the fiscal year ended December 31, 1996
furnished to the Lenders pursuant to Section 4.02 through the date of the
initial Borrowing, and except as described in the Parent Guarantor's Quarterly
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Reports on Form 10-Q for the quarterly periods ended March 31, 1997, June 30,
1997 and September 30, 1997 furnished to the Lenders pursuant to Section 4.02
prior to the date hereof, there has been no material adverse change in, and
there has occurred no event or condition which is likely to result in a material
adverse change in, the condition, financial or otherwise, results of operations,
business, assets or operations of (i) prior to the Approval Date, the Obligors
taken as a whole or (ii)on and after the Approval Date, the Parent Guarantor
and the Subsidiaries taken as a whole.
SECTION 4.04. Title to Properties; Possession Under Leases. (a)
To the best of the Parent Guarantor's knowledge, each of the Parent
Guarantor and the Principal Subsidiaries has good and marketable title to, or
valid leasehold interests in, all its material properties and assets and
licenses, easements, rights of way and other rights to use, except for minor
defects in title that do not interfere with its ability to conduct its business
as currently conducted or to utilize such properties and assets for their
intended purposes. All such material properties and assets are free and clear of
Liens, other than Liens expressly permitted by Section 6.01.
(b) Each of the Parent Guarantor and the Principal Subsidiaries
has complied with all obligations under all material leases to which it is a
party and all such leases are in full force and effect, except where such
failure to comply or maintain such leases in full force and effect would not
have a Material Adverse Effect. Each of the Parent Guarantor and the
Subsidiaries enjoys peaceful and undisturbed possession under all such material
leases except where such failure would not have a Material Adverse Effect.
SECTION 4.05. Ownership of Subsidiaries. The Parent Guarantor
owns, free and clear of any Lien (other than Liens expressly permitted by
Section 6.01), all of the issued and outstanding shares of common stock of each
of the Principal Subsidiaries.
SECTION 4.06. Litigation; Compliance with Laws. (a) There is no
action, suit, or proceeding, or any governmental investigation or any
arbitration, in each case pending or, to the knowledge of the Parent Guaran-
tor, threatened against the Parent Guarantor or any of the Subsidiaries or any
material property of any thereof before any court or arbitrator or any
governmental or administrative body, agency, or official on the date hereof or
the date of the initial Borrowing which (i) challenges the validity of this
Agreement or the Notes or (ii), except as disclosed in the Parent Guarantor's
Annual Report on Form 10-K for the fiscal year ended December 31, 1996 or its
Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 1997,
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June 30, 1997 and September 30, 1997 furnished to the Lenders pursuant to
Section 4.02 prior to the date hereof, may have a Material Adverse Effect.
(b) Neither the Parent Guarantor nor any of the Subsidiaries is in
violation of any law, rule, or regulation, or in default with respect to any
judgment, writ, injunction or decree of any Governmental Authority, where such
violation or default could reasonably be anticipated to result in a Material
Adverse Effect.
SECTION 4.07. Agreements. (a) Neither the Parent Guarantor nor
any of the Subsidiaries is a party to any agreement or instrument or subject
to any corporate restriction that has resulted, or could reasonably be
anticipated to result, in a Material Adverse Effect.
(b) Neither the Parent Guarantor nor any of the Subsidiaries is in
default in any manner under any provision of any indenture or other agreement or
instrument evidencing Indebtedness, or any other material agreement or
instrument to which it is a party or by which it or any of its properties or
assets are or may be bound, where such default could reasonably be anticipated
to result in a Material Adverse Effect.
SECTION 4.08. Federal Reserve Regulations. No part of the
proceeds of the Advances will be used, whether directly or indirectly, and
whether immediately, incidentally, or ultimately, for any purpose which
entails a violation of, or which is inconsistent with, the provisions of
the Margin Regulations.
SECTION 4.09. Investment Company Act; Public Utility Holding
Company Act. Neither the Parent Guarantor nor any of the Subsidiaries is (a) an
"investment company" as defined in, or subject to regulation under, the Invest-
ment Company Act of 1940 or (b) a "holding company" as defined in, or subject
to regulation under, the Public Utility Holding Company Act of 1935.
SECTION 4.10. Use of Proceeds. The Borrower will use the proceeds
of the Advances only for the purposes specified in Section 5.05.
SECTION 4.11. Tax Returns. Each of the Parent Guarantor and the
Subsidiaries has filed or caused to be filed all Federal, state and local tax
returns required to have been filed by it and has paid or caused to be paid all
taxes shown to be due and payable on such returns or on any assessments received
by it, except taxes that are being contested in good faith by appropriate
proceedings and for which the Parent Guarantor shall have set aside on its books
adequate reserves.
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SECTION 4.12. No Material Misstatements. No statement, informa-
tion, report, financial statement, exhibit, or schedule furnished by or on
behalf of the Parent Guarantor to the Administrative Agent, the
Co-Administrative Agent or any Lender in connection with the syndication or
negotiation of this Agreement or included herein or delivered pursuant hereto
contained, contains, or will contain any material misstatement of fact or
intentionally omitted, omits, or will omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under which
they were, are, or will be made, not misleading.
SECTION 4.13. Employee Benefit Plans. (a) Each Plan is in
compliance with ERISA, except for such noncompliance that has not resulted,
and could not reasonably be anticipated to result, in a Material Adverse Effect.
(b) No Plan has an accumulated or waived funding deficiency within
the meaning of Section 412 or Section 418B of the Code, except for any such
deficiency that has not resulted, and could not reasonably be anticipated to
result, in a Material Adverse Effect.
(c) No proceedings have been instituted to terminate any Plan,
except for such proceedings where the termination of a Plan has not resulted,
and could not reasonably be anticipated to result, in a Material Adverse Effect.
(d) Neither the Parent Guarantor nor any Subsidiary or ERISA
Affiliate has incurred any liability to or on account of a Plan under ERISA
(other than obligations to make contributions in accordance with such Plan), and
no condition exists which presents a material risk to the Parent Guarantor or
any Subsidiary of incurring such a liability, except for such liabilities that
have not resulted, and could not reasonably be anticipated to result, in a
Material Adverse Effect.
SECTION 4.14. Insurance. Each of the Parent Guarantor and
the Principal Subsidiaries maintains insurance with financially sound and
reputable insurers, or self-insurance, with respect to its properties and
business against loss or damage of the kind customarily insured against by
reputable companies in the same or similar business and of such types and in
such amounts (with such deductible amounts) as is customary for such companies
under similar circumstances.
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ARTICLE V
AFFIRMATIVE COVENANTS
The Parent Guarantor covenants and agrees with the Administrative Agent
and each Lender that, so long as this Agreement shall remain in effect or the
principal of or interest on any Advance (or any portion thereof), or any other
expenses or amounts payable hereunder, shall be unpaid, the Parent Guarantor
will:
SECTION 5.01. Existence, Businesses and Properties. (a) Preserve
and maintain, cause each of the Principal Subsidiaries to
preserve and maintain, and cause each other Subsidiary to preserve and maintain
(where the failure by any such other Subsidiary to so preserve and maintain
would likely result in a Material Adverse Effect), its corporate existence,
rights and franchises, provided, however, that the corporate existence of any
Principal Subsidiary (other than the Borrower) may be terminated if such
termination is not disadvantageous to the Administrative Agent or any Lender;
(b) continue to own all of the outstanding shares of common stock
of each Principal Subsidiary other than the Borrower, and continue to own
outstanding shares of common stock of the Borrower carrying voting power
sufficient to elect a majority of the Board of Directors of the Borrower and
representing at least 51% of the economic interests in the Borrower;
(c) comply, and cause each of the Subsidiaries to comply, in all
material respects, with all applicable laws, rules, regulations and orders;
(d) pay, and cause each of the Subsidiaries to pay, before any
such amounts become delinquent, (i) all taxes, assessments and governmental
charges imposed upon it or upon its property, and (ii) all claims (including,
without limitation, claims for labor, materials, supplies, or services) which
might, if unpaid, become a Lien upon its property, unless, in each case, the
validity or amount thereof is being disputed in good faith, and the Parent
Guarantor has maintained adequate reserves with respect thereto;
(e) keep, and cause each of the Subsidiaries to keep, proper books
of record and account, containing complete and accurate entries of all financial
and business transactions of the Parent Guarantor and such Subsidiary;
(f) continue to carry on, and cause each Principal Subsidiary to
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continue to carry on, substantially the same type of business as the Parent
Guarantor or such Principal Subsidiary conducted as of the date hereof and
business reasonably related thereto; and
(g) maintain or cause to be maintained insurance with financially
sound and reputable insurers, or self-insurance, with respect to its properties
and business and the properties and business of the Subsidiaries against loss or
damage of the kinds customarily insured against by reputable companies in the
same or similar businesses, such insurance to be of such types and in such
amounts (with such deductible amounts) as is customary for such companies under
similar circumstances;
provided, however, that the foregoing shall not limit the right of the Parent
Guarantor or any of its Subsidiaries to engage in any transaction not otherwise
prohibited by Section 6.02, 6.03 or 6.04.
SECTION 5.02. Financial Statements, Reports, etc. In the case of
the Parent Guarantor, furnish to the Administrative Agent and
each Lender:
(a) as soon as available and in any event within 110 days
after the end of each fiscal year, (i) consolidated balance sheets and
the related statements of income and cash flows of the Parent Guarantor
and its Subsidiaries (the Parent Guarantor and its Subsidiaries being
collectively referred to as the "Companies") as of the close of such
fiscal year (which requirement shall be deemed satisfied by the
delivery of the Parent Guarantor's Annual Report on Form 10-K (or any
successor form) for such year), all audited by KPMG Peat Marwick or
other independent public accountants of recognized national standing
and accompanied by an opinion of such accountants to the effect that
such consolidated financial statements fairly present in all material
respects the financial condition and results of operations of the
Companies an a consolidated basis in accordance with GAAP consistently
applied and (ii) if on the date they are to be so furnished the
Approval Date has not yet occurred, a balance sheet and the related
statements of income and cash flows of each Subsidiary Guarantor as of
the close of such fiscal year, each certified by a Financial Officer as
fairly presenting the financial condition and results of operations of
such Subsidiary Guarantor in accordance with GAAP consistently applied;
(b) within 65 days after the end of each of the first three
fiscal quarters of each fiscal year, (i) consolidated balance sheets
and related statements of income and cash flows of the Companies as of
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the close of such fiscal quarter and the then elapsed portion of the
fiscal year (which requirement shall be deemed satisfied by the
delivery of the Parent Guarantor's Quarterly Report on Form 10-Q (or
any successor form) for such quarter), each certified by a Financial
Officer as fairly presenting the financial condition and results of
operations of the Companies on a consolidated basis in accordance with
GAAP consistently applied, subject to normal year-end audit adjustments
and (ii) if on the date they are to be so furnished the Approval Date
has not yet occurred, a balance sheet and related statements of income
and cash flows of each Subsidiary Guarantor as of the close of such
fiscal quarter and the then elapsed portion of the fiscal year, each
certified by a Financial Officer as fairly presenting the financial
condition and results of operations of such Subsidiary Guarantor in
accordance with GAAP consistently applied, subject to normal year-end
audit adjustments;
(c) promptly upon the mailing or filing thereof copies of all
financial statements, reports and proxy statements mailed to the Parent
Guarantor's public shareholders, and copies of all registration
statements (other than those on Form S-8) and Form 8-K's (to the extent
that such Form 8-K's disclose actual or potential adverse developments
with respect to the Parent Guarantor or any of its Subsidiaries that
constitute, or could reasonably be anticipated to constitute, a
Material Adverse Effect) filed with the Securities and Exchange
Commission (or any successor thereto) or any national securities
exchange;
(d) prompt notice of any reduction in the credit rating given
to the Parent Guarantor by any Rating Agency;
(e) promptly after (i) the occurrence thereof, notice of any
ERISA Termination Event or "prohibited transaction", as such term is
defined in Section 4975 of the Code, with respect to any Plan that
results, or could reasonably be anticipated to result, in a Material
Adverse Effect, which notice shall specify the nature thereof and the
Parent Guarantor's proposed response thereto, and (ii) actual knowledge
thereof copies of any notice of PBGC's intention to terminate or to
have a trustee appointed to administer any Plan; and
(f) promptly, from time to time, such other information,
regarding its operations, business affairs and financial condition, or
compliance with the terms of this Agreement, as the Administrative
Agent or any Lender may reasonably request.
