EXECUTION COPY
REVOLVING CREDIT AGREEMENT
dated as of
August 10, 2000
among
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION,
THE BANKS LISTED HEREIN,
THE BANK OF NOVA SCOTIA
and
BANK ONE, N.A.
as CO-DOCUMENTATION AGENTS,
BANK OF AMERICA, N.A.
as SYNDICATION AGENT
and
THE CHASE MANHATTAN BANK
as ADMINISTRATIVE AGENT
Arranged by
CHASE SECURITIES INC.
and
BANC OF AMERICA SECURITIES LLC
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TABLE OF CONTENTS
PAGE
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions 1
SECTION 1.02. Accounting Terms and Determinations 15
SECTION 1.03. Types of Borrowings 15
ARTICLE 2
THE CREDITS
SECTION 2.01. Commitments to Lend 16
SECTION 2.02. Notice of Committed Borrowings 17
SECTION 2.03. Money Market Borrowings 17
SECTION 2.04. Notice to Banks; Funding of Loans 21
SECTION 2.05. Notes 22
SECTION 2.06. Maturity of Loans 23
SECTION 2.07. Interest Rates 23
SECTION 2.08. Method of Electing Interest Rates 27
SECTION 2.09. Fees 29
SECTION 2.10. Optional Termination or Reduction of Commitments 30
SECTION 2.11. Mandatory Termination of Commitments 30
SECTION 2.12. Optional Prepayments 30
SECTION 2.13. General Provisions as to Payments 31
SECTION 2.14. Funding Losses 32
SECTION 2.15. Computation of Interest and Fees 32
SECTION 2.16. Withholding Tax Exemption 32
SECTION 2.17. Increase of Commitments 33
ARTICLE 3
CONDITIONS
SECTION 3.01. Effectiveness 34
SECTION 3.02. Borrowings 35
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Corporate Existence, Power and Authority 36
SECTION 4.02. Financial Statements 37
SECTION 4.03. Litigations 38
PAGE
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SECTION 4.04. Governmental Authorizations 38
SECTION 4.05. Capital Term Certificates 38
SECTION 4.06. No Violation of Agreements 38
SECTION 4.07. No Event of Default under the Indentures 39
SECTION 4.08. Compliance with ERISA 39
SECTION 4.09. Compliance with Other Laws 40
SECTION 4.10. Tax Status 40
SECTION 4.11. Investment Company Act 40
SECTION 4.12. Public Utility Holding Company Act 40
SECTION 4.13. Disclosure 40
SECTION 4.14. Subsidiaries 40
SECTION 4.15. Environmental Matters 41
ARTICLE 5
COVENANTS
SECTION 5.01. Corporate Existence 41
SECTION 5.02. Disposition of Assets; Merger, Character of Business; etc 42
SECTION 5.03. Financial Information 42
SECTION 5.04. Default Certificates 43
SECTION 5.05. Notice of Litigation, Legislative Developments and Defaults 44
SECTION 5.06. ERISA 45
SECTION 5.07. Payment of Charges 45
SECTION 5.08. Inspection of Books and Assets 45
SECTION 5.09. Indebtedness 46
SECTION 5.10. Liens 46
SECTION 5.11. Maintenance of Insurance 47
SECTION 5.12. Subsidiaries and Joint Ventures 47
SECTION 5.13. Minimum TIER 48
SECTION 5.14. Retirement of Patronage Capital 48
SECTION 5.15. Use of Proceeds 48
ARTICLE 6
DEFAULTS
SECTION 6.01. Events of Defaults 48
SECTION 6.02. Notice of Default 51
PAGE
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ARTICLE 7
THE AGENT
SECTION 7.01. Appointment and Authorization 51
SECTION 7.02. Agent and Affiliates 51
SECTION 7.03. Action by Agent 51
SECTION 7.04. Consultation with Experts 51
SECTION 7.05. Liability of Agent 52
SECTION 7.06. Indemnification 52
SECTION 7.07. Credit Decision 52
SECTION 7.08. Successor Agent 52
SECTION 7.09. Co-Documentation Agents and Syndication Agent NotLiable 53
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair 53
SECTION 8.02. Illegality 54
SECTION 8.03. Increased Cost and Reduced Return 54
SECTION 8.04. Base Rate Loans Substituted for Affected Fixed Rate Loans 56
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Notices 57
SECTION 9.02. No Waivers 57
SECTION 9.03. Expenses; Documentary Taxes; Indemnification 57
SECTION 9.04. Sharing of Set-offs 58
SECTION 9.05. Amendments and Waivers 59
SECTION 9.06. Successors and Assigns 59
SECTION 9.07. Collateral 60
SECTION 9.08. Managing Agents; Co-Agents 61
SECTION 9.09. Governing Law 61
SECTION 9.10. Counterparts; Integration 61
SECTION 9.11. Several Obligations 61
SECTION 9.12. Severability 61
SECTION 9.13. Waiver/Notice 61
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Schedule I - Agent Schedule
Exhibit A - Note
Exhibit B - RUS Guarantee
Exhibit C - Money Market Quote Request
Exhibit D - Invitation for Money Market Quotes
Exhibit E - Money Market Quote
Exhibit F - Opinion of General Counsel for the Borrower
Annex A to Exhibit F - Subsidiaries and Joint Ventures
Exhibit G - Opinion of Special Counsel for the Agent
Exhibit H - Extension Agreement
Exhibit I - Assignment and Assumption Agreement
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REVOLVING CREDIT AGREEMENT
REVOLVING CREDIT AGREEMENT dated as of August 10, 2000 among NATIONAL
RURAL UTILITIES COOPERATIVE FINANCE CORPORATION, a not-for-profit
cooperative association incorporated under the laws of the District of
Columbia, as Borrower, the BANKS listed on the signature pages hereof, THE
BANK OF NOVA SCOTIA and BANK ONE, N.A., as Co-Documentation Agents, BANK OF
AMERICA, N.A., as Syndication Agent, and THE CHASE MANHATTAN BANK, as
Administrative Agent.
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein, have the
following meanings:
"Absolute Rate Auction" means a solicitation of Money Market Quotes
setting forth Money Market Absolute Rates pursuant to Section 2.03.
"Adjusted CD Rate" has the meaning set forth in Section 2.07(b).
"Adjusted London Interbank Offered Rate" has the meaning set forth
in Section 2.07(c).
"Administrative Questionnaire" means, with respect to each Bank, the
administrative questionnaire in the form submitted to such Bank by the
Agent and submitted to the Agent (with a copy to the Borrower) duly
completed by such Bank.
"Agent" means The Chase Manhattan Bank in its capacity as
administrative agent for the Banks hereunder, and its successors in such
capacity.
"Agreement" means this Revolving Credit Agreement, as the same may
be amended from time to time.
"Applicable Lending Office" means, with respect to any Bank, (i) in
the case of its Domestic Loans, its Domestic Lending Office, (ii) in the
case of its Euro-Dollar Loans, its Euro-Dollar Lending Office and (iii)
in the case of its Money Market Loans, its Money Market Lending Office..
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"Assessment Rate" has the meaning set forth in Section 2.07(b).
"Assignee" has the meaning set forth in Section 9.06(c).
"Bank" means each bank listed on the signature pages hereof, each
Assignee which becomes a Bank pursuant to Section 9.06(c), and their
Respective successors.
"Base Rate" means, for any day, a rate per annum equal to the higher of
(i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the
Federal Funds Rate for such day.
"Base Rate Loan" means a Committed Loan that bears interest at the
Base Rate pursuant to the applicable Notice of Committed Borrowing or
Notice of Interest Rate Election or the last sentence of Section 2.08(a)
or Article 8.
"Bonds" means any bonds issued pursuant to either Indenture or both, as
the context may require.
"Borrower" means the National Rural Utilities Cooperative Finance
Corporation, a not-for-profit cooperative association incorporated under
the laws of the District of Columbia, and its successors.
"Borrowing" has the meaning set forth in Section 1.03.
"Capital Term Certificate" means a note of the Borrower substantially
in the form of the membership subscription certificates and the loan and
guarantee certificates outstanding on the date of the execution and
delivery of this Agreement and any other Indebtedness of the Borrower
having substantially similar provisions as to subordination as those
contained in said outstanding membership subscription certificates and
loan and guarantee certificates.
"CD Base Rate" has the meaning set forth in Section 2.07(b).
"CD Loan" means a Committed Loan that bears interest at a CD Rate
pursuant to the applicable Notice of Committed Borrowing or Notice of
Interest Rate Election.
"CD Margin" means .290%.
"CD Reference Banks" means The Chase Manhattan Bank and Bank of
America, N.A.
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"Commitment" means (i) with respect to each Bank listed on the
signature pages hereof, the amount set forth opposite the name of such
Bank on the signature pages hereof and (ii) with respect to any Assignee
that becomes a Bank pursuant to Section 9.06(c), the amount of the
transferor Bank's Commitment assigned to it pursuant to Section 9.06(c),
in each case as such amount may be reduced from time to time pursuant to
Sections 2.10 and 2.11; provided that, if the context so requires, the
term "Commitment" means the obligation of a Bank to extend credit up to
such amount to the Borrower hereunder.
"Committed Loan" means a Revolving Loan or a Term Loan; provided
that, if any such loan or loans (or portions thereof) are combined or
subdivided pursuant to a Notice of Interest Rate Election, the term
"Committed Loan" shall refer to the combined principal amount resulting
from such combination or to each of the separate principal amounts
resulting from such subdivision, as the case may be.
"Commitment Termination Date" means August 9, 2001 or such later
date to which this Agreement shall have been extended pursuant to Section
2.01(c), or, if either such day is not a Euro-Dollar Business Day, the
next preceding Euro-Dollar Business Day.
"Consolidated Subsidiary" means at any date any Subsidiary or other
entity the accounts of which would be combined or consolidated with those
of the Borrower in its combined or consolidated financial statements if
such statements were prepared as of such date.
"Co-Documentation Agents" means The Bank of Nova Scotia and Bank
One, N.A., each in its capacity as co-documentation agent for the Banks
hereunder, and their successors in such capacity.
"Default" means any condition or event which constitutes an Event
of Default or which with the giving of notice or lapse of time or both
(as specified in Section 6.01) would, unless cured or waived, become an
Event of Default.
"Derivatives Obligations" of any Person means all obligations of
such Person in respect of any rate swap transaction, basis swap, forward
rate transaction, commodity swap, commodity option, equity or equity
index swap, equity or equity index option, bond option, interest rate
option, foreign exchange transaction, cap transaction, floor transaction,
collar transaction, currency swap transaction, cross-currency rate swap
transaction, currency option or any other similar transaction (including
any option with respect to any of the foregoing transactions) or any
combination of the foregoing transactions.
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"Determination Date" shall have the meaning provided in Section 5.09.
"Domestic Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in New York City are authorized by law
to close.
"Domestic Lending Office" means, as to each Bank, its office located at
its address set forth in its Administrative Questionnaire (or identified in
its Administrative Questionnaire as its Domestic Lending Office) or such
other office as such Bank may hereafter designate as its Domestic Lending
Office by notice to the Borrower and the Agent; provided that any Bank may
so designate separate Domestic Lending Offices for its Base Rate Loans, on
the one hand, and its CD Loans, on the other hand, in which case all
references herein to the Domestic Lending Office of such Bank shall be
deemed to refer to either or both of such offices, as the context may
require.
"Domestic Loans" means CD Loans or Base Rate Loans or both.
"Domestic Reserve Percentage" has the meaning set forth in Section
2.07(b).
"Effective Date" means the date this Agreement becomes effective in
accordance with Section 3.01.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances,
rules, judgments, orders, decrees, plans, injunctions, permits,
concessions, grants, franchises, licenses, agreements and governmental
restrictions relating to the environment, the effect of the environment
on human health or to emissions, discharges or releases of pollutants,
contaminants, Hazardous Substances or wastes into the environment
including, without limitation, ambient air, surface water, ground water,
or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling
of pollutants, contaminants, Hazardous Substances or wastes or the
clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, or any successor statute.
"ERISA Group" means the Borrower, any Subsidiary and all members of
a controlled group of corporations and all trades or businesses (whether
or not incorporated) under common control which, together with the
Borrower or any Subsidiary, are treated as a single employer under Section
414 of the Internal Revenue Code.
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"Euro-Dollar Business Day" means any Domestic Business Day on
which commercial banks are open for international business (including
dealings in dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its office, branch
or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or affiliate of
such Bank as it may hereafter designate as its Euro-Dollar Lending Office
by notice to the Borrower and the Agent.
"Euro-Dollar Loan" means a Committed Loan that bears interest at a
Euro-Dollar Rate pursuant to the applicable Notice of Committed Borrowing or
Notice of Interest Rate Election.
"Euro-Dollar Margin" means .165%.
"Euro-Dollar Reference Banks" means the principal London offices of
The Chase Manhattan Bank and Bank of America, N.A.
"Euro-Dollar Reserve Percentage" has the meaning set forth in Section
2.07(c).
"Event of Default" has the meaning set forth in Section 6.01.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Domestic
Business Day next succeeding such day, provided that (i) if such day is not
a Domestic Business Day, the Federal Funds Rate for such day shall be such
rate on such transactions on the next preceding Domestic Business Day as so
published on the next succeeding Domestic Business Day, and (ii) if no such
rate is so published on such next succeeding Domestic Business Day, the
Federal Funds Rate for such day shall be the average rate quoted to The Chase
Manhattan Bank on such day on such transactions as determined by the Agent.
"Fixed Rate Loans" means CD Loans or Euro-Dollar Loans or Money
Market Loans (excluding Money Market LIBOR Loans bearing interest at the
Base Rate pursuant to Section 8.01(a)) or any combination of the foregoing.
"Group of Loans" means, at any time, a group of Loans consisting of (i)
all Committed Loans which are Base Rate Loans at such time, (ii) all Euro-
Dollar Loans having the same Interest Period at such time or (iii) all CD
Loans having.
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the same Interest Period at such time; provided that, if a Committed Loan of
any particular Bank is converted to or made as a Base Rate Loan pursuant to
Article 8, such Loan shall be included in the same Group or Groups of Loans
From time to time as it would have been in if it had not been so converted
or made.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any
Indebtedness or lease payments of any other Person or otherwise in any
manner assuring the holder of any Indebtedness of, or the obligee under
any lease of, any other Person through an agreement, contingent or
otherwise, to purchase Indebtedness or the property subject to such lease,
or to purchase goods, supplies or services primarily for the purpose of
enabling the debtor or obligor to make payment of the Indebtedness or under
such lease or of assuring such Person against loss, or to supply funds to
or in any other manner invest in the debtor or obligor, or otherwise;
provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business. The term
Guarantee" when used as a verb has a correlative meaning.
"Hazardous Substances" means any toxic, radioactive, caustic or
otherwise hazardous substance, including petroleum, its derivatives, by-
products and other hydrocarbons, or any substance having any constituent
elements displaying any of the foregoing characteristics.
"Indebtedness" with respect to any Person means:
(1) all indebtedness which would appear as indebtedness on a balance
sheet of such Person prepared in accordance with generally accepted
accounting principles (i) for money borrowed, (ii) which is evidenced by
securities sold for money or (iii) which constitutes purchase money
indebtedness;
(2) all indebtedness of others Guaranteed by such Person;
(3) all indebtedness secured by any Lien upon property owned by such
Person, even though such Person has not assumed or become liable for the
payment of such indebtedness; and
(4) all indebtedness of such Person created or arising under any
conditional sale or other title retention agreement (including any lease
in the nature of a title retention agreement) with respect to property
acquired by such Person (even though the rights and remedies of the seller
or lender under such agreement in the event of default are limited to
repossession of such property), but only if such property is included as
an asset on the balance sheet of such Person; provided that, in computing
the "Indebtedness" of such Person, there shall be excluded any particular
indebtedness if, upon or prior to the maturity thereof,
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there shall have been deposited with the proper depositary in trust money
(or evidences of such indebtedness) in the amount necessary to pay, redeem
or satisfy such indebtedness, and thereafter such money and evidences of
indebtedness so deposited shall not be included in any computation of the
assets of such Person; and provided further that no provision of this
definition shall be construed to include as "Indebtedness" of the Borrower
any indebtedness by virtue of any agreement by the Borrower to advance or
supply funds to Members.
"Indenture" means either the 1972 Indenture or the 1994 Indenture,
and "Indentures" means both such Indentures.
"Interest Period" means: (1) with respect to each Euro-Dollar
Borrowing, the period commencing on the date of such Borrowing and ending
one, two, three or six months thereafter, as the Borrower may elect in
the applicable Notice of Borrowing; provided that:
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Euro-Dollar Business
Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of
such Interest Period) shall, subject to clause (c) below, end on the
last Euro-Dollar Business Day of a calendar month;
(c) any Interest Period which begins before the Commitment
Termination Date and would otherwise end after the Commitment
Termination Date shall end on the Commitment Termination Date; and
(d) any Interest Period which begins before the first anniversary
of the Commitment Termination Date and would otherwise end after the
first anniversary of the Commitment Termination Date shall end on the
first anniversary of the Commitment Termination Date;
(2) with respect to each CD Borrowing, the period commencing on the
date of such Borrowing and ending 30, 60, 90 or 180 days thereafter, as the
Borrower may elect in the applicable Notice of Borrowing; provided that:
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(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day;
(b) any Interest Period which begins before the Commitment
Termination Date and would otherwise end after the Commitment
Termination Date shall end on the Commitment Termination Date; and
(c) any Interest Period which begins before the first anniversary
of the Commitment Termination Date and would otherwise end after the
first anniversary of the Commitment Termination Date shall end on the
first anniversary of the Commitment Termination Date;
(3) with respect to each Base Rate Borrowing, the period commencing on
the date of such Borrowing and ending 30 days thereafter; provided that:
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day;
(b) any Interest Period which begins before the Commitment
Termination Date and would otherwise end after the Commitment
Termination Date shall end on the Commitment Termination Date; and
(c) any Interest Period which begins before the first anniversary
of the Commitment Termination Date and would otherwise end after the first
anniversary of the Commitment Termination Date shall end on the first
anniversary of the Commitment Termination Date;
(4) with respect to each Money Market LIBOR Borrowing, the period
commencing on the date of such Borrowing and ending any whole number of
months thereafter (but not less than one month) as the Borrower may elect in
accordance with Section 2.03; provided that:
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Euro-Dollar Business
Day;
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(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of
such Interest Period) shall, subject to clause (c) below, end on the
last Euro-Dollar Business Day of a calendar month;
(c) any Interest Period which begins before the Commitment
Termination Date and would otherwise end after the Commitment
Termination Date shall end on the Commitment Termination Date; and
(d) any Interest Period which begins before the first anniversary
of the Commitment Termination Date and would otherwise end after the
first anniversary of the Commitment Termination Date shall end on the
first anniversary of the Commitment Termination Date;
(5) with respect to each Money Market Absolute Rate Borrowing, the
period commencing on the date of such Borrowing and ending such number of
days thereafter (but not less than 30 days) as the Borrower may elect in
accordance with Section 2.03; provided that:
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day;
(b) any Interest Period which begins before the Commitment
Termination Date and would otherwise end after the Commitment
Termination Date shall end on the Commitment Termination Date; and
(c) any Interest Period which begins before the first
anniversary of the Commitment Termination Date and would otherwise end
after the first anniversary of the Commitment Termination Date shall end
on the first anniversary of the Commitment Termination Date;
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"Joint Venture" means any corporation, partnership, association, joint
venture or other entity in which the Borrower, directly or indirectly
through Subsidiaries or Joint Ventures, has an equity interest at the time
of 10% or more but which is not a Subsidiary; provided that no Person whose
only assets are RUS.
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Guaranteed Loans and investments incidental thereto shall be deemed a Joint
Venture.
"LIBOR Auction" means a solicitation of Money Market Quotes setting
forth Money Market Margins based on the London Interbank Offered Rate
pursuant to Section 2.03.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
asset. For the purposes of this Agreement, the Borrower or any Subsidiary
shall be deemed to own subject to a Lien any asset which it has acquired or
holds subject to the interest of a vendor or lessor under any conditional
sale agreement, capital lease or other title retention agreement relating
to such asset.
"Loan" means a Domestic Loan or a Euro-Dollar Loan or a Money
Market Loan and "Loans" means Domestic Loans or Euro-Dollar Loans or
Money Market Loans or any combination of the foregoing.