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SECTION 5.03. Litigation and other Notices. Furnish to the Admin-
istrative Agent and each Lender prompt written notice of
the following:
(a) any Event of Default or Default, specifying the nature and
extent thereof and the corrective action (if any) proposed to be taken
with respect thereto;
(b) the filing or commencement of, or any threat or notice of
intention of any person to file or commence, any action, suit or
proceeding, whether at law or in equity or by or before any
governmental authority, against the Parent Guarantor or any of the
Subsidiaries which is reasonably likely to be adversely determined and
which, if adversely determined, could reasonably be anticipated to
result in a Material Adverse Effect; and
(c) any development with respect to the Parent Guarantor or
any Subsidiary that has resulted in, or could reasonably be anticipated
to result in, a Material Adverse Effect.
SECTION 5.04. Maintaining Records. Maintain all financial records
in accordance with GAAP and, upon reasonable notice, permit any Lender to visit
and inspect the financial records of the Parent Guarantor at reasonable times
and as often as requested and to make extracts from and copies of such financial
records, and permit any representatives designated by any Lender to discuss
the affairs, finances and condition of the Parent Guarantor with the appropriate
officers thereof and, with the Parent Guarantor's consent (which shall not be
unreasonably withheld, the independent accountants therefore; provided, however,
that if the Parent Guarantor shall so require, a single representative shall be
appointed by the Majority Lenders to exercise the rights granted under this
Section 5.04.
SECTION 5.05. Use of Proceeds. Use the proceeds of the Advances
only for the purposes set forth in the preamble of this Agreement; provided,
however, that no such proceeds shall be used directly or indirectly in connec-
tion with (i) the acquisition of in excess of 5% of any class of equity security
that is registered pursuant to Section 12 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), (ii) any transaction subject to the
requirements of Section 13 of the Exchange Act or (iii) any transaction subject
to the requirements of Section 14 of the Exchange Act with respect to which
proxies, consents or authorizations, as the case may be, are being sought by any
person (as defined in the Exchange Act) other than the majority of the board
of directors of the issuer of the securities in respect of which such proxies,
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consents or authorizations are being sought.
ARTICLE VI
NEGATIVE COVENANTS
The Parent Guarantor covenants and agrees with each Lender and the
Administrative Agent that, so long as this Agreement shall remain in effect or
the principal of or interest on any Advance (or any portion thereof), or any
other expenses or amounts payable hereunder, shall be unpaid, it will not:
SECTION 6.01. Liens. Create, incur, assume, or suffer to exist,
or permit any of the Principal Subsidiaries to create, incur, assume, or suffer
to exist, any Lien on any of its property now owned or hereafter acquired to
secure any Indebtedness of the Parent Guarantor or any such Principal Sub-
sidiary, other than (a) Liens incurred or deposits made in the ordinary course
of business to secure surety and appeal bonds, leases, return-of-money bonds and
other similar obligations (exclusive of obligations of the payment of borrowed
money); (b) Liens created under or in connection with the First Mortgage Bond
Indenture or any other indentures governing the issuance of mortgage bonds by
the Parent Guarantor; (c) pledges or deposits to secure the utility obligations
of the Parent Guarantor incurred in the ordinary course of business; (d) Liens
upon or in property now owned or hereafter acquired to secure Indebtedness
incurred solely for the purpose of financing the acquisition, construction or
improvement of any property, provided that such Indebtedness shall not exceed
the fair market value of the property being acquired, constructed or improved;
(e) Liens on the assets of any Principal Subsidiary to secure the repayment
of project financing for such Principal Subsidiary; (f) Liens on the assets
of any Person merged or consolidated with or into(in accordance with Section
6.04) the Parent Guarantor or any Principal Subsidiary that were in effect at
the time of such merger or consolidation; and (g) Liens securing Indebtedness of
the Parent Guarantor or of any Principal Subsidiary to the U.S.Rural
Electrification Administration (or any successor agency) or to the U.S. Rural
Telephone Bank (or any successor agency); provided, however, that the Parent
Guarantor or any Principal Subsidiary may create, incur, assume or suffer to
exist other Liens (in addition to Liens excepted by the foregoing clauses (a)
through (g)) on its assets so long as the assets subject to such Liens do not
represent in the aggregate more than 30% of the Parent Guarantor's
Consolidated Tangible Assets.
SECTION 6.02. Ownership of the Principal Subsidiaries. Sell,
assign, pledge, or otherwise transfer or dispose of any shares of common stock,
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voting stock, or stock convertible into voting or common stock of any Principal
Subsidiary except to another Subsidiary or (in the case of stock of the Bor-
rower) if such transaction would not result in a violation of Section 5.01(b).
SECTION 6.03. Asset Sales. Permit any Principal Subsidiary to
sell, assign, or otherwise dispose of assets (whether in one transaction or a
series of transactions), if after giving effect to such transaction, (a) such
Principal Subsidiary (if not the Borrower) will have disposed of, in the
aggregate, assets representing more than 25% of such Principal Subsidiary's
Subsidiary first became a Principal Subsidiary or (b) such Principal Subsidiary
(if the Borrower) will have disposed of, in the aggregate, assets representing
more than 25% of such Principal Subsidiary's aggregate Consolidated Tangible
Assets as of the date of such transaction; provided that any Principal Sub-
sidiary may transfer assets representing up to 100% of such Principal
Subsidiary's Consolidated Tangible Assets to any other Subsidiary or to the
Parent Guarantor.
SECTION 6.04. Mergers. Merge or consolidate with, or sell, assign,
lease, or otherwise dispose of (whether in one transaction or a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to any person, or permit any Principal Subsidiary to do so,
except that (a) any Subsidiary (other than the Borrower) may merge into or,
subject to Section 6.03, transfer assets to the Parent Guarantor or any other
Subsidiary and the Parent Guarantor may merge with any person and (b) the
Borrower may, subject to Section 5.01(b), merge with another Person if, im-
mediately thereafter and after giving effect thereto, no event shall occur or
be continuing which constitutes an Event of Default or a Default; provided that,
immediately thereafter and after giving effect thereto, no event shall occur or
be continuing which constitutes an Event of Default or a Default and, in the
case of any such merger to which the Parent Guarantor is a party, either the
Parent Guarantor is the surviving corporation or the surviving entity (if not
the Parent Guarantor) has a consolidated net worth (as determined in accordance
with GAAP) immediately subsequent to such merger at least equal to the
Consolidated Net Worth of the Parent Guarantor immediately prior to such
merger and expressly assumes the obligations of the Parent Guarantor under
the Loan Documents; providing, however, that notwithstanding the foregoing, the
Parent Guarantor and any of the Principal Subsidiaries may sell assets in the
ordinary course of its business and may sell or otherwise dispose of worn out or
obsolete equipment on a basis consistent with good business practices.
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SECTION 6.05. Restrictions on Dividends. Enter into or permit any
Principal Subsidiary to enter into, any contract or agreement (other than with
a governmental regulatory authority having jurisdiction over the Parent
Guarantor or such Principal Subsidiary) restricting the ability of such Prin-
cipal Subsidiary to pay dividends or make distributions to the Parent Guarantor
in any manner that would impair the ability of any Obligor to meet its present
and future obligations hereunder or under any Note. The Secretary of the Parent
Guarantor or another officer of the Parent Guarantor satisfactory to the
Administrative Agent shall, prior to entry into any contract or agreement that
could restrict the ability of any Principal Subsidiary to pay dividends or make
distributions to the Parent Guarantor, deliver to the Lenders a certificate
certifying (a) to the absence of any Event of Default or Default after giving
effect to the entry by such Principal Subsidiary into such contract or agree-
ment, and (b) that such contract or agreement will not impair the ability of
the Parent Guarantor to meet its present and future obligations hereunder
or under any Note.
SECTION 6.06. Transactions with Affiliates. Sell or transfer any
property or assets to, or purchase or acquire any property or assets from,
or otherwise engage in any other transactions with, any of its Affiliates,
except that as long as no Default or Event of Default shall have occurred and be
continuing, the Parent Guarantor or any Subsidiary may engage in any of the
foregoing transactions in the ordinary course of business at prices and on terms
and conditions not less favorable to the Parent Guarantor or such Subsidiary
that could be obtained on an arm's-length basis from unrelated third parties
or as otherwise may be required by any Federal or state
Governmental Authority.
SECTION 6.07. Minimum Consolidated Net Worth. Permit its Con-
solidated Net Worth at any time to be less than $1,000,000,000.
SECTION 6.08. Subsidiary Guarantors. Permit (a) the combined
shareholders' equity of the Subsidiary Guarantors to be less than 150% of the
aggregate principal amount of the Advances outstanding at any time prior to the
Approval Date or (b) the aggregate fair market value of the tax exempt municipal
bond portfolio investments of the Subsidiary Guarantors to be less than 125%
of the aggregate principal amount of the Advances outstanding at any time
prior to the Approval Date.
ARTICLE VII
EVENTS OF DEFAULT
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In case of the happening of any of the following events ("Events of
Default"):
(a) any representation or warranty made or deemed made in or in
connection with this Agreement or the Borrowings hereunder, or any
representation, warranty, statement, or information contained in any
written report, certificate, financial statement, or other instrument
furnished in connection with or pursuant to this Agreement, shall prove
to have been false or misleading in any material respect when so made,
deemed made, or furnished;
(b) default shall be made in the payment of any principal of any
Advance (or any portion thereof) when and as the same shall become due
and payable, whether at the due date thereof or at a date fixed or for
prepayment thereof or by acceleration thereof or otherwise;
(c) default shall be made in the payment of any interest on any
Advance (or any portion thereof) or any Fee or any other amount (other
than an amount referred to in (b) above) due under any Loan Document,
when and as the same shall become due and payable, and such default
shall continue unremedied for a period of five Business Days;
(d) default shall be made in the due observance or performance of
any covenant, condition, or agreement contained in Section 5.01(f) or
Section 5.05 or in Article VI;
(e) default shall be made in the due observance or performance of
any covenant, condition, or agreement contained herein (other than
those specified in (b), (c), or (d) above) and such default shall
continue unremedied for a period of 30 days after the earlier to occur
of (i) the Parent Guarantor obtaining knowledge thereof and (ii) the
date that written notice thereof shall have been given to the Parent
Guarantor by the Administrative Agent or any Lender;
(f) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking
(i) relief in respect of the Parent Guarantor or any Principal
Subsidiary, or of a substantial part of the property or assets of the
Parent Guarantor or a Principal Subsidiary, under Title 11 of the
United States Code, as now constituted or hereafter amended, or any
other Federal or state bankruptcy, insolvency, receivership, or similar
law, (ii) the appointment of a receiver, trustee, custodian,
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sequestrator, conservator, or similar official for the Parent Guarantor
or any Principal Subsidiary or for a substantial part of the property
or assets of the Parent Guarantor or a Principal Subsidiary, or (iii)
the winding-up or liquidation of the Parent Guarantor or any Principal
Subsidiary; and such proceeding or petition shall continue undismissed
for 60 days or an order or decree approving or ordering any of the
foregoing shall be entered;
(g) the Parent Guarantor or any Principal Subsidiary shall (i)
voluntarily commence any proceeding or file any petition seeking relief
under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other Federal or state bankruptcy,
insolvency, receivership, or similar law, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner,
any proceeding or the filing of any petition described in (f) above,
(iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator, or similar official for the
Parent Guarantor or any Principal Subsidiary or for a substantial part
of the property or assets of the Parent Guarantor or any Principal
Subsidiary, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general
assignment for the benefit of creditors, (vi) become unable, admit in
writing its inability, or fail generally to pay its debts as they
become due, or (vii) take any action for the purpose of effecting any
of the foregoing;
(h) the Parent Guarantor or any Principal Subsidiary, as the case
may be, fails to pay when due, or within any grace period applicable
thereto by the terms thereof any other Indebtedness of the Parent
Guarantor or any Principal Subsidiary aggregating $50,000,000 or more;
(i) the Parent Guarantor or any Principal Subsidiary shall fail to
observe or perform any covenant or agreement contained in any single
agreement or instrument relating to any Indebtedness in excess of (i)
$75,000,000 in the aggregate, with respect to any Indebtedness issued
on a tax-exempt basis, and (ii) $50,000,000 in the aggregate, with
respect to all other Indebtedness, in each case within any applicable
grace period, or any other event shall occur if the effect of such
failure or other event is to accelerate, or to permit the holder of
such Indebtedness or any other person to accelerate, the maturity of
such Indebtedness; or any such Indebtedness shall be required to be
prepaid (other than by a regularly scheduled required prepayment or the
exercise by the Parent Guarantor or such Principal Subsidiary of its
right to make a voluntary prepayment) in whole or in part prior to its
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stated maturity;
(j) a judgment or order for the payment of money in excess of
$50,000,000 and having a Material Adverse Effect shall be rendered
against the Parent Guarantor or any of the Subsidiaries and such
judgment or order shall continue unsatisfied (in the case of a money
judgment) and in effect for a period of 30 days during which execution
shall not be effectively stayed or deferred (whether by action of a
court, by agreement, or otherwise);
(k) a Plan shall fail to maintain the minimum funding standard
required by Section 412(d) of the Code for any plan year or a waiver of
such standard is sought or granted under Section 412(d), or a Plan is
or shall have been terminated or the subject of termination proceedings
under ERISA, or the Parent Guarantor or an ERISA Affiliate has incurred
a liability to or on account of a Plan under Section 4062, 4063, 4064,
4201 or 4204 of ERISA, and there shall result from any such event or
events a Material Adverse Effect;
(l) there shall have occurred a Change in Control;
(m) the Approval Date shall not have occurred on or before the
90th day after the date hereof; or
(n) before the Approval Date, the obligations of any Subsidiary
Guarantor under Article X shall be, or shall be asserted by any Obligor
to be, invalid; or on or after the Approval Date, the obligations of
the Parent Guarantor under Article X shall be, or shall be asserted by
any Obligor to be, invalid;
then, and in every such event (other than an event with respect to the Borrower
described in paragraph (f) or (g) above), and at any time thereafter during the
continuance of such event, the Administrative Agent, at the request of the
Majority Lenders, shall by notice to the Borrower, take either or both of the
following actions, at the same or different times: (i) terminate forthwith the
Commitments and (ii) declare the Advances then outstanding to be forthwith due
and payable in whole or in part, whereupon the principal of the Advances so
declared to be due and payable, together with accrued interest thereon and any
unpaid accrued Fees and all other liabilities of the Obligors accrued hereunder
and under any other Loan Document, shall become forthwith due and payable,
without presentment, demand, protest, or any other notice of any kind, all of
which are hereby expressly waived by each Obligor, anything contained herein or
in any other Loan Document to the contrary notwithstanding; and in any event
with respect to the Borrower described in paragraph (f) or (g) above, the
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Commitments shall automatically terminate and the principal of the Advances then
outstanding, together with accrued interest thereon and any unpaid accrued Fees
and all other liabilities of the Obligors accrued hereunder and under any other
Loan Document, shall automatically become due and payable, without presentment,
demand, protest, or any other notice of any kind, all of which are hereby
expressly waived by each Obligor, anything contained herein or in any other Loan
Document to the contrary notwithstanding.
ARTICLE VIII
THE ADMINISTRATIVE AGENT
SECTION 8.01. Authorization and Action. Each Lender hereby appoints
and authorizes the Administrative Agent to take such action as administrative
agent on its behalf and to exercise such powers under this Agreement as are
delegated to the Administrative Agent by the terms hereof, together with
such powers as are reasonably incidental thereto. As to any matters not
expressly provided for by this Agreement (including, without limitation,
enforcement or collection of the Notes), the Administrative Agent shall not
be required to exercise any discretion or take any action, but shall be required
to act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Majority Lenders, and such
instructions shall be binding upon all Lenders and all holders of Notes;
provided, however, that the Administrative Agent shall not be required to take
any action which exposes the Administrative Agent to personal liability or
which is contrary to this Agreement or applicable law. The Administrative
Agent agrees to give to each Lender prompt notice of each notice given to it
by any Obligor pursuant to the terms of this Agreement.
SECTION 8.02. Administrative Agent's Reliance, Etc. Neither the
Administrative Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it or them under
or in connection with this Agreement, except for its or their own negligence or
willful misconduct. Without limitation of the generality of the foregoing, the
Administrative Agent: (i) may treat the payee of any Note as the holder thereof
until the Administrative Agent receives and accepts an Assignment and Acceptance
an Eligible Assignee, as assignee, as provided in Section 9.07; (ii) may
consult with legal counsel (including counsel for the any Obligor), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance
with the advice of such counsel, accountants or experts; (iii) makes no warranty
or representation to any Lender and shall not be responsible to any Lender for
any statements, warranties or representations (whether written or oral) made
in or in connection with this Agreement; (iv) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the
terms, covenants or conditions of this Agreement on the part of the Borrower
or to inspect the property (including the books and records) of the Borrower or
any of its Subsidiaries; (v) shall not be responsible to any Lender for the
due execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; and (vi) shall incur no liability under or in respect of this
Agreement by acting upon any notice, consent, certificate or other instrument
or writing (which may be by telecopier, telegram, cable or telex) believed
by it to be genuine and signed or sent by the proper party or parties.
SECTION 8.03. Citibank and Affiliates. With respect to its Com-
mitment, the Advances made by it and the Notes issued to it, Citibank shall
have the same rights and powers under this Agreement as any other Lender and
may exercise the same as though it were not the Administrative Agent;
and the term "Lender" or "Lenders" shall, unless otherwise expressly indicated,
include Citibank in its individual capacity. Citibank and its Affiliates may
accept deposits from, lend money to, act as trustee under indentures of, and
generally engage in any kind of business with, the Borrower, any of its
Subsidiaries and any person who may do business with or own securities of
the Borrower or any such Subsidiary, all as if Citibank were not the Adminis-
trative Agent and without any duty to account therefor to the Lenders.
SECTION 8.04. Lender Credit Decision. Each Lender acknowledges
that it has, independently and without reliance upon the Administrative Agent or
any other Lender and based on the financial statements referred to in Section
4.01 and such other documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement. Each
Lender also acknowledges that it will, independently and without reliance upon
the Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement.
SECTION 8.05. Indemnification . The Lenders agree to indemnify the
Administrative Agent (to the extent not reimbursed by the Borrower), ratably
according to the respective principal amounts of the Notes then held by them
(or if no Notes are at the time outstanding, ratably according to the respective
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amounts of their Commitments), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against the Administrative Agent in any way
relating to or arising out of this Agreement or any action taken or omitted by
the Administrative Agent under this Agreement, provided that no Lender shall
be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Administrative Agent's gross negligence or willful misconduct. Without
limiting the foregoing, each Lender agrees to reimburse the Administrative
Agent promptly upon demand for its ratable share of any out-of-pocket expenses
(including counsel fees) incurred by the Administrative Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings
or otherwise) of, or legal advice in respect of rights or responsibilities
under, this Agreement, to the extent that the Administrative Agent is not
reimbursed for such expenses by the Borrower.
SECTION 8.06. Successor Administrative Agent. The Administrative
Agent may resign at any time by giving written notice thereof to the Lenders
and the Borrower and may be removed at any time with or without cause by the
Majority Lenders. Upon any such resignation or removal, the Majority Lenders
shall have the right to appoint a successor Administrative Agent that, unless
a Default or Event of Default shall have occurred and then be continuing, is
reasonably acceptable to the Borrower. If no successor Administrative Agent
shall have been so appointed by the Majority Lenders, and shall have
accepted such appointment, within 30 days after the retiring Administrative
Agent's giving of notice of resignation or the Majority Lenders' removal of the
retiring Administrative Agent, then the retiring Administrative Agent may, on
behalf of the Lenders, appoint a successor Administrative Agent, which shall be
a commercial bank organized under the laws of the United States of America or
of any State thereof and having a combined capital and surplus of at least
$50,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
under this Agreement. After any retiring Administrative Agent's resignation
or removal hereunder as Administrative Agent, the provisions of this Article
VIII shall inure to its benefit as to any actions taken or omitted to be taken
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by it while it was Administrative Agent under this Agreement.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the A Notes, nor consent to any departure by
the Borrower therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Majority Lenders, and then such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment, waiver or
consent shall, unless in writing and signed by all the Lenders (other than the
Designated Bidders), do any of the following: (a) waive any of the conditions
specified in Section 3.01, (b) increase the Commitments of such Lenders or
subject such Lenders to any additional obligations, (c) reduce the principal
of, or interest on, the A Notes or any fees or other amounts payable hereunder,
(d) postpone any date fixed for any payment of principal of, or interest on, the
A Notes or any fees or other amounts payable hereunder, (e) change the percent-
age of the Commitments or of the aggregate unpaid principal amount of the A
Notes, or the number of Lenders, which shall be required for the Lenders or any
of them to take any action hereunder or (f) amend this Section 9.01; provided
further that no amendment, waiver or consent shall, unless in writing and signed
by each Lender holding a B Note at such time, (1) reduce the principal of, or
interest on, such B Note or any fees or other amounts payable hereunder or
thereunder with respect thereto, (2) postpone any date fixed for any payment
of principal of, or interest on, such B Note or any fees or other amounts
payable hereunder or thereunder with respect thereto, or (3) subject such
Lender to any additional obligations; and provided further that no amendment,
waiver or consent shall, unless in writing and signed by the Administra-
tive Agent in addition to the Lenders required above to take such action,
affect the rights or duties of the Administrative Agent under this Agree-
ment or any Note. This Agreement and the Notes constitute the entire
agreement of the parties with respect to the subject matter hereof and thereof.