"London Interbank Offered Rate" has the meaning set forth in Section
2.07(c).
"Member" means any Person which is a member or a patron of the
Borrower.
"Money Market Absolute Rate" has the meaning set forth in Section
2.03(d).
"Money Market Absolute Rate Loan" means a loan to be made by a
Bank pursuant to an Absolute Rate Auction.
"Money Market Lending Office" means, as to each Bank, its Domestic
Lending Office or such other office, branch or affiliate of such Bank as it
may hereafter designate as its Money Market Lending Office by notice to the
Borrower and the Agent; provided that any Bank may from time to time by
notice to the Borrower and the Agent designate separate Money Market
Lending Offices for its Money Market LIBOR Loans, on the one hand, and its
Money Market Absolute Rate Loans, on the other hand, in which case all
references herein to the Money Market Lending Office of such Bank shall be
deemed to refer to either or both of such offices, as the context may
require.
"Money Market LIBOR Loan" means a loan to be made by a Bank pursuant
to a LIBOR Auction (including such a loan bearing interest at the Prime
Rate pursuant to Section 8.01(a)).
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"Money Market Loan" means a Money Market LIBOR Loan or a Money
Market Absolute Rate Loan.
"Money Market Margin" has the meaning set forth in Section 2.03(d).
"Money Market Quote" means an offer by a Bank to make a Money
Market Loan in accordance with Section 2.03.
"Moody's" means Moody's Investors Service, Inc., and its successors.
"Net Margins" means operating and non-operating income of the
Borrower and its Subsidiaries determined on a combined or consolidated basis
(excluding income on Guaranteed Portions of RUS Guaranteed Loans) less,
without duplication, operating and non-operating costs and expenses of the
Borrower and its Subsidiaries determined on a combined or consolidated basis
(excluding costs and expenses relating to Guaranteed Portions of RUS
Guaranteed Loans).
"1994 Indenture" means the Indenture dated as of February 15, 1994 and
as amended as of September 16, between the Borrower and U.S. Bank
National Association, as trustee, as amended and supplemented from time to
time, providing for the issuance in series of certain collateral trust
bonds of the Borrower.
"1972 Indenture" means the Seventeenth Supplemental Indenture dated
as of March 1, 1987, amending and restating in full the Indenture dated as
of December 1, 1972, by and between the Borrower and U.S. Bank Trust
National Association, as trustee.
"Notes" means promissory notes of the Borrower, substantially in the
form of Exhibit A hereto, evidencing the obligation of the Borrower to
repay the Loans, and "Note" means any one of such promissory notes issued
hereunder.
"Notice of Borrowing" means a Notice of Committed Borrowing (as
defined in Section 2.02) or a Notice of Money Market Borrowing (as defined
in Section 2.03(f)).
"Parent" means, with respect to any Bank, any Person controlling such
Bank.
"Participant" has the meaning set forth in Section 9.06(b).
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"Patronage Capital Certificates" means those certificates that evidence
the allocation of Net Margins by the Borrower among its Members in
proportion to interest earned by the Borrower from such Members.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality
thereof.
"Plan" means any multiemployer plan or single employer plan, as
defined in Section 4001 and subject to Title IV of ERISA, which is
maintained, or at any time during the five calendar years preceding the
date of this Agreement was maintained, for employees of the Borrower or
a Subsidiary of the Borrower or any member of the ERISA Group.
"Prime Rate" means the rate of interest publicly announced by The
Chase Manhattan Bank in New York City from time to time as its Prime Rate.
"Prior Credit Agreement" means the Revolving Credit Agreement dated
as of September 29, among the Borrower, the banks listed on the signature
pages thereof, The Bank of Nova Scotia and Bank One, N.A., as Co-
Documentation Agents, Bank of America, N.A., as Syndication Agent, and
The Chase Manhattan Bank, as Administrative Agent.
"Qualified Subordinated Indebtedness" means the Borrower's (i) 8%
Quarterly Income Capital Securities (Subordinated Deferrable Interest
Debentures Due 2045), (ii) Member Subordinated Capital Securities issued
pursuant to the Borrower's Prospectus Supplement dated May 2, 2000
supplementing the Borrower's Prospectus date February 22, 2000 and having
a maturity of not less than 40 years from the date of issuance thereof and
(iii) any other Indebtedness of the Borrower having substantially similar
terms as those contained in the instruments and documents relating to the
foregoing Indebtedness.
"Reference Banks" means the CD Reference Banks or the Euro-Dollar
Reference Banks, as the context may require, and "Reference Bank" means any
one of such Reference Banks.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Regulation X" means Regulation X of the Board of Governors of the
Federal Reserve System, as in effect from time to time..
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"Reportable Event" means an event described in Section 4043(c) of
ERISA or regulations promulgated by the Department of Labor thereunder (with
respect to which the 30 day notice requirement has not been waived by the
PBGC).
"Required Banks" means at any time Banks having at least 51% of the
sum of the aggregate amount of the unused Commitments and the aggregate
principal outstanding amount of the Loans.
"Revolving Credit Period" means the period from and including the
Effective Date to but excluding the Commitment Termination Date.
"Revolving Loan" means a loan made by a Bank pursuant to Section
2.01(a).
"RUS" means the Rural Utilities Service of the Department of
Agriculture of the United States of America (as successor to the Rural
Electrification Administration of the Department of Agriculture of the
United States of America) or any other regulatory body which succeeds to
its functions.
"RUS Guaranteed Loan" means any loan made by any Person, which
loan (x) bears interest at least equal to such Person's cost of funds and
(y) is guaranteed, in whole or in part, as to principal and interest by the
United States of America through the RUS pursuant to a guarantee, which
guarantee contains provisions no less favorable to the holder thereof than
the provisions set forth in the form of Exhibit B-1 or Exhibit B-2 hereto;
and "Guaranteed Portion" of any RUS Guaranteed Loan means that portion of
principal of, and interest on, such RUS Guaranteed Loan which is guaranteed
by the United States of America through the RUS as provided in clause (y).
"S&P" means Standard and Poor's Rating Services, a division of The
McGraw-Hill Companies, Inc., and its successors.
"Subsidiary" of any Person means (i) any corporation more than 50% of
whose stock of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes o
f such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person directly
or indirectly through its Subsidiaries, and (ii) any other Person in which
such Person directly or indirectly through Subsidiaries has more than a 50%
voting and equity interest, provided that no Person whose only assets are
RUS Guaranteed Loans and investments incidental thereto shall be deemed a
Subsidiary. Neither the Rural Telephone Finance Cooperative nor the
Guaranty Funding Cooperative is on the date of this.
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Agreement a "Subsidiary", except that the Rural Telephone Finance
Cooperative and, but only so long as the Borrower maintains control of the
Board of Directors of the Guaranty Funding Cooperative (including, without
limitation, the ability to appoint a majority of such Board of Directors),
the Guaranty Funding Cooperative shall each be considered a "Subsidiary"
for purposes of the definitions of "Net Margins" and "TIER".
"Superior Indebtedness" means all Indebtedness of the Borrower (other
than Capital Term Certificates and Qualified Subordinated Indebtedness) and
its Subsidiaries determined on a combined or consolidated basis, but
excluding (i) Indebtedness of the Borrower or any of its Subsidiaries to
the extent that the proceeds of such Indebtedness are used to fund
Guaranteed Portions of RUS Guaranteed Loans and (ii) any indebtedness of
any Member Guaranteed by the Borrower or any of its Subsidiaries
("Guaranteed Indebtedness"), to the extent that either (x) the long-term
unsecured debt of such Member is rated at least BBB+ by S&P or Baa1 by
Moody's or (ii) the payment of principal and interest by the Borrower or
any of its Subsidiaries in respect of such Guaranteed Indebtedness is
covered by insurance or reinsurance provided by an insurer having an
insurance financial strength rating of AAA by S&P or a financial strength
rating of Aaa by Moody's.
"Syndication Agent" means Bank of America, N.A. in its capacity as
Syndication Agent for the Banks hereunder, and its successors in such
capacity.
"Term Loan" means a loan made pursuant to Section 2.01(b).
"TIER" means, for any period, the ratio of (x) Net Margins plus
interest on Indebtedness of the Borrower or its Subsidiaries determined on
a combined or consolidated basis (but excluding Indebtedness of the
Borrower or any of its Subsidiaries to the extent that the proceeds of
such Indebtedness are used to fund Guaranteed Portions of RUS Guaranteed
Loans) plus amortization of bond discount and amortization of bond
issuance costs of the Borrower and its Subsidiaries determined on a
combined or consolidated basis for such period (but excluding such
amortization of discount and issuance costs with respect to Indebtedness
referred to in the preceding parenthetical phrase) to (y) interest on
Indebtedness of the Borrower or its Subsidiaries determined on a combined
or consolidated basis (but excluding Indebtedness of the Borrower or any
of its Subsidiaries to the extent that the proceeds of such Indebtedness
are used to fund Guaranteed Portions of RUS Guaranteed Loans) plus
amortization of bond discount and amortization of bond issuance costs of
the Borrower and its Subsidiaries determined on a combined or consolidated
basis for such period (but excluding such amortization of discount and
issuance costs with respect to Indebtedness referred to in the preceding
parenthetical phrase).
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SECTION 1.02. Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made and all financial
statements required to be delivered hereunder shall be prepared in
accordance with generally accepted accounting principles as in effect from
time to time, applied on a basis consistent (except for changes concurred in
by the Borrower's independent public accountants) with the most recent
audited combined financial statements of the Borrower and its Consolidated
Subsidiaries delivered to the Banks.
SECTION 1.03. Types of Borrowings. The term "Borrowing" denotes the
aggregation of Loans of one or more Banks to be made to the Borrower
pursuant to Article 2 on a single date and for a single Interest Period.
Borrowings are classified for purposes of this Agreement either by
reference to the pricing of Loans comprising such Borrowing (e.g., a
"Euro-Dollar Borrowing" is a Borrowing comprised of Euro-Dollar Loans) or
by reference to the provisions of Article 2 under which participation
therein is determined (i.e., a "Revolving Borrowing" is a Borrowing under
Section 2.01(a) in which all Banks participate in proportion to their
Commitments, while a "Money Market Borrowing" is a Borrowing under Section
2.03 in which the Bank participants are determined on the basis of their
bids in accordance therewith).
ARTICLE 2
THE CREDITS
SECTION 2.01. Commitments to Lend. (a) Revolving Loans. During the
Revolving Credit Period each Bank severally agrees, on the terms and
Conditions set forth in this Agreement, to make loans to the Borrower
pursuant to this Section from time to time in amounts such that the
aggregate principal amount of Revolving Loans by such Bank at any one
time outstanding shall not exceed the amount of its Commitment. Each
Borrowing shall be in an aggregate principal amount of $10,000,000 or
any larger multiple of $1,000,000 (except that any such Borrowing may
be in the maximum aggregate amount available in accordance with Section
3.02(c) or 3.02(d)) and shall be made from the several Banks ratably
in proportion to their respective Commitments. Within the foregoing
limits, the Borrower may borrow under this Section, repay or, to the
extent permitted by Section 2.12, prepay Loans and reborrow at any time
during the Revolving Credit Period under this Section.
(b) Term Loans. Each Bank severally agrees, on the terms and
conditions set forth in this Agreement, to make a Term Loan to the Borrower
on
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the Commitment Termination Date in an amount up to but not exceeding the
amount of its Commitment, as then in effect.
(c) Extension of Commitments. The Commitment Termination Date may be
extended from time to time in the manner set forth in this subsection (c),
in each case for a period of up to 364 days from the date on which Banks
having 51% of the Commitments shall have notified the Agent of their
agreement so to extend. If the Borrower wishes to request an extension of
the Commitment Termination Date, it shall give written notice to that effect
(such notice to state the date to which the Commitment Termination Date then
in effect is requested to be extended, subject to the provisions of the
preceding sentence) to the Agent not less than 60 nor more than 90 days
prior to the Commitment Termination Date then in effect, whereupon the
Agent shall promptly notify each of the Banks of such request and send a
copy of the Extension Agreement referred to below to each Bank. Each Bank
will use its best efforts to respond to such request, whether affirmatively
or negatively, as it may elect in its discretion, within 30 days of such
notice to the Agent. If less than all Banks respond affirmatively to such
request within 30 days, then the Borrower may request the Banks that do not
elect to extend the Commitment Termination Date to assign their Commitments
in their entirety, no later than 15 days prior to the Commitment Termination
Date then in effect, to one or more Assignees pursuant to Section 9.06(c)
which Assignees will agree to extend the Commitment Termination Date. If
Banks having at least 51% of the Commitments (including such Assignees and
excluding their respective transferor Banks) respond affirmatively, then,
subject to receipt by the Agent of counterparts of an Extension Agreement in
substantially the form of Exhibit H hereto duly completed and signed by all
of the parties thereto, the Commitment Termination Date shall be extended
for the period specified above. The Commitment of any Bank that elects not
to extend the Commitment Termination Date shall terminate on the Commitment
Termination Date in effect immediately prior to giving effect to any such
extension.
SECTION 2.02. Notice of Committed Borrowings. The Borrower shall give
the Agent notice (a "Notice of Committed Borrowing") not later than 11:00
A.M. (New York City time) on (x) the date of each Base Rate Borrowing, (y)
the second Domestic Business Day before each CD Borrowing and (z) the third
Euro-Dollar Business Day before each Euro-Dollar Borrowing, specifying:
(a) the date of such Borrowing, which shall be a Domestic Business Day
in the case of a Domestic Borrowing or a Euro-Dollar Business Day in the
case of a Euro-Dollar Borrowing,
(b) the aggregate amount of such Borrowing,
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(c) whether the Loans comprising such Borrowing are to bear interest
initially at the Base Rate, a CD Rate or a Euro-Dollar Rate, and
(d) in the case of a Fixed Rate Borrowing, the duration of the Interest
Period applicable thereto, subject to the provisions of the definition of
Interest Period.
Notwithstanding the foregoing, no more than 15 Fixed Rate Borrowings
shall be outstanding at any one time, and any Borrowing which would exceed
such limitation shall be made as a Base Rate Borrowing.
SECTION 2.03. Money Market Borrowings. (a) In addition to Committed
Borrowings pursuant to Section 2.01, the Borrower may, as set forth in this
Section, request the Banks during the Revolving Credit Period to make offers
to make Money Market Loans to the Borrower. The Banks may, but shall have no
obligation to, make such offers and the Borrower may, but shall have no
obligation to, accept any such offers in the manner set forth in this
Section.
(b) Money Market Quote Request. When the Borrower wishes to request
offers to make Money Market Loans under this Section, it shall transmit to
the Agent by telex or facsimile transmission a Money Market Quote Request
substantially in the form of Exhibit C hereto so as to be received no later
than 10:00 A.M. (New York City time) on (x) the fifth Euro-Dollar Business
Day prior to the date of Borrowing proposed therein, in the case of a LIBOR
Auction or (y) the Domestic Business Day next preceding the date of
Borrowing proposed therein, in the case of an Absolute Rate Auction (or,
in either case, such other time or date as the Borrower and the Agent shall
have mutually agreed and shall have notified to the Banks not later than the
date of the Money Market Quote Request for the first LIBOR Auction or
Absolute Rate Auction for which such change is to be effective) specifying:
(i) the proposed date of Borrowing, which shall be a Euro-Dollar
Business Day in the case of a LIBOR Auction or a Domestic Business Day
in the case of an Absolute Rate Auction,
(ii) the aggregate amount of such Borrowing, which shall be
$10,000,000 or any larger multiple of $1,000,000,
(iii) the duration of the Interest Period applicable thereto,
subject to the provisions of the definition of Interest Period, and
(iv) whether the Money Market Quotes requested are to set forth
a Money Market Margin or a Money Market Absolute Rate.
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The Borrower may request offers to make Money Market Loans for more
than one Interest Period in a single Money Market Quote Request. No Money
Market Quote Request shall be given within five Euro-Dollar Business Days
(or such other number of days as the Borrower and the Agent may agree) of
any other Money Market Quote Request.
(c) Invitation for Money Market Quotes. Promptly upon receipt of a
Money Market Quote Request, the Agent shall send to the Banks by telex or
facsimile transmission an Invitation for Money Market Quotes substantially
in the form of Exhibit D hereto, which shall constitute an invitation by
the Borrower to each Bank to submit Money Market Quotes offering to make
the Money Market Loans to which such Money Market Quote Request relates
in accordance with this Section.
(d) Submission and Contents of Money Market Quotes. (i) Each Bank
may submit a Money Market Quote containing an offer or offers to make Money
Market Loans in response to any Invitation for Money Market Quotes. Each
Money Market Quote must comply with the requirements of this subsection (d)
and must be submitted to the Agent by telex or facsimile transmission at its
offices specified in or pursuant to Section 9.01 not later than (x) 2:00
P.M. (New York City time) on the fourth Euro-Dollar Business Day prior to
the proposed date of Borrowing, in the case of a LIBOR Auction or (y) 9:00
A.M. (New York City time) on the proposed date of Borrowing, in the case of
an Absolute Rate Auction (or, in either case, such other time or date as
the Borrower and the Agent shall have mutually agreed and shall have
notified to the Banks not later than the date of the Money Market Quote
Request for the first LIBOR Auction or Absolute Rate Auction for which such
change is to be effective); provided that Money Market Quotes submitted by
the Agent (or any affiliate of the Agent) in the capacity of a Bank may be
submitted, and may only be submitted, if the Agent or such affiliate
notifies the Borrower of the terms of the offer or offers contained therein
not later than (x) 1:00 P.M. (New York City time) on the fourth
Euro-Dollar Business Day prior to the proposed date of Borrowing, in the case
of a LIBOR Auction or (y) 8:45 A.M. (New York City time) on the proposed date
of Borrowing, in the case of an Absolute Rate Auction. Subject to Articles 3
and 6, any Money Market Quote so made shall be irrevocable except with the
written consent of the Agent given on the instructions of the Borrower.
(ii) Each Money Market Quote shall be in substantially the form
of Exhibit E hereto and shall in any case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money Market Loan for
which each such offer is being made, which principal amount
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(w) may be greater than or less than the Commitment of the
quoting Bank, (x) must be $1,000,000 or any larger multiple
thereof, (y) may not exceed the principal amount of Money Market
Loans for which offers were requested and (z) may be subject to
an aggregate limitation as to principal amount of Money Market
Loans for which offers being made by such quoting Bank may
be accepted,
(C) in the case of a LIBOR Auction, the margin above or
below the applicable London Interbank Offered Rate (the "Money
Market Margin") offered for each such Money Market Loan,
expressed as a percentage (rounded to the nearest 1/10,000th of 1%)
to be added to or subtracted from such base rate,
(D) in the case of an Absolute Rate Auction, the rate of
interest per annum (rounded to the nearest 1/10,000th of 1%) (the
"Money Market Absolute Rate") offered for each such Money Market
Loan, and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers by the
quoting Bank with respect to each Interest Period specified in the
related Invitation for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded if it:
(A) is not substantially in conformity with Exhibit E
hereto or does not specify all of the information required by
subsection (d)(ii),
(B) contains qualifying, conditional or similar language,
(C) proposes terms other than or in addition to those set
forth in the applicable Invitation for Money Market Quotes, or
(D) arrives after the time set forth in subsection (d)(i).
(e) Notice to Borrower. The Agent shall promptly notify the Borrower
of the terms (x) of any Money Market Quote submitted by a Bank that is in
accordance with subsection (d) and (y) of any Money Market Quote that
amends, modifies or is otherwise inconsistent with a previous Money Market
Quote submitted by such Bank with respect to the same Money Market Quote
Request. Any such subsequent Money Market Quote shall be disregarded by
the Agent.
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unless such subsequent Money Market Quote is submitted solely to correct a
manifest error in such former Money Market Quote. The Agent's notice to the
Borrower shall specify (A) the aggregate principal amount of Money Market
Loans for which offers have been received for each Interest Period specified
in the related Money Market Quote Request, (B) the respective principal
amounts and Money Market Margins or Money Market Absolute Rates, as the case
may be, so offered and (C) if applicable, limitations on the aggregate
principal amount of Money Market Loans for which offers in any single Money
Market Quote may be accepted.
(f) Acceptance and Notice by Borrower. Not later than 10:00 A.M.
(New York City time) on (x) the third Euro-Dollar Business Day prior to the
proposed date of Borrowing, in the case of a LIBOR Auction or (y) the
proposed date of Borrowing, in the case of an Absolute Rate Auction (or, in
either case, such other time or date as the Borrower and the Agent shall
have mutually agreed and shall have notified to the Banks not later than
the date of the Money Market Quote Request for the first LIBOR Auction or
Absolute Rate Auction for which such change is to be effective), the
Borrower shall notify the Agent of its acceptance or non-acceptance of the
offers so notified to it pursuant to subsection (e). In the case of
acceptance, such notice (a "Notice of Money Market Borrowing") shall specify
the aggregate principal amount of offers for each Interest Period that are
accepted. The Borrower may accept any Money Market Quote in whole or in
part; provided that:
(i) the aggregate principal amount of each Money Market
Borrowing may not exceed the applicable amount set forth in the related
Money Market Quote Request,
(ii) the aggregate principal amount of each Money Market
Borrowing must be $10,000,000 or any larger multiple of $1,000,000,
(iii) acceptance of offers may only be made on the basis of
ascending Money Market Margins or Money Market Absolute Rates, as
the case may be, and
(iv) the Borrower may not accept any offer that is described in
subsection (d)(iii) or that otherwise fails to comply with the
requirements of this Agreement.
(g) Allocation by Agent. If offers are made by two or more Banks with
the same Money Market Margins or Money Market Absolute Rates, as the case
may be, for a greater aggregate principal amount than the amount in respect
of which such offers are accepted for the related Interest Period, the
principal amount of Money Market Loans in respect of which such offers are
accepted shall be
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allocated by the Agent among such Banks as nearly as possible (in such
multiples, not greater than $100,000, as the Agent may deem appropriate) in
proportion to the aggregate principal amounts of such offers. Determinations
by the Agent of the amounts of Money Market Loans shall be conclusive in the
absence of manifest error.
SECTION 2.04. Notice to Banks; Funding of Loans. (a) Upon receipt of a
Notice of Borrowing, the Agent shall promptly notify each Bank of the
Contents thereof and of such Bank's share (if any) of such Borrowing and
such Notice of Borrowing shall not thereafter be revocable by the Borrower.
(b) Not later than 1:00 P.M. (New York City time) on the date of each
Borrowing, each Bank participating therein shall (except as provided in
Subsection (c) of this Section) make available its share of such Borrowing,
in Federal or other funds immediately available in New York City, to the
Agent at its address specified in or pursuant to Section 9.01. Unless the
Agent determines that any applicable condition specified in Article 3 has
not been satisfied, the Agent will make the funds so received from the Banks
available to the Borrower at the Agent's aforesaid address.
(c) If any Bank makes a new Loan hereunder on a day on which the
Borrower is to repay all or any part of an outstanding Loan from such Bank,
such Bank shall apply the proceeds of its new Loan to make such repayment
and only an amount equal to the difference (if any) between the amount being
borrowed and the amount being repaid shall be made available by such Bank to
the Agent as provided in subsection (b), or remitted by the Borrower to the
Agent as provided in Section 2.13, as the case may be.
(d) Unless the Agent shall have been notified by any Bank prior to the
date of Borrowing (or prior to 1:00 P.M. (New York City time) on the date
of Borrowing in the case of a Base Rate Borrowing) that such Bank does not
intend to make available to the Agent such Bank's portion of the Borrowing
to be made on such date, the Agent may assume that such Bank has made such
amount available to the Agent on such date and the Agent may, in reliance
upon such assumption, make available to the Borrower a corresponding
amount, subject to the provisions of subsection (c). If such corresponding
amount is not in fact made available to the Agent by such Bank, the Agent
shall be entitled to recover such corresponding amount on demand from such
Bank. If such Bank does not pay such corresponding amount forthwith upon
the Agent's demand therefor, the Agent shall promptly notify the Borrower
and the Borrower shall promptly pay such corresponding amount to the Agent.
The Agent shall also be entitled to recover from such Bank or the Borrower
interest on such corresponding amount in respect of each day from the date
such corresponding amount was made available by the Agent to the Borrower to
the date such corresponding amount is recovered
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by the Agent, at a rate per annum equal to (x) in the case of a Bank, the
Federal Funds Rate for each such day and (y) in the case of the Borrower,
the then applicable rate for Base Rate Loans, CD Loans, Euro-Dollar Loans
or Money Market Loans, as appropriate. Nothing herein shall be deemed to
relieve any Bank from its obligation to fulfill its Commitment hereunder or
to prejudice any rights which the Borrower may have against any Bank as a
result of any default by such Bank hereunder. For purposes of this
subsection (d), no amount paid to the Agent hereunder shall be considered
to have been recovered by the Agent on the date of payment unless such
amount shall have been received by the Agent by 2:30 P.M. (New York City
time) on such date.
SECTION 2.05. Notes. (a) The Loans of each Bank shall be evidenced by
a single Note payable to the order of such Bank for the account of its
Applicable Lending Office in an amount equal to the aggregate unpaid
principal amount of such Bank's Loans.
(b) Each Bank may, by notice to the Borrower and the Agent, request
that its Loans of a particular type be evidenced by a separate Note in an
amount equal to the aggregate unpaid principal amount of such Loans. Each
such Note shall be in substantially the form of Exhibit A hereto with
appropriate modifications to reflect the fact that it evidences solely Loans
of the relevant type. Each reference in this Agreement to the "Note" of such
Bank shall be deemed to refer to and include any or all of such Notes, as
the context may require.
(c) Upon receipt of each Bank's Note pursuant to Section 3.01(b), the
Agent shall forward such Note to such Bank. Each Bank shall record the
date, amount, type and maturity of each Loan made by it and the date and
amount of each payment of principal made by the Borrower with respect
thereto, and may, if such Bank so elects in connection with any transfer or
enforcement of its Note, endorse on the schedule forming a part thereof
appropriate notations to evidence the foregoing information with respect to
each such Loan then outstanding; provided that the failure of any Bank to
make any such recordation or endorsement shall not affect the obligations of
the Borrower hereunder or under the Notes. Each Bank is hereby irrevocably
authorized by the Borrower so to endorse its Note and to attach to and make
a part of its Note a continuation of any such schedule as and when
required.
SECTION 2.06. Maturity of Loans. (a) The Revolving Loans shall mature,
and the principal amount thereof shall be due and payable, on the last day
of the Revolving Credit Period.
(b) Each Money Market Loan shall mature, and the principal amount
thereof shall be due and payable, on the last day of the Interest Period
applicable to such Borrowing.
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(c) The Term Loans shall mature on the first anniversary of the
Commitment Termination Date.
SECTION 2.07. Interest Rates. (a) Each Base Rate Loan shall bear
interest on the outstanding principal amount thereof, for each day from the
date such Loan is made until it becomes due, at a rate per annum equal to
the Base Rate for such day. Such interest shall be payable for each
Interest Period on the last day thereof and, with respect to the principal
amount of any Base Rate Loan that is prepaid or converted to a CD Loan or
Euro-Dollar Loan, on the date of such prepayment or conversion. Any overdue
principal of or interest on any Base Rate Loan shall bear interest, payable
on demand, for each day until paid at a rate per annum equal to the sum of
2% plus the rate otherwise applicable to Base Rate Loans for such day. (
b) Each CD Loan shall bear interest on the outstanding principal
amount thereof, for the Interest Period applicable thereto, at a rate per
annum equal to the sum of the CD Margin plus the applicable Adjusted CD
Rate; provided that if any CD Loan shall, as a result of clause (2)(b) of
the definition of Interest Period, have an Interest Period of less than 30
days, such Loan shall bear interest during such Interest Period at the rate
applicable to Base Rate Loans during such period. Such interest shall be
payable for each Interest Period on the last day thereof and, if such
Interest Period is longer than 90 days, 90 days after the first day thereof
and, with respect to the principal amount of any CD Loan that is prepaid or
converted to a Base Rate Loan or Euro-Dollar Loan, on the date of such
prepayment or conversion. Any overdue principal of or interest on any CD
Loan shall bear interest, payable on demand, for each day until paid at a
rate per annum equal to the sum of 2% plus the higher of (i) the sum of the
CD Margin plus the Adjusted CD Rate applicable to such Loan and (ii) the
rate applicable to Base Rate Loans for such day.
The "Adjusted CD Rate" applicable to any Interest Period means a rate
per annum determined pursuant to the following formula:
[ CDBR ]*
ACDR =[ ----- ] + AR
[ 1.00 - DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
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* The amount in brackets being rounded upwards, if necessary, to the next
higher 1/100 of 1% The "CD Base Rate" applicable to any Interest Period is
the rate of interest determined by the Agent to be the average (rounded
upward, if necessary, to the next higher 1/100 of 1%) of the prevailing
rates per annum bid at 10:00 A.M. (New York City time) (or as soon
thereafter as practicable) on the first day of such Interest Period by two
or more New York certificate of deposit dealers of recognized standing for
the purchase at face value from each CD Reference Bank of its certificates
of deposit in an amount comparable to the unpaid principal amount of the CD
Loan of such CD Reference Bank to which such Interest Period applies and
having a maturity comparable to such Interest Period.
"Domestic Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by
the Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including without limitation
any basic, supplemental or emergency reserves) for a member bank of the
Federal Reserve System in New York City with deposits exceeding five
billion dollars in respect of new non-personal time deposits in dollars in
New York City having a maturity comparable to the related Interest Period and
in an amount of $100,000 or more. The Adjusted CD Rate shall be adjusted
automatically on and as of the effective date of any change in the Domestic
Reserve Percentage.
"Assessment Rate" means for any day the annual assessment rate in effect
on such day which is payable by a member of the Bank Insurance Fund
classified as adequately capitalized and within supervisory subgroup "A" (or
a comparable successor assessment risk classification) within the meaning of
12 C.F.R. Section 327.4(a) (or any successor provision) to the Federal
Deposit Insurance Corporation (or any successor) for such Corporation's (or
such successor's) insuring time deposits at offices of such institution in
the United States. The Adjusted CD Rate shall be adjusted automatically on
and as of the effective date of any change in the Assessment Rate.
(c) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable thereto, at a
rate per annum equal to the sum of the Euro-Dollar Margin plus the
applicable Adjusted London Interbank Offered Rate. Such interest shall be
payable for each Interest Period on the last day thereof and, if such
Interest Period is longer than three months, three months after the first
day thereof and, with respect to the principal amount of any Euro-Dollar
Loan that is prepaid or converted to a Base Rate Loan or CD Loan, on the
date of such prepayment or conversion.
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The "Adjusted London Interbank Offered Rate" applicable to any
Interest Period means a rate per annum equal to the quotient obtained
(rounded upward, if necessary, to the next higher 1/100 of 1%) by dividing
(i) the applicable London Interbank Offered Rate by (ii) 1.00 minus the
Euro-Dollar Reserve Percentage.
The "London Interbank Offered Rate" applicable to any Interest Period
means the average (rounded upward, if necessary, to the next higher 1/16 of
1%) of the respective rates per annum at which deposits in dollars are
offered to each of the Euro-Dollar Reference Banks in the London interbank
market at approximately 11:00 A.M. (London time) two Euro-Dollar Business
Days before the first day of such Interest Period in an amount approximately
equal to the principal amount of the Euro-Dollar Loan of such Euro-Dollar
Reference Bank to which such Interest Period is to apply and for a period
of time comparable to such Interest Period.
"Euro-Dollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by
the Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars
in respect of "Eurocurrency liabilities" (or in respect of any other
category of liabilities which includes deposits by reference to which the
interest rate on Euro-Dollar Loans is determined or any category of
extensions of credit or other assets which includes loans by a non-United
States office of any Bank to United States residents). The Adjusted London
Interbank Offered Rate shall be adjusted automatically on and as of the
effective date of any change in the Euro-Dollar Reserve Percentage.
(d) Any overdue principal of or interest on any Euro-Dollar Loan shall
bear interest, payable on demand, for each day from and including the date
payment thereof was due to but excluding the date of actual payment, at a
rate per annum equal to the sum of 2% plus the higher of (i) the sum of the
Euro-Dollar Margin plus the Adjusted London Interbank Offered Rate
applicable to such Loan and (ii) the Euro-Dollar Margin plus the quotient
obtained (rounded upwards, if necessary, to the next higher 1/100 of 1%) by
dividing (x) the average (rounded upward, if necessary, to the next higher
1/16 of 1%) of the respective rates per annum at which one day (or, if such
amount due remains unpaid more than three Euro-Dollar Business Days, then
for such other period of time not longer than six months as the Agent may
select) deposits in dollars in an amount approximately equal to such overdue
payment due to each of the Euro-Dollar Reference Banks are offered to such
Euro-Dollar Reference Bank in the London interbank market for the applicable
period determined as provided above by (y) 1.00 minus the Euro-Dollar
Reserve Percentage (or, if the circumstances described in clause (a)
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or (b) of Section 8.01 shall exist, at a rate per annum equal to the sum of
2% plus the rate applicable to Base Rate Loans for such day).
(e) Subject to Section 8.01(a), each Money Market LIBOR Loan shall
bear interest on the outstanding principal amount thereof, for the Interest
Period applicable thereto, at a rate per annum equal to the sum of the
London Interbank Offered Rate for such Interest Period (determined in
accordance with Section 2.07(c) as if each Euro-Dollar Reference Bank were
to participate in the related Money Market LIBOR Borrowing ratably in
proportion to its Commitment) plus (or minus) the Money Market Margin quoted
by the Bank making such Loan in accordance with Section 2.03. Each Money
Market Absolute Rate Loan shall bear interest on the outstanding principal
amount thereof, for the Interest Period applicable thereto, at a rate per
annum equal to the Money Market Absolute Rate quoted by the Bank making such
Loan in accordance with Section 2.03. Such interest shall be payable for
each Interest Period on the last day thereof and, if such Interest Period is
longer than three months, at intervals of three months after the first day
thereof. Any overdue principal of or interest on any Money Market Loan shall
bear interest, payable on demand, for each day until paid at a rate per
annum equal to the sum of 2% plus the Prime Rate for such day.
(f) The Agent shall determine each interest rate applicable to the Loans
hereunder. The Agent shall give prompt notice to the Borrower and the
participating Banks of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest error.
(g) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Agent as contemplated by this Section. If any Reference
Bank does not furnish a timely quotation, the Agent shall determine the
relevant interest rate on the basis of the quotation or quotations furnished
by the remaining Reference Bank or Banks or, if none of such quotations is
available on a timely basis, the provisions of Section 8.01 shall apply.
SECTION 2.08. Method of Electing Interest Rates. (a) The Loans included
in each Committed Borrowing shall bear interest initially at the type of rate
specified by the Borrower in the applicable Notice of Committed Borrowing.
Thereafter, the Borrower may from time to time elect to change or continue
the type of interest rate borne by each Group of Loans (subject to Section
2.08(d) and the provisions of Article 8), as follows:
(i) if such Loans are Base Rate Loans, the Borrower may elect to
convert such Loans to CD Loans as of any Domestic Business Day or to
Euro-Dollar Loans as of any Euro-Dollar Business Day;
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(ii) if such Loans are CD Loans, the Borrower may elect to
convert such Loans to Base Rate Loans as of any Domestic Business Day,
or convert such Loans to Euro-Dollar Loans as of any Euro-Dollar
Business Day or continue such Loans as CD Loans, as of the end of any
Interest Period applicable thereto, for an additional Interest Period,
subject to Section 2.14 if any such conversion is effective on any day
other than the last day of an Interest Period applicable to such Loans;
and
(iii) if such Loans are Euro-Dollar Loans, the Borrower may elect
to convert such Loans to Base Rate Loans as of any Domestic Business
Day, or convert such Loans to CD Loans as of any Euro-Dollar Business
Day or may elect to continue such Loans as Euro-Dollar Loans, as of the
end of any Interest Period applicable thereto, for an additional
Interest Period, subject to Section 2.14 if any such conversion is
effective on any day other than the last day of an Interest Period
applicable to such Loans.
Each such election shall be made by delivering a notice (a "Notice of
Interest Rate Election") to the Administrative Agent not later than 10:30
A.M. (New York City time) on the third Euro-Dollar Business Day before the
conversion or continuation selected in such notice is to be effective
(unless the relevant Loans are to be converted from Domestic Loans of one
type to Domestic Loans of the other type or are CD Loans to be continued as
CD Loans for an additional Interest Period, in which case such notice shall
be delivered to the Agent not later than 10:30 A.M. (New York City time) on
the second Domestic Business Day before such conversion or continuation is to
be effective). A Notice of Interest Rate Election may, if it so specifies,
apply to only a portion of the aggregate principal amount of the relevant
Group of Loans; provided that (i) such portion is allocated ratably among
the Loans comprising such Group and (ii) the portion to which such Notice
applies, and the remaining portion to which it does not apply, are each at
least $10,000,000 (unless such portion is comprised of Base Rate Loans). If
no such notice is timely received before the end of an Interest Period for
any Group of CD Loans or Euro-Dollar Loans, the Borrower shall be deemed to
have elected that such Group of Loans be converted to Base Rate Loans at the
end of such Interest Period.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which such notice
applies;
(ii) the date on which the conversion or continuation selected in
such notice is to be effective, which shall comply with the applicable
clause of Section 2.08(a);
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(iii) if the Loans comprising such Group are to be converted, the
new Type of Loans and, if the Loans resulting from such conversion are
to be CD Loans or Euro-Dollar Loans, the duration of the next
succeeding Interest Period applicable thereto; and
(iv) if such Loans are to be continued as CD Loans or Euro-Dollar
Loans for an additional Interest Period, the duration of such
additional Interest Period.
Each Interest Period specified in a Notice of Interest Rate Election
shall comply with the provisions of the definition of Interest Period.
(c) Promptly after receiving a Notice of Interest Rate Election from
the Borrower pursuant to Section 2.08(a), the Agent shall notify each Bank
of the contents thereof and such notice shall not thereafter be revocable by
the Borrower.
(d) The Borrower shall not be entitled to elect to convert any
Committed Loans to, or continue any Committed Loans for an additional
Interest Period as, CD Loans or Euro-Dollar Loans if (i) the aggregate
principal amount of any Group of CD Loans or Euro-Dollar Loans created or
continued as a result of such election would be less than $10,000,000 or (ii)
a Default shall have occurred and be continuing when the Borrower delivers
notice of such election to the Agent.
(e) If any Committed Loan is converted to a different type of Loan, the
Borrower shall pay, on the date of such conversion, the interest accrued to
such date on the principal amount being converted.
SECTION 2.09. Fees.
(a) Facility Fees. The Borrower shall pay to the Agent for the account
of each Bank facility fees on the daily average amount of such Bank's
Commitment (whether used or unused), for the period from the Effective Date
to but excluding the earlier of the date the Commitments are terminated or
the Commitment Termination Date, at a rate of 0.085% per annum; provided
that, if such Bank continues to have any Committed Loans outstanding after
its Commitment terminates, then such facility fee shall continue to accrue
on the daily outstanding principal amount of such Bank's Committed Loans
from and including the date on which its Commitment terminates to but
excluding the date on which such Bank ceases to have any Committed Loans
outstanding. Accrued facility fees shall be payable on each January 1,
April 1, July 1, and October 1 and on the date the Commitments are
terminated (and, if later, on the date the Loans shall be repaid in their
entirety); provided that any facility fees accruing after the first
anniversary of the Commitment Termination Date shall be payable on demand.
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(b) Utilization Fees. (i) During any period when the aggregate
outstanding principal amount of the Loans exceeds 50% of the aggregate amount
of the Commitments or the Commitments have been terminated but Loans are
outstanding, the Borrower shall, unless Minimum Rating Status exists, pay to
the Agent for the account of each Bank utilization fees at a rate of 0.125%
per annum. Such utilization fee shall accrue on the average daily aggregate
outstanding principal amount of such Bank's Loans and shall be payable on
each January 1, April 1, July 1, and October 1 and on the date the
Commitments are terminated (and, if later, on the date the Loans shall be
repaid in their entirety); provided that any utilization fees accruing after
the first anniversary of the Commitment Termination Date shall be payable on
demand.