SECTION 9.02. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telecopier, telegraphic,
telex or cable communication) and mailed, telecopied, telegraphed, telexed,
cabled or delivered, if to any Obligor, at P.O.Box 3801, High Ridge Park,
Stamford, Connecticut 06905, Attention: Robert J. DeSantis, Vice President and
Treasurer
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of the Parent Guarantor, telephone no. (203) 614-5052, telecopier number
(203) 614-4625; if to any Lender (other than a Designated Bidder), at the
Domestic Lending Office specified in the Administrative Questionnaire of
such Lender or in the Assignment and Acceptance pursuant to which it became a
Lender; if to any Designated Bidder, at the Domestic Lending Office specified in
the Designation Agreement pursuant to which it became a Lender; and if to the
Administrative Agent, Citibank, N.A., 2 Penn's Way, Suite 200, New Castle,
Delaware, 19720, Attention: Mr. Savas Divan, telephone no. (302) 894-6030
telecopier no.(302) 894-6120*; or, as to the Borrower or the Administrative
Agent, at such other address as shall be designated by such party in a written
notice to the other parties and, as to each other party, at such other address
as shall be designated by such party in a written notice to the Borrower
and the Administrative Agent. All such notices and communications shall, when
mailed, telecopied, telegraphed, telexed or cabled, be effective when received
(if deposited in the mails), telecopied, delivered to the telegraph company,
confirmed by telex answerback or delivered to the cable company, respectively,
except that notices and communications to the Administrative Agent pursuant to
Article II or VII shall not be effective until received by the Administrative
Agent.
SECTION 9.03. No Waiver; Remedies. No failure on the part of
any Lender or the Administrative Agent to exercise, and no delay in exercising,
any right hereunder or under any Note shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
* Reflects change from executed original.
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SECTION 9.04. Costs, Expenses and Indemnification.
(a) The Borrower agrees to pay and reimburse within 30 days after
demand all costs and expenses of the Administrative Agent in connection with the
preparation, execution, delivery, administration, modification and amendment of
this Agreement, the Notes and the other documents to be delivered hereunder,
including, without limitation, the reasonable fees and out-of-pocket expenses of
counsel for the Administrative Agent with respect thereto and with respect to
advising the Administrative Agent as to its rights and responsibilities under
this Agreement. The Borrower further agrees to pay on demand all costs and
expenses, if any (including, without limitation, reasonable counsel fees and
expenses of the Administrative Agent and each of the Lenders), incurred by the
Administrative Agent or any Lender in connection with the enforcement (whether
through negotiations, legal proceedings or otherwise) of this Agreement, the
Notes and the other documents to be delivered hereunder, including, without
limitation, reasonable counsel fees and expenses in connection with the
enforcement of rights under this Section 9.04(a).
(b) The Borrower hereby indemnifies the Administrative Agent,
Citicorp Securities, Inc., each Lender and each of respective their Affiliates
and their respective officers, directors, employees, agents, advisors and
representatives (each, an "Indemnified Party") from and against any and all
claims, damages, losses, liabilities and expenses (including, without
limitation, fees and disbursements of counsel), joint or several, that may be
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or relating to any investigation,
litigation or proceeding or the preparation of any defense with respect thereto
arising out of or in connection with or relating to this Agreement, the Notes or
the transactions contemplated hereby or thereby or any use made or proposed to
be made with the proceeds of the Advances, whether or not such investigation,
litigation or proceeding is brought by the Borrower, any of its shareholders or
creditors, an Indemnified Party or any other person, or an Indemnified Party is
otherwise a party thereto, and whether or not any of the conditions precedent
set forth in Article III are satisfied or the other transactions contemplated by
this Agreement are consummated, except to the extent such claim, damage, loss,
liability or expense results from such Indemnified Party's negligence or willful
misconduct, or from a violation by such Indemnified Party of any law, order,
regulation or agreement to which such Indemnified Party or its properties is
subject, or from a breach of this Agreement.
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The Borrower hereby further agrees that no Indemnified Party shall
have any liability (whether direct or indirect, in contract, tort or otherwise)
to the Borrower for or in connection with or relating to this Agreement, the
Notes or the transactions contemplated hereby or thereby or any use made or
proposed to be made with the proceeds of the Advances, except to the extent such
liability is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's negligence or
willful misconduct; provided that nothing in this paragraph shall be deemed to
constitute a waiver of any claim the Borrower may have, or to exculpate any
person from any liability that such person may have to the Borrower, for breach
by such person of its obligations under this Agreement.
(c) If any payment of principal of, or Conversion or Continuation
of, any Eurodollar Rate Advance is made other than on the last day of an
Interest Period for such Advance, as a result of acceleration of the maturity of
the Notes pursuant to Article VII or for any other reason (other than a payment
or Conversion pursuant to Section 2.13), the Borrower shall pay (subject to the
last sentence of this Section 9.04(c)) to the Administrative Agent for the
account of such Lender any amounts required to compensate such Lender for any
additional losses, costs or expenses which it may reasonably incur as a result
of such payment, Continuation or Conversion, including, without limitation, any
loss (excluding loss of anticipated profits), cost or expense incurred by reason
of the liquidation or reemployment of deposits or other funds acquired by any
Lender to fund or maintain such Advance. The Borrower shall pay amounts owing to
any Lender pursuant to this Section 9.04(c) within 30 days after receipt from
such Lender of a certificate setting forth in reasonable detail the calculation
of the amount such Lender is entitled to claim under this Section 9.04(c) (which
certificate shall be conclusive and binding for all purposes, absent manifest
error).
SECTION 9.05. Right of Set-off. Upon (i) the occurrence and
during the continuance of any Event of Default under Article VII or (ii) the
making of the request or the granting of the consent specified by Article
VII to authorize the Administrative Agent to declare the Notes due and payable
pursuant to the provisions of Article VII, each Lender and each of its
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Lender or such Affiliate to or for
the credit or the account of the Borrower (all such deposits and other indebted-
ness being herein called "Obligations") against any and all of the obligations
of the Borrower now or hereafter existing under this Agreement and any Note held
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by such Lender, whether or not such Lender shall have made any demand under this
Agreement or such Note and although the Obligations may be unmatured. Each
Lender agrees promptly to notify the Borrower after any such set-off and
application made by such Lender or such Affiliate, provided that the failure to
give such notice shall not affect the validity of such set-off and application.
The rights of each Lender and its Affiliate under this Section are in addition
to other rights and remedies (including, without limitation, other rights of
set-off) which such Lender or such Affiliate may have.
SECTION 9.06. Binding Effect. This Agreement shall become effec-
tive when it shall have been executed by the Borrower and the Administrative
Agent and when the Administrative Agent shall have been notified by each Bank
that such Bank has executed it and thereafter shall be binding upon and
inure to the benefit of the Borrower, the Administrative Agent and each Lender
and their respective successors and assigns, except that the Borrower shall
not have the right to assign its rights hereunder or any interest herein without
the prior written consent of the Lenders.
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SECTION 9.07. Assignments, Designations and Participations.
(a) Each Lender (other than a Designated Bidder) may, with notice
to and the consent of the Administrative Agent and the Borrower, such consents
not to be unreasonably withheld (but not otherwise), assign to one or more banks
or other entities all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitment,
the Advances owing to it and the Note or Notes held by it); provided, however,
that (i) no such consent by the Borrower or the Administrative Agent shall be
required in the case of any assignment to an Affiliate of the assigning Lender,
(ii) each such assignment shall be of a constant, and not a varying, percentage
of all rights and obligations of the assigning Lender under this Agreement
(other than any right to make B Advances, B Advances owing to it or B Notes),
(iii) the amount of the Commitment of the assigning Lender being assigned
pursuant to each such assignment (determined as of the date of the Assignment
and Acceptance with respect to such assignment) shall in no event be less than
$10,000,000 and shall be an integral multiple of $1,000,000 unless the Borrower
and the Administrative Agent otherwise agree, (iv) each such assignment shall be
to an Eligible Assignee, (v) the parties to each such assignment shall execute
and deliver to the Administrative Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with any Note or Notes subject
to such assignment, and (vi) the parties to each such assignment (other than the
Borrower) shall deliver to the Administrative Agent a processing and recordation
fee of $3,000. Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in each Assignment and Acceptance, (x) the
assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (y) the
Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such Lender shall cease to be a party hereto).
(b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender makes no representation
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or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or the performance or observance by the Borrower of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to in
Section 4.01 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Administrative Agent, such assigning Lender or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes the Administrative Agent to
take such action as administrative agent on its behalf and to exercise such
powers under this Agreement as are delegated to the Administrative Agent by the
terms hereof, together with such powers as are reasonably incidental thereto;
and (vii) such assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of this Agreement are required
to be performed by it as a Lender.
(c) Upon its receipt of an Assignment and Acceptance executed by
an assigning Lender and an assignee representing that it is an Eligible
Assignee, together with any Note or Notes subject to such assignment, the
Administrative Agent shall, if such Assignment and Acceptance has been completed
(and the Borrower and the Administrative Agent shall have consented to the
relevant assignment to the extent required pursuant to Section 9.07(a)) and is
in substantially the form of Exhibit C hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Borrower. Within five Business Days
after its receipt of such notice, the Borrower, at its own expense, shall
execute and deliver to the Administrative Agent in exchange for the surrendered
Note or Notes (X) a new A Note to the order of such Eligible Assignee in an
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amount equal to the Commitment assumed by it pursuant to such Assignment and
Acceptance and, if the assigning Lender has retained a Commitment hereunder, a
new A Note to the order of the assigning Lender in an amount equal to the
Commitment retained by it hereunder and (Y) new B Note or Notes to the order of
such Eligible Assignee in an amount equal to the principal amount of the B
Advances (if any) acquired by it pursuant to such Assignment and Acceptance and,
if the assigning Lender has retained a portion of such B Advances, new B Note or
Notes to the order of the assigning Lender in an amount equal to the principal
amount of the B Advances retained by it hereunder). Such new A Note or Notes
shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered A Note or Notes, and such new B Note or Notes shall
be in an aggregate principal amount equal to the aggregate principal amount of
such surrendered B Note or Notes. All such Notes shall be dated the effective
date of such Assignment and Acceptance and shall otherwise be in substantially
the form of Exhibit A-1 or A-2 hereto, as applicable.
(d) Each Lender (other than the Designated Bidders) may designate
one or more banks or other entities to have a right to make B Advances as a
Lender pursuant to Section 2.03; provided, however, that (i) no such Lender
shall be entitled to make more than two such designations, (ii) each such Lender
making one or more of such designations shall retain the right to make B
Advances as a Lender pursuant to Section 2.03, (iii) each such designation shall
be to a Designated Bidder and (iv) the parties to each such designation shall
execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, a Designation Agreement. Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in each Designation Agreement, the designee thereunder shall be a party hereto
with a right to make B Advances as a Lender pursuant to Section 2.03 and the
obligations related thereto.
(e) By executing and delivering a Designation Agreement, the
Lender making the designation thereunder and its designee thereunder confirm and
agree with each other and the other parties hereto as follows: (i) such Lender
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
this Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other instrument or
document furnished pursuant hereto; (ii) such Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Borrower or the performance or observance by the Borrower of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such designee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to in
Section 4.01 and such other documents and information as it has deemed
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appropriate to make its own credit analysis and decision to enter into the
Designation Agreement; (iv) such designee will, independently and without
reliance upon the Administrative Agent, such designating Lender or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (v) such designee confirms that it is a Designated
Bidder; (vi) such designee appoints and authorizes the Administrative Agent to
take such action as administrative agent on its behalf and to exercise such
powers under this Agreement as are delegated to the Administrative Agent by the
terms hereof, together with such powers as are reasonably incidental thereto;
and (vii) such designee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of this Agreement are required
to be performed by it as a Lender.