(ii) For purposes of this Section, "Minimum Rating Status" exists at
any date if at such date the Borrower has outstanding senior unsecured
long-term debt and such debt, without third party enhancement, is rated (or,
if on such date the Borrower has no outstanding senior unsecured long-term
debt, evidence satisfactory to the Agent is provided to the effect that the
rating of senior unsecured long-term debt of the Borrower, assuming that it
had outstanding senior unsecured long-term debt, would be rated) at least
AA- (or any equivalent rating which is used in lieu thereof) or higher by
S&P or Aa3 (or any equivalent rating which is used in lieu thereof) or higher
by Moody's.
(c) Agents' Fees. The Borrower shall pay to the Agent and the Co-
Syndication Agents, each for its own account, one or more fees in such amounts
and at such times as has been previously agreed between the Borrower and each
of them.
SECTION 2.10. Optional Termination or Reduction of Commitments. During
the Revolving Credit Period, the Borrower may, upon at least three Domestic
Business Days' notice to the Agent (which notice the Agent will promptly
deliver to the Banks), (i) terminate the Commitments at any time, if no
Loans are outstanding at such time or (ii) ratably reduce from time to time
by an aggregate amount of $10,000,000 or any larger multiple of $1,000,000,
the aggregate amount of the Commitments in excess of the aggregate
outstanding principal amount of the Loans.
SECTION 2.11. Mandatory Termination of Commitments. The Commitments
shall terminate on the Commitment Termination Date and any Loans then
outstanding (together with accrued interest thereon) shall be due and
payable on such date.
SECTION 2.12. Optional Prepayments. (a) Subject in the case of Fixed
Rate Loans to Section 2.14, the Borrower may (i) upon at least one Domestic.
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Business Day's notice to the Agent, prepay any Group of Domestic Loans (or
any Money Market Borrowing bearing interest at the Base Rate pursuant to
Section 8.01(a)) or (ii) upon at least three Euro-Dollar Business Days'
notice to the Agent, prepay any Group of Euro-Dollar Loans, in each case in
whole at any time, or from time to time in part in amounts aggregating
$10,000,000 or any larger multiple of $1,000,000, by paying the principal
amount to be prepaid together with accrued interest thereon to the date of
prepayment. Each such optional prepayment shall be applied to prepay ratably
the Loans of the several Banks included in such Group of Loans (or such
Money Market Borrowing).
(b) Except as provided in Section 2.12(a), the Borrower may not prepay
all or any portion of the principal amount of any Money Market Loan prior to
the maturity thereof.
(c) Upon receipt of a notice of prepayment pursuant to this Section, the
Agent shall promptly notify each Bank of the contents thereof and of such
Bank's ratable share (if any) of such prepayment and such notice shall not
thereafter be revocable by the Borrower.
SECTION 2.13. General Provisions as to Payments. (a) The Borrower
shall make each payment of principal of, and interest on, the Loans and of
fees hereunder, not later than 1:00 P.M. (New York City time) on the date
when due, in Federal or other funds immediately available in New York City,
to the Agent at its address referred to in Section 9.01. The Agent will
promptly distribute to each Bank its ratable share of each such payment
received by the Agent for the account of the Banks. Whenever any payment of
principal of, or interest on, the Domestic Loans or of fees shall be due on
a day which is not a Domestic Business Day, the date for payment thereof
shall be extended to the next succeeding Domestic Business Day. Whenever
any payment of principal of, or interest on, the Euro-Dollar Loans shall be
due on a day which is not a Euro-Dollar Business Day, the date for payment
thereof shall be extended to the next succeeding Euro-Dollar Business Day
unless such Euro-Dollar Business Day falls in another calendar month, in
which case the date for payment thereof shall be the next preceding
Euro-Dollar Business Day. Whenever any payment of principal of, or interest
on, the Money Market Loans shall be due on a day which is not a Euro-Dollar
Business Day, the date for payment thereof shall be extended to the next
succeeding Euro-Dollar Business Day. If the date for any payment of
principal is extended by operation of law or otherwise, interest thereon
shall be payable for such extended time.
(b) Unless the Agent shall have received notice from the Borrower prior
to the date on which any payment is due to the Banks hereunder that the
Borrower will not make such payment in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date and the
Agent may, in
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reliance upon such assumption, cause to be distributed to each Bank on such
due date an amount equal to the amount then due such Bank. If and to the
extent that the Borrower shall not have so made such payment, each Bank
shall repay to the Agent forthwith on demand such amount distributed to such
Bank together with interest thereon, for each day from the date such amount
is distributed to such Bank until the date such Bank repays such amount to
the Agent, at the Federal Funds Rate.
SECTION 2.14. Funding Losses. If the Borrower makes any payment of
principal with respect to any Fixed Rate Loan or any Fixed Rate Loan is
converted to a different type of Loan (whether such payment or conversion
is pursuant to Article 2, 6 or 8 or otherwise) on any day other than the
last day of the Interest Period applicable thereto, or the end of an
applicable period fixed pursuant to Section 2.07(d), or if the Borrower
fails to borrow, prepay, convert or continue any Fixed Rate Loans after
notice has been given to any Bank in accordance with Section 2.04(a),
2.08(c) or 2.12(c) the Borrower shall reimburse each Bank within 15 days
after demand for any resulting loss or expense incurred by it (or by an
existing or prospective Participant in the related Loan), including (without
limitation) any loss incurred in obtaining, liquidating or employing
deposits from third parties, but excluding loss of margin for the period
after any such payment or conversion or failure to borrow, prepay, convert
or continue; provided that such Bank shall have delivered to the Borrower a
certificate as to the amount of such loss or expense, which certificate
hall be conclusive in the absence of manifest error.
SECTION 2.15. Computation of Interest and Fees. Interest based on the
Prime Rate and fees hereunder shall be computed on the basis of a year of
365 days (or 366 days in a leap year) and paid for the actual number of
days elapsed (including the first day but excluding the last day). All
other interest shall be computed on the basis of a year of 360 days and
paid for the actual number of days elapsed (including the first day but
excluding the last day).
SECTION 2.16. Withholding Tax Exemption. At least five Domestic
Business Days prior to the first date on which interest or fees are payable
hereunder for the account of any Bank, each Bank that is not incorporated
under the laws of the United States of America or a state thereof agrees
that it will deliver to each of the Borrower and the Agent two duly
completed copies of United States Internal Revenue Service Form 1001 or
4224, certifying in either case that such Bank is entitled to receive
payments under this Agreement and its Note without deduction or withholding
of any United States federal income taxes. Each Bank which so delivers a
Form 1001 or 4224 further undertakes to deliver to each of the Borrower and
the Agent two additional copies of such form (or a successor form) on or
before the date that such form expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent form so
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delivered by it, and such amendments thereto or extensions or renewals
thereof as may be reasonably requested by the Borrower or the Agent, in
each case certifying that such Bank is entitled to receive payments under
this Agreement and its Note without deduction or withholding of any United
States federal income taxes, unless an event (including without limitation
any change in treaty, law or regulation) has occurred prior to the date on
which any such delivery would otherwise be required which renders all such
forms inapplicable or which would prevent such Bank from duly completing
and delivering any such form with respect to it and such Bank advises the
Borrower and the Agent that it is not capable of receiving payments without
any deduction or withholding of United States federal income tax.
SECTION 2.17. Increase of Commitments. Upon at least 15 days' prior
notice to the Agent (which notice the Agent shall promptly transmit to each
of the Banks), the Borrower shall have the right, subject to the terms and
conditions set forth below and with the consent of the Banks as set forth
below, to increase the aggregate amount of the Commitments in multiples of
$5,000,000. Any such increase shall apply, at the option of the Borrower,
(x) to the Commitment of one or more Banks, provided that (i) the Required
Banks (including each Bank whose Commitment is to be increased) shall
consent to such increase, (ii) the amount set forth on the signature pages
hereof opposite the name of each Bank the Commitment of which is being so
increased shall be amended to reflect the increased Commitment of such Bank
and (iii) if any Committed Loans are outstanding at the time of such an
increase, the Borrower will, notwithstanding anything to the contrary
contained in this Agreement, on the date of such increase incur and repay
or prepay one or more Committed Loans from the Banks in such amounts so that
after giving effect thereto, the Committed Loans shall be outstanding on a
pro rata basis (based on the Commitments of the Banks after giving effect to
the changes made pursuant hereto on such date) from all the Banks or (y) to
the creation of a new Commitment of an institution not then a Bank
hereunder, provided that (i) such institution becomes a party to this
Agreement as a Bank by execution and delivery to the Borrower and the Agent
of counterparts of this Agreement, (ii) the Required Banks shall consent to
the creation of such Commitment of such Bank, (iii) the signature pages
hereof shall be amended to reflect the Commitment of such new Bank, (iv)
the Borrower shall issue a Note to such new Bank in conformity with the
provisions of Section 2.05, (v) if any Committed Loans are outstanding at
the time of the creation of such Commitment of such Bank, the Borrower
will, notwithstanding anything to the contrary contained in this Agreement,
on the date of the creation of such Commitment incur and repay or prepay one
or more Committed Loans from the Banks in such amounts so that after giving
effect thereto, the Committed Loans shall be outstanding on a pro rata basis
(based on the Commitments of the Banks after giving effect to the changes
made pursuant hereto on such date) from all the Banks and (vi) if such
institution is neither a banking institution nor an affiliate of
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a Bank, such institution must be consented to by the Agent; provided further
that any such increase or creation may apply, at the option of the Borrower,
as set forth in clause (x) or (y) above but without the consent of the
Required Banks so long as (i) the amount of such increase or the amount of
such new Commitment so created, as the case may be, when added to the
aggregate amount of all such prior increases in the Commitments and all such
prior creations of new Commitments, in each case created after the Effective
Date, does not exceed $500,000,000 and (ii) after giving effect to such
increase or new Commitment, the amount of the Commitment of any Bank shall
not exceed 17.5% of the aggregate amount of the Commitments (excluding, for
purposes of this clause (ii), any increase resulting solely from the merger
or the acquisition of one Bank into or by another Bank). It is understood
that any increase in the amount of the Commitments pursuant to this Section
2.17 shall not constitute an amendment of this Agreement or the Notes.
ARTICLE 3
CONDITIONS
SECTION 3.01. Effectiveness. This Agreement shall become effective on
the date (the "Effective Date") on which the Agent shall have received the
following documents or other items, each dated the Effective Date unless
otherwise indicated:
(a) receipt by the Agent of counterparts hereof signed by each of the
parties hereto (or, in the case of any party as to which an executed
counterpart shall not have been received, receipt by the Agent in form
satisfactory to it of telegraphic, telex or other written confirmation from
such party of execution of a counterpart hereof by such party);
(b) receipt by the Agent for the account of each Bank of a duly
executed Note dated on or before the Effective Date complying with the
provisions of Section 2.05;
(c) receipt by the Agent of an opinion of John Jay List, Esq., General
Counsel of the Borrower, substantially in the form of Exhibit F hereto and
covering such additional matters relating to the transactions contemplated
hereby as the Required Banks may reasonably request, such opinion to be in
form and substance satisfactory to the Agent;
(d) receipt by the Agent of an opinion of Davis Polk & Wardwell,
special counsel for the Agent, substantially in the form of Exhibit G
hereto and covering such additional matters relating to the transactions
contemplated hereby
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as the Required Banks may reasonably request, such opinion to be in form and
substance satisfactory to the Agent;
(e) receipt by the Agent of a certificate signed by the Chief Financial
Officer or the Governor and an Assistant Secretary-Treasurer or the
Controller of the Borrower to the effect set forth in clauses (c) through
(g), inclusive, of Section 3.02 and, in the case of clauses (c), (e) and
(g), setting forth in reasonable detail the calculations required to
establish such compliance;
(f) receipt by the Agent, with a copy for each Bank, of a certificate
of an officer of the Borrower acceptable to the Agent stating that all
consents, authorizations, notices and filings required or advisable in
connection with this Agreement are in full force and effect, and the Agent
shall have received evidence thereof reasonably satisfactory to it;
(g) evidence satisfactory to the Required Banks that the Commitments,
as defined in the Prior Credit Agreement, have been terminated (except that
Sections 2.14, 7.05, 7.06, 8.03 and 9.03 (and Section 2.13 and Article 9
insofar as such Section or Article relates to such Sections 2.14, 7.05,
7.06, 8.03 and 9.03, as applicable)) of the Prior Credit Agreement shall
survive the termination of such Commitments and shall remain in full force
and effect) and all amounts owed under the Prior Credit Agreement have been
paid in full; and (h) receipt by the Agent of all documents the Required
Banks may reasonably request relating to the existence of the Borrower, the
Corporate authority for and the validity of this Agreement and the Notes,
and any other matters relevant hereto, all in form and substance
satisfactory to the Agent.
The Agent shall promptly notify the Borrower and the Banks of the Effective
Date, and such notice shall be conclusive and binding on all parties
hereto.
SECTION 3.02. Borrowings. The obligation of any Bank to make a Loan
on the occasion of any Borrowing is subject to the satisfaction of the
following conditions:
(a) the fact that the Effective Date shall have occurred prior to
August 31, 2000;
(b) receipt by the Agent of a Notice of Borrowing as required by
Section
2.02 or 2.03, as the case may be;
(c) the fact that, immediately after such Borrowing, the Borrower is
in compliance with Section 7.12(a) of the 1972 Indenture and Section 7.11
of the 1994 Indenture, as each Indenture is in effect as of the date
hereof;
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(d) the fact that, immediately after such Borrowing, the aggregate
outstanding principal amount of the Loans will not exceed the aggregate
amount of the Commitments;
(e) the fact that, immediately after such Borrowing, no Default shall
have occurred and be continuing;
(f) the fact that the representations and warranties of the Borrower
contained in this Agreement shall be true on and as of the date of such
Borrowing (it being understood and agreed that the representation and
warranty set forth in Section 4.13 shall be true and correct as to all
information furnished prior to the making of the respective Loan); and
(g) the fact that, at the time of such Borrowing, (i) there shall be
no collateral securing Bonds issued pursuant to either Indenture of a type
other than the types of collateral permitted to secure Bonds issued
pursuant to such Indenture as of the date hereof and (ii) the Allowable
Amount of Eligible Collateral then pledged under either Indenture shall
not exceed 150% of the aggregate principal amount of Bonds then Outstanding
under such Indenture and no collateral shall secure Bonds other than the
Eligible Collateral under such Indenture, the Allowable Amount of which is
included within the prior computation or collateral previously so pledged
which ceases to be such Eligible Collateral not as a result of any acts or
omissions to act of the Borrower (other than the declaration of an "event of
default" as defined in a Mortgage which results in the exercise of any right
or remedy described in such Mortgage); each defined term used in this clause
(g) shall have the meaning assigned thereto in the applicable Indenture.
Each Borrowing hereunder shall be deemed to be a representation and
warranty by the Borrower on the date of such Borrowing as to the facts
specified in clauses (c), (d), (e), (f) and (g) of this Section.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
The Borrower makes the following representations, warranties and
agreements, which shall survive the execution and delivery of this Agreement
and the Notes and the making of the Loans:
SECTION 4.01. Corporate Existence, Power and Authority. The Borrower
is a cooperative association duly incorporated, validly existing and in good
standing under the laws of the District of Columbia and has the corporate
power.
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and authority and all material governmental licenses, authorizations,
consents and approvals required to own its property and assets and to
transact the business in which it is engaged. The Borrower is duly qualified
or licensed as a foreign corporation in good standing in every jurisdiction
in which the nature of the business in which it is engaged makes such
qualification or licensing necessary, except in those jurisdictions in which
the failure to be so qualified or licensed would not (after qualification,
assuming that the Borrower could so qualify without the payment of any fee
or penalty and retain the rights as they existed prior to such qualification
all to an extent so that any fees or penalties required to be so paid or any
rights not so retained would not, individually or in the aggregate, have a
material adverse effect on the business or financial condition of the
Borrower), individually or in the aggregate, have a material adverse effect
upon the business or financial condition of the Borrower. The Borrower has
the corporate power and authority to execute, deliver and carry out the
terms and provisions of this Agreement and the Notes. This Agreement has
been, and the Notes when executed and delivered will have been, duly and
validly authorized, executed and delivered by the Borrower, and this
Agreement constitutes a legal, valid and binding agreement of the Borrower,
and the Notes, when executed and delivered by the Borrower in accordance
with this Agreement, will constitute legal, valid and binding obligations
of the Borrower, in each case enforceable in accordance with its terms,
except as the same may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and by general principles of equity.
SECTION 4.02. Financial Statements. (a) The combined balance sheets of
the Borrower and its Consolidated Subsidiaries as at May 31, 1999 and the
related combined statements of income, expenses and net margins, changes in
Members' equity and cash flows for the fiscal year ended May 31, 1999,
including the related notes, accompanied by the opinion and report thereon
of Arthur Andersen & Co., certified public accountants, heretofore delivered
to the Banks, present fairly in accordance with generally accepted
accounting principles (i) the combined financial position of the Borrower
and its Consolidated Subsidiaries as at the date of said balance sheets and
(ii) the combined results of the operations of the Borrower and its
Consolidated Subsidiaries for said fiscal year. The Borrower has no material
liabilities (contingent or otherwise) which are not disclosed by or reserved
against in the most recent audited financial statements or in the notes
thereto other than (i) Indebtedness incurred and (ii) loan and guarantee
commitments issued in each case by the Borrower in the ordinary course of
business since the date of such financial statements. All such financial
statements have been prepared in accordance with generally accepted
accounting principles applied on a basis consistent with prior periods,
except as disclosed therein. The same representations as are set forth in
this Section 4.02 shall be deemed to have been made by the Borrower in
respect of the most recent annual and quarterly financial statements of the
Borrower and its Consolidated Subsidiaries (except
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that the opinion and report of Arthur Andersen & Co. may be replaced by an
opinion and report of another nationally recognized firm of independent
certified public accountants) furnished or required to be furnished to the
Banks prior to or at the time of the making of each Loan hereunder, at the
time the same are furnished or required to be furnished.
(b) The unaudited combined balance sheets of the Borrower and its
Consolidated Subsidiaries as of February 29, 2000 and the related unaudited
combined statements of income, expenses and net margins, changes in Members'
equity and cash flows for the nine months then ended, heretofore delivered
to the Banks, present fairly in conformity with generally accepted
accounting principles applied on a basis consistent with the financial
statements referred to in subsection (a) of this Section 4.02, the combined
financial position of the Borrower and its Consolidated Subsidiaries as of
such date and their combined results of operations and changes in financial
position for such nine-month period (subject to normal year-end
adjustments). The Borrower has no material liabilities (contingent or
otherwise) which are not disclosed by or reserved against in such financial
statements for such nine-month period other than Indebtedness incurred and
loan and guarantee commitments issued by the Borrower in the ordinary course
of business since the date of such financial statements.
SECTION 4.03. Litigations. There are no actions, suits, proceedings or
investigations pending or, to the Borrower's knowledge, threatened by or
before any court or any governmental authority, body or agency or any
arbitration board which are reasonably likely to materially adversely affect
the business, property, assets, financial position or results of operations
of the Borrower or the authority or ability of the Borrower to perform its
obligations under this Agreement or the Notes.
SECTION 4.04. Governmental Authorizations. No authorization, consent,
approval or license of, or declaration, filing or registration with or
exemption by, any governmental authority, body or agency is required in
connection with the execution, delivery or performance by the Borrower of
this Agreement or the Notes.
SECTION 4.05. Capital Term Certificates. The holders of the Borrower's
Capital Term Certificates are not and will not be entitled to receive any
payments with respect to the principal thereof or interest thereon solely
because of withdrawing or being expelled from membership in the Borrower.