(f) Upon its receipt of a Designation Agreement executed by a
designating Lender and a designee representing that it is a Designated Bidder,
the Administrative Agent shall, if such Designation Agreement has been completed
and is substantially in the form of Exhibit D hereto, (i) accept such
Designation Agreement, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Borrower.
(g) The Administrative Agent shall maintain at its address
referred to in Section 9.02 a copy of each Assignment and Acceptance and each
Designation Agreement delivered to and accepted by it and a register for the
recordation of the names and addresses of each of the Lenders and, with respect
to Lenders other than Designated Bidders, the Commitment of, and principal
amount of the A Advances owing to, each such Lender from time to time (the
"Register"). The entries in the Register shall be conclusive and binding for the
purposes, absent manifest error, and the Borrower, the Administrative Agent and
the Lenders may treat each person whose name is recorded in the Register as a
Lender hereunder for the purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
(h) Each Lender may sell participations to one or more banks or
other entities in or to all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Commitment, the Advances owing to it and the Note or Notes held by it);
provided, however, that (i) such Lender's obligations under this Agreement
(including, without limitation, its Commitment to the Borrower hereunder) shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) such Lender shall
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remain the holder of any such Note for all purposes of this Agreement, (iv) the
Borrower, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement, and (v) no participant under any such
participation agreement shall have any right to approve any amendment or waiver
of any provision of this Agreement or any Note, or to consent to any departure
by the Borrower therefrom, except to the extent that any such amendment, waiver
or consent would (x) reduce the principal of, or interest on, the Notes or any
fee or other amounts payable hereunder, in each case to the extent the same are
subject to such participation, or (y) postpone any date fixed for the payment of
principal of, or interest on, the Notes or any fees or other amounts payable
hereunder, in each case to the extent the same are subject to such
participation.
(i) Any Lender may, in connection with any assignment, designation
or participation or proposed assignment, designation or participation pursuant
to this Section 9.07, disclose to the assignee, designee or participant or
proposed assignee, designee or participant, any information relating to the
Parent Guarantor or any of its Subsidiaries furnished to such Lender by or on
behalf of the Parent Guarantor or the Borrower; provided that, prior to any such
disclosure, the assignee, designee or participant or proposed assignee, designee
or participant shall agree to preserve the confidentiality of any confidential
information relating to the Parent Guarantor or any such Subsidiary received by
it from such Lender on the terms set forth in Section 9.14.
(j) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Advances owing to it and the Notes held by it) in favor of any Federal Reserve
Bank in accordance with Regulation A of the Board of Governors of the Federal
Reserve System.
(k) All amounts payable by the Borrower to any Lender under
Sections 2.08, 2.12, 2.15 and 9.04(c) in respect of Advances held by such
Lender, and such Lender's Commitment, shall be determined as if such Lender had
not sold or agreed to sell any participations in such Advances or Commitment and
as if such Lender were funding each of such Advances and Commitments in the same
way that it is funding the portion of such Advances and Commitment in which no
participations have been sold. No assignee or other transferee of any Lender's
rights shall be entitled to receive any greater payment under Section 2.12 than
such Lender would have been entitled to receive with respect to the rights
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transferred, unless such transfer is made (i) with the Borrower's prior written
consent, (ii) by reason of the provisions of said Section 2.12 requiring such
Lender to designate a different Applicable Lending Office as provided in said
Section 2.12 or (iii) at a time when the circumstances giving rise to such
greater payment did not exist.
SECTION 9.08. Governing Law; Submission to Jurisdiction. This
Agreement and the Notes shall be governed by, and construed in accordance
with, the law of the State of New York. The Borrower hereby submits to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York state court sitting in New York City
for the purposes of all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. The Borrower irrevocably
waives, to the fullest extent permitted by applicable law, any objection that it
may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum.
SECTION 9.09. Severability. In case any provision in this
Agreement or in any Note shall be held to be invalid, illegal or unenforceable,
such provision shall be severable from the rest of this Agreement or such Note,
as the case may be, and the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 9.10. Execution in Courterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
SECTION 9.11. Survival. The obligations of the Borrower under
Sections 2.08, 2.12, 2.15 and 9.04 (and the Guarantees by the Guarantors of
such obligations under Article X) and the obligations of the Lenders under
Section 8.05 shall survive the repayment of the Advances and the termination
of the Commitments. In addition, each representation and warranty made,
or deemed to be made by any Notice of A Borrowing or Notice of B Borrowing,
herein or pursuant hereto shall survive the making of such representation and
warranty, and no Lender shall be deemed to have waived, by reason of making any
Advance, any Default or Event of Default that may arise by reason of such
representation or warranty proving to have been false or misleading,
notwithstanding that such Lender or the Administrative Agent may have had
notice or knowledge or reason to believe that such representation or warranty
was false or misleading at the time such extension of credit was made.
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SECTION 9.12. Waiver of Jury Trial. EACH OF THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTES OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 9.13. Substitution of Lender. If (a) the obligation of
any Lender to make, Continue or otherwise maintain Eurodollar Rate Advances
has been suspended pursuant to Section 2.13, (b) any Lender has demanded
compensation under Section 2.12 or 2.15 or (c) any Lender shall fail to consent
to an amendment or a waiver which pursuant to the terms of Section 9.01
requires the consent of all Lenders and with respect to which the Majority
Lenders shall have granted their consent, the Borrower shall have the right, if
no Default or Event of Default then exists, to replace such Lender (the
"Replaced Lender") with one or more Eligible Assignee(s), (each, a "Replacement
Lender") acceptable to the Administrative Agent, provided that:
(i) at the time of any replacement pursuant to this Section 9.13,
the Replacement Lenders shall enter into one or more Assignment and
Acceptance Agreements, pursuant to which such Replacement Lenders shall
acquire the Commitments and outstanding Advances of the Replaced Lender
and, in connection therewith, shall pay to the Replaced Lender in
respect thereof an amount equal to the sum of (A) an amount equal to
the principal of, and all accrued interest on, all outstanding Advances
of the Replaced Lender, (B) an amount equal to all accrued and unpaid
Facility Fees owing to the Replaced Lender and (C) an amount equal to
the amount which would be payable by the Borrower to the Replaced
Lender pursuant to Section 9.04(c) if the Borrower prepaid at the time
of such replacement all of the Advances of such Replaced Lender
outstanding at such time; and
(ii) all obligations of the Borrower owing to the Replaced Lender
(other than those specifically described in clause (i) above in respect
of which the assignment purchase price has been, or is concurrently
being, paid) shall be paid in full to such Replaced Lender concurrently
with such replacement.
Upon (I) the execution of the respective Assignment and Assumption Agreements,
(II) the payment of amounts referred to in clauses (i) and (ii) above and (III)
if so requested by a Replacement Lender, delivery to such Replacement Lender of
the appropriate Note or Notes executed by the Borrower, each Replacement Lender
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shall become a Lender hereunder and the Replaced Lender shall cease to
constitute a Lender hereunder.
SECTION 9.14. Confidentiality. Each Lender agrees to hold all
non-public information obtained pursuant to the provisions of this Agreement in
accordance with its customary procedure for handling confidential information
of this nature and in accordance with safe and sound banking practices,
provided that nothing herein shall prevent any Lender from disclosing such
information (i) to any other Lender or to the Administrative Agent (or to
Citicorp Securities, Inc.), (ii) upon the order of any court or administrative
agency or otherwise to the extent required by statute, rule, regulation or
judicial process, (iii) to bank examiners or upon the request or demand of any
other regulatory agency or authority, (iv) which had been publicly disclosed
other than as a result of a disclosure by the Administrative Agent or any
Lender prohibited by this Agreement, (v) in connection with any litigation
to which any one or more of the Lenders or the Administrative Agent is a party,
or in connection with the exercise of any remedy hereunder or under any Note,
(vi) to such Lender's or Administrative Agent's legal counsel and independent
auditors and accountants and (vii) subject to provisions substantially similar
to those contained in this Section, to any actual or proposed participant or
assignee.
Credit Agreement
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ARTICLE X
GUARANTEE
SECTION 10.01. The Guarantee. Subject to Section 10.09 hereof,
the Guarantors hereby jointly and severally guarantee to each Lender and the
Administrative Agent and their respective successors and assigns the prompt
payment in full when due (whether at stated maturity, by acceleration or
otherwise) of the principal of and interest on the Advances made by the Lenders
to, and the Notes held by each Lender of, the Borrower and all other amounts
from time to time owing to the Lenders or the Administrative Agent by the
Borrower under this Agreement and under the Notes strictly in accordance with
the terms thereof (such obligations being herein collectively called the
"Guaranteed Obligations"). Subject to Section 10.09, the Guarantors hereby
further jointly and severally agree that if the Borrower shall fail to pay in
full when due (whether at stated maturity, by acceleration or otherwise) any
of the Guaranteed Obligations, the Guarantors will promptly pay the same,
without any demand or notice whatsoever, and that in the case of any extension
of time of payment or renewal of any of the Guaranteed Obligations, the same
will be promptly paid in full when due (whether at extended maturity, by
acceleration or otherwise) in accordance with the terms of such extension or
renewal.
SECTION 10.02. Obligations Unconditional. Subject to Section
10.09, the obligations of the Guarantors under Section 10.01 are absolute
and unconditional, joint and several, irrespective of the value, genuineness,
validity, regularity or enforceability of the obligations of the Borrower under
this Agreement, the Notes or any other agreement or instrument referred
to herein or therein, or any substitution, release or exchange of any other
guarantee of or security for any of the Guaranteed Obligations, and, to
the fullest extent permitted by applicable law, irrespective of any other
circumstance whatsoever that might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor, i being the intent of this
Section 10.02 that the obligations of the Guarantors hereunder shall be absolute
and unconditional, joint and several, under any and all circumstances. Without
limiting the generality of the foregoing, but subject to Section 10.09, it is
agreed that the occurrence of any one or more of the following shall not alter
or impair the liability of the Guarantors hereunder which shall remain absolute
and unconditional as described above:
(i) at any time or from time to time, without notice to the
Guarantors, the time for any performance of or compliance with any of
the Guaranteed Obligations shall be extended, or such performance or
compliance shall be waived;
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(ii) any of the acts mentioned in any of the provisions of this
Agreement or the Notes or any other agreement or instrument referred to
herein or therein shall be done or omitted;
(iii) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under this
Agreement or the Notes or any other agreement or instrument referred to
herein or therein shall be waived or any other guarantee of any of the
Guaranteed Obligations or any security therefor shall be released or
exchanged in whole or in part or otherwise dealt with; or
(iv) any lien or security interest granted to, or in favor of, the
Administrative Agent or any Lender or Lenders as security for any of
the Guaranteed Obligations shall fail to be perfected.
The Guarantors hereby expressly waive diligence, presentment, demand of payment,
protest and all notices whatsoever, and any requirement that the Administrative
Agent or any Lender exhaust any right, power or remedy or proceed against the
Borrower under this Agreement or the Notes or any other agreement or instrument
referred to herein or therein, or against any other Person under any other
guarantee of, or security for, any of the Guaranteed Obligations.
SECTION 10.03. Reinstatement. Subject to Section 10.09, the
obligations of the Guarantors under this Article X shall be automatically
reinstated if and to the extent that for any reason any payment by or on behalf
of the Borrower in respect of the Guaranteed Obligations is rescinded or must be
otherwise restored by any holder of any of the Guaranteed Obligations, whether
as a result of any proceedings in bankruptcy or reorganization or otherwise and
the Guarantors jointly and severally agree that they will indemnify the
Administrative Agent and each Lender on demand for all reasonable costs and
expenses (including, without limitation, fees of counsel) incurred by the
Administrative Agent or such Lender in connection with such rescission or
restoration, including any such costs and expenses incurred in defending against
any claim alleging that such payment constituted a preference, fraudulent
transfer or similar payment under any bankruptcy, insolvency or similar law.
SECTION 10.04. Subrogation. The Guarantors hereby jointly and
severally agree that until the payment and satisfaction in full of all
Guaranteed Obligations and the expiration and termination of the Commitments
of the Lenders under this Agreement they shall not exercise any right or remedy
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arising by reason of any performance by them of their guarantee in Section
10.01, whether by subrogation or otherwise, against the Borrower or any other
guarantor of any of the Guaranteed Obligations or any security for any of the
Guaranteed Obligations.
SECTION 10.05. Remedies. Subject to Section 10.09, the Guarantors
jointly and severally agree that, as between the Guarantors and the Lenders, the
obligations of the Borrower under this Agreement and the Notes may be declared
to be forthwith due and payable as provided in Article VII (and shall be deemed
to have become automatically due and payable in the circumstances provided
in said Article VII) for purposes of Section 10.01 notwithstanding any stay,
injunction or other prohibition preventing such declaration (or such obligations
from becoming automatically due and payable) as against the Borrower and that,
in the event of such declaration (or such obligations being deemed to have
become automatically due and payable), such obligations (whether or not due
and payable by the Borrower) shall forthwith become due and payable by the
Guarantors for purposes of said Section 10.01.
SECTION 10.06 Instrument for the Payment of Money. Subject to
Section 10.09, each Guarantor hereby acknowledges that the guarantee in this
Article X constitutes an instrument for the payment of money, and consents and
agrees that any Lender or the Administrative Agent, at its sole option, in the
event of a dispute by such Guarantor in the payment of any moneys due hereunder,
shall have the right to bring motion-action under New York CPLR Section 3213.
SECTION 10.07. Continuing Guarantee. Subject to Section 10.09,
the guarantee in this Article X is a continuing guarantee, and shall apply to
all Guaranteed Obligations whenever arising.
SECTION 10.08. General Limitation on Guarantee Obligations. In
any action or proceeding involving any state corporate law, or any state or
Federal bankruptcy, insolvency, reorganization or other law affecting the rights
of creditors generally, if the obligations of any Subsidiary Guarantor under
Section 10.01 would otherwise be held or determined to be void, invalid or
unenforceable, or subordinated to the claims of any other creditors, on account
of the amount of its liability under said Section 10.01, then, notwithstanding
any other provision hereof to the contrary, the amount of such liability shall,
without any further action by such Subsidiary Guarantor, any Lender, the
Administrative Agent or any other Person, be automatically limited and reduced
Credit Agreement
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to the highest amount that is valid and enforceable and not subordinated to the
claims of other creditors as determined in such action or proceeding.
SECTION 10.09. Effectiveness of Guarantee. Notwithstanding any-
thing contained herein to the contrary, the Parent Guarantor shall have no
obligations under this Article X until the Approval Date. On the Approval Date,
the obligations of the Parent Guarantor under this Article X shall become
effective and the obligations of the Subsidiary Guarantors under this Article X
shall terminate.
Credit Agreement
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers thereunto duly authorized, as of the
date first above written.
BORROWER
ELECTRIC LIGHTWAVE, INC.
By /s/ David B. Sharkey
Title: President
PARENT GUARANTOR
CITIZENS UTILITIES COMPANY
By /s/ Robert J. DeSantis
Title: Vice President and Treasurer
SUBSIDIARY GUARANTORS
SOUTHWESTERN INVESTMENTS, INC.
By /s/ Robert J. DeSantis
Title: Vice President, Treasurer and
Chief Financial Officer
SOUTHWESTERN CAPITAL CORP.
By /s/ Robert J. DeSantis
Title: Vice President, Treasurer and
Chief Financial Officer
CU CAPITALCORP
By /s/ Robert J. DeSantis
Title: Vice President, Treasurer and
Chief Financial Officer
Credit Agreement
<PAGE>
- 74 -
ADMINISTRATIVE AGENT
CITIBANK, N.A., as
Administrative Agent
By /s/ Mary S. Thomas
Title: Attorney-in-Fact
Commitment BANKS
$165,000,000 CITIBANK, N.A.
By /s/ Mary S. Thomas
Title: Attorney-in-Fact
$ 60,000,000 BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By /s/ Vanessa Sheh Meyer
Title: Managing Director
$ 60,000,000 DEUTSCHE BANK AG,
NEW YORK BRANCH
AND/OR CAYMAN ISLANDS BRANCH
By /s/ V. Shannon Sewsanker
Title: Assistant Vice President
By /s/ Susan M. O'Connor
Title: Director
$ 40,000,000 THE FUJI BANK, LIMITED,
SAN FRANCISCO AGENCY
Credit Agreement
<PAGE>
- 75 -
By /s/ Keiichi Ozawa
Title: Joint General Manager
Credit Agreement
<PAGE>
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$ 25,000,000 BANK OF HAWAII
By /s/ Joseph T. Donalson
Title: Vice President
$ 25,000,000 FLEET NATIONAL BANK
By /s/ Robert D. Lanigan
Title: Director
$ 25,000,000 SUNTRUST BANK, ATLANTA
By /s/ W. David Wisdom
Title: Group Vice President
By /s/ Laura G. Harrison
Title: Assistant Vice President
Credit Agreement
<PAGE>
EXHIBIT A-1
FORM OF A NOTE
U.S.$______________ Dated: _________ __, _____
FOR VALUE RECEIVED, the undersigned, ELECTRIC LIGHTWAVE, INC., a
Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
_________________ (the "Lender") for the account of its Applicable Lending
Office (as defined in the Credit Agreement referred to below) on the Termination
Date (as so defined) the principal sum of U.S.$[amount of the Lender's
Commitment in figures] or, if less, the aggregate principal amount of the A
Advances (as defined below) made by the Lender to the Borrower pursuant to the
Credit Agreement then outstanding.
The Borrower promises to pay interest on the unpaid principal
amount of each A Advance from the date of such A Advance until such principal
amount is paid in full, at such interest rates, and payable at such times, as
are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the
United States of America to Citibank, N.A., as Administrative Agent, at 1 Court
Square, 7th Floor, Long Island City, New York 11120, in same day funds. Each A
Advance made by the Lender to the Borrower pursuant to the Credit Agreement, and
all payments made on account of principal thereof, shall be recorded by the
Lender and, prior to any transfer hereof, endorsed on the grid attached hereto
which is part of this Promissory Note; provided that the failure of the Lender
to make any such recordation or endorsement shall not affect the obligations of
the Borrower hereunder or under the Credit Agreement.
This Promissory Note is one of the A Notes referred to in, and is
entitled to the benefits of, the Credit Agreement dated as of November 21, 1997
(the "Credit Agreement") among the Borrower, the Guarantors referred to therein,
the Lender and certain other banks parties thereto, and Citibank, N.A., as
Administrative Agent for the Lender and such other banks. The Credit Agreement,
among other things, (i) provides for the making of advances (the "A Advances")
by the Lender to the Borrower from time to time in an aggregate amount not to
exceed at any time outstanding the U.S. dollar amount first above mentioned, the
indebtedness of the Borrower resulting from each such A Advance being evidenced
by this Promissory Note, and (ii) contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity hereof upon the
terms and conditions therein specified.
Credit Agreement
<PAGE>
- 2 -
The Borrower hereby waives presentment, demand, protest and notice
of any kind. No failure to exercise, and no delay in exercising, any rights
hereunder on the part of the holder hereof shall operate as a waiver of such
rights.
This Promissory Note shall be governed by, and construed in
accordance with, the law of the State of New York, United States.
ELECTRIC LIGHTWAVE, INC.
By__________________________
Title:
Form of A Note
<PAGE>
<TABLE>
<CAPTION>
- 3 -
ADVANCES AND PAYMENTS OF PRINCIPAL
<S> <C> <C> <C> <C>
================ ------------------------- ---------------------------- ------------------------- ==========================
Amount of Unpaid of
Amount of Principal Paid Principal Notation
Date Advance or Prepaid Balance Made By
================ ------------------------- ---------------------------- ------------------------- ==========================
================ ------------------------- ---------------------------- ------------------------- ==========================
================ ------------------------- ---------------------------- ------------------------- ==========================
================ ------------------------- ---------------------------- ------------------------- ==========================
================ ------------------------- ---------------------------- ------------------------- ==========================
================ ------------------------- ---------------------------- ------------------------- ==========================
================ ------------------------- ---------------------------- ------------------------- ==========================
================ ------------------------- ---------------------------- ------------------------- ==========================
================ ------------------------- ---------------------------- ------------------------- ==========================
================ ------------------------- ---------------------------- ------------------------- ==========================
================ ------------------------- ---------------------------- ------------------------- ==========================
================ ------------------------- ---------------------------- ------------------------- ==========================
================ ------------------------- ---------------------------- ------------------------- ==========================
================ ------------------------- ---------------------------- ------------------------- ==========================
================ ------------------------- ---------------------------- ------------------------- ==========================
================ ------------------------- ---------------------------- ------------------------- ==========================
================ ------------------------- ---------------------------- ------------------------- ==========================
================ ------------------------- ---------------------------- ------------------------- ==========================
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</TABLE>
Form of A Note
<PAGE>
EXHIBIT A-2
FORM OF B NOTE
U.S.$______________ Dated: _________ __, _____
FOR VALUE RECEIVED, the undersigned, ELECTRIC LIGHTWAVE, INC., a
Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
_________________ (the "Lender") for the account of its Applicable Lending
Office (as defined in the Credit Agreement referred to below), on
______________, _____, the principal amount of __________ Dollars
($___________).
The Borrower promises to pay interest on the unpaid principal
amount hereof from the date hereof until such principal amount is paid in full,
at the interest rate and payable on the interest payment date or dates provided
below:
Interest Rate: _____% per annum (calculated on the basis of a year of
_____ days for the actual number
of days elapsed).
Interest Payment Date or Dates: ___________________________
Both principal and interest are payable in lawful money of the
United States of America to ______________ or the account of the Lender at the
office of ________________________________, at _____________________, in same
day funds.
This Promissory Note is one of the B Notes referred to in, and is
entitled to the benefits of, the Credit Agreement dated as of November 21, 1997
(the "Credit Agreement") among the Borrower, the Guarantors referred to therein,
the Lender and certain other banks parties thereto, and Citibank, N.A., as
Administrative Agent for the Lender and such other banks. The Credit Agreement,
among other things, contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events.
The Borrower hereby waives presentment, demand, protest and notice
of any kind. No failure to exercise, and no delay in exercising, any rights
hereunder on the part of the holder hereof shall operate as a waiver of such
rights.
Form of A Note
<PAGE>
- 2 -
This Promissory Note shall be governed by, and construed in
accordance with, the law of the State of New York, United States.
ELECTRIC LIGHTWAVE, INC.