SECTION 4.06. No Violation of Agreements. Neither the Borrower nor any
Subsidiary is in default in any material respect under any material
agreement or other instrument to which it is a party or by which it is bound
or its property or assets may be affected. No event or condition exists
which constitutes, or with the
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giving of notice or lapse of time or both would constitute, such a default
under any such agreement or other instrument. Neither the execution and
delivery of this Agreement or the Notes, nor the consummation of any of the
transactions herein or therein contemplated, nor compliance with the terms
and provisions hereof or thereof, will contravene any provision of law,
statute, rule or regulation to which the Borrower is subject or any
judgment, decree, award, franchise, order or permit applicable to the
Borrower, or will conflict or be inconsistent with, or will result in any
breach of, any of the terms, covenants, conditions or provisions
of, or constitute (or with the giving of notice or lapse of time, or both,
would constitute) a default under (or condition or event entitling any
Person to require, whether by purchase, redemption, acceleration or
otherwise, the Borrower to perform any obligations prior to the scheduled
maturity thereof), or result in the creation or imposition of any Lien upon
any of the property or assets of the Borrower pursuant to the terms of, any
indenture, mortgage, deed of trust, agreement or other instrument to which
it may be subject, or violate any provision of the certificate of
incorporation or by-laws of the Borrower. Without limiting the generality of
the foregoing, the Borrower is not a party to, or otherwise subject to any
provision contained in, any instrument evidencing Indebtedness of the
Borrower, any agreement or indenture relating thereto or any other contract
or agreement (including its certificate of incorporation and by-laws), which
would be violated by the incurring of the Indebtedness to be evidenced by
the Notes.
SECTION 4.07. No Event of Default under the Indentures. The Borrower
has complied fully with all of the material provisions of each Indenture. No
Event of Default (within the meaning of such term as defined in each
Indenture) and no event, act or condition (except for possible non-
compliance by the Borrower with any immaterial provision of such Indenture
which in itself is not such an Event of Default under such Indenture) which
with notice or lapse of time, or both, would constitute such an Event of
Default has occurred and is continuing under such Indenture. The Borrowings
by the Borrower contemplated by this Agreement will not cause such an Event
of Default under, or the violation of any covenant contained in, either
Indenture.
SECTION 4.08. Compliance with ERISA. The Plans (other than Plans
consisting of mulitemployer plans (as defined in Section 4001 of ERISA)) are
in substantial compliance with ERISA, no such Plan is insolvent or in
reorganization, and no such Plan has an accumulated or waived funding
deficiency within the meaning of Section 412 of the Internal Revenue Code.
No Plan consisting of a multiemployer plan (as defined in Section 4001 of
ERISA) is in reorganization. Neither the Borrower nor a Subsidiary of the
Borrower nor any member of the ERISA Group has incurred any material
liability (including any material contingent liability) to or on account of
a Plan pursuant to Section 4062, 4063, 4064, 4201 or 4204 of ERISA, no
proceedings have been instituted to terminate any Plan, and no condition
exists which presents a material risk to the
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Borrower or a Subsidiary of the Borrower of incurring a material liability
to or on account of a Plan pursuant to any of the foregoing Sections of
ERISA.
SECTION 4.09. Compliance with Other Laws. The Borrower and each
Subsidiary is in compliance, in all material respects, with all applicable
requirements of law and all applicable rules and regulations of each
Federal, State, municipal or other governmental department, agency or
authority, domestic or foreign.
SECTION 4.10. Tax Status. The Borrower is exempt from payment of
Federal income tax under Section 501(c)(4) of the Internal Revenue Code.
SECTION 4.11. Investment Company Act. The Borrower is not an
"investment company" or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as
amended.
SECTION 4.12. Public Utility Holding Company Act. The Borrower is not
a "holding company", or a "subsidiary company" of a "holding company", or
an "affiliate" of a "holding company" or of a "subsidiary company" of a
"holding company", as such terms are defined in the Public Utility Holding
Company Act of 1935, as amended.
SECTION 4.13. Disclosure. To the best of the Borrower's knowledge,
information and belief, neither this Agreement nor any document,
certificate or financial statement furnished to any Bank by or on behalf of
the Borrower in connection herewith (all such documents, certificates and
financial statements, taken as a whole) contains any untrue statement of a
material fact or omits to state any material fact necessary in order to make
the statements contained herein and therein not misleading. There is no fact
(other than facts of a general economic or political nature) known to the
Borrower which in its judgment materially adversely affects or in the future
is likely to (so far as is now known to the Borrower) have a material
adverse effect upon the business, operations, prospects, property, assets
or financial condition of the Borrower which has not been set forth in this
Agreement or in other documents, certificates or financial statements
furnished to the Banks by or on behalf of the Borrower in connection with
the transactions contemplated hereby.
SECTION 4.14. Subsidiaries. Each of the Borrower's corporate
Subsidiaries is a corporation duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of incorporation, and has
all corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted.
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SECTION 4.15. Environmental Matters. In the ordinary course of its
business, the Borrower conducts reviews, to the extent appropriate given the
nature of its business operations, of the effect of Environmental Laws on
the business, operations and properties of the Borrower and its
Subsidiaries, in the course of which it identifies and evaluates associated
liabilities and costs (including, without limitation, any capital or
operating expenditures required for clean-up or closure of properties
presently or previously owned, any capital or operating expenditures
required to achieve or maintain compliance with environmental protection
standards imposed by law or as a condition of any license, permit or
contract, any related constraints on operating activities, including any
periodic or permanent shutdown of any facility or reduction in the level of
or change in the nature of operations conducted thereat, any costs or
liabilities in connection with off-site disposal of wastes or Hazardous
Substances, and any actual or potential liabilities to third parties,
including employees, and any related costs and expenses). On the basis of
this review, the Borrower has reasonably concluded that such associated
liabilities and costs, including the cost of compliance with Environmental
Laws, are unlikely to have a material adverse effect on the business,
financial condition, results of operations or prospects of the Borrower and
its Consolidated Subsidiaries, considered as a whole.
ARTICLE 5
COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment
hereunder or any amount payable under any Note or any fee payable pursuant
to Section 2.09 or any other amount then due and payable hereunder remains
unpaid:
SECTION 5.01. Corporate Existence. The Borrower, at its own cost and
expense, will, and will cause each Subsidiary to, do or cause to be done
all things necessary to preserve and keep in full force and effect its
corporate existence, material rights and franchises; provided, however,
that neither the Borrower nor any Subsidiary shall be required to preserve
any right or franchise or, in the case of a Subsidiary, its corporate
existence, if its Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the
Borrower or such Subsidiary (provided that the termination of the corporate
existence of a Subsidiary shall be permitted if the Board of Directors of
the Borrower shall determine that its existence is not desirable in the
conduct of the business of the Borrower) and that the loss thereof is not
disadvantageous in any material respect to the Banks.
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SECTION 5.02. Disposition of Assets; Merger, Character of Business; etc.
The Borrower will not wind up or liquidate its business or sell, lease,
transfer or otherwise dispose of all or substantially all of its assets as an
entirety or in a series of related transactions and will not consolidate with
or merge with or into any other Person other than a merger with a Subsidiary
in which the Borrower is the surviving Person. The Borrower will not engage in
any business other than the business contemplated by its certificate of
incorporation and by-laws, each as in effect on the Effective Date.
SECTION 5.03. Financial Information. The Borrower will, and will cause
each Subsidiary to, keep its books of account in accordance with generally
accepted accounting principles and the Borrower will furnish to the Banks
(i) as soon as available and in any event within 60 days after the close of
each of the first three quarters of each fiscal year of the Borrower, as at
the end of, and for the period commencing at the end of the previous fiscal
year and ending with, such quarter, unaudited combined balance sheets of the
Borrower and its Consolidated Subsidiaries and the related unaudited
combined statements of income, expenses and net margins, changes in Members'
equity and cash flow of the Borrower and its Consolidated Subsidiaries for
such quarter and for the portion of the Borrower's fiscal year ended at the
end of such quarter, setting forth in each case in comparative form the
figures for the corresponding quarter and the corresponding portion of the
Borrower's previous fiscal year, all in reasonable detail and certified
(subject to normal year-end adjustments) as to fairness of presentation in
accordance with generally accepted accounting principles and consistency
(except for changes concurred in by the Borrower's independent certified
public accountants) by the Chief Financial Officer, the Governor, an
Assistant Secretary-Treasurer or the Controller of the Borrower; (ii) as
soon as practicable and in any event within 90 days after the close of each
fiscal year of the Borrower, as at the end of and for the fiscal year just
closed, combined balance sheets of the Borrower and its Consolidated
Subsidiaries and the related combined statements of income, expenses and net
margins, changes in Members' equity and cash flow for such fiscal year for
the Borrower and its Consolidated Subsidiaries, all in reasonable detail and
fully certified (without any qualification as to the scope of the audit) by
Arthur Andersen & Co. or other independent certified public accountants of
nationally recognized standing selected by the Borrower, who shall have
audited the books and accounts of the Borrower for such fiscal year; (iii)
together with the financial statements referred to in clauses (i) and (ii)
above, a certificate signed by the Governor, the Chief Financial Officer, an
Assistant Secretary-Treasurer or the Controller of the Borrower, in such
detail as shall be reasonably satisfactory to the Required Banks, (x)
identifying (A) all Indebtedness outstanding as at the end of the fiscal
period covered by such financial statements extended by the Borrower or by
any other Person and Guaranteed by the Borrower to any of the forty Members
with the largest amount of Indebtedness to (or Guaranteed by) the Borrower
outstanding as at the end of
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the fiscal period covered by such financial statements (the "Largest
Members") as to which, to the knowledge and information of the Borrower,
the Member is in default (whether in the payment of the principal thereof
or interest thereon or with respect to any material covenant or agreement
contained in any instrument, mortgage or agreement evidencing or relating
to such Indebtedness) and specifying whether such default has been waived by
the Borrower or such other Person and the nature and status of each such
default not so waived and (B) the aggregate amount of all Indebtedness
outstanding as of the end of the fiscal period covered by such financial
statements as to which, to the knowledge and information of the Borrower,
Members other than the Largest Members are in default (whether in the
payment of the principal thereof or interest thereon or with respect to any
material covenant or agreement contained in any instrument, mortgage or
agreement evidencing or relating to such Indebtedness), (y) identifying
the ten Members with the largest amount of Indebtedness to (or Guaranteed
by) the Borrower outstanding as of the end of the fiscal period covered by
such financial statements, together with the principal amount of such
Indebtedness outstanding with respect to each such Member as of the end of
such fiscal period and (z) identifying all loans which are RUS Guaranteed
Loans and are outstanding as of the end of the fiscal period covered by
such financial statements, together with (a) the principal amount of each
such RUS Guaranteed Loan as of the end of such fiscal period, (b) the total
amount of Indebtedness incurred by the Borrower and Subsidiaries of the
Borrower in order to fund such RUS Guaranteed Loan, (c) the total interest
expense incurred during such fiscal period by the Borrower and Subsidiaries
of the Borrower in connection with the Indebtedness referred to in preceding
clause (b) and (d) the amount of the Guaranteed Portion of such RUS
Guaranteed Loan; (iv) with reasonable promptness, copies of all regular
and periodical financial statements or other financial reports and documents
which the Borrower may make available to its Members or bondholders or file
with the Securities and Exchange Commission; (v) promptly after obtaining
knowledge or receiving notice of a change (whether an increase or decrease)
in any rating issued by S&P or Moody's pertaining to any securities of, or
guaranteed by, the Borrower or any of its Subsidiaries or affiliates, a
notice setting forth such change; and (vi) with reasonable promptness,
such other information respecting the business, operations, prospects and
financial condition of the Borrower or any of its Subsidiaries or any Joint
Venture as any Bank may, from time to time, reasonably request, including,
without limitation, with respect to the performance and observance by the
Borrower of the covenants and conditions contained in this Agreement.
SECTION 5.04. Default Certificates. Concurrently with each financial
statement delivered to the Banks pursuant to clauses (i) and (ii) of
Section 5.03, the Borrower will furnish to the Banks a certificate signed by
the Governor, the Chief Financial Officer, an Assistant Secretary-Treasurer
or the Controller of the Borrower to the effect that the review of the
activities of the Borrower during such
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year or the portion thereof covered by such financial statement and of the
performance of the Borrower under this Agreement has been made under his
supervision and that to the best of his knowledge, based on such review,
there exists no event which constitutes a Default or an Event of Default
under this Agreement or, if any such event exists, specifying the nature
thereof, the period of its existence and what action the Borrower has taken
and proposes to take with respect thereto, which certificate shall set forth
the calculations or other data required to establish compliance with the
provisions of Section 5.09 and Sections 5.12 through 5.14, inclusive, at the
end of such fiscal quarter or fiscal year, as the case may be. The Borrower
further covenants that upon any such officer of the Borrower obtaining
knowledge of any Default or Event of Default under this Agreement, it will
forthwith, and in no event later than the close of business on the Business
Day immediately after the day such knowledge is obtained, deliver to the
Banks a statement of any officer referred to above specifying the nature and
the period of existence thereof and what action the Borrower has taken and
proposes to take with respect thereto.
SECTION 5.05. Notice of Litigation, Legislative Developments and
Defaults. The Borrower will promptly give written notice to each of the
Banks of (i) any action, proceeding or claim of which the Borrower may have
notice, which may be commenced or asserted against the Borrower or any
Subsidiary in which the amount involved is $1,000,000 or more and is not
covered in full by insurance or as to which any insurer has disclaimed
liability; (ii) any dispute which may exist between the Borrower or any
Subsidiary and any governmental body, which is likely to materially and
adversely affect the normal business operation of the Borrower or the
Borrower and its Subsidiaries taken as a whole or any of the material
properties and assets of the Borrower or the Borrower and its Subsidiaries
taken as a whole; (iii) any legislation enacted by any governmental
body and any rulings and regulations promulgated by any governmental or
regulatory bodies, known or which should be known to the Borrower, affecting
the Borrower or any Subsidiary or generally affecting the Borrower's Members
which is likely to materially and adversely affect the present or future
operations of the Borrower, the Borrower and its Subsidiaries taken as a
whole or the Borrower's Members; and (iv) any default by the Borrower or
any Subsidiary or event or condition known or which should be known to the
Borrower which with the giving of notice or lapse of time, or both, would
constitute a default, with respect to any payment or payments in respect of
Indebtedness of the Borrower or such Subsidiary aggregating in excess of
$15,000,000 (whether in payment of principal thereof or interest thereon
or with respect to any material covenant or agreement contained in any
instrument, mortgage, deed of trust or agreement evidencing or relating to
such Indebtedness or otherwise).
SECTION 5.06. ERISA. As soon as possible and, in any event, within 10
days after the Borrower or a Subsidiary of the Borrower knows or has reason
to
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know that a Reportable Event has occurred, that an accumulated funding
deficiency has been incurred or an application may be or has been made to the
Secretary of the Treasury for a waiver of the minimum funding standard under
Section 412 of the Internal Revenue Code with respect to a Plan, that a Plan
has been or may be terminated, that proceedings may be or have been
instituted to terminate a Plan, or that the Borrower, a Subsidiary of the
Borrower or any member of the ERISA Group will or may incur any liability to
or on account of a Plan under Section 4062, 4063, 4064, 4201 or 4204 of
ERISA, the Borrower will deliver to each of the Banks a certificate of the
Chief Financial Officer of the Borrower setting forth details as to such
occurrence and action, if any, which the Borrower or such Subsidiary is
required or proposes to take, together with any notices required to be filed
with or by the Borrower, such Subsidiary, such member of the ERISA Group,
the PBGC or the plan administrator with respect thereto. Upon the request of
any Bank, the Borrower will furnish to such Bank a copy of the annual report
of each Plan (Form 5500) required to be filed with the Internal Revenue
Service. Copies of annual reports or any notices required to be
delivered to the Banks hereunder shall be delivered no later than 10 days
after the later of the date such report or notice has been filed with the
Internal Revenue Service or the PBGC or received by the Borrower or a
Subsidiary of the Borrower.
SECTION 5.07. Payment of Charges. The Borrower will, and will cause
each Subsidiary to, duly pay and discharge (i) all taxes, assessments and
governmental charges or levies imposed upon or against it or its property or
assets, prior to the date on which penalties attach thereto, unless and to
the extent only that such taxes, assessments and governmental charges or
levies are being contested in good faith by appropriate proceedings; and
(ii) all lawful claims, including, without limitation, claims for labor,
materials, supplies or services, which might or could, if unpaid, become a
Lien upon such property or assets, unless and to the extent only that the
validity of the amount thereof is being contested in good faith by
appropriate proceedings.
SECTION 5.08. Inspection of Books and Assets. The Borrower will, and
will cause each Subsidiary to, permit any representative of any Bank (or
any agent or nominee of such Bank) to visit and inspect any of the property
of the Borrower or such Subsidiary, to examine the books of record and
account of the Borrower or such Subsidiary and to discuss the affairs,
finances and accounts of the Borrower or such Subsidiary with the officers
and independent public accountants of the Borrower or such Subsidiary, all
at such reasonable times and as often as such Bank may reasonably request.
SECTION 5.09. Indebtedness. (a) The Borrower will not, and will not
permit any of its Subsidiaries to, incur, assume or Guarantee any Superior
Indebtedness, or make any optional prepayment on any Capital Term
Certificate, provided that (i) subject to the provisions of Section 5.12,
any Subsidiary may
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incur Superior Indebtedness owing to the Borrower or assume or Guarantee
Indebtedness of any Person (other than the Borrower or any of its
Subsidiaries) owing to the Borrower and (ii) the Borrower may incur, assume
or Guarantee Superior Indebtedness or make optional prepayments on Capital
Term Certificates if, after giving effect to any such action specified above
in this clause (ii), (x) on the date of such incurrence, assumption or
Guarantee or making of such optional prepayment (the "Determination Date")
the aggregate principal amount of Superior Indebtedness then outstanding
would not exceed ten times the sum of (a) the aggregate principal amount of
Capital Term Certificates outstanding on the Determination Date, (b) the
aggregate amount of Members' equity in the Borrower, other than Capital
Term Certificates, on the Determination Date and (c) the aggregate principal
amount of Qualified Subordinated Indebtedness outstanding on the
Determination Date and (y) on no given future date would the aggregate
principal amount of Superior Indebtedness outstanding on the
Determination Date which will remain outstanding on such given future date
exceed ten times the sum of (a) the aggregate principal amount of Capital
Term Certificates outstanding on the Determination Date which will remain
outstanding on such given future date, (b) the aggregate amount of Members'
equity in the Borrower, other than Capital Term Certificates, on the
Determination Date and (c) the aggregate principal amount of Qualified
Subordinated Indebtedness outstanding on the Determination Date which will
remain outstanding on such given future date. The respective principal
amounts of Superior Indebtedness, Capital Term Certificates and Qualified
Subordinated Indebtedness to be outstanding on such given future date shall
be determined after giving effect to mandatory sinking fund payments, other
mandatory prepayments and serial and other maturity payments required to be
made on or prior to said given future date by the terms of such Superior
Indebtedness, Capital Term Certificates, Qualified Subordinated Indebtedness
or any indenture or other instrument pursuant to which they are respectively
issued.
(b) If any Loan is outstanding hereunder, the Borrower will not take any
action which would prevent it from then complying, or fail to take any action
which would enable it then to comply, with the provisions of Section 3.02(g),
assuming for this purpose only that the Borrower then intended to borrow from
one or more of the Banks hereunder.
SECTION 5.10. Liens. The Borrower will not create or permit to exist any
Lien on or with respect to any Indebtedness of any Member which is an asset
of the Borrower, now existing or hereafter created, or any collateral
securing any such Indebtedness, and the Borrower will not permit any
Subsidiary to create or permit to exist any Lien on or with respect to any
of such Subsidiary's assets, except Liens (i) granted by the Borrower to the
trustee pursuant to either Indenture, (ii) on any such Indebtedness granted
by the Borrower to secure any borrowing for the purpose of making loans to
Member power supply systems or
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loans to Members for bulk power supply projects or loans to Members for the
purpose of providing financing to telephone and related systems eligible to
borrow from the RUS, which borrowing or borrowings are on terms (except as
to terms of interest, premium, if any, and amortization) not materially more
disadvantageous to the Borrower's unsecured creditors than the borrowings
under either Indenture (it being understood that the Borrower can not pledge
such assets to an extent greater than 150% of the aggregate principal amount
of such Indebtedness) and which Liens secure amounts not exceeding
$500,000,000 in the aggregate at any one time outstanding, (iii) of current
taxes not delinquent or a security for taxes being contested in good faith,
(iv) other than in favor of the PBGC, created by or resulting from any legal
proceedings (including legal proceedings instituted by the Borrower or any
Subsidiary) which are being contested in good faith by appropriate
proceedings, including appeals of judgments as to which a stay of execution
shall have been issued, and adequate reserves shall have been established,
(v) created by the Borrower to secure Guarantees by the Borrower of
Indebtedness, the interest on which is excludable from the gross income of
the recipient thereof for Federal income tax purposes as provided in Section
103(a) of the Internal Revenue Code or Section 103(a) of the Internal
Revenue Code of 1954, as amended, (x) of a Member which is a state or
political subdivision thereof or (y) of a state or political subdivision
thereof incurred to benefit a Member for one of the purposes provided in
Section 142(a)(2), (4), (5), (6), (8), (9), (10) or (12) of the Internal
Revenue Code or Section 103(b)(4)(D), (E), (F), (G), (H) or (J) of the
Internal Revenue Code of 1954, as amended, and (vi) granted by any
Subsidiary to the Borrower.