By_________________________
Title:
Form of B Note
<PAGE>
EXHIBIT B-1
NOTICE OF A BORROWING
Citibank, N.A., as Administrative
Agent for the Lenders parties
to the Credit Agreement
referred to below
1 Court Square, 7th Floor, Zone 7
Long Island City, New York 11120
Attention: Kim Coley
[Date]
Ladies and Gentlemen:
The undersigned, Electric Lightwave, Inc., refers to the Credit
Agreement, dated as of November 21, 1997 (the "Credit Agreement", the terms
defined therein being used herein as therein defined), among the undersigned,
the Guarantors referred to therein, certain Lenders parties thereto and
Citibank, N.A., as Administrative Agent for said Lenders, and hereby gives you
notice, irrevocably, pursuant to Section 2.02 of the Credit Agreement that the
undersigned hereby requests an A Borrowing under the Credit Agreement, and in
that connection sets forth below the information relating to such A Borrowing
(the "Proposed A Borrowing") as required by Section 2.02(a) of the Credit
Agreement:
(i) The Business Day of the Proposed A Borrowing is ___________
__, _____.
(ii) The Type of A Advances comprising the Proposed A Borrowing is
[Base Rate Advances] [Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed A Borrowing is
$___________.
[(iv) The initial Interest Period for each A Advance made as part
of the Proposed A Borrowing is ______ month[s]]**.
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the Proposed A
Borrowing:
(A) the representations and warranties contained in
** For Eurodollar Rate Advances only.
Form of B Note
<PAGE>
- 2 -
Article IV [(other than Sections 4.03 and 4.06)]*** are correct, before
and after giving effect to the Proposed A Borrowing and to the
application of the proceeds therefrom, as though made on and as of such
date; and
(B) no event has occurred and is continuing, or would result from
such Proposed A Borrowing or from the application of the proceeds
therefrom, which constitutes a Default or an Event of Default.
Very truly yours,
ELECTRIC LIGHTWAVE, INC.
By___________________________
Title:
*** Exclude bracketed text if the proposed A Borrowing is the
initial Borrowing under the Credit Agreement.
Form of Notice of A Borrowing
<PAGE>
EXHIBIT B-2
NOTICE OF B BORROWING
Citibank, N.A., as Administrative
Agent for the Lenders parties
to the Credit Agreement
referred to below
1 Court Square, 7th Floor, Zone 7
Long Island City, New York 11120
Attention: Kim Coley
[Date]
Ladies and Gentlemen:
The undersigned, Electric Lightwave, Inc., refers to the Credit
Agreement, dated as of November 21, 1997 (the "Credit Agreement", the terms
defined therein being used herein as therein defined), among the undersigned,
the Guarantors referred to therein, certain Lenders parties thereto and
Citibank, N.A., as Administrative Agent for said Lenders, and hereby gives you
notice pursuant to Section 2.03 of the Credit Agreement that the undersigned
hereby requests a B Borrowing under the Credit Agreement, and in that connection
sets forth the terms on which such B Borrowing (the "Proposed B Borrowing") is
requested to be made:
(A) Date of B Borrowing _____________________
(B) Amount of B Borrowing _____________________
(C) Maturity Date _____________________
(D) Interest Rate Basis _____________________
(E) Interest Payment Date(s) _____________________
(F) _______________________ _____________________
(G) _______________________ _____________________
(H) _______________________ _____________________
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the Proposed B
Borrowing:
(a) the representations and warranties contained in Article IV
[(other than Sections 4.03 and 4.06]* are correct, before and after
giving effect to the Proposed B Borrowing and to the application of the
proceeds therefrom, as though made on and as of such date;
* Exclude bracketed text if the proposed B Borrowing is the
initial Borrowing under the Credit Agreement.
Form of Notice of A Borrowing
<PAGE>
- 2 -
(b) no event has occurred and is continuing, or would result
from the Proposed B Borrowing or from the application of the proceeds
therefrom, which constitutes a Default or an Event of Default; and
(c) the aggregate amount of the Proposed B Borrowing and all
other Borrowings to be made on the same day under the Credit Agreement
is within the aggregate amount of the unused Commitments of the
Lenders.
The undersigned hereby confirms that the Proposed B Borrowing
is to be made available to it in accordance with Section 2.03(a)(v) of the
Credit Agreement.
Very truly yours,
ELECTRIC LIGHTWAVE, INC.
By________________________
Title:
Form of Notice of B Borrowing
<PAGE>
EXHIBIT C
ASSIGNMENT AND ACCEPTANCE
Dated ____________ __, _____
Reference is made to the Credit Agreement dated as of November
21, 1997 (the "Credit Agreement") among Electric Lightwave, Inc., a Delaware
corporation (the "Borrower"), the Guarantors (as defined in the Credit
Agreement), the Lenders (as defined in the Credit Agreement) and Citibank, N.A.,
as Administrative Agent for the Lenders (the "Administrative Agent"). Terms
defined in the Credit Agreement are used herein with the same meaning.
___________________(the "Assignor") and _________________ (the
"Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and
the Assignee hereby purchases and assumes from the Assignor, that interest in
and to all of the Assignor's rights and obligations under the Credit Agreement
as of the date hereof [(other than in respect of B Advances and B Notes)]* which
represents the percentage interest specified on Schedule 1 of all outstanding
rights and obligations under the Credit Agreement [(other than in respect of B
Advances and B Notes)]1, including, without limitation, such interest in the
Assignor's Commitment, the A Advances and B Advances owing to the Assignor, and
the A Note[s] and B Note[s] held by the Assignor. After giving effect to such
sale and assignment, the Assignee's Commitment and the amount of the A Advances
and B Advances owing to the Assignee will be as set forth in Section 2 of
Schedule 1.
2. The Assignor (i) represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement or any other
instrument or document furnished pursuant thereto; (iii) makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of the Borrower or the performance or observance by the Borrower of
any of its obligations under the Credit Agreement or any other instrument or
document furnished pursuant thereto; and
* Delete bracketed text if B Advances are covered by this
Assignment and Acceptance.
Form of Notice of B Borrowing
<PAGE>
- 2 -
(iv) attaches the A Note[s] and B Note[s] referred to in paragraph 1 above and
requests that the Administrative Agent exchange such Note[s] for (X) a new A
Note to the order of the Assignee in an amount equal to the Commitment assumed
by it pursuant hereto and a new A Note to the order of the Assignor in an amount
equal to the Commitment retained by it under the Credit Agreement and (Y) new
B Note or Notes to the order of the Assignee in an amount equal to the principal
amount of the B Advances (if any) acquired by it pursuant hereto and, if the
Assignor has retained a portion of such B Advances, new B Note or Notes to the
order of the Assignor in an amount equal to the principal amount of the B
Advances retained by it under the Credit Agreement, in each case specified on
Schedule 1 hereto.
3. The Assignee (i) confirms that it has received a copy of
the Credit Agreement, together with copies of the financial statements referred
to in Section 4.01 thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance; (ii) agrees that it will, independently and
without reliance upon the Administrative Agent, the Assignor or any other Lender
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Credit Agreement; (iii) confirms that it is an Eligible Assignee; (iv)
appoints and authorizes the Administrative Agent to take such action as
administrative agent on its behalf and to exercise such powers under the Credit
Agreement as are delegated to the Administrative Agent by the terms thereof,
together with such powers as are reasonably incidental thereto; (v) agrees that
it will perform in accordance with their terms all of the obligations which by
the terms of the Credit Agreement are required to be performed by it as a
Lender; [and] (vi) specifies as its Domestic Lending Office (and address for
notices) and Eurodollar Lending Office the offices set forth beneath its name on
the signature pages hereof [and (vii) attaches the forms prescribed by the
Internal Revenue Service of the United States certifying as to the Assignee's
status for purposes of determining exemption from United States withholding
taxes with respect to all payments to be made to the Assignee under the Credit
Agreement and the Notes or such other documents as are necessary to indicate
that all such payments are subject to such rates at a rate reduced by an
applicable tax treaty].**
4. Following the execution of this Assignment and Acceptance
** If the Assignee is organized under the laws of a
jurisdiction outside the United States.
Form of Assignment and Acceptance
<PAGE>
- 3 -
by the Assignor and the Assignee and the consent of the Borrower (to the extent
required pursuant to Section 9.07 of the Credit Agreement), it will be delivered
to the Administrative Agent for acceptance and recording by the Administrative
Agent. The effective date of this Assignment and Acceptance shall be the date of
acceptance thereof by the Administrative Agent, unless otherwise specified on
Schedule 1 hereto (the "Effective Date").
5. Upon such acceptance and recording by the Administrative
Agent, as of the Effective Date, (i) the Assignee shall be a party to the Credit
Agreement and, to the extent provided in this Assignment and Acceptance, have
the rights and obligations of a Lender thereunder and (ii) the Assignor shall,
to the extent provided in this Assignment and Acceptance, relinquish its rights
and be released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Administrative
Agent, from and after the Effective Date, the Administrative Agent shall make
all payments under the Credit Agreement and the Notes in respect of the interest
assigned hereby (including, without limitation, all payments of principal,
interest and Facility Fees with respect thereto) to the Assignee. The Assignor
and Assignee shall make all appropriate adjustments in payments under the Credit
Agreement and the Notes for periods prior to the Effective Date directly between
themselves.
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the law of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed by their respective officers thereunto
duly authorized, as of the date first above written, such execution being made
on Schedule 1 hereto.
Form of assignment and Acceptance
<PAGE>
SCHEDULE 1
to
ASSIGNMENT AND ACCEPTANCE
Percentage assigned to Assignee ______________%
Assignee's Commitment $______________
Aggregate outstanding principal
amount of A Advances assigned $______________
Principal Amount of A Note
payable to Assignee $______________
Principal Amount of A Note
payable to Assignor $______________
Aggregate outstanding principal
amount of B Advances assigned $______________
Principal Amount of B Note
payable to Assignee $______________
Principal Amount of B Note
payable to Assignor $______________
Effective Date (if other than
date of acceptance by
Administrative Agent)* __________ __, _____
[NAME OF ASSIGNOR], as Assignor
By______________________________
Title:
[NAME OF ASSIGNEE], as Assignee
By______________________________
Title:
Domestic Lending Office:
Eurodollar Lending Office:
Form of Assignment and Acceptance
<PAGE>
- 2 -
* This date should be no earlier than the date of acceptance by the
Administrative Agent.
Form of Assignment and Acceptance
<PAGE>
- 3 -
Accepted this ____ day
of _______, _____
CITIBANK, N.A., as
Administrative Agent
By_____________________
Title:
CONSENTED TO:
ELECTRIC LIGHTWAVE, INC.
By_____________________
Title:
Form of Assignment and Acceptance
<PAGE>
EXHIBIT D
DESIGNATION AGREEMENT
Dated _____________ __, _____
Reference is made to the Credit Agreement dated as of November
21, 1997 (the "Credit Agreement") among Electric Lightwave, Inc., a Delaware
corporation (the "Borrower"), the Guarantors (as defined in the Credit
Agreement), the Lenders (as defined in the Credit Agreement) and Citibank, N.A.,
as Administrative Agent for the Lenders (the "Administrative Agent"). Terms
defined in the Credit Agreement are used herein with the same meaning.
_________________ (the "Designator") and ________________ (the
"Designee") agree as follows:
1. The Designator hereby designates the Designee, and the
Designee hereby accepts such designation, to have a right to make B Advances
pursuant to Section 2.03 of the Credit Agreement.
2. The Designator makes no representation or warranty and
assumes no responsibility with respect to (i) any statements, warranties or
representations made in or in connection with the Credit Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement or any other instrument or document furnished pursuant
thereto and (ii) the financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under the Credit Agreement
or any other instrument or document furnished pursuant thereto.
3. The Designee (i) confirms that it has received a copy of
the Credit Agreement, together with copies of the financial statements referred
to in Section 4.01 thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Designation Agreement; (ii) agrees that it will, independently and without
reliance upon the Administrative Agent, the Designator or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Credit Agreement; (iii) confirms that it is a Designated Bidder; (iv)
appoints and authorizes the Administrative Agent to take such action as
administrative agent on its behalf and to exercise such powers under the Credit
Agreement as are delegated to the Administrative Agent by the terms thereof,
together with such powers as are reasonably incidental thereto; (v) agrees that
it will perform in accordance with their terms all of the obligations which by
the terms of the Credit Agreement are required to be performed by it as a
Form of Assignment and Acceptance
<PAGE>
- 2 -
Lender; and (vi) specifies as its Applicable Lending Office with respect to B
Advances (and address for notices) the offices set forth beneath its name on the
signature pages hereof.
4. Following the execution of this Designation Agreement by
the Designator and its Designee, it will be delivered to the Administrative
Agent for acceptance and recording by the Administrative Agent. The effective
date of this Designation Agreement shall be the date of acceptance thereof by
the Administrative Agent, unless otherwise specified on the signature page
hereto (the "Effective Date").
5. Upon such acceptance and recording by the Administrative
Agent, as of the Effective Date, the Designee shall be a party to the Credit
Agreement with a right to make B Advances as a Lender pursuant to Section 2.03
of the Credit Agreement and the rights and obligations of a Lender related
thereto.
6. This Designation Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
Form of Designation Agreement
<PAGE>
- 3 -
IN WITNESS WHEREOF, the parties hereto have caused this
Designation Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
Effective Date*: _____________ __, _____
[NAME OF DESIGNATOR]
By_______________________
Title:
[NAME OF DESIGNEE]
By_______________________
Title:
Applicable Lending
Office (and address
for notices)
--------------------------
--------------------------
--------------------------
--------------------------
Accepted this ____ day
of _____________, _____
CITIBANK, N.A., as
Administrative Agent
By______________________
Title:
* This date should be no earlier than the date of acceptance by the
Administrative Agent.
Form of Designation Agreement
<PAGE>
EXHIBIT E
[Form of Opinion of Counsel of the Borrower]
________, 1997
To the Banks party to the
Credit Agreement referred to
below
Citibank, N.A., as Administrative
Administrative Agent
399 Park Avenue
New York, New York 10043
Ladies and Gentlemen:
This opinion is rendered in connection with the Credit Agreement (the
"Credit Agreement") dated as of November 21, 1997, among the Electric Lightwave,
Inc. (the "Borrower"), Citizens Utilities Company (the "Parent Guarantor"), the
Subsidiary Guarantors referred to therein, the Lenders referred to therein and
Citibank, N.A., as Administrative Agent, providing for loans to be made by said
Lenders to the Borrower in an aggregate principal amount not exceeding
$400,000,000. Terms defined in the Credit Agreement are used herein as therein
defined.
I am the General Counsel of the Parent Guarantor and, in that capacity
in connection with the foregoing, I have examined the Credit Agreement and the
Notes. I have also examined originals or copies, certified or otherwise
identified to my satisfaction, of such documents, corporate records,
certificates of public officials and other instruments, and have conducted such
other investigations of fact and law, as I have deemed necessary or advisable
for purposes of this opinion.
Based on the foregoing, I am of the opinion that:
1. Each of the Guarantor and the Principal Subsidiaries (a) is a
corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation, (b)
has the requisite power and authority to own its property and
assets and to carry on its business as now conducted and (c)
is qualified to do business in every jurisdiction where such
qualification is required, except where the failure so to
qualify would not have a Material Adverse Effect.
2. The execution, delivery and performance by each Obligor of
the Credit Agreement and (in the case of the Borrower) the
Notes(a) have been duly authorized by all necessary corporate
action on the part of such Obligor and do not and will not
Form of Designation Agreement
<PAGE>
- 2 -
require the consent or approval of shareholders of such
Obligor, other than such consents as have been obtained,
(b) will not violate (i) any provision of law, statute,
rule or regulation or the Certificate of Incorporation
or the By-Laws of any Obligor or (ii) any order of any
court or of any other agent of government binding upon any
Obligor, (c) will not violate, be in conflict with, result
in a breach of or constitute (alone or with notice or lapse
of time or both) a default under any indenture, agreement or
other instrument to which the Parent Guarantor, any Sub-
sidiary Guarantor, the Borrower or any other Principal
Subsidiary is a party or by which the Parent Guarantor, any
Subsidiary Guarantor, the Borrower or any other Principal
Subsidiary or any of its properties or assets are or may be
bound and (d) will not result in the creation or imposition
of any lien, charge or encumbrance of any nature whatsoever
upon any property or assets of the Parent Guarantor, any
Subsidiary Guarantor, the Borrower or any other Principal
Subsidiary.
3. All consents or approvals of, or other actions by, any
governmental agency, authority or regulatory body required in
connection with the execution, delivery and performance by
each Obligor of the Credit Agreement and (in the case of the
Borrower) the Notes have been duly obtained and are in full
force and effect, without amendment or modification, and are
not the subject of any pending or threatened proceedings
seeking to amend, modify, or rescind all or any portion of the
terms thereof, or any stay.
4. The Credit Agreement and (in the case of the Borrower) the
Notes have been duly executed and delivered by each Obligor
and constitute legal, valid and binding obligations of each
Obligor stated to be a party thereto, enforceable against such
Obligor in accordance with their terms, except as such
enforceability may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium and other laws
affecting the rights of creditors generally and general
principles of equity.
5. There are not any actions, suits, or proceedings at law or in
equity or by or before any governmental instrumentality,
regulatory authority, or other agency now pending or, to the
best of my knowledge, threatened against the Parent Guarantor
or any Subsidiary (a) which involve the Credit Agreement or
Opinion of Counsel of the Borrower
<PAGE>
- 3 -
any of the transactions contemplated thereby or (b) which, if
adversely determined, could reasonably be expected to have a
Material Adverse Effect, or (ii) impair in any respect the
validity or enforceability of, or the ability of any Obligor
to perform its obligations under, the Credit Agreement or the
Notes.
6. Neither the Parent Guarantor nor any Subsidiary is in
violation of any law, or in default with respect to any
judgment, writ, injunction, decree, rule, or regulation of any
court or governmental agency or instrumentality, where such
violation or default could have (i) a Material Adverse Effect,
or (ii) impair in any respect the validity or enforceability
of, or the ability of any Obligor to perform its obligations
under, the Credit Agreement or the Notes.
7. Neither the Parent Guarantor nor any Subsidiary is an
"investment company" as defined in or subject to regulation
under the Investment Company Act of 1940, as amended. Neither
the Parent Guarantor nor the Subsidiary is a "holding company"
as defined in or subject to regulation under the Public
Utility Holding Company Act of 1935, as amended.
Very truly yours,
Opinion of Counsel of the Borrower
<PAGE>
EXHIBIT F
[Form of Opinion of Special New York Counsel
to the Administrative Agent]
November 21, 1997
To the Banks party to the
Credit Agreement referred to
below
Citibank, N.A., as
Administrative Agent
399 Park Avenue
New York, New York 10043
Ladies and Gentlemen:
We have acted as special New York counsel to Citibank, N.A.,
as Administrative Agent, in connection with the Credit Agreement dated as of
November 21, 1997 (the "Credit Agreement") among Electric Lightwave, Inc. (the
"Borrower"), the guarantors named therein, the lenders named therein and
Citibank, N.A., as Administrative Agent, providing for loans to be made by said
lenders to the Borrower in an aggregate principal amount not exceeding
$400,000,000. Terms defined in the Credit Agreement are used herein as defined
therein. This opinion is being delivered pursuant to Section 3.01(f) of the
Credit Agreement.
In rendering the opinions expressed below, we have assumed,
with respect to all of the documents referred to in this opinion letter, that:
(i) such documents have been duly authorized by, have
been duly executed and delivered by, and (except to
the extent set forth in the opinions below as to the
Borrower) constitute legal, valid, binding and
enforceable obligations of, all of the parties to
such documents;
(ii) all signatories to such documents have been duly authorized; and
(iii) all of the parties to such documents are duly
organized and validly existing and have the power and
authority (corporate or other) to execute, deliver
and perform such documents.
Opinion of Special New York Counsel
to the Administrative Agent
<PAGE>
- 2 -
Based upon and subject to the foregoing and subject also to
the comments and qualifications set forth below, and having considered such
questions of law as we have deemed necessary as a basis for the opinions
expressed below, we are of the opinion that the Credit Agreement constitutes,
and each of the Notes when executed and delivered for value will constitute, the
legal, valid and binding obligation of each Obligor stated to be a signatory
thereto, enforceable against such Obligor in accordance with its terms, except
as may be limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or transfer or other similar laws relating to or affecting
the rights of creditors generally and except as the enforceability thereof is
subject to the application of general principles of equity (regardless of
whether considered in a proceeding in equity or at law), including, without
limitation, (a) the possible unavailability of specific performance, injunctive
relief or any other equitable remedy and (b) concepts of materiality,
reasonableness, good faith and fair dealing.
The foregoing opinions are subject to the following comments
and qualifications:
(A) The enforceability of Section 9.04(b) of the Credit
Agreement may be limited by laws limiting the enforceability of
provisions exculpating or exempting a party from, or requiring
indemnification of a party for, its own action or inaction, to the
extent such action or inaction involves gross negligence, recklessness
or wilful or unlawful conduct.
(B) The enforceability of provisions in the Credit Documents
to the effect that terms may not be waived or modified except in
writing may be limited under certain circumstances.
(C) We express no opinion as to (i) the effect of the laws of
any jurisdiction in which any Lender is located (other than the State
of New York) that limit the interest, fees or other charges such Lender
may impose, (ii) the second sentence of Section 2.16 of the Credit
Agreement, (iii) the second sentence of Section 9.08 of the Credit
Agreement, insofar as such sentence relates to the subject matter
jurisdiction of the United States District Court for the Southern
District of New York to adjudicate any controversy related to the
Credit Documents, (iv) the waiver of inconvenient forum set forth in
Section 9.08 of the Credit Agreement with respect to proceedings in the
United States District Court for the Southern District of New York and
(v) Section 9.09 of the Credit Agreement.
Opinion of Special New York Counsel
to the Administrative Agent
<PAGE>
- 3 -
(D) Clause (iii) of the second sentence of Section 10.02 of
the Credit Agreement may not be enforceable to the extent that the
Guaranteed Obligations are materially altered.
(E) We express no opinion as to the applicability to the
obligations of any Subsidiary Guarantor (or the enforceability of such
obligations) of Section 548 of the Bankruptcy Code or any other
provision of law relating to fraudulent conveyances, transfers or
obligations.
The foregoing opinions are limited to matters involving the
Federal laws of the United States and the law of the State of New York, and we
do not express any opinion as to the laws of any other jurisdiction.
This opinion letter is, pursuant to Section 3.01(f) of the
Credit Agreement, provided to you by us in our capacity as special New York
counsel to the Administrative Agent and may not be relied upon by any person for
any purpose other than in connection with the transactions contemplated by the
Credit Agreement without, in each instance, our prior written consent.
Very truly yours,
Opinion of Special New York Counsel
to the Administrative Agent
<PAGE>
* Reflects change from executed original.
** For Eurodollar Rate Advances only.
*** Exclude bracketed text if the proposed A Borrowing is the initial
Borrowing under the Credit Agreement.
* Exclude bracketed text if the proposed B Borrowing is the initial
Borrowing under the Credit Agreement.
* Delete bracketed text if B Advances are covered by this Assignment
and Acceptance.
** If the Assignee is organized under the laws of a jurisdiction outside
the United States.