SECTION 5.11. Maintenance of Insurance. The Borrower will maintain,
and will cause each Subsidiary to maintain, insurance in such amounts, on
such forms and with such companies as is necessary or appropriate for its
business.
SECTION 5.12. Subsidiaries and Joint Ventures. The sum of the amount
of Indebtedness owing to the Borrower by all of its Subsidiaries and Joint
Ventures plus the amount paid by the Borrower in respect of the stock,
obligations or securities of or any other interest in such Subsidiaries and
Joint Ventures plus any capital contributions by the Borrower to such
Subsidiaries and Joint Ventures plus the amount of assets otherwise sold
or transferred by the Borrower to such Subsidiaries and Joint Ventures
(other than sales at fair market value) shall not exceed at any time 10% of
the sum of (i) all accounts which, in accordance with generally accepted
accounting principles, constitute Members' equity in the Borrower at such
time, (ii) all Indebtedness of the Borrower shown in its balance
sheet dated as of May 31, 1999 as "Members' Subordinated Certificates" as
such Indebtedness shall be reduced from time to time and any other
Indebtedness of the Borrower incurred after May 31, 1999 having
substantially similar provisions as to subordination as those contained in
said outstanding certificates as such other Indebtedness shall be reduced
from time to time, in each case at
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such time and (iii) all Qualified Subordinated Indebtedness outstanding at
such time.
SECTION 5.13. Minimum TIER. The Borrower shall at no time permit the
average of the TIERs for the six (6) immediately preceding fiscal quarters
of the Borrower to be less than 1.025:1.00.
SECTION 5.14. Retirement of Patronage Capital. The Borrower shall not
make, or permit any Subsidiaries of the Borrower to make, any payments to
Members in respect of Patronage Capital Certificates unless (i) the TIER for
the immediately preceding fiscal year equals or exceeds 1.05:1.00 and (ii)
there exists (and would exist after giving effect to any such payment) no
Default or Event of Default under this Agreement.
SECTION 5.15. Use of Proceeds. The proceeds of the Loans made
hereunder may be used by the Borrower for general corporate purposes. None
of such proceeds will be used, directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of buying or carrying any
"margin stock", within the meaning of Regulation U. Neither the Borrower nor
any agent acting on its behalf has taken or will take any action which might
cause this Agreement or the Notes to violate Regulation U or Regulation X.
ARTICLE 6
DEFAULTS
SECTION 6.01. Events of Defaults. If one or more of the following events
("Events of Default") shall have occurred and be continuing:
(a) Principal and Interest. The Borrower shall (i) fail to pay when due
(whether upon stated maturity, by acceleration or otherwise) any principal
of the Notes or (ii) fail, and such failure shall continue uncured for five
or more Business Days, to pay when due (whether upon stated maturity, by
acceleration or otherwise) any interest on the Notes;
(b) Other Amounts. The Borrower shall fail to pay when due any fee or
other amount payable under this Agreement and such failure remains uncured
for five (5) days after the due date thereof;
(c) Covenants Without Notice. The Borrower shall fail to observe or
perform any covenant or agreement on its part to be observed or performed
which is set forth in Section 5.01, 5.02, 5.09, 5.10, 5.12, 5.13, 5.14 or
5.15;
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(d) Covenants With 10 Days Grace. The Borrower shall fail to observe
or perform any covenant or agreement on its part to be observed or
performed, which is set forth in Section 5.05, 5.06, 5.07 or 5.08, and such
non-observance or non-performance shall continue unremedied for a period of
more than 10 days;
(e) Other Covenants. The Borrower shall fail to observe or perform any
covenant, condition or agreement on its part to be observed or performed,
other than as referred to in subsections (a), (b), (c) and (d) above, for a
period of 30 days after written notice specifying such failure and
requesting that it be remedied is given by any Bank to the Borrower and
the other Banks; provided that, if the failure be such that it cannot be
corrected within the applicable period, but can be corrected within a
reasonable period of time thereafter, it shall not constitute a default if
corrective action is instituted by the Borrower within the applicable
period and diligently pursued until the failure is corrected;
(f) Representations. Any representation, warranty, certification or
statement made or deemed to be made by the Borrower in this Agreement or in
any certificate, financial statement or other document delivered pursuant
to this Agreement shall prove to have been incorrect in any material respect
when made or deemed to be made;
(g) Non-Payments of Indebtedness and/or Derivatives Obligations. The
Borrower or any Subsidiary of the Borrower shall fail to make any payment
or payments aggregating for the Borrower and its Subsidiaries in excess of
$25,000,000 in respect of Indebtedness and/or Derivatives Obligations of
the Borrower or any Subsidiary (other than the Notes or any Indebtedness
under this Agreement) when due (whether upon stated maturity, by
acceleration or otherwise) or within any applicable grace period;
(h) Defaults Under Other Agreements. The Borrower or any Subsidiary
shall fail to observe or perform within any applicable grace period any
covenant or agreement contained in any agreement or instrument relating to
any Indebtedness of the Borrower or any Subsidiary, aggregating for the
Borrower and its Subsidiaries in excess of $25,000,000 if the effect of
such failure is to accelerate, or to permit the holder of such Indebtedness
or any other Person to accelerate, the maturity of such Indebtedness;
(i) Bankruptcy. The Borrower or any Subsidiary shall generally not
pay its debts as they become due, or shall admit in writing its inability to
pay its debts generally or shall make a general assignment for the benefit o
f creditors; or any proceeding shall be instituted by or against the Borrower
or any Subsidiary seeking to adjudicate it bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
conservation or proceeding in the nature thereof, relief or composition of it
or its debts under any law relating
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to bankruptcy, insolvency or reorganization or relief or protection of
debtors, or seeking the entry of an order for relief or the appointment of
a receiver (including state regulatory authorities acting in a similar
capacity), trustee, custodian or other similar official for it or for any
substantial part of its property, and, in the case of any such proceeding
instituted against it (but not instituted by it) shall remain undismissed
or unstayed for a period of 60 days; or the Borrower or any Subsidiary
shall take any action to authorize any of the actions set forth above in
this subsection (i);
(j) ERISA. A Plan shall fail to maintain the minimum funding standard
required by Section 412 of the Internal Revenue Code for any plan year or
a waiver of such standard is sought or granted under Section 412(d), or a
Plan is, shall have been or is likely to be terminated or the subject of
Termination proceedings under ERISA, or the Borrower or a Subsidiary of
the Borrower or any member of the ERISA Group has incurred or is likely to
incur 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 either a liability or a material risk of incurring a liability
to the PBGC or a Plan, which in the opinion of the Required Banks, will
have a material adverse effect upon the business, operations or the
financial condition of the Borrower or a Subsidiary of the Borrower; or
(k) Money Judgment. A final judgment or order for the payment of
money in excess of $25,000,000 shall be rendered against the Borrower or any
Subsidiary and such judgment or order shall continue unsatisfied and in
effect for a period of 45 days during which execution shall not be
effectively stayed or deferred (whether by action of a court, by agreement
or otherwise); then, and in any such event, and at any time thereafter, if
any Event of Default shall then be continuing, the Agent, upon the request
of the Required Banks, shall by notice to the Borrower, take any or all of
the following actions, without prejudice to the rights of the Agent, any
Bank or the holder of any Note to enforce its claims against the Borrower:
(a) declare the Commitments terminated, whereupon the Commitment of each
Bank shall forthwith terminate immediately and any fee payable pursuant
to Section 2.09 shall forthwith become due and payable without any other
notice of any kind; or (b) declare the principal of and accrued interest on
the Loans, and all other obligations owing hereunder, to be, whereupon the
same shall become, forthwith due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Borrower; provided that, if an Event of Default specified in subsection (i)
shall occur, the result which would occur upon the giving of written notice
by the Agent to the Borrower, as specified in clauses (a) and (b) above,
shall occur automatically without the giving of any such notice.
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SECTION 6.02. Notice of Default. The Agent shall give notice to the
Borrower under Section 6.01(b) promptly upon being requested to do so by any
Bank and shall thereupon notify all the Banks thereof.
ARTICLE 7
THE AGENT
SECTION 7.01. Appointment and Authorization. Each Bank irrevocably
appoints and authorizes the Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement and the Notes as are
delegated to the Agent by the terms hereof or thereof, together with all
such powers as are reasonably incidental thereto.
SECTION 7.02. Agent and Affiliates. The Chase Manhattan Bank of New
York shall have the same rights and powers under this Agreement as any
other Bank and may exercise or refrain from exercising the same as though
it were not the Agent, and The Chase Manhattan Bank and its affiliates may
accept deposits from, lend money to, and generally engage in any kind of
business with the Borrower or any Subsidiary or affiliate of the Borrower
as if it were not the Agent hereunder.
SECTION 7.03. Action by Agent. The obligations of the Agent hereunder
are only those expressly set forth herein. Without limiting the generality
of the foregoing, the Agent shall not be required to take any action with
respect to any Default, except as expressly provided in Article 6.
SECTION 7.04. Consultation with Experts. The Agent may consult with
legal counsel (who may be counsel for the Borrower), independent public
accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken by it in good faith in accordance
with the advice of such counsel, accountants or experts.
SECTION 7.05. Liability of Agent. Neither the Agent nor any of its
affiliates nor any of their respective directors, officers, agents, or
employees shall be liable for any action taken or not taken by it in
connection herewith (i) with the consent or at the request of the Required
Banks or (ii) in the absence of its own gross negligence or willful
misconduct. Neither the Agent nor any of its affiliates nor any of their
respective directors, officers, agents or employees shall be responsible
for or have any duty to ascertain, inquire into or verify (i) any
statement, warranty or representation made in connection with this
Agreement or any borrowing hereunder; (ii) the performance or observance of
any of the covenants or agreements of the Borrower; (iii) the satisfaction
of any condition.
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specified in Article 3, except receipt of items required to be delivered to
the Agent; or (iv) the validity, effectiveness or genuineness of this
Agreement, the Notes or any other instrument or writing furnished in
connection herewith. The Agent shall not incur any liability by acting in
reliance upon any notice, consent, certificate, statement, or other writing
(which may be a bank wire, telex or similar writing) reasonably believed by
it to be genuine or to be signed by the proper party or parties.
SECTION 7.06. Indemnification. Each Bank shall, ratably in accordance
with its Commitment, indemnify the Agent, its affiliates and their
respective directors, officers, agents and employees (to the extent not
reimbursed by the Borrower) against any cost, expense (including counsel
fees and disbursements), claim, demand, action, loss or liability (except
such as result from such indemnitee's gross negligence or willful
misconduct) that such indemnitees may suffer or incur in connection with
this Agreement or any action taken or omitted by such indemnitees hereunder.
SECTION 7.07. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank, and
based on such documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement. Each
Bank also acknowledges that it will, independently and without reliance upon
the Agent or any other Bank, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking any action under this Agreement.
SECTION 7.08. Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Banks and the Borrower. Upon any such
resignation, the Required Banks shall have the right, with the consent of
the Borrower, such consent not to be unreasonably withheld, to appoint a
successor Agent. If no successor Agent shall have been so appointed by the
Required Banks, and shall have accepted such appointment, within 15 days
after the retiring Agent gives notice of resignation, then the retiring
Agent may, on behalf of the Banks, appoint a successor Agent, which shall
be a commercial bank organized or licensed under the laws of the United
States of America or of any State thereof and having a combined capital
and surplus of at least $500,000,000. Upon the acceptance of its appointment
as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights and duties of
the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations hereunder. After any retiring Agent's resignation
hereunder as Agent, the provisions of this Article shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Agent.
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SECTION 7.09. Co-Documentation Agents and Syndication Agent Not
Liable. Nothing in this Agreement shall impose upon any Co-Documentation
Agent or the Syndication Agent, each in such capacity, any duties or
responsibilities whatsoever.
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair.
If on or prior to the first day of any Interest Period for any Fixed Rate
Borrowing:
(a) the Agent is advised by the Reference Banks that deposits in dollars
(in the applicable amounts) are not being offered to the Reference Banks in
the relevant market for such Interest Period, or
(b) in the case of a Committed Borrowing, Banks having 50% or more
of the aggregate amount of the Commitments advise the Agent that the Adjusted
CD Rate or the Adjusted London Interbank Offered Rate, as the case may be, as
determined by the Agent will not adequately and fairly reflect the cost to
such Banks of funding their CD Loans or Euro-Dollar Loans, as the case may
be, for such Interest Period, the Agent shall forthwith give notice thereof
to the Borrower and the Banks, whereupon until the Agent notifies the
Borrower that the circumstances giving rise to such suspension no longer
exist, (i) the obligations of the Banks to make CD Loans or Euro-Dollar
Loans, as the case may be, or to continue or convert outstanding Loans as o
r into CD Loans or Euro-Dollar Loans, as the case may be, shall be suspended
and (ii) each outstanding CD Loan or Euro-Dollar Loan, as the case may be,
shall be converted into a Base Rate Loan on the last day of the then current
Interest Period applicable thereto. Unless the Borrower notifies the Agent
at least two Domestic Business Days before the date of any Fixed Rate
Borrowing for which a Notice of Borrowing has previously been given that it
elects not to borrow on such date, (i) if such Fixed Rate Borrowing is a
Committed Borrowing, such Borrowing shall instead be made as a Base Rate
Borrowing and (ii) if such Fixed Rate Borrowing is a Money Market LIBOR
Borrowing, the Money Market LIBOR Loans comprising such Borrowing shall
bear interest for each day from and including the first day to but
excluding the last day of the Interest Period applicable thereto at the
Base Rate for such day.
SECTION 8.02. Illegality. If, on or after the date of this Agreement,
the adoption of any applicable law, rule or regulation, or any change
therein, or any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by any Bank (or
its Euro-Dollar Lending.
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Office) with any request or directive (whether or not having the force of
law) of any such authority, central bank or comparable agency shall make it
unlawful or impossible for any Bank (or its Euro-Dollar Lending Office) to
make, maintain or fund its Euro-Dollar Loans and such Bank shall so notify
the Agent, the Agent shall forthwith give notice thereof to the other Banks
and the Borrower, whereupon until such Bank notifies the Borrower and the
Agent that the circumstances giving rise to such suspension no longer exist,
the obligation of such Bank to make Euro-Dollar Loans or to convert
outstanding Loans into Euro-Dollar Loans or continue outstanding Loans as
Euro-Dollar Loans, shall be suspended. Before giving any notice to the Agent
pursuant to this Section, such Bank shall designate a different Euro-Dollar
Lending Office if such designation will avoid the need for giving such
notice and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank. If such Bank shall determine that it may not
lawfully continue to maintain and fund any of its outstanding Euro-Dollar
Loans to maturity and shall so specify in such notice, the Borrower
shall immediately prepay in full the then outstanding principal amount of
each such Euro-Dollar Loan, together with accrued interest thereon.
Concurrently with prepaying each such Euro-Dollar Loan, the Borrower shall
borrow a Base Rate Loan in an equal principal amount from such Bank (on
which interest and principal shall be payable contemporaneously with the
related Euro-Dollar Loans of the other Banks), and such Bank shall make
such a Base Rate Loan.
SECTION 8.03. Increased Cost and Reduced Return. (a) If on or after
(x) the date hereof, in the case of any Committed Loan or any obligation to
make Committed Loans or (y) the date of the related Money Market Quote, in
the case of any Money Market Loan, the adoption of any applicable law, rule
or regulation, or any change therein, or any change in the interpretation
or administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof,
or compliance by any Bank (or its Applicable Lending Office) with any request
or directive (whether or not having the force of law) of any such authority,
central bank or comparable agency:
(i) shall subject any Bank (or its Applicable Lending Office) to
any tax, duty or other charge with respect to its Fixed Rate Loans, its
Notes or its obligation to make Fixed Rate Loans, or shall change the
Basis of taxation of payments to any Bank (or its Applicable Lending
Office) of the principal of or interest on its Fixed Rate Loans or any
other amounts due under this Agreement in respect of its Fixed Rate
Loans or its obligation to make Fixed Rate Loans (except for changes in
the rate of tax on the overall net income of such Bank or its
Applicable Lending Office imposed by the jurisdiction in which such
Bank's principal executive office or Applicable Lending Office is
located); or
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(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any such requirement imposed by the
Board of Governors of the Federal Reserve System, but excluding (A) with
respect to any CD Loan, any such requirement included in an applicable
Domestic Reserve Percentage and (B) with respect to any Euro-Dollar
Loan any such requirement included in an applicable Euro-Dollar Reserve
Percentage), special deposit, insurance assessment (excluding, with
respect to any CD Loan, any such requirement reflected in an applicable
Assessment Rate) or similar requirement against assets of, deposits
with or for the account of, or credit extended by, any Bank (or its
Applicable Lending Office) or shall impose on any Bank (or its
Applicable Lending Office) or on the United States market for
certificates of deposit or the London interbank market any other
condition affecting its Fixed Rate Loans, its Notes or its obligation
to make Fixed Rate Loans; and the result of any of the foregoing is to
increase the cost to such Bank (or its Applicable Lending Office) of
making or maintaining any Fixed Rate Loan, or to reduce the amount of
any sum received or receivable by such Bank (or its Applicable Lending
Office) under this Agreement or under its Note with respect thereto, by
an amount deemed by such Bank to be material, then, within 15 days
after demand by such Bank (with a copy to the Agent), the Borrower
shall pay to such Bank such additional amount or amounts as will
compensate such Bank for such increased cost or reduction (including
any amount or amounts equal to any taxes on the overall net income of
such Bank payable by such Bank with respect to the amount of payments
required to be made pursuant to this Section 8.03(a)).
(b) If any Bank determines that the adoption of any applicable law,
rule, regulation, guideline or request concerning capital adequacy, or any
change therein, or any change in interpretation or administration thereof
by any governmental authority, central bank or comparable agency
(including, without limitation, any such adoption or change the effect of
which would be, for purposes of capital adequacy requirements, to treat
the Commitments hereunder as not constituting commitments with an original
maturity of one year or less), occurring after the date hereof, will have
the effect of increasing the amount of capital required or expected to be
maintained by such Bank based on the existence of such Bank's Commitment
hereunder or its obligations hereunder, it will notify the Borrower. This
determination will be made on a Bank by Bank basis. The Borrower will pay
to each Bank on demand such additional amounts as are necessary to
compensate for the increased cost to such Bank as a result of the event
described in the first sentence of this Section 8.03(b). In determining such
amount, such Bank will act reasonably and in good faith and will use
averaging and attribution methods which are reasonable, and such Bank will
pass such costs on to the Borrower only if such costs are passed on in a
similar manner by such Bank to similarly situated borrowers (which are
parties to credit or loan
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documentation containing a provision similar to this Section 8.03(b)), as
determined by such Bank in its reasonable discretion. Each Bank's
determination of compensation shall be conclusive if made in accordance
with this provision. Each Bank, upon determining that any increased costs
will be payable pursuant to this Section 8.03(b), will give prompt written
notice thereof to the Borrower, which notice shall show the basis for
calculation of such increased costs, although the failure to give any such
notice shall not release or diminish any of the Borrower's obligations to
pay increased costs pursuant to this Section 8.03(b).
(c) Each Bank will promptly notify the Borrower and the Agent of any
event of which it has knowledge, occurring after the date hereof, which
will entitle such Bank to compensation pursuant to this Section and will
designate a different Applicable Lending Office if such designation will
avoid the need for, or reduce the amount of, such compensation and will not,
in the judgment of such Bank, be otherwise disadvantageous to such Bank. A
Bank claiming compensation under this Section shall furnish a certificate to
the Borrower setting forth the additional amount or amounts to be paid to it
hereunder, which shall be conclusive in the absence of manifest error. In
determining such amount, such Bank may use any reasonable averaging and
attribution methods. SECTION 8.04. Base Rate Loans Substituted for Affected
Fixed Rate Loans. If (i) the obligation of any Bank to make, or to continue
or convert outstanding Loans as or to, Euro-Dollar Loans has been suspended
pursuant to Section 8.02 or (ii) any Bank has demanded compensation under
Section 8.03(a) and the Borrower shall, by at least five Euro-Dollar
Business Days' prior notice to such Bank through the Agent, have elected
that the provisions of this Section shall apply to such Bank, then, unless
and until such Bank notifies the Borrower that the circumstances giving
rise to such suspension or demand for compensation no longer apply:
(a) all Loans which would otherwise be made by such Bank as CD
Loans or Euro-Dollar Loans, as the case may be, shall be made instead as
Base Rate Loans (on which interest and principal shall be payable
Contemporaneously with the related Fixed Rate Loans of the other Banks),
and
(b) after each of its CD Loans or Euro-Dollar Loans, as the case may
be, has been repaid, all payments of principal which would otherwise be
applied to repay such Fixed Rate Loans shall be applied to repay its Base
Rate Loans instead
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ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests, directions, consents,
approvals and other communications to any party hereunder shall be in
writing (including bank wire, telex, facsimile transmission or similar
writing) and shall be given to such party: (x) in the case of the Borrower
or the Agent, at its address or telex or telecopier number set forth on the
signature pages hereof, (y) in the case of any Bank, at its address or
telex or telecopier number set forth in its Administrative Questionnaire
or (z) in the case of any other party, such other address or telex or
telecopier number as such party may hereafter specify for the purpose by
notice to the Agent and the Borrower. Each such notice, request, direction,
consent, approval or other communication shall be effective (i) if given
by telex, when such telex is transmitted to the telex number specified in
this Section and the appropriate answerback is received or (ii) if given by
any other means, when delivered or received at the address specified in
this Section; provided that notices to the Agent under Article 2 or
Article 8 shall not be effective until received.
SECTION 9.02. No Waivers. No failure or delay by the Agent or any Bank
in exercising any right, power or privilege hereunder or under any Note
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of
any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 9.03. Expenses; Documentary Taxes; Indemnification. (a) The
Borrower shall pay (i) all reasonable out-of-pocket expenses of the Agent,
including reasonable fees and disbursements of special counsel for the
Agent, in connection with the preparation of this Agreement, any waiver
or consent hereunder or any amendment hereof or any Default or alleged
Default hereunder and (ii) if an Event of Default occurs, all reasonable
out-of-pocket expenses incurred by the Agent or any Bank, including
reasonable fees and disbursements incurred by counsel or in-house counsel,
in connection with such Event of Default and collection, bankruptcy,
insolvency and other enforcement proceedings resulting therefrom. The
Borrower shall indemnify each Bank against any transfer taxes, documentary
taxes, assessments or charges made by any governmental authority by reason
of the execution and delivery of this Agreement or the Notes and any and
all liabilities with respect to or resulting from any delay or omission
(unless solely attributable to such Bank) to pay such taxes.
(b) The Borrower agrees to indemnify each Bank, their respective
affiliates and the respective directors, officers, agents and employees of
the foregoing (each an "Indemnitee") and hold each Indemnitee harmless from
and
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against any and all liabilities, losses, damages, costs and expenses of any
kind, including, without limitation, the reasonable fees and disbursements
of counsel, which may be incurred by any Indemnitee (or by the Agent in
connection with its actions as Agent hereunder) in connection with any
investigative, administrative or judicial proceeding (whether or not such
Indemnitee shall be designated a party thereto) relating to or arising out
of this Agreement or any actual or proposed use of proceeds of Loans
hereunder; provided that no Indemnitee shall have the right to be
indemnified hereunder for its own gross negligence, willful misconduct or
unlawful conduct as determined by a court of competent jurisdiction.
SECTION 9.04. Sharing of Set-offs. Each Bank agrees that if it shall,
by exercising any right of set-off or counterclaim or otherwise, receive
payment of a proportion of the aggregate amount of principal and interest
then due with respect to any Note held by it which is greater than the
proportion received by any other Bank in respect of the aggregate amount of
principal and interest due with respect to any Note held by such other Bank,
the Bank receiving such proportionately greater payment shall purchase such
participations in the Notes held by the other Banks, and such other
adjustments shall be made, as may be required so that all such payments of
principal and interest with respect to the Notes held by the Banks shall be
shared by the Banks pro rata; provided that nothing in this Section shall
impair the right of any Bank to exercise any right of set-off or
counterclaim it may have and to apply the amount subject to such exercise
to the payment of indebtedness of the Borrower other than its indebtedness
under the Notes. The Borrower agrees, to the fullest extent it may e
ffectively do so under applicable law, that any holder of a participation in
a Note, whether or not acquired pursuant to the foregoing arrangements, may
exercise rights of set-off or counterclaim and other rights with respect to
such participation as fully as if such holder of a participation were a
direct creditor of the Borrower in the amount of such participation.
SECTION 9.05. Amendments and Waivers. Any provision of this Agreement
or the Notes may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by the Borrower and the Required Banks
(and, if the rights or duties of the Agent are affected thereby, by the
Agent); provided that no such amendment or waiver shall, unless signed by
all the Banks, (i) increase or decrease the Commitment of any Bank (except
for a ratable decrease in the Commitments of all Banks) or subject any Bank
to any additional obligation, (ii) reduce the principal of or rate of
interest on any Loan or any fees hereunder, (iii) postpone the date fixed
for any payment of principal of or interest on any Loan or any fees
hereunder or for any reduction or termination of any Commitment or (iv)
change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Notes, or the number of Banks, which shall be
required for the Banks or any of them to take any action under this
Section or any other provision of this Agreement.
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SECTION 9.06. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, except that the Borrower
may not assign or otherwise transfer any of its rights under this Agreement
without the prior written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its
Commitment or any or all of its Loans. In the event of any such grant by a
Bank of a participating interest to a Participant, whether or not upon
notice to the Borrower and the Agent, such Bank shall remain responsible
for the performance of its obligations hereunder, and the Borrower and the
Agent shall continue to deal solely and directly with such Bank in
connection with such Bank's rights and obligations under this Agreement.
Any agreement pursuant to which any Bank may grant such a participating
interest shall provide that such Bank shall retain the sole right
and responsibility to enforce the obligations of the Borrower hereunder
including, without limitation, the right to approve any amendment,
modification or waiver of any provision of this Agreement; provided that
such participation agreement may provide that such Bank will not agree to
any modification, amendment or waiver of this Agreement described in clause
(i), (ii) or (iii) of Section 9.05 without the consent of the Participant.
Subject to the provisions of subsection (e), the Borrower agrees that each
Participant shall, to the extent provided in its participation agreement,
be entitled to the benefits, and be bound by the obligations, of Article 8
with respect to its participating interest. An assignment or other transfer
which is not permitted by subsection (c) or (d) below shall be given effect
for purposes of this Agreement only to the extent of a participating
interest granted in accordance with this subsection (b).
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "Assignee") all, or a proportionate part (but not in a
ny case in an amount less than $10,000,000) of all, of its rights and
obligations under this Agreement and the Notes, and such Assignee shall
assume such rights and obligations, pursuant to an Assignment and
Assumption Agreement in substantially the form of Exhibit I hereto executed
by such Assignee and such transferor Bank, with (and subject to) the
subscribed consent of the Borrower and the Agent, such consents not to be
unreasonably withheld; provided that if an Assignee is another Bank or an
affiliate of such transferor Bank, no such consent shall be required; and
provided further that such assignment may, but need not, include the rights
of the transferor Bank in respect of outstanding Money Market Loans. Upon
execution and delivery of such an instrument and payment by such Assignee
to such transferor Bank of an amount equal to the purchase price agreed
between such transferor Bank and such Assignee, such Assignee shall be a
Bank party to this Agreement and shall have all the rights and obligations
of a Bank with a Commitment as set forth in such instrument of assumption,
and the.(NY) 04675/103/CA/ca.wpd
58
<PAGE>
transferor Bank shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by any party shall
be required. Upon the consummation of any assignment pursuant to this
subsection (c), the transferor Bank, the Agent and the Borrower shall make
appropriate arrangements so that, if required, a new Note is issued to the
Assignee. In connection with any such assignment, the transferor Bank shall
pay to the Agent an administrative fee for processing such assignment in
the amount of $3,500. If the Assignee is not incorporated under the laws of
the United States of America or a state thereof, it shall, prior to the
first date on which interest or fees are payable hereunder for its account,
deliver to the Borrower and the Agent certification as to exemption from
deduction or withholding of any United States federal income taxes in
accordance with Section 2.16.
(d) Any Bank may at any time assign all or any portion of its rights
under this Agreement and its Note to a Federal Reserve Bank. No such
assignment shall release the transferor Bank from its obligations
hereunder. (e) No Assignee, Participant or other transferee of any Bank's
rights shall be entitled to receive any greater payment under Section 8.03
than such Bank would have been entitled to receive with respect to the
rights transferred, unless such transfer is made with the Borrower's prior
written consent or by reason of the provisions of Section 8.02 or 8.03
requiring such Bank to designate a different Applicable Lending Office
under certain circumstances or at a time when the circumstances giving rise
to such greater payment did not exist.
SECTION 9.07. Collateral. Each of the Banks represents to the Agent
and each of the other Banks that it in good faith is not relying upon any
"margin stock" (as defined in Regulation U) as collateral in the extension
or maintenance of the credit provided for in this Agreement.
SECTION 9.08. Managing Agents; Co-Agents. Each Bank listed on
Schedule I hereto under the heading "Managing Agent" shall be a Managing
Agent hereunder. Each Bank listed on Schedule I hereto under the heading
"Co-Agent" shall be a Co-Agent hereunder. Nothing in this Agreement shall
impose upon any Managing Agent or Co-Agent, each in such capacity, any
duties or responsibilities whatsoever.
SECTION 9.09. Governing Law. This Agreement and each Note shall be
governed by and construed in accordance with the laws of the State of
New York.
SECTION 9.10. Counterparts; Integration. This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the
same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement constitutes the entire agreement and
understanding among the parties
59
<PAGE>
hereto and supersedes any and all prior agreements and understandings, oral
or written, relating to the subject matter hereof.
SECTION 9.11. Several Obligations. The obligations of the Banks
hereunder are several. Neither the failure of any Bank to carry out its
obligations hereunder nor of this Agreement to be duly authorized, executed
and delivery by any Bank shall relieve any other Bank of its obligations
hereunder (or affect the rights hereunder of such other Bank). No Bank shall
be responsible for the obligations of, or any action taken or omitted by,
any other Bank hereunder.
SECTION 9.12. Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 9.13. Waiver/Notice. (a) Each Bank party to the Five-Year
Credit Agreement dated as of February 28, 1995 (as amended and restated as
of November 26, 1996 and as further amended to the date hereof the
"Five-Year Credit Agreement") hereby waives the Borrower's obligation to
notify the Agent at least 45 days prior to the creation of any new
commitment pursuant to Section 2.16 of the Five-Year Credit Agreement solely
to the extent necessary to permit any Bank party hereto to provide a
commitment under the Five-Year Credit Agreement effective on the Effective
Date.
(b) Each Bank hereby waives the Borrower's obligation to notify the
Agent at least 15 days prior to the creation of a new Commitment pursuant to
Section 2.17 solely to the extent necessary to permit one or more
institutions to provide a new Commitment hereunder effective within thirty
days of the Effective Date.
(c) The Borrower hereby notifies each Bank party to the Prior Credit
Agreement of the Borrower's termination of the Commitments (as defined in
the Prior Credit Agreement), such termination to be effective on the
Effective Date. Each Bank party to the Prior Credit Agreement hereby waives
the Borrower's obligation to notify the Administrative Agent under the Prior
Credit Agreement of such termination at least three Domestic Business Days
prior to such termination.
60
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the day
and year first above written.
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
By:
Name:
Title:
Address: Woodland Park
2201 Cooperative Way
Herndon, Virginia 22071-3025
Attention:
Title:
Telephone No.: (703) 709-6700
Telecopier No.: (703) 709-6779
<PAGE>
Commitments
$345,000,000 THE CHASE MANHATTAN BANK
By:
Name:
Title:
$340,000,000 BANK ONE, N.A. (MAIN OFFICE-
CHICAGO)
By:
Name:
Title:
$280,000,000 THE BANK OF NOVA SCOTIA
By:
Name:
Title:
$250,000,000 ABN AMRO BANK N.V.
By:
Name:
Title:
By:
Name:
Title:
<PAGE>
$250,000,000 THE INDUSTRIAL BANK OF JAPAN,
LIMITED, NEW YORK BRANCH
By:
Name:
Title:
$230,000,000 BANK OF AMERICA, N.A.
By:
Name:
Title:
$225,000,000 MORGAN GUARANTY TRUST
COMPANY OF NEW YORK
By:
Name:
Title:
$200,000,000 BANQUE NATIONALE DE PARIS
By:
Name:
Title:
$200,000,000 BARCLAYS BANK PLC
By:
Name:
Title:
<PAGE>
$200,000,000 CREDIT LYONNAIS NEW YORK
BRANCH
By:
Name:
Title:
$200,000,000 TORONTO DOMINION (NEW YORK),
INC.
By:
Name:
Title:
$150,000,000 FIRST UNION NATIONAL BANK
By:
Name:
Title:
$100,000,000 COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK
B.A., "RABOBANK NEDERLAND",
NEW YORK BRANCH
By:
Name:
Title:
By:
Name:
Title:
<PAGE>
$100,000,000 BANCA NAZIONALE DEL LAVORO S.P.A. -
NEW YORK BRANCH
By:
Name:
Title:
By:
Name:
Title:
$100,000,000 LEHMAN COMMERCIAL PAPER INC.
By:
Name:
Title:
$100,000,000 STATE STREET BANK AND TRUST
COMPANY
By:
Name:
Title:
$77,500,000 BANK OF TOKYO-MITSUBISHI
TRUST COMPANY
By:
Name:
Title:
$75,000,000 US BANK NATIONAL ASSOCIATION
By:
Name:
Title:
<PAGE>
$75,000,000 PNC BANK, NATIONAL ASSOCIATION
By:
Name:
Title:
$75,000,000 NORDDEUTSCHE LANDESBANK
GIROZENTRALE NEW YORK BRANCH
AND/OR CAYMAN ISLAND BRANCH
By:
Name:
Title:
By:
Name:
Title:
By:
Name:
Title:
$70,000,000 BANCA MONTE DEI PASCHI DI SIENA,
S.P.A.
By:
Name:
Title:
By:
Name:
Title:
<PAGE>
$50,000,000 FIRSTAR BANK, NATIONAL
ASSOCIATION
By:
Name:
Title:
$50,000,000 COMERICA BANK
By:
Name:
Title:
$50,000,000 KBC BANK N.V.
By:
Name:
Title:
By:
Name:
Title:
$50,000,000 BANCO DI NAPOLI, S.P.A.-NEW YORK
BRANCH
By:
Name:
Title:
By:
Name:
Title:
<PAGE>
$50,000,000 WESTDEUTSCHE LANDESBANK
By:
Name:
Title:
$30,000,000 CREDIT AGRICOLE INDOSUEZ
By:
Name:
Title:
By:
Name:
Title:
$25,000,000 BAYERISCHE LANDESBANK
GIROZENTRALE
By:
Name:
Title:
By:
Name:
Title:
$25,000,000 MELLON BANK, N.A.
By:
Name:
Title:
<PAGE>
$25,000,000 BANCA DI ROMA
By:
Name:
Title:
By:
Name:
Title:
$25,000,000 BW CAPITAL MARKETS, INC.
By:
Name:
Title:
$25,000,000 HARRIS TRUST AND SAVINGS BANK
By:
Name:
Title:
$25,000,000 BANK OF MONTREAL
By:
Name:
Title:
<PAGE>
$15,000,000 FIRST TENNESSEE BANK NATIONAL
ASSOCIATION
By:
Name:
Title:
By:
Name:
Title:
By:
Name:
Title:
Total Commitments
$4,087,500,000
===============
<PAGE>
THE BANK OF NOVA SCOTIA,
as Co-Documentation Agent
By:
Title:
BANK ONE, N.A. (MAIN OFFICE-CHICAGO),
as Co-Documentation Agent
By:
Title:
BANK OF AMERICA, N.A.
as Syndication Agent
By:
Title:
THE CHASE MANHATTAN BANK,
as Administrative Agent
By:
Title:
Address: 270 Park Avenue
New York, New York 10017
Attention: Thomas Casey
Telecopy number: (212) 270-3089
<PAGE>
SCHEDULE I
Institution Title
The Chase Manhattan Bank Administrative Agent
Bank of America, N.A. Syndication Agent
The Bank of Nova Scotia Documentation Agent
Bank One, N.A. (Main Office-Chicago) Documentation Agent
ABN AMRO Bank N.V. Senior Managing Agent
The Industrial Bank of Japan, Limited Senior Managing Agent
Morgan Guaranty Trust Company of New York Managing Agent
Credit Lyonnais New York Branch Managing Agent
Toronto Dominion (New York), Inc. Managing Agent
BNP Paribas Managing Agent
Barclays Bank PLC Managing Agent
First Union National Bank Co-Agent
<PAGE>
EXHIBIT A
NOTE
New York, New York
, 200_
For value received, National Rural Utilities Cooperative Finance
Corporation, a not-for-profit cooperative association incorporated under
the laws of the District of Columbia (the "Borrower"), promises to pay to
the order of (the "Bank"), for the account of its Applicable Lending
Office, the unpaid principal amount of each Loan made by the Bank to the
Borrower pursuant to the Revolving Credit Agreement referred to below on
the last day of the Interest Period relating to such Loan. The Borrower
promises to pay interest on the unpaid principal amount of each such Loan
on the dates and at the rate or rates provided for in the Revolving Credit
Agreement. All such payments of principal and interest shall be made in
lawful money of the United States in Federal or other immediately available
funds at the office of The Chase Manhattan Bank, 270 Park Avenue, New York,
New York.
All Loans made by the Bank, the respective types and maturities
thereof and all repayments of the principal thereof shall be recorded by
the Bank and, prior to any transfer hereof, appropriate notations to
evidence the foregoing information with respect to each such Loan then
outstanding may be endorsed by the Bank on the schedule attached hereto,
or on a continuation of such schedule attached to and made a part hereof;
provided that the failure of the Bank to make any such recordation or
endorsement shall not affect the obligations of the Borrower hereunder or
under the Revolving Credit Agreement.
This note is one of the Notes referred to in the 364-Day Revolving
Credit Agreement dated as of August 10, 2000 among the Borrower, the
banks listed on the signature pages thereof, The Bank of Nova Scotia and
Bank One, N.A., as Co-Documentation Agents, Bank of America, N.A., as
Syndication Agent, and The Chase Manhattan Bank, as Administrative Agent
(as the same may be amended from time to time, the "Revolving Credit
Agreement"). Terms defined in the Revolving Credit Agreement are used
herein with the same meanings. Reference is made to the Revolving Credit
Agreement for provisions for the prepayment hereof and the acceleration of
the maturity hereof.
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
By_______________________________
Title:
<PAGE>
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
Amount of
Amount of Type of Loan Principal Maturity Date Notation Made
Date Loan Repaid By
2
<PAGE>
EXHIBIT B-1
Form of RUS Guarantee
The United States of America acting through the Administrator of the
Rural Utilities Service ("RUS") hereby unconditionally guarantees to [name
of Payee] the making of [__%] of the payments of principal and interest when
and as due on this Note of _________ (the "Cooperative") in accordance with
the terms hereof and of the Loan Agreement referred to in this Note, until
such principal and interest shall be indefeasibly paid in full (which
includes interest accruing on such principal between the date of default
under this Note and the payment in full of this Guarantee), irrespective of
receipt by RUS of any sums or property from its enforcement of its remedies
for the Cooperative default. This Guarantee shall be incontestable except
for fraud or misrepresentation of which the holder had actual knowledge at
the time it became a holder. RUS hereby waives diligence, presentment,
demand, protest and notice of any kind, as well as any requirement that [name
of Payee] exhaust any right or take any action against the Cooperative.
This Guarantee is issued pursuant to Title III of the Rural
Electrification Act of 1936, as amended (7 U.S.C. {{ 901, et seq.), and
the Loan Guarantee and Servicing Agreement among RUS, the Cooperative, Bank
One, N.A. and National Rural Utilities Cooperative Finance Corporation
dated ___________, ____.
UNITED STATES OF AMERICA
Date___________, ____ By_______________________
Administrator of Rural Electrification
Administration
<PAGE>
EXHIBIT B-2
Form of RUS Guarantee
The United States of America acting through the Administrator of the
Rural Utilities Service ("RUS") hereby unconditionally guarantees to the
Payee the making of the payments of principal and Guaranteed Interest when
and as due on the Note of _______________ (the "Cooperative") dated _____ in
the original principal amount of $ _____ (the "Note"), in accordance with
the terms thereof and of the Loan Agreement and the Master Loan Guarantee
and Servicing Agreement referred to in the Note, until such principal and
Guaranteed Interest shall be indefeasibly paid in full (which includes
interest accruing at the Guaranteed Interest Rate between the date of
default under the Note and the payment in full of this Guarantee),
irrespective of receipt by RUS of any sums or property from its enforcement
of its remedies for the Cooperative's default. This Guarantee shall be
incontestable except for fraud or misrepresentation of which the holder had
actual knowledge at the time it became a holder. RUS hereby waives
diligence, presentment, demand, protest and notice of any kind (except
the "Default Notice" required pursuant to Section 5.3(a) of the Master
Loan Guarantee and Servicing Agreement), and acknowledges that the Payee
does not have any right or obligation to exercise any right or take any
action against the Cooperative.
This Guarantee is issued pursuant to the Rural Electrification Act of
1936, as amended (7 U.S.C. 901, et seq.) (the "Act"), and the Master
Loan Guarantee and Servicing Agreement between RUS and National Rural
Utilities Cooperative Finance Corporation dated as of February 16, .
THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE UNITED STATES OF AMERICA, TO THE EXTENT
APPLICABLE, AND OTHERWISE THE LAWS OF THE COMMONWEALTH OF VIRGINIA.
THE UNDERSIGNED, AS [ADMINISTRATOR] OF RUS, DOES HEREBY CERTIFY THAT I AM
AUTHORIZED UNDER THE ACT AND 7 CFR PART 1700 TO DELIVER THIS GUARANTEE.
UNITED STATES OF AMERICA,
by
[Administrator]
of the
Rural Utilities Service
Dated: RUS Loan No..
<PAGE>
EXHIBIT C
Form of Money Market Quote Request
[Date]
To: The Chase Manhattan Bank
(the "Agent")
From: National Rural Utilities
Cooperative Finance Corporation (the "Borrower")
Re: 364-Day Revolving Credit Agreement (the "Revolving Credit Agreement")
dated as of August 10, 2000 among the Borrower, the banks listed on
the signature pages thereof, The Bank of Nova Scotia and Bank One,
N.A., as Co-Documentation Agents, Bank of America, N.A., as
Syndication Agent, and The Chase Manhattan Bank, as Administrative
Agent.
We hereby give notice pursuant to Section 2.03 of the Revolving Credit
Agreement that we request Money Market Quotes for the following proposed
Money Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount 1 Interest Period 2
$
Such Money Market Quotes should offer a Money Market [Margin] [Absolute Rate].
[The applicable base rate is the London Interbank Offered Rate.]
Terms used herein have the meanings assigned to them in the Revolving Credit
Agreement.
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
By________________________
Title:
____________________
1 Amount must be $10,000,000 or a larger multiple of $1,000,000.
2 Any number of whole months (but not less than one month) (LIBOR Auction)
or not less than 30 days (Absolute Rate Auction), subject to the provisions
of the definition of Interest Period.
<PAGE>
EXHIBIT D
FORM OF INVITATION FOR MONEY MARKET QUOTES
To: [Name of Bank]
Re: Invitation for Money Market Quotes
to the National Rural Utilities Cooperative
Finance Corporation (the "Borrower")
Pursuant to Section 2.03 of the 364-Day Revolving Credit Agreement
dated as of August 10, 2000 among the Borrower, the banks listed on the
signature pages thereof, The Bank of Nova Scotia and Bank One, N.A., as
Co-Documentation Agents, Bank of America, N.A., as Syndication Agent, and
The Chase Manhattan Bank, as Administrative Agent:
Date of Borrowing: __________________
Principal Amount Interest Period
$
Such Money Market Quotes should offer a Money Market [Margin] [Absolute
Rate]. [The applicable base rate is the London Interbank Offered Rate.]
Please respond to this invitation by no later than [2:00 P.M.]
[9:00 A.M.] (New York City time) on [date].
THE CHASE MANHATTAN BANK
By______________________
Authorized Officer
<PAGE>
EXHIBIT E
FORM OF MONEY MARKET QUOTE
THE CHASE MANHATTAN BANK,
as Administrative Agent
270 Park Avenue
New York, New York 10017
Attention:
Re: Money Market Quote to
National Rural Utilities Cooperative
Finance Corporation (the "Borrower")
In response to your invitation on behalf of the Borrower dated
_____________, 19__, we hereby make the following Money Market Quote on
the following terms:
1. Quoting Bank: ________________________________
2. Person to contact at Quoting Bank: _____________________________
3. Date of Borrowing: ____________________*
4. We hereby offer to make Money Market Loan(s) in the following principal
amounts, for the following Interest Periods and at the following rates:
Principal Interest Money Market
Amount** Period*** [Margin****] [Absolute Rate*****]
$
$
[Provided, that the aggregate principal amount of Money Market Loans
for which the above offers may be accepted shall not exceed
$____________.]**__________
* As specified in the related Invitation.
** Principal amount bid for each Interest Period may not exceed
principal amount requested. Specify aggregate limitation if the sum of
the individual offers exceeds the amount the Bank is willing to lend.
Bids must be made for $1,000,000 or a larger multiple thereof.
(notes continued on following page)
<PAGE>
We understand and agree that the offer(s) set forth above, subject to
the satisfaction of the applicable conditions set forth in the 364-Day
Revolving Credit Agreement dated as of August 10, 2000 among the Borrower,
the banks listed on the signature pages thereof, The Bank of Nova Scotia
and Bank One, N.A., as Co-Documentation Agents, Bank of America, N.A., as
Syndication Agent, and The Chase Manhattan Bank, as Administrative Agent.
Very truly yours,
[NAME OF BANK]
Dated: _______________
By: __________________________
Authorized Officer
*** Any number of whole months (but not less than one month) or not less
than 30 days, as specified in the related Invitation. No more than five
bids are permitted for each Interest Period.
**** Margin over or under the London Interbank Offered Rate determined for
the applicable Interest Period. Specify percentage (rounded to the nearest
1/10,000 of 1%) and specify whether "PLUS" or "MINUS".
***** Specify rate of interest per annum (rounded to the nearest 1/10,000th
of 1%).
2
<PAGE>
EXHIBIT F
OPINION OF JOHN JAY LIST, ESQ.,
GENERAL COUNSEL OF THE BORROWER
August 10, 2000
I am General Counsel of the National Rural Utilities Cooperative Finance
Corporation (the "Borrower") and am delivering this opinion pursuant to the
364-Day Revolving Credit Agreement (the "Agreement") dated as of August 10,
2000 among the Borrower, the banks listed on the signature pages thereof,
The Bank of Nova Scotia and Bank One, N.A., as Co-Documentation Agents, Bank
of America, N.A., as Syndication Agent, and The Chase Manhattan Bank, as
Administrative Agent. Terms defined in the Agreement are used herein as
therein defined. This opinion is being rendered to you at the request of my
client, the Borrower, pursuant to Section 3.01(c) of the Agreement.
I have 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.
Upon the basis of the foregoing, I am of the opinion that:
1. The Borrower is a cooperative association duly incorporated, validly
existing and in good standing under the laws of the District of Columbia and
has the corporate power and authority and all material governmental
licenses, authorizations, consents and approvals required to own its
property and assets and to transact the business in which it is engaged.
The Borrower is duly qualified or licensed as a foreign corporation in good
standing in every jurisdiction in which the nature of the business in
which it is engaged makes such qualification or licensing necessary, except
in those jurisdictions in which the failure to be so qualified or licensed
would not (after qualification, assuming that the Borrower could so qualify
without the payment of any fee or penalty and retain its rights as they
existed prior to such qualification all to an extent so that any fees or
penalties required to be so paid or any rights not so retained would not,
individually or in the aggregate, have a material adverse effect on the
business or financial condition of the Borrower), individually or in the
aggregate, have a material adverse effect upon the business or financial
condition of the Borrower. The Borrower has the corporate power and
authority to execute, deliver and carry out the terms and provisions of the
Agreement and the Notes. The Agreement and the Notes have been duly and
validly authorized, executed and delivered by the Borrower, and the
Agreement constitutes a legal, valid and binding agreement of the Borrower,
and the Notes constitute legal, valid and binding obligations of the
Borrower, in each case enforceable in
<PAGE>
accordance with its terms, except as the same may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and by
general principles of equity.
2. There are no actions, suits, proceedings or investigations pending
or, to my knowledge, threatened against or affecting the Borrower by or
before any court or any governmental authority, body or agency or any
arbitration board which are reasonably likely to materially adversely affect
the business, property, assets, financial position or results of operations
of the Borrower or the authority or ability of the Borrower to perform its
obligations under the Agreement or the Notes.
3. No authorization, consent, approval or license of, or declaration,
filing or registration with or exemption by, any governmental authority,
body or agency is required in connection with the execution, delivery or
performance by the Borrower of the Agreement or the Notes.
4. The holders of the Borrower's Capital Term Certificates are not and
will not be entitled to receive any payments with respect to the principal
thereof or interest thereon solely because of withdrawing or being expelled
from membership in the Borrower.
5. Neither the Borrower nor any Subsidiary is in default in any
material respect under any material agreement or other instrument to which
it is a party or by which it is bound or its property or assets may be
affected. No event or condition exists which constitutes, or with the giving
of notice or lapse of time or both would constitute, such a default under
any such agreement or other instrument. Neither the execution and delivery
of the Agreement or the Notes, nor the consummation of any of the
transactions therein contemplated, nor compliance with the terms and
provisions thereof, will contravene any provision of law, statute, rule or
regulation to which the Borrower is subject or any judgment, decree, award,
franchise, order or permit applicable to the Borrower, or will conflict or
be inconsistent with, or will result in any breach of, any of the terms,
covenants, conditions or provisions of, or constitute (or with the giving
of notice or lapse of time, or both, would constitute) a default under (or
condition or event entitling any Person to require, whether by purchase,
redemption, acceleration or otherwise, the Borrower to perform any
obligations prior to the scheduled maturity thereof), or result in the
creation or imposition of any Lien upon any of the property or assets of
the Borrower pursuant to the terms of, any indenture, mortgage, deed of
trust, agreement or other instrument to which it may be subject, or violate
any provision of the certificate of incorporation or by-laws of the
Borrower. Without limiting the generality of the foregoing, the Borrower
is not a party to, or otherwise subject to any provision contained
in, any instrument evidencing Indebtedness of the Borrower, any agreement
or indenture relating thereto or any other contract or agreement (including
its certificate of incorporation and by-laws), which would be violated by
the incurring of the Indebtedness to be evidenced by the Notes.
2
<PAGE>
6. The Borrower has complied fully with all of the material provisions
of each Indenture. No Event of Default (within the meaning of such term as
defined in either Indenture) and no event, act or condition (except for
possible non-compliance by the Borrower with any immaterial provision of
such Indenture which in itself is not such an Event of Default under such
Indenture) which with notice or lapse of time, or both, would constitute
such an Event of Default has occurred and is continuing under such
Indenture.
The borrowings by the Borrower contemplated by the Agreement will not
cause such an Event of Default under, or the violation of any covenant
contained in, either Indenture.
7. Set forth on Annex A attached hereto is a true, correct and
complete list of all of the Borrower's Subsidiaries and Joint Ventures,
the jurisdiction of incorporation or organization of each such Subsidiary
and Joint Venture and the nature and percentage of the Borrower's ownership
of each such Subsidiary and Joint Venture.
8. The Borrower has received a ruling from the Internal Revenue Service
to the effect that it is exempt from payment of Federal income tax under
Section 501(c)(4) of the Internal Revenue Code of 1986, and nothing has come
to our attention that leads us to believe that the Borrower is not so exempt.
3
<PAGE>
EXHIBIT G
OPINION OF
DAVIS POLK & WARDWELL,
SPECIAL COUNSEL FOR THE AGENT
August 10, 2000
To the Banks and the Agent
Referred to Below
c/o The Chase Manhattan Bank, as Agent
270 Park Avenue
New York, New York 10017
Dear Sirs:
We have participated in the preparation of the 364-Day Revolving
Credit Agreement dated as of August 10, 2000 (the "Credit Agreement") among
the National Rural Utilities Cooperative Finance Corporation, a
not-for-profit cooperative association incorporated under the laws of the
District of Columbia (the "Borrower"), the banks listed on the signature
pages thereof, The Bank of Nova Scotia and Bank One, N.A., as
Co-Documentation Agents, Bank of America, N.A., as Syndication Agent, and
The Chase Manhattan Bank, as Administrative Agent (the "Agent"), and have
acted as special counsel for the Agent for the purpose of rendering this
opinion pursuant to Section 3.01(d) of the Credit Agreement. Terms defined
in the Credit Agreement are used herein as therein defined.
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates
of public officials and other instruments and have conducted such other
investigations of fact and law as we have deemed necessary or advisable for
purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that the Credit
Agreement constitutes a valid and binding agreement of the Borrower and the
Notes issued today constitute valid and binding obligations of the Borrower,
in each case enforceable in accordance with its terms, except as the same may
be limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and by general principles of equity.
<PAGE>
In rendering the foregoing opinion, we have assumed that (i) the
Borrower is duly incorporated, validly existing and in good standing under
the laws of the jurisdiction of its incorporation and (ii) the execution,
delivery and performance by the Borrower of the Credit Agreement and the
Notes issued by the Borrower are within the Borrower's corporate powers,
have been duly authorized by all necessary corporate action, require no
action by or in respect of, or filing with, any governmental body, agency
or official and do not contravene or constitute a default under, any
provision of applicable law or regulation or of the Borrower's certificate
of incorporation or by-laws or of any agreement, judgment, injunction,
order, decree or other instrument binding upon the Borrower or result in
the creation or imposition of any lien on the assets of the Borrower or any
Subsidiary of the Borrower.
We are members of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the State of New York and the federal laws
of the United States of America. In giving the foregoing opinion, we express
no opinion as to the effect (if any) of any law of any jurisdiction (except
the State of New York) in which any Bank is located which limits the rate of
interest that such Bank may charge or collect.
This opinion is rendered solely to you in connection with the above
matter. This opinion may not re relied upon by you for any other purpose or
relied upon by any other Person without our prior written consent.
Very truly yours,
2
<PAGE>
EXHIBIT H
EXTENSION AGREEMENT
[Date]
National Rural Utilities
Cooperative Finance Corporation
Woodland Park
2201 Cooperative Way
Herndon, VA 22071-3025
The Chase Manhattan Bank,
as Administrative Agent
under the Credit Agreement
referred to below
270 Park Avenue
New York, NY 10017
Gentlemen:
Effective as of [effective date], the undersigned hereby agree to
extend the Commitment Termination Date as now in effect under the 364-Day
Credit Agreement dated as of August 10, 2000 as amended and supplemented
from time to time (the "Credit Agreement"), among National Rural Utilities
Cooperative Finance Corporation, the Banks listed therein, The Bank of Nova
Scotia and Bank One, N.A., as Co-Documentation Agents, Bank of America,
N.A., as Syndication Agent, and The Chase Manhattan Bank, as Administrative
Agent, to [Date]. Terms defined in the Credit Agreement are used herein as
therein defined.
This Extension Agreement shall be construed in accordance with and
governed by the law of the State of New York.
[NAME OF BANK]
By____________________________
Title:.
<PAGE>
[NAME OF BANK]
By____________________________
Title:
THE CHASE MANHATTAN BANK, as
Administrative Agent
By____________________________
Title:
Agreed and accepted:
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION
By_______________________________
Title:
<PAGE>
EXHIBIT I
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of ___________, 200__ among [ASSIGNOR] (the
"Assignor"), [ASSIGNEE] (the "Assignee"), NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE CORPORATION (the "Borrower") and THE CHASE
MANHATTAN BANK, as Administrative Agent (the "Agent").
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement (the "Agreement")
relates to the 364-Day Credit Agreement dated as of August 10, 2000 (the
"Credit Agreement") among the Borrower, the Assignor and the other Banks
party thereto, as Banks, The Bank of Nova Scotia and Bank One, N.A., as
Co-Documentation Agents, Bank of America, N.A., as Syndication Agent, and
The Chase Manhattan Bank, as Administrative Agent (the "Agent");
WHEREAS, as provided under the Credit Agreement, the Assignor has a
Commitment to make Loans to the Borrower in an aggregate principal amount
at any time outstanding not to exceed $__________;
WHEREAS, Committed Loans made to the Borrower by the Assignor under
the Credit Agreement in the aggregate principal amount of $__________ are
outstanding at the date hereof; and
WHEREAS, the Assignor proposes to assign to the Assignee all of the
rights of the Assignor under the Credit Agreement in respect of a portion
of its Commitment thereunder in an amount equal to $__________ (the
"Assigned Amount"), together with a corresponding portion of its
outstanding Committed Loans, and the Assignee proposes to accept assignment
of such rights and assume the corresponding obligations from the Assignor on
such terms;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Credit Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells to the
Assignee all of the rights of the Assignor under the Credit Agreement to
the extent of the Assigned Amount, and the Assignee hereby accepts such
assignment from the Assignor and
<PAGE>
assumes all of the obligations of the Assignor under the Credit Agreement to
the extent of the Assigned Amount, including the purchase from the Assignor
of the corresponding portion of the principal amount of the Committed Loans
made by the Assignor outstanding at the date hereof. Upon the execution and
delivery hereof by the Assignor, the Assignee, the Borrower and the Agent
and the payment of the amounts specified in Section 3 required to be paid on
the date hereof (i) the Assignee shall, as of the date hereof, succeed to
the rights and be obligated to perform the obligations of a Bank under
the Credit Agreement with a Commitment in an amount equal to the Assigned
Amount, and (ii) the Commitment of the Assignor shall, as of the date
hereof, be reduced by a like amount and the Assignor released from its
obligations under the Credit Agreement to the extent such obligations have
been assumed by the Assignee. The assignment provided for herein shall be
without recourse to the Assignor.
SECTION 3. Payments. As consideration for the assignment and sale
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on
the date hereof in Federal funds the amount heretofore agreed between them.
It is understood that commitment and/or facility fees accrued to the date
hereof are for the account of the Assignor and such fees accruing from and
including the date hereof are for the account of the Assignee. Each of the
Assignor and the Assignee hereby agrees that if it receives any amount under
the Credit Agreement which is for the account of the other party hereto, it
shall receive the same for the account of such other party to the extent of
such other party's interest therein and shall promptly pay the same to such
other party.
SECTION 4. Consent of the Borrower and the Agent. This Agreement is
conditioned upon the consent of the Borrower and the Agent pursuant to
Section 9.06(c) of the Credit Agreement. The execution of this Agreement by
the Borrower and the Agent is evidence of this consent. Pursuant to Section
9.06(c) of the Credit Agreement the Borrower agrees to execute and deliver
a Note payable to the order of the Assignee to evidence the assignment and
assumption provided for herein.
SECTION 5. Non-Reliance on Assignor. The Assignor makes no
Representation or warranty in connection with, and shall have no
responsibility with respect to, the solvency, financial condition, or
statements of the Borrower, or the validity and enforceability of the
obligations of the Borrower in respect of the Credit Agreement or any Note.
The Assignee acknowledges that it has, independently and without reliance
on the Assignor, and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into
this Agreement and will continue to be responsible for making its own
independent appraisal of the business, affairs and financial condition of
the Borrower.
SECTION 6. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
2
<PAGE>
SECTION 7. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date
first above written.
[ASSIGNOR]
By_________________________
Title:
[ASSIGNEE]
By__________________________
Title:
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE
CORPORATION
By__________________________
Title:
THE CHASE MANHATTAN BANK, as
Administrative Agent
By__________________________
Title:
