Document:

exh10-1_010510.htm

EXHIBIT 10.1

$600,000,000

AMENDED AND RESTATED CREDIT AGREEMENT

among

PNM RESOURCES, INC.

and

FIRST CHOICE POWER, L.P.,

as the initial Borrowers,

THE LENDERS IDENTIFIED HEREIN,

BANK OF AMERICA, N.A.,

as Administrative Agent

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Syndication Agent

AND

CITIBANK, N.A.,

JPMORGAN CHASE BANK, N.A.

and

UNION BANK OF CALIFORNIA, N.A.

as Co-Documentation Agents

DATED AS OF AUGUST 15, 2005

BANC OF AMERICA SECURITIES LLC

and

WACHOVIA CAPITAL MARKETS, LLC,

as Joint Lead Arrangers and Co-Book Managers

  

  

  

TABLE OF CONTENTS

	
SECTION 1  DEFINITIONS AND ACCOUNTING TERMS 
	
1

	
          1.1        Definitions. 
	
1

	
          1.2        Computation of Time Periods and Other Definitional Provisions. 
	
18

	
          1.3        Accounting Terms/Calculation of Financial Covenants. 
	
18

	
          1.4        Time.     
	
18

	
          1.5        Rounding of Financial Covenants.
	
18

	
          1.6        References to Agreements and Requirement of Laws.
	
18

	
          1.7        Letter of Credit Amounts. 
	
18

	
SECTION 2  CREDIT FACILITY 
	
19

	
          2.1        Revolving Loans. 
	
19

	
          2.2        Letter of Credit Subfacility. 
	
21

	
          2.3        Continuations and Conversions. 
	
28

	
          2.4        Minimum Amounts.
	
29

	
          2.5        Extension Option. 
	
29

	
          2.6        Designation and Termination of Subsidiary Borrowers. 
	
29

	
          2.7        Evidence of Debt. 
	
31

	
SECTION 3  GENERAL PROVISIONS APPLICABLE TO REVOLVING LOANS 
	
31

	
          3.1        Interest. 
	
31

	
          3.2        Payments Generally. 
	
32

	
          3.3        Prepayments.
	
33

	
          3.4        Fees.  
	
33

	
          3.5        Payment in full at Maturity. 
	
34

	
          3.6        Computations of Interest and Fees. 
	
34

	
          3.7        Pro Rata Treatment. 
	
35

	
          3.8        Sharing of Payments.
	
36

	
          3.9        Capital Adequacy.
	
36

	
          3.10      Eurodollar Provisions. 
	
37

	
          3.11      Illegality.
	
37

	
          3.12      Requirements of Law; Reserves on Eurodollar Loans. 
	
37

	
          3.13      Taxes.
	
38

	
          3.14      Compensation. 
	
40

	
          3.15      Determination and Survival of Provisions. 
	
41

	
SECTION 4  CONDITIONS PRECEDENT TO CLOSING
	
41

	
          4.1        Closing Conditions. 
	
41

	
SECTION 5  CONDITIONS TO ALL EXTENSIONS OF CREDIT 
	
43

	
          5.1        Funding Requirements. 
	
43

	
SECTION 6  REPRESENTATIONS AND WARRANTIES 
	
44

	
          6.1        Organization and Good Standing. 
	
44

	
          6.2        Due Authorization.
	
44

	
          6.3        No Conflicts. 
	
44

	
          6.4        Consents. 
	
45

	
          6.5        Enforceable Obligations. 
	
45

	
          6.6        Financial Condition. 
	
45

	
          6.7        No Material Change.
	
45

	
          6.8        No Default. 
	
45

 

 

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          6.9       Litigation.
	
46

	
          6.10     Taxes.
	
46

	
          6.11     Compliance with Law.
	
46

	
          6.12     ERISA.
	
46

	
          6.13     Use of Proceeds; Margin Stock. 
	
47

	
          6.14     Government Regulation.
	
47

	
          6.15     Solvency. 
	
48

	
          6.16     Disclosure.
	
48

	
          6.17     Environmental Matters.
	
48

	
          6.18     Material Leases.
	
48

	
          6.19     Material Lease Interest Payments and Discount Rate. 
	
48

	
SECTION 7  AFFIRMATIVE COVENANTS
	
49

	
          7.1        Information Covenants. 
	
49

	
          7.2        Financial Covenants. 
	
51

	
          7.3        Preservation of Existence and Franchises. 
	
51

	
          7.4        Books and Records.
	
51

	
          7.5        Compliance with Law. 
	
51

	
          7.6        Payment of Taxes and Other Indebtedness. 
	
52

	
          7.7        Insurance. 
	
52

	
          7.8        Performance of Obligations. 
	
52

	
          7.9        Use of Proceeds. 
	
52

	
          7.10      Audits/Inspections. 
	
52

	
          7.11      Ownership of Certain Subsidiaries. 
	
52

	
SECTION 8  NEGATIVE COVENANTS
	
53

	
          8.1        Nature of Business. 
	
53

	
          8.2        Consolidation and Merger.
	
53

	
          8.3        Sale or Lease of Assets.
	
53

	
          8.4        Affiliate Transactions.
	
53

	
          8.5        Liens. 
	
54

	
          8.6        Accounting Changes.
	
55

	
          8.7        Burdensome Agreements.
	
55

	
SECTION 9  EVENTS OF DEFAULT
	
55

	
          9.1        Events of Default. 
	
55

	
          9.2        Acceleration; Remedies.
	
57

	
          9.3        Allocation of Payments After Event of Default. 
	
58

	
SECTION 10  AGENCY PROVISIONS 
	
59

	
          10.1      Appointment and Authority.
	
59

	
          10.2      Rights as a Lender. 
	
59

	
          10.3      Exculpatory Provisions. 
	
60

	
          10.4      Reliance by Administrative Agent. 
	
60

	
          10.5      Delegation of Duties.
	
61

	
          10.6      Resignation of Administrative Agent. 
	
61

	
          10.7      Non-Reliance on Administrative Agent and Other Lenders.
	
62

	
          10.8      No Other Duties, Etc.
	
62

	
          10.9      Administrative Agent May File Proofs of Claim.
	
62

	
SECTION 11  MISCELLANEOUS 
	
63

 

 

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          11.1      Notices; Effectiveness; Electronic Communication.
	
63

	
          11.2      Right of Set-Off. 
	
65

	
          11.3      Successors and Assigns. 
	
65

	
          11.4      No Waiver; Remedies Cumulative. 
	
68

	
          11.5      Attorney Costs, Expenses, Taxes and Indemnification by Borrowers. 
	
68

	
          11.6      Amendments, Etc. 
	
70

	
          11.7      Counterparts.
	
71

	
          11.8      Headings. 
	
71

	
          11.9      Survival of Indemnification and Representations and Warranties. 
	
71

	
          11.10    Governing Law; Venue; Service.
	
71

	
          11.11    Waiver of Jury Trial; Waiver of Consequential Damages. 
	
72

	
          11.12    Severability. 
	
72

	
          11.13    Further Assurances. 
	
72

	
          11.14    Confidentiality. 
	
72

	
          11.15    Entirety. 
	
73

	
          11.16    Binding Effect; Continuing Agreement. 
	
73

	
          11.17    Regulatory Statement. 
	
73

	
          11.18    USA Patriot Act Notice. 
	
74

	
          11.19    Acknowledgment. 
	
74

	
          11.20    Replacement of Lenders. 
	
74

  

 

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SCHEDULES

 

	 Schedule 1.1(a) 	 Pro Rata Shares
	 Schedule 1.1(c)	 Existing Letters of Credit
	 Schedule 6.18	 Material Leases
	 Schedule 6.19	 Material Lease Interest Payments and Discount Rate
	 Schedule 11.1 	 Notices
	 Schedule 11.3	 Processing and Recording Fees

 

 

EXHIBITS 

 

	 Exhibit 1.1A     	 Form of Guaranty Agreement
	 Exhibit 1.1B  	 Form of Joinder Agreement
	 Exhibit 2.1(b)   	 Form of Notice of Borrowing
	 Exhibit 2.1(e)     	 Form of Note
	 Exhibit 2.3       	 Form of Notice of Continuation/Conversion
	 Exhibit 7.1(c)   	 Form of Compliance Certificate
	 Exhibit 11.3(b)    	 Form of Assignment and Assumption

 

 

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EXHIBIT 10.1

AMENDED AND RESTATED CREDIT AGREEMENT

THIS AMENDED AND RESTATED CREDIT AGREEMENT (this "Credit Agreement") is entered into as of  August 15, 2005 among PNM RESOURCES, INC., a New Mexico corporation (the "Company"), FIRST CHOICE POWER,
L.P., a Texas limited partnership ("FCP", together with the Company and any other Subsidiaries of the Company that become borrowers hereunder in accordance with Section 2.6, the "Borrowers"), the Lenders and BANK OF AMERICA, N.A., as Administrative Agent.

RECITALS

WHEREAS, the Company and FCP are parties to that certain Credit Agreement, dated as of November 15, 2004, among the Company and FCP, as borrowers, the lenders and financial institutions party thereto, Bank of America, N.A., as administrative agent, and Wachovia Bank, National Association,
as syndication agent (as amended from time to time, the "Existing Credit Agreement"); and

WHEREAS, the Company and FCP have requested that the Lenders amend and restate the Existing Credit Agreement to, among other things, increase the senior credit facility to an aggregate principal amount of $600,000,000; and

WHEREAS, the Lenders party hereto have agreed to make the requested amended and restated senior credit facility available on the terms and conditions hereinafter set forth.

NOW, THEREFORE, IN CONSIDERATION of the premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

SECTION 1

DEFINITIONS AND ACCOUNTING TERMS

1.1           Definitions.

The following terms shall have the meanings specified herein unless the context otherwise requires.  Defined terms herein shall include in the singular number the plural and in the plural the singular:

"Adjusted Eurodollar Rate" means the Eurodollar Rate plus the Applicable Percentage.

"Administrative Agent" means Bank of America or any successor administrative agent appointed pursuant to Section 10.9.

"Administrative Agent's Office" means the Administrative Agent's address and, as appropriate, account as set forth on Schedule 11.1 or such other address or account with as the Administrative Agent may from
time to time notify the Company and the Lenders.

"Administrative Fees" has the meaning set forth in Section 3.4(d).

"Administrative Questionnaire" means an Administrative Questionnaire in a form supplied by the Administrative Agent.

 

 

 

"Affiliate" means, with respect to any Person, any other Person directly or indirectly controlling (including but not limited to all directors and officers of such Person), controlled by or under direct or indirect common control with such Person.  A Person shall
be deemed to control a corporation if such Person possesses, directly or indirectly, the power (a) to vote 10% or more of the securities having ordinary voting power for the election of directors of such corporation or (b) to direct or cause direction of the management and policies of such corporation, whether through the ownership of voting securities, by contract or otherwise.

"Agent-Related Persons" means the Administrative Agent, together with its Affiliates and the officers, directors, employees, agents and attorneys-in-fact of the Administrative Agent and its Affiliates.

"Applicable Percentage" means, for Eurodollar Loans, L/C Fees, Commitment Fees and Utilization Fees, the appropriate applicable percentages, in each case (subject to the exception  indicated below) corresponding to the Debt Rating in effect as of the most recent
Calculation Date as shown below:

	
Pricing Level
	
Debt Rating*
	
Applicable Percentage for Eurodollar Loans and L/C Fees
	
Applicable Percentage for Commitment Fees
	
Applicable Percentage for Utilization Fees

	
I
	
> A-/A3
	
0.350%
	
0.080%
	
0.100%

	
II
	
BBB+/Baa1
	
0.400%
	
0.100%
	
0.100%

	
III
	
BBB/Baa2
	
0.500%
	
0.125%
	
0.100%

	
IV
	
BBB-/Baa3
	
0.650%
	
0.150%
	
0.100%

	
V
	
BB+/Ba1
	
0.875%
	
0.200%
	
0.125%

	
VI
	
<BB+ or unrated/

<Ba1 or unrated
	
1.250%
	
0.300%
	
0.250%

	
  
	
*
	
The Debt Rating of the Company shall be used for purposes of determining the Applicable Percentages for (a) outstanding Eurodollar Loans and L/C Fees of the Company, First Choice and FCP, (b) Commitment Fees and (c) Utilization Fees payable with respect to Loans made to the Company, First Choice and FCP.  The Debt Rating of TNMP shall be used for purposes of determining the Applicable Percentages for (a)
outstanding Eurodollar Loans and L/C Fees of TNMP and (b) Utilization Fees payable with respect to Loans made to TNMP.

The Applicable Percentage shall be determined based on the applicable Debt Ratings and adjusted on the date one Business Day after the date on which an applicable Debt Rating is upgraded or downgraded in a manner which requires a change in the then applicable Pricing Level set forth above (the date the Debt Ratings begin to apply and
each such adjustment date referred to herein as a "Calculation Date"). If at any time there is a split in a Person's Debt Rating between S&P and Moody's, the Applicable Percentage shall be determined by the higher of the two Debt Ratings (i.e. the lower pricing); provided that if the two Debt Ratings are more than one level apart, the Applicable Percentage shall be based on the
Debt Rating which is one level lower than the higher rating.  If the applicable Borrower does not have a Debt Rating from either S&P or Moody's, then, with respect to that Debt Rating for that Borrower, Pricing Level VI shall apply.  Each Applicable Percentage shall be effective from one Calculation Date until the next Calculation Date.  Any 

 

 

2

 

adjustment in the Applicable Percentage shall be applicable to all existing Eurodollar Loans as well as any new Eurodollar Loans made.  The applicable Pricing Level for Applicable Percentage, as of the Closing Date, is Pricing Level IV.

"Approved Fund" means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an
entity or an Affiliate of an entity that administers or manages a Lender.

"Arrangers" means Banc of America Securities LLC and Wachovia Capital Markets LLC, in each case together with its successors and/or assigns.

"Assignee Group" means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.

"Assignment and Assumption" means an Assignment and Assumption substantially in the form of Exhibit 11.3(b).

"Authorized Officer" means any of the president, chief executive officer, chief financial officer or treasurer of the Company.

"Bank of America" means Bank of America, N.A., together with its successors and/or assigns.

"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the United States Code, as amended, modified, succeeded or replaced from time to time.

"Base Rate" means for any day a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such day as publicly announced from time to time by the Administrative Agent as its "prime rate" (the "Prime
Rate").  The Prime Rate is a rate set by the Administrative Agent based upon various factors including the Administrative Agent's costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate.  Any change in such rate announced by the Administrative Agent shall take effect at the opening of business on the day specified in the public announcement of such change.

"Base Rate Loan" means any Revolving Loan bearing interest at a rate determined by reference to the Base Rate.

"Borrowers" means (a) the Company, (b) FCP and (c) subject to compliance with Section 2.6, First Choice and TNMP, and "Borrower" means any one of them.

"Borrower Obligations" means, with respect to each Borrower, without duplication, all of the obligations of such Borrower to the Lenders and the Administrative Agent, whenever arising, under this Credit Agreement, the Notes, or any of the other Credit Documents.

"Borrowing" means a borrowing consisting of simultaneous Revolving Loans of the same Type and, in the case of Eurodollar Loans, having the same Interest Period made by each of the Lenders pursuant to Section 2.1.

"Business Day" means any day other than a Saturday, a Sunday, a legal holiday or a day on which banking institutions are authorized or required by Law or other governmental action to close 

 

 

3

 

in New York, New York or Charlotte, North Carolina; provided that in the case of Eurodollar Loans such day is also a day on which dealings are conducted by and between banks in the London interbank market.

"Capital Stock" means (a) in the case of a corporation, all classes of capital stock of such corporation, (b) in the case of a partnership, partnership interests (whether general or limited), (c) in the case of a limited liability company, membership interests and (d) any
other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person; including, in each case, all warrants, rights or options to purchase any of the foregoing.

"Cash Collateralize" means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the applicable L/C Issuer and the Lenders, as collateral for the L/C Obligations, cash or deposit account balances pursuant to documentation in form and substance
satisfactory to the Administrative Agent and the applicable L/C Issuer.

"Change of Control" means the occurrence of any of the following:  (a) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries,
and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have "beneficial ownership" of all Capital Stock that such person or group has the right to acquire (such right, an "option right"), whether such right is exercisable immediately
or only after the passage of time), directly or indirectly, of  twenty-five (25%) of the Capital Stock of the Company entitled to vote for members of the board of directors or equivalent governing body of the Company on a fully diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right); (b) during any period of 24 consecutive months, a majority of the members of the board of directors or other equivalent governing body
of the Company cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals
referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body (excluding, in the case of both clause (ii) and clause (iii), any individual whose initial nomination for, or assumption of office as, a member of that board or equivalent governing body occurs as a result of an actual or threatened solicitation of proxies or consents for the election or removal of one or more directors by any person or group other than
a solicitation for the election of one or more directors by or on behalf of the board of directors); or (c) any Person or two or more Persons acting in concert shall have acquired by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation thereof, will result in its or their acquisition of the power to exercise, directly or indirectly, a controlling influence over the management or policies of the Company, or control over the Voting Stock of the Company on a fully-diluted
basis (and taking into account all such Voting Stock that such Person or group has the right to acquire pursuant to any option right) representing twenty-five (25%)  or more of the combined voting power of such Voting Stock.

"Closing Date" means the date of this Credit Agreement, which is the first date all the conditions precedent in Section 5.1 are satisfied or waived in accordance with Section 5.1.

 

4

 

"Code" means the Internal Revenue Code of 1986 and the rules and regulations promulgated thereunder, as amended, modified, succeeded or replaced from time to time.

"Commitment" means, as to each Lender, its obligation to (a) make Revolving Loans to the Borrowers pursuant to Section 2.1 and (b) fund or purchase Participation Interests in L/C Obligations pursuant to Section 2.2, in an aggregate principal amount at any one time outstanding
not to exceed such Lender's Pro Rata Share of the Revolving Committed Amount as set forth opposite such Lender's name on Schedule 1.1(a) or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Credit Agreement.

"Company" means PNM Resources, Inc., a New Mexico corporation, together with its successors and permitted assigns.

"Compensation Period" has the meaning set forth in Section 3.2(c)(ii).

"Compliance Certificate" means a fully completed and duly executed officer's certificate in the form of Exhibit 7.1(c), together with a Covenant Compliance Worksheet.

"Consolidated Capitalization" means, with respect to any Person, the sum of (a) all of the shareholders' equity or net worth of such Person and its Subsidiaries, as determined in accordance with GAAP plus (b) Consolidated Indebtedness of such Person and its Subsidiaries
plus (c) the outstanding principal amount of Preferred Stock plus (d) 75% of the outstanding principal amount of Specified Securities of such Person and its Subsidiaries.

"Consolidated Indebtedness" means, as of any date of determination, with respect to any Person and its Subsidiaries on a consolidated basis, an amount equal to (a) all Indebtedness of such Person and its Subsidiaries as of such date minus (b) the
outstanding principal amount of stranded cost securitization bonds of such Person and its Subsidiaries minus (c) an amount equal to the lesser of (i) 75% of the outstanding principal amount of Specified Securities of such Person and its Subsidiaries or (ii) 10% of Consolidated Capitalization (calculated assuming clause (i) above is applicable).

"Consolidated Interest Expense" means, for any period, with respect to any Person and its Subsidiaries on a consolidated basis, an amount equal to total interest expense of such Person and its Subsidiaries for such period (including, without limitation, all such interest
expense accrued or capitalized during such period, whether or not actually paid during such period), as determined in accordance with GAAP.

"Consolidated Net Income" means, with respect to any Person, the consolidated net income of such Person and its Subsidiaries, as determined in accordance with GAAP.

"Constellation Agreement" means that certain Power Supply and Service Agreement dated December 22, 2003 between First Choice and Constellation Energy, as amended, and any future amendments, replacements or extensions thereof (so long as such amendments, replacements or extensions
are not materially less favorable to the Company and its Subsidiaries).

"Contingent Obligation" means, with respect to any Person, any direct or indirect liability of such Person with respect to any Indebtedness, liability or other obligation (the "primary obligation") of another Person (the "primary obligor"), whether or not contingent, (a)
to purchase, 

 

 

5

 

repurchase or otherwise acquire such primary obligation or any property constituting direct or indirect security therefor, (b) to advance or provide funds (i) for the payment or discharge of any such primary obligation or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth
or solvency or any balance sheet item, level of income or financial condition of the primary obligor, (c) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor in respect thereof to make payment of such primary obligation or (d) otherwise to assure or hold harmless the owner of any such primary obligation against loss or failure or inability to perform in respect thereof; provided, however,
that, with respect to the Company and its Subsidiaries, the term Contingent Obligation shall not include endorsements for collection or deposit in the ordinary course of business.  The amount of any Contingent Obligation of any Person shall be deemed to be an amount equal to the maximum amount of such Person's liability with respect to the stated or determinable amount of the primary obligation for which such Contingent Obligation is incurred or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to perform thereunder).

"Covenant Compliance Worksheet" shall mean a fully completed worksheet in the form of Schedule I to Exhibit 7.1(c).

"Credit Agreement" has the meaning set forth in the Preamble hereof.

"Credit Documents" means this Credit Agreement, the Notes, any Guaranty Agreement, any Joinder Agreement, any Notice of Borrowing, any Notice of Continuation/Conversion, and any other document, agreement or instrument entered into or executed in connection with the foregoing.

"Credit Exposure" has the meaning set forth in the definition of "Required Lenders".

"Credit Extension" means each of the following: (a) a Borrowing and (b) an L/C Credit Extension.

"Debt Rating" means, with respect to the Company or TNMP, as applicable, the long term unsecured senior non-credit enhanced debt rating of such Person by S&P and Moody's.

"Debtor Relief Laws" means the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

"Default" means any event, act or condition which with notice or lapse of time, or both, would constitute an Event of Default.

"Default Rate" means an interest rate equal to two percent (2%) plus the rate that otherwise would be applicable (or if no rate is applicable, the Base Rate plus two percent (2%) per annum).

"Defaulting Lender" means, at any time, any Lender that, (a) has failed to make a Revolving Loan or purchase or fund a Participation Interest (but only for so long as such Revolving Loan is not made or such Participation Interest is not purchased or funded), (b) has failed
to pay to the Administrative Agent or any Lender an amount owed by such Lender pursuant to the terms of this 

 

 

6

 

Credit Agreement (but only for so long as such amount has not been repaid) or (c) has been deemed insolvent or has become subject to a bankruptcy or insolvency proceeding or to a receiver, trustee or similar official.

"Dollars" and "$" means dollars in lawful currency of the United States of America.

"Eligible Assignee" means (a) a Lender, (b) an Affiliate of a Lender, (c) an Approved Fund and (d) any other Person (other than a natural person) approved by the Administrative Agent, each L/C Issuer and the Company (such approval not to be unreasonably withheld or delayed); provided that
(i) the Company's consent is not required during the existence and continuation of a Default or an Event of Default, (ii) approval by the Company shall be deemed given if no objection is received by the assigning Lender and the Administrative Agent from the Company within five Business Days after notice of such proposed assignment has been delivered to the Company and (iii) neither the Company nor any Subsidiary or Affiliate of the Company shall qualify as an Eligible Assignee.

"Environmental Claims" means any and all administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, accusations, allegations, notices of noncompliance or violation, investigations (other than internal reports prepared by any Person in
the ordinary course of its business and not in response to any third party action or request of any kind) or proceedings relating in any way to any actual or alleged violation of or liability under any Environmental Law or relating to any permit issued, or any approval given, under any such Environmental Law (collectively, "Claims"), including, without limitation, (a) any and all Claims by Governmental Authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable Environmental Law and (b) any and all Claims by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief resulting from Hazardous Substances or arising from alleged injury or threat of injury to human health or the environment.

"Environmental Laws" shall mean any and all federal, state and local laws, statutes, ordinances, rules, regulations, permits, licenses, approvals, rules of common law and orders of courts or Governmental Authorities, relating to the protection of human health or occupational
safety or the environment, now or hereafter in effect and in each case as amended from time to time, including, without limitation, requirements pertaining to the manufacture, processing, distribution, use, treatment, storage, disposal, transportation, handling, reporting, licensing, permitting, investigation or remediation of Hazardous Substances.

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor statute, and all rules and regulations from time to time promulgated thereunder.

"ERISA Affiliate" means, with respect to any Borrower, any Person (including any trade or business, whether or not incorporated) that would be deemed to be under "common control" with, or a member of the same "controlled group" as, such Borrower or any of its Subsidiaries,
within the meaning of Sections 414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA.

"ERISA Event" means, with respect to any Borrower: (a) a Reportable Event with respect to a Plan or a Multiemployer Plan, (b) a complete or partial withdrawal by such Borrower, any of its Subsidiaries or any ERISA Affiliate from a Multiemployer Plan, or the receipt by such
Borrower, any of its Subsidiaries or any ERISA Affiliate of notice from a Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA or that it 

 

 

7

 

intends to terminate or has terminated under Section 4041A of ERISA, (c) the distribution by such Borrower, any of its Subsidiaries or any ERISA Affiliate under Section 4041 or 4041A of ERISA of a notice of intent to terminate any Plan or the taking of any action to terminate any Plan, (d) the commencement of proceedings by the PBGC
under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or the receipt by such Borrower, any of its Subsidiaries or any ERISA Affiliate of a notice from any Multiemployer Plan that such action has been taken by the PBGC with respect to such Multiemployer Plan, (e) the institution of a proceeding by any fiduciary of any Multiemployer Plan against such Borrower, any of its Subsidiaries or any ERISA Affiliate to enforce Section 515 of ERISA, which is not dismissed
within thirty (30) days, (f) the imposition upon such Borrower, any of its Subsidiaries or any ERISA Affiliate of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, or the imposition or threatened imposition of any Lien upon any assets of such Borrower, any of its Subsidiaries or any ERISA Affiliate as a result of any alleged failure to comply with the Code or ERISA in respect of any Plan, (g) the engaging in or otherwise becoming liable for
a nonexempt Prohibited Transaction by such Borrower, any of its Subsidiaries or any ERISA Affiliate, (h) a violation of the applicable requirements of Section 404 or 405 of ERISA or the exclusive benefit rule under Section 401(a) of the Code by any fiduciary of any Plan for which such Borrower, any of its Subsidiaries or any ERISA Affiliate may be directly or indirectly liable, (i) the adoption of an amendment to any Plan that, pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA, would result in
the loss of tax-exempt status of the trust of which such Plan is a part if such Borrower, any of its Subsidiaries or any ERISA Affiliate fails to timely provide security to such Plan in accordance with the provisions of such sections or (j) the withdrawal of such Borrower, any of its Subsidiaries or any ERISA Affiliate from a Multiple Employer Plan during a play year in which it was a substantial employer (as such term is defined in Section 4001(a)(2) of ERISA), or the termination of a Multiple Employer
Plan.

"Eurodollar Loan" means a Revolving Loan bearing interest based at a rate determined by reference to the Adjusted Eurodollar Rate.

"Eurodollar Rate" means, for any Interest Period with respect to a Eurodollar Loan, the rate per annum equal to the British Bankers Association LIBOR Rate ("BBA LIBOR"), as published by Reuters (or other commercially
available source providing quotations of BBA LIBOR as designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period.  If such rate is not available at such time for any reason, then the "Eurodollar Rate" for such Interest Period shall be the rate per annum determined by
the Administrative Agent to be the rate at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Loan being made, continued or converted by Bank of America and with a term equivalent to such Interest Period would be offered by Bank of America's London Branch to major banks in the London interbank eurodollar market at their request at approximately 4:00 p.m. (London time) two Business Days prior to the commencement of
such Interest Period.

"Event of Default" has the meaning set forth in Section 9.1.

"Exchange Act" means the Securities Exchange Act of 1934, and the rules and regulations promulgated thereunder, as amended, modified, succeeded or replaced from time to time.

"Existing Credit Agreement" has the meaning set forth in the Recitals to this Agreement.

 

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"Existing Letters of Credit" means the letters of credit set forth on Schedule 1.1(c).

"FCP" means First Choice Power, L.P., a Texas limited partnership, and its successors.

"FCP Guarantor Event of Default" means an Event of Default with respect to the Company.

"Federal Funds Rate" means, for any day, the rate per annum equal to the weighted average (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) 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 on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall
be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by the Administrative Agent.

"Fee Letters" means those certain letter agreements, each dated as of August 9, 2005, among (a) the Company, Bank of America and Banc of America Securities LLC and (b) the Company, Wachovia Bank, N.A. and Wachovia Capital Markets LLC, in each case as amended, modified, supplemented
or restated from time to time.

"Financial Officer" means the chief financial officer, vice president-finance, principal accounting officer or treasurer of a Borrower.

"First Choice" means First Choice Power Special Purpose, L.P., a Texas limited partnership, and its successors.

"First Choice Guarantor Event of Default" means, if the Company guaranties the Borrower Obligations of First Choice, an Event of Default with respect to the Company.

"First Choice Securitization" means the accounts receivable securitization effected by the Constellation Agreement, and any replacements or extensions thereof (so long as such replacements or extensions are not materially less favorable to the Company and its Subsidiaries).

"First Mortgage Bonds" means those first mortgage bonds issued pursuant to the FMB Indenture.

"Fiscal Quarter" means each of the calendar quarters ending as of the last day of each March, June, September and December.

"Fiscal Year" means the calendar year ending December 31.

"FMB Indenture" means the Indenture of Mortgage and Deed of Trust, dated as of June 1, 1947, between PSNM and The Bank of New York (formerly Irving Trust Company), as trustee thereunder, as supplemented and amended.

"Foreign Lender" has the meaning set forth in Section 3.13(f).

 

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"Fund" means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.

"GAAP" means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting
Standards Board (or agencies with similar functions of comparable stature and authority within the U.S. accounting profession) or that are promulgated by any Governmental Authority having appropriate jurisdiction.

"Government Acts" has the meaning set forth in Section 2.2(k).

"Governmental Authority" means any domestic or foreign nation or government, any state or other political subdivision thereof and any central bank thereof, any municipal, local, city or county government, and any entity exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to government (including, without limitation, any state dental board) and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.

"Granting Lender" has the meaning specified in Section 11.3(h).

"Guarantor Event of Default" means either (a) a First Choice Guarantor Event of Default, (b) a FCP Guarantor Event of Default or (c) a TNMP Guarantor Event of Default.

"Guaranty Agreement" means the Amended and Restated Guaranty Agreement executed and delivered by the Company on the Closing Date with respect to FCP and any other Guaranty Agreement substantially in the form of Exhibit
1.1A that is executed and delivered by the Company pursuant to Section 2.6 or otherwise.

"Hazardous Substances" means any substances or materials (a) that are or become defined as hazardous wastes, hazardous substances, pollutants, contaminants or toxic substances under any Environmental Law, (b) that are defined by any Environmental Law as toxic, explosive,
corrosive, ignitable, infectious, radioactive, mutagenic or otherwise hazardous, (c) the presence of which require investigation or response under any Environmental Law, (d) that constitute a nuisance, trespass or health or safety hazard to Persons or neighboring properties, (e) that consist of underground or aboveground storage tanks, whether empty, filled or partially filled with any substance, or (f) that contain, without limitation, asbestos, polychlorinated biphenyls, urea formaldehyde foam insulation, petroleum
hydrocarbons, petroleum derived substances or wastes, crude oil, nuclear fuel, natural gas or synthetic gas.

"Hedging Agreements" means, collectively, interest rate protection agreements, equity index agreements, foreign currency exchange agreements, option agreements or other interest or exchange rate or commodity price hedging agreements
(other than forward contracts for the delivery of power or gas written by a Borrower to its jurisdictional and wholesale customers in the ordinary course of business).

"Indebtedness" means, with respect to any Person (without duplication), (a) all indebtedness and obligations of such Person for borrowed money or in respect of loans or advances of any kind, (b) all obligations of such Person evidenced by notes, bonds, debentures or similar
instruments, (c) all reimbursement obligations of such Person with respect to surety 

 

 

10

 

bonds, letters of credit and bankers' acceptances (in each case, whether or not drawn or matured and in the stated amount thereof), (d) all obligations of such Person to pay the deferred purchase price of property or services, (e) all indebtedness created or arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person, (f) all obligations of such Person as lessee under leases that are or are required to be, in accordance with GAAP, recorded as capital leases, to the extent such obligations are required to be so recorded, (g) the net termination obligations of such Person under any Hedging Agreements, calculated as of any date as if such agreement or arrangement were terminated as of such date in accordance with the applicable rules under GAAP, (h) all Contingent Obligations of such
Person, (i) all obligations and liabilities of such Person incurred in connection with any transaction or series of transactions providing for the financing of assets through one or more securitizations or in connection with, or pursuant to, any synthetic lease or similar off-balance sheet financing, (j) the aggregate amount of uncollected accounts receivable of such Person subject at the time of determination to a sale of receivables (or similar transaction) to the extent such transaction is effected with recourse
to such Person (whether or not such transaction would be reflected on the balance sheet of such Person in accordance with GAAP), (k) all obligations, contingent or otherwise, under the Material Leases, (l) all Specified Securities and (m) all indebtedness referred to in clauses (a) through (l) above secured by any Lien on any property or asset owned or held by such Person regardless of whether the indebtedness secured thereby shall have been assumed by such Person or is nonrecourse to the credit of such Person.

"Indemnified Liabilities" has the meaning set forth in Section 11.5(b).

"Indemnitees" has the meaning set forth in Section 11.5(b).

"Insured Series First Mortgage Bonds" means First Mortgage Bonds in the aggregate principal amount of $65,000,000 pledged by PSNM to secure guarantees of $65,000,000 principal amount of pollution control revenue bonds issued by the City of Farmington, New Mexico, for
the benefit of PSNM, which pollution control revenue bonds are also supported by a municipal bond insurance policy issued by AMBAC Indemnity Corporation.

"Interest Payment Date" means, (a) as to any Eurodollar Loan, the last day of each Interest Period applicable to such Loan and the Maturity Date; provided, however,
that if any Interest Period for a Eurodollar Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates and (b) as to any Base Rate Loan, the last Business Day of each Fiscal Quarter and the Maturity Date.

"Interest Period" means, as to each Eurodollar Loan, the period commencing on the date such Eurodollar Loan is disbursed or converted to or continued as a Eurodollar Loan and ending on the date one, two, three or six months thereafter, as selected by the applicable Borrower
in its Notice of Borrowing or Notice of Continuation/Conversion; provided that:

(a)           any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business
Day;

(b)           any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end
of such Interest Period; and

 

11

 

(c)           no Interest Period shall extend beyond the Maturity Date.

"ISP" means, with respect to any Letter of Credit, the "International Standby Practices 1998" published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance).

"Joinder Agreement" means any Joinder Agreement substantially in the form of Exhibit 1.1B that is executed and delivered by TNMP or First Choice, as applicable, pursuant to Section 2.6.

"Laws" means, collectively, all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any
Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

"L/C Borrowing" means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made.

"L/C Credit Extension" means, with respect to any Letter of Credit, the issuance thereof, the extension of the expiry date thereof, the renewal or increase of the amount thereof or any extension of credit resulting from a drawing thereunder that has not been reimbursed.

"L/C Fees" has the meaning set forth in Section 3.4(c).

"L/C Fronting Fee" has the meaning set forth in Section 2.2(i).

"L/C Issuer" means either of Bank of America or Wachovia Bank, National Association, in each case, in its capacity as an issuer of Letters of Credit hereunder, or any successor issuer of Letters of Credit hereunder.

"L/C Obligations" means, as of any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all L/C
Borrowings.  For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.7.  For all purposes of this Credit Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of
Credit shall be deemed to be "outstanding" in the amount so remaining available to be drawn.

"Lender" means any of the Persons identified as a "Lender" on the signature pages hereto, any Eligible Assignee which may become a Lender by way of assignment in accordance with the terms hereof and any Person which becomes a Lender pursuant to Section 2.1(f), together with
their successors and permitted assigns.

"Lending Office" means, as to any Lender, the office or offices of such Lender described as such in such Lender's Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Company and the Administrative Agent.

 

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"Letter of Credit" means any  letter of credit issued hereunder and shall include the Existing Letters of Credit.

"Letter of Credit Application" means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by the applicable L/C Issuer.

"Letter of Credit Expiration Date" means the day that is ten days prior to the Maturity Date then in effect (or, if such day is not a Business Day, the next preceding Business Day).

"Letter of Credit Sublimit" means an amount equal to THREE HUNDRED MILLION DOLLARS ($300,000,000).  The Letter of Credit Sublimit is part of, and not in addition to, the Revolving Committed Amount.

"Lien" means any mortgage, pledge, hypothecation, assignment, security interest, lien (statutory or otherwise), preference, priority, charge or other encumbrance of any nature, whether voluntary or involuntary, including, without limitation, the interest of any vendor or
lessor under any conditional sale agreement, title retention agreement, capital lease or any other lease or arrangement having substantially the same effect as any of the foregoing.

"Mandatory Borrowing" has the meaning set forth in Section 2.2(d).

"Margin Stock" has the meaning ascribed to such term in Regulation U.

"Material Adverse Change" means a material adverse change in the condition (financial or otherwise), operations, business, performance, properties or assets of the Company and its Subsidiaries, taken as a whole.

"Material Adverse Effect" means, with respect to any Borrower, a material adverse effect upon (a) the business, assets, liabilities (actual or contingent), operations, condition (financial or otherwise) or prospects of such Borrower and its Subsidiaries, taken as a whole,
(b) the ability of such Borrower or any of its Subsidiaries to perform its obligations under this Credit Agreement or any of the other Credit Documents or (c) the legality, validity or enforceability of this Credit Agreement or any of the other Credit Documents or the rights and remedies of the Administrative Agent and the Lenders hereunder and thereunder.

"Material Lease" means any lease by PSNM of its leasehold interests in (i) Unit 1 or Unit 2, and related common facilities, of the Palo Verde Nuclear Generating Station or (ii) the electric transmission line, and related facilities, known as the Eastern Interconnection
Project, including, without limitation, any lease set forth on Schedule 6.18 hereto.

"Maturity Date" means August 15, 2010 or, with respect to some or all of the Lenders if such date is extended pursuant to Section 2.5, August 15, 2011 and/or August 15, 2012.

"Moody's" means Moody's Investors Service, Inc. and its successors.

"Multiemployer Plan" means, with respect to any Borrower, any "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA to which such Borrower, any of its Subsidiaries or any ERISA Affiliate makes, is making or is obligated to make contributions or has
made or been obligated to make contributions.

 

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"Multiple Employer Plan" means, with respect to any Borrower, a Single Employer Plan to which such Borrower, any of its Subsidiaries or any ERISA Affiliate and at least one employer other than such Borrower, any of its Subsidiaries or any ERISA Affiliate are contributing
sponsors.

"Nonrenewal Notice Date" has the meaning set forth in Section 2.2(b)(iii).

"Notes" means the promissory notes of each of the Borrowers in favor of each of the Lenders evidencing the Revolving Loans made to such Borrower provided pursuant to Section 2.1, individually or collectively, as appropriate, as such promissory notes may be amended, modified,
supplemented, extended, renewed or replaced from time to time and as evidenced in the form of Exhibit 2.1(e).

"Notice of Borrowing" means a request by a Borrower for a Revolving Loan in the form of Exhibit 2.1(b).

"Notice of Continuation/Conversion" means a request by a Borrower to continue an existing Eurodollar Loan to a new Interest Period or to convert a Eurodollar Loan to a Base Rate Loan or a Base Rate Loan to a Eurodollar Loan, in the form of Exhibit
2.3.

"Other Taxes" has the meaning set forth in Section 3.13(b).

"PBGC" means the Pension Benefit Guaranty Corporation and any successor thereto.

"Participant" has the meaning set forth in Section 11.3(d).

"Participation Interest" means (a) the purchase by a Lender of a participation in Letters of Credit or L/C Obligations as provided in Section 2.2 or (b) the purchase by a Lender of a participation in any Revolving Loan as provided in Section 3.8.

"Person" means any individual, partnership, joint venture, firm, corporation, limited liability company, association, trust or other enterprise (whether or not incorporated), or any Governmental Authority.

"Plan" means, with respect to any Borrower, any "employee benefit plan" (within the meaning of Section 3(3) of ERISA) which is covered by ERISA and with respect to which such Borrower, any of its Subsidiaries or any ERISA Affiliate is (or, if such plan were terminated at
such time, would under Section 4069 of ERISA be deemed to be) an "employer" within the meaning of Section 3(5) of ERISA.

"Preferred Stock" means, with respect to any Person, all preferred Capital Stock issued by such Person in which the terms thereof do not require such Capital Stock to be redeemed or to make mandatory sinking fund payments.

"Prime Rate" has the meaning set forth in the definition of Base Rate in this Section 1.1.

"Pro Rata Share" means, with respect to each Lender at any time, a fraction (expressed as a percentage, carried out to the ninth decimal place), the numerator of which is the amount of the Commitment of such Lender at such time and the denominator of which is the amount
of the Revolving Committed Amount at such time; provided that if the Commitment of each Lender to make Revolving Loans and the obligation of the L/C Issuers to make L/C Credit Extensions have 

 

 

14

 

been terminated pursuant to Section 9.2 or otherwise, then the Pro Rata Share of each Lender shall be determined based on such Lender's percentage ownership of the sum of the aggregate amount of outstanding Revolving Loans plus the aggregate amount of outstanding L/C Obligations.  The initial Pro Rata Share of each Lender
is set forth opposite the name of such Lender on Schedule 1.1(a) or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable.

"Prohibited Transaction" means any transaction described in (a) Section 406 of ERISA that is not exempt by reason of Section 408 of ERISA or by reason of a Department of Labor prohibited transaction individual or class exemption or (b) Section 4975(c) of the Code that is
not exempt by reason of Section 4975(c)(2) or 4975(d) of the Code.

"Property" means any right, title or interest in or to any property or asset of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.

"PSNM" means Public Service Company of New Mexico, a New Mexico corporation.

"PSNM Accounts Receivable Securization" means the electric and gas accounts receivable securitization program that was approved by the New Mexico Public Regulation Commission in Case 3838 and was executed by PSNM and Bank of America (successor by merger to Fleet National
Bank), or an Affiliate thereof, on April 8, 2003, and any amendments, replacements or extensions thereof (so long as such amendments, replacements or extensions are not materially less favorable to the Company and its Subsidiaries).

"Register" has the meaning set forth in Section 11.3(c).

"Regulations T, U and X" means Regulations T, U and X, respectively, of the Federal Reserve Board, and any successor regulations.

"Reportable Event" means (a) any "reportable event" within the meaning of Section 4043(c) of ERISA for which the notice under Section 4043(a) of ERISA has not been waived by the PBGC (including any failure to meet the minimum funding standard of, or timely make any required
installment under, Section 412 of the Code or Section 302 of ERISA, regardless of the issuance of any waivers in accordance with Section 412(d) of the Code), (b) any such "reportable event" subject to advance notice to the PBGC under Section 4043(b)(3) of ERISA, (c) any application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code, and (d) a cessation of operations described in Section 4062(e) of ERISA.

"Required Lenders" means Lenders whose aggregate Credit Exposure (as hereinafter defined) constitutes more than 50% of the Credit Exposure of all Lenders at such time; provided, however, that if any Lender shall be a Defaulting Lender at such time then there shall be excluded
from the determination of Required Lenders the aggregate principal amount of Credit Exposure of such Lender at such time.  For purposes of the preceding sentence, the term "Credit Exposure" as applied to each Lender shall mean (a) at any time prior to the termination of the Commitments, the Pro Rata Share of such Lender of the Revolving Committed Amount multiplied by the Revolving Committed Amount and (b) at any time after the termination of the Commitments, the sum of (i) the principal balance of the
outstanding Revolving Loans of such Lender plus (ii) such Lender's Participation Interests in the face amount of the outstanding Letters of Credit.

"Requirement of Law" means, with respect to any Person, the organizational documents of such Person and any Law applicable to or binding upon such Person or any of its property or to 

 

 

15

 

which such Person or any of its property is subject or otherwise pertaining to any or all of the transactions contemplated by this Credit Agreement and the other Credit Documents.

"Responsible Officer" means, with respect to any Borrower, the president, the chief executive officer, the co-chief executive officer, the chief financial officer, any executive officer, vice president-finance, principal accounting officer or treasurer of such Borrower,
and any other officer or similar official thereof responsible for the administration of the obligations of such Borrower in respect of this Credit Agreement and the other Credit Documents.

"Restricted Payment" means, with respect to any Person, any dividend or other distribution (whether in cash, securities or other property) with respect to any Capital Stock of such Person.

"Revolving Committed Amount" means SIX HUNDRED MILLION DOLLARS ($600,000,000) or such other amount, as it may be reduced from time to time in accordance with Section 2.1(d) or increased pursuant to Section 2.1(f).

"Revolving Loans" or "Loans" has the meaning set forth in Section 2.1(a).

"S&P" means Standard & Poor's Rating Service, a division of The McGraw-Hill Companies, Inc. and its successors.

"Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

"Single Employer Plan" means any Plan which is covered by Title IV of ERISA, but which is not a Multiemployer Plan or Multiple Employer Plan.

"Solvent" means, with respect to any Person as of a particular date, that on such date (a) such Person is able to pay its debts and other liabilities, Contingent Obligations and other commitments as they mature in the normal course of business, (b) such Person does not intend
to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to pay as such debts and liabilities mature in their ordinary course, (c) such Person is not engaged in a business or a transaction, and is not about to engage in a business or a transaction, for which such Person's assets would constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which such Person is engaged or is to engage, (d) the fair value of the assets
of such Person is greater than the total amount of liabilities, including, without limitation, Contingent Obligations, of such Person and (e) the present fair saleable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured.

"SPC" has the meaning set forth in Section 11.3(h).

"Specified Securities" means, with respect to any Person, (a) all preferred Capital Stock issued by such Person and required by the terms thereof to be redeemed or for which mandatory sinking fund payments are due, (b) all securities issued by such Person that contain two
distinct components, typically medium-term debt and a forward contract for the issuance of common stock prior to the debt maturity, including such securities commonly referred to by their tradenames as "FELINE PRIDES", "PEPS", "HITS", "SPACES" and "DECS" and generally referred to as "equity units" and (c) all other securities issued by such Person that are similar to those described in the forgoing clauses (a) and (b).

 

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"Subsidiary" means, as to any Person, (a) any corporation more than 50% of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective
of whether or not at the time, any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person directly or indirectly through Subsidiaries, and (b) any partnership, association, joint venture or other entity in which such person directly or indirectly through Subsidiaries has more than a 50% equity interest at any time.  Any reference to Subsidiary herein, unless otherwise identified, shall mean a Subsidiary,
direct or indirect, of the Company.  Any reference to a Subsidiary of the Company herein shall not include any Subsidiary that is inactive, has minimal or no assets and does not generate revenues.

"Subsidiary Borrower Sublimit" means (a) with respect to TNMP (to the extent such Person is a Borrower hereunder), the lesser of (i) ONE HUNDRED MILLION DOLLARS ($100,000,000) and (ii) the Revolving Committed Amount
then in effect, (b) with respect to First Choice (to the extent such Person is a Borrower hereunder), the lesser of (i) THREE HUNDRED MILLION DOLLARS ($300,000,000) minus the aggregate amount of the Credit Extensions made to FCP and (ii) the Revolving Committed Amount then in effect and (c) with respect to FCP, the lesser of (i) THREE HUNDRED
MILLION DOLLARS ($300,000,000) minus the aggregate amount of the Credit Extensions made to First Choice hereunder and (ii) the Revolving Committed Amount then in effect.  The Subsidiary Borrower Sublimits of First Choice and FCP may be increased in accordance with Section 2.1(g).

"Taxes" has the meaning set forth in Section 3.13(a).

"TNMP" means Texas-New Mexico Power Company, a Texas corporation.

"TNMP Guarantor Event of Default" means, if the Company guaranties the Borrower Obligations of TNMP, an Event of Default with respect to the Company.

"Total Assets" means all assets of a Borrower and its Subsidiaries as shown on its most recent quarterly consolidated balance sheet, as determined in accordance with GAAP.

"Type" means, with respect to a Revolving Loan, its character as a Base Rate Loan or a Eurodollar Loan.

"Unreimbursed Amount" has the meaning specified in Section 2.2(d)(i).

"Unused Revolving Commitment" means, for any date of determination, the amount by which (a) the aggregate Revolving Committed Amount on such date exceeds (b) the sum of the aggregate principal amount of outstanding Revolving Loans plus the aggregate principal amount of outstanding
L/C Obligations on such date.

"Utilization Fees" has the meaning set forth in Section 3.4(b).

"Voting Stock" means the Capital Stock of a Person that is then outstanding and normally entitled to vote in the election of directors and other securities of such Person convertible into or exercisable for such Capital Stock (whether or not such securities are then currently
convertible or exercisable).

 

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1.2           Computation of Time Periods and Other Definitional Provisions.

For purposes of computation of periods of time hereunder, the word "from" means "from and including" and the words "to" and "until" each mean "to but excluding."  References in this Credit Agreement to "Articles", "Sections", "Schedules" or "Exhibits" shall be to Articles, Sections, Schedules or Exhibits of or to this Credit
Agreement unless otherwise specifically provided.

1.3           Accounting Terms/Calculation of Financial Covenants.

Except as otherwise expressly provided herein, all accounting terms used herein or incorporated herein by reference shall be interpreted, and all financial statements and certificates and reports as to financial matters required to be delivered to the Administrative Agent or the Lenders hereunder shall be prepared, in accordance with GAAP
applied on a consistent basis. Notwithstanding anything to the contrary in this Credit Agreement, for purposes of calculation of the financial covenants set forth in Section 7.2, all accounting determinations and computations thereunder shall be made in accordance with GAAP as in effect as of the date of this Credit Agreement applied on a basis consistent with the application used in preparing the most recent financial statements of the Company referred to in Section 4.1(d).  In the event that
any changes in GAAP after such date are required to be applied to the Company, or, if applicable, TNMP, and would affect the computation of the financial covenants contained in Section 7.2, such changes shall be followed only from and after the date this Credit Agreement shall have been amended to take into account any such changes.

1.4           Time.

All references to time herein shall be references to Central Standard Time or Central Daylight Time, as the case may be, unless specified otherwise.

1.5           Rounding of Financial Covenants.

Any financial ratios required to be maintained by a Borrower pursuant to this Credit Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number
(with a rounding-up if there is no nearest number).

1.6           References to Agreements and Requirement of Laws.

Unless otherwise expressly provided herein: (a) references to organization documents, agreements (including the Credit Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements,
extensions, supplements and other modifications are not prohibited by any Credit Document and (b) references to any Requirement of Law shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Requirement of Law.

1.7           Letter of Credit Amounts.

Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at such time; provided, however, that with respect to
any Letter of Credit that, by its terms or the terms of any Letter of Credit related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be 

 

 

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deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.

SECTION 2

CREDIT FACILITY

2.1           Revolving Loans.

(a)           Revolving Loan Commitment.   Subject to the terms and conditions set forth herein, each Lender severally agrees to make revolving loans (each a "Revolving
Loan" or "Loan" and collectively the "Revolving Loans" or "Loans") in Dollars to the Borrowers, at any time and from time to time, during the period from and including the Closing Date to but not including the Maturity Date (or such earlier date if the Commitments have been terminated as provided herein); provided, however,
that after giving effect to any Borrowing (i) the sum of the aggregate principal amount of outstanding Revolving Loans plus the aggregate principal amount of outstanding L/C Obligations shall not exceed the Revolving Committed Amount, (ii) the sum of the principal amount of outstanding Revolving Loans plus the principal amount of outstanding L/C Obligations of each of TNMP, First Choice and FCP, as applicable, shall not exceed the Subsidiary Borrower Sublimit for such Person and (iii) with respect to each individual
Lender, the sum of the aggregate principal amount of outstanding Revolving Loans plus the aggregate principal amount of outstanding L/C Obligations of such Lender shall not exceed such Lender's Pro Rata Share of the Revolving Committed Amount.  Subject to the terms of this Credit Agreement (including Section 3.3), the Borrowers may borrow, repay and reborrow Revolving Loans.

(b)           Method of Borrowing for Revolving Loans.  By no later than 11:00 a.m. (i) on the date of the requested Borrowing of Revolving Loans that will be Base Rate Loans and (ii) three Business Days prior
to the date of the requested Borrowing of Revolving Loans that will be Eurodollar Loans, the applicable Borrower shall telephone the Administrative Agent as well as submit a written Notice of Borrowing in the form of Exhibit 2.1(b) to the Administrative Agent setting forth (A) the amount requested, (B) the date of the requested Borrowing, (C) the Type of Revolving Loan, (D) with respect to Revolving Loans that will be Eurodollar Loans, the Interest
Period applicable thereto, and (E) certification that such Borrower has complied in all respects with Section 5.  If the applicable Borrower shall fail to specify (1) an Interest Period in the case of a Eurodollar Loan, then such Eurodollar Loan shall be deemed to have an Interest Period of one month or (2) the Type of Revolving Loan requested, then such Revolving Loan shall be deemed to be a Base Rate Loan.  All Revolving Loans made on the Closing Date shall be Base Rate Loans.  Thereafter,
all or any portion of the Revolving Loans may be converted into Eurodollar Loans in accordance with the terms of Section 2.3.

(c)           Funding of Revolving Loans.  Upon receipt of a Notice of Borrowing, the Administrative Agent shall promptly inform the Lenders as to the terms thereof.  Each such Lender shall make its
Pro Rata Share of the requested Revolving Loans available to the Administrative Agent in immediately available funds at the Administrative Agent's Office not later than 1:00 p.m. on the Business Day specified in the applicable Notice of Borrowing.  Upon satisfaction of the conditions set forth in Section 5, the amount of the requested Revolving Loans will then be made available to the applicable Borrower by the Administrative Agent either by (i) crediting the account of such Borrower on the books of
the Administrative Agent with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by such Borrower.

 

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(d)           Reductions of Revolving Committed Amount.  Upon at least three Business Days' notice, the Company shall have the right to permanently terminate or reduce the aggregate unused amount of the Revolving
Committed Amount at any time or from time to time; provided that (i) each partial reduction shall be in an aggregate amount at least equal to $5,000,000 and in integral multiples of $1,000,000 above such amount and (ii) no reduction shall be made which would reduce the Revolving Committed Amount to an amount less than the sum of the aggregate principal amount of outstanding Revolving Loans plus the aggregate principal amount of outstanding L/C Obligations.  Any reduction in (or termination of) the Revolving
Committed Amount shall be permanent and may not be reinstated.

(e)           Notes.  At the request of any Lender, the Revolving Loans made by such Lender shall be evidenced by duly executed promissory notes of the applicable Borrowers in favor of such Lender in substantially
the form of Exhibit 2.1(e).  Each Lender may attach schedules to its Note and endorse thereon the date, Type (if applicable), amount and maturity of its Loans and payments with respect thereto.

(f)           Increases of the Revolving Committed Amount.  The Company shall have the right, upon at least fifteen (15) Business Days' prior written notice to the Administrative Agent, to increase the Revolving
Committed Amount, in one or more increases, at any time and from time to time after the Closing Date, subject, however, in any such case, to satisfaction of the following conditions precedent:

(i)           no Default or Event of Default shall have occurred and be continuing on the date on which such increase is to become effective;

(ii)           after giving effect to such increase, the Revolving Committed Amount shall not exceed $850,000,000;

(iii)           the representations and warranties set forth in Section 6 shall be true and correct in all material respects on and as of the date on which such increase is to become effective;

(iv)           such increase shall be in a minimum amount of $10,000,000 and in integral multiples of $1,000,000 in excess thereof;

(v)           such requested increase shall only be effective upon receipt by the Administrative Agent of (A) additional commitments in a corresponding amount of such requested increase from either existing Lenders and/or one or more other institutions that qualify as an Eligible
Assignee (it being understood and agreed that no existing Lender shall be required to provide an additional commitment) and (B) documentation from each institution providing an additional commitment evidencing their commitment and their obligations under this Agreement in form and substance acceptable to the Administrative Agent;

(vi)           the Administrative Agent shall have received all documents (including resolutions of the board of directors of the Company and applicable opinions) it may reasonably request relating to the corporate or other necessary authority for  and the validity of such
increase in the Revolving Committed Amount, and any other matters relevant thereto, all in form and substance reasonably satisfactory to the Administrative Agent;

 

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(vii)           if any Revolving Loans are outstanding at the time of the increase in the Revolving Committed Amount, the Borrowers shall, if applicable, prepay one or more existing Revolving Loans (such prepayment to be subject to Section 3.14) in an amount necessary such that
after giving effect to the increase in the Revolving Committed Amount, each Lender will hold its pro rata share (based on its Pro Rata Share of the increased Revolving Committed Amount) of outstanding Revolving Loans; and

(viii)           the Company shall pay such fees to the Administrative Agent, for the benefit of the Lenders providing such additional commitments, as determined at the time of such increase.

(g)           Increases of the Subsidiary Borrower Sublimits of FCP and First Choice.  In connection with any increase to the Revolving Committed Amount pursuant to Section 2.1(f), the Company shall have the
right, upon at least fifteen (15) Business Days' prior written notice to the Administrative Agent, to increase the Subsidiary Borrower Sublimits of FCP and First Choice by a corresponding amount of such increase in the Revolving Committed Amount subject to receipt by the Administrative Agent of all documents (including resolutions and applicable opinions) it may reasonably request relating to the authority for and validity of such increase and any other matters relevant thereto, all in form and substance reasonably
satisfactory to the Administrative Agent.  It is understood and agreed that any increase in the Revolving Committed Amount pursuant to Section 2.1(f) and any corresponding increase to the Subsidiary Borrower Sublimits of FCP and First Choice shall not affect the Subsidiary Borrower Sublimit of TNMP.

2.2           Letter of Credit Subfacility.

(a)           The Letter of Credit Commitment.

(i)           Subject to the terms and conditions set forth herein and other terms and conditions that the applicable L/C Issuer may reasonably require, (A) each L/C Issuer agrees, in reliance upon the agreements of the other Lenders set forth in this Section 2.2, from time to time
on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue standby Letters of Credit in Dollars for the account of a Borrower and to amend Letters of Credit previously issued by it, in each case in accordance with subsection (b) below and (B) the Lenders severally agree to participate in such Letters of Credit; provided, however,
that after giving effect to the issuance of any Letter of Credit (1) the sum of the aggregate principal amount of outstanding Revolving Loans plus the aggregate principal amount of outstanding L/C Obligations shall not exceed the Revolving Committed Amount, (2) the sum of the principal amount of outstanding Revolving Loans plus the principal amount of outstanding L/C Obligations of each of TNMP, First Choice and FCP, as applicable, shall not exceed the Subsidiary Borrower Sublimit for such Person, (3) with respect
to each individual Lender, the sum of the aggregate principal amount of outstanding Revolving Loans of such Lender plus the aggregate principal amount of outstanding L/C Obligations of such Lender shall not exceed such Lender's Pro Rata Share of the Revolving Committed Amount and (4) the aggregate amount of L/C Obligations shall not at any time exceed the Letter of Credit Sublimit.  Within the foregoing limits, and subject to the terms and conditions hereof, a Borrower may, during the foregoing
period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.

 

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(ii)           An L/C Issuer shall be under no obligation to issue or amend any Letter of Credit if:

(A)           any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such L/C Issuer from issuing such Letter of Credit, or any Requirement of Law applicable to such L/C Issuer or any request or directive (whether
or not having the force of law) from any Governmental Authority with jurisdiction over such L/C Issuer shall prohibit, or request that such L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which such L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon such L/C Issuer any
unreimbursed loss, cost or expense which was not applicable on the Closing Date and which such L/C Issuer in good faith deems material to it;

(B)           the expiry date of such requested Letter of Credit would occur more than twelve months after the date of issuance, unless the Required Lenders have approved such expiry date;

(C)           the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all the Lenders have approved such expiry date;

(D)           the issuance of such Letter of Credit would violate one or more policies of such L/C Issuer;

(E)           such Letter of Credit is in an initial amount less than $100,000 (unless otherwise agreed to by such L/C Issuer), is to be used for a purpose other than as permitted by Section 7.9, or is denominated in a currency other than Dollars; or

(F)           a default of any Lender's obligations to fund under Section 2.2(d) exists or any Lender is at such time a Defaulting Lender hereunder, unless the applicable L/C Issuer has entered into satisfactory
arrangements with the applicable Borrower or such Lender to eliminate such L/C Issuer's risk with respect to such Lender.

(iii)           An L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) such L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof or (B) the beneficiary of such Letter of Credit does not
accept the proposed amendment to such Letter of Credit.

(b)           Procedures for Issuance and Amendment of Letters of Credit.

(i)           Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the applicable Borrower delivered to an L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by
a Responsible Officer of such Borrower.  The Letter of Credit Application must be received by the applicable L/C Issuer and the Administrative Agent not later than 11:00 a.m. at least two Business Days (or such later date and time as such 

 

 

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L/C Issuer may agree in a particular instance in its sole discretion) prior to the proposed issuance date or date of amendment, as applicable.  In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the applicable L/C Issuer:
(A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day), (B) the amount thereof, (C) the expiry date thereof, (D) the name and address of the beneficiary thereof, (E) the documents to be presented by such beneficiary in case of any drawing thereunder, (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder and (G) such other matters as such L/C Issuer may require.  In the case of a request for an amendment of
any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the applicable L/C Issuer (1) the Letter of Credit to be amended, (2) the proposed date of amendment thereof (which shall be a Business Day), (3) the nature of the proposed amendment and (4) such other matters as such L/C Issuer may require.

(ii)           Promptly after receipt of any Letter of Credit Application, the applicable L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the applicable Borrower
and, if not, such L/C Issuer will provide the Administrative Agent with a copy thereof.  Upon receipt by the applicable L/C Issuer of confirmation from the Administrative Agent that the requested issuance or amendment is permitted in accordance with the terms hereof, then, subject to the terms and conditions hereof, such L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of such Borrower or enter into the applicable amendment, as the case may be, in each case in accordance
with such L/C Issuer's usual and customary business practices.

(iii)           If a Borrower so requests in any applicable Letter of Credit Application, the applicable L/C Issuer may, in its sole and absolute discretion, agree to issue a Letter of Credit that has automatic renewal provisions (each, an "Auto-Renewal
Letter of Credit"); provided that any such Auto-Renewal Letter of Credit must permit such L/C Issuer to prevent any such renewal at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the "Nonrenewal Notice Date") in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued.  Unless
otherwise directed by the applicable L/C Issuer, the applicable Borrower shall not be required to make a specific request to such L/C Issuer for any such renewal.  Once an Auto-Renewal Letter of Credit has been issued, the Lenders shall be deemed to have authorized (but may not require) the applicable L/C Issuer to permit the renewal of such Letter of Credit at any time to an expiry date not later than the Letter of Credit Expiration Date; provided, however, that such L/C Issuer shall not permit any
such renewal if (A) such L/C Issuer has determined that it would have no obligation at such time to issue such Letter of Credit in its renewed form under the terms hereof (by reason of the provisions of Section 2.2(a)(ii) or otherwise), or (B) it has received notice (which may be by telephone or in writing) on or before the day that is five Business Days before the Nonrenewal Notice Date (1) from the Administrative Agent that
the Required Lenders have elected not to permit such renewal or (2) from the Administrative Agent, any Lender or the applicable Borrower that one or more of the applicable conditions specified in Section 5 is not then satisfied.

(iv)           Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the 

 

 

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applicable L/C Issuer will also deliver to the applicable Borrower and the Administrative Agent a true and complete copy of such Letter of Credit or amendment.

(c)           Participations.

(i)           On the Closing Date, each Lender shall be deemed to have purchased without recourse a risk participation from the applicable L/C Issuer in each Existing Letter of Credit and the obligations arising thereunder and any collateral relating thereto, in each case in an amount
equal to its Pro Rata Share of the obligations under such Existing Letter of Credit, and shall absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and be obligated to pay to such L/C Issuer therefor and discharge when due, its Pro Rata Share of the obligations arising under such Existing Letter of Credit.

(ii)           Each Lender, upon issuance of a Letter of Credit, shall be deemed to have purchased without recourse a risk participation from the applicable L/C Issuer in such Letter of Credit and the obligations arising thereunder and any collateral relating thereto, in each case
in an amount equal to its Pro Rata Share of the obligations under such Letter of Credit, and shall absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and be obligated to pay to such L/C Issuer therefor and discharge when due, its Pro Rata Share of the obligations arising under such Letter of Credit.

(d)         Reimbursement.

(i)           In the event of any drawing under any Letter of Credit, the applicable L/C Issuer will promptly notify the applicable Borrower.  The applicable Borrower shall reimburse the applicable L/C Issuer on the day of drawing under any Letter of Credit either with the
proceeds of a Revolving Loan obtained hereunder or otherwise in immediately available funds.  If the applicable Borrower shall fail to reimburse the applicable L/C Issuer as provided hereinabove (the "Unreimbursed Amount"), the unreimbursed amount of such drawing shall bear interest at a per annum rate equal to the Base Rate plus two percent (2%).

(ii)           Subsequent to a drawing under any Letter of Credit, unless the applicable Borrower shall immediately notify the applicable L/C Issuer of its intent to otherwise reimburse such L/C Issuer, such Borrower shall be deemed to have requested a Base Rate Loan in the amount
of the drawing as described herein, the proceeds of which will be used to satisfy the reimbursement obligations.  On any day on which the applicable Borrower shall be deemed to have requested a Revolving Loan borrowing to reimburse a drawing under a Letter of Credit, the Administrative Agent shall give notice to the Lenders that a Revolving Loan has been deemed requested in connection with a drawing under a Letter of Credit, in which case a Revolving Loan borrowing comprised solely of Base Rate Loans
(each such borrowing, a "Mandatory Borrowing") shall be immediately made from all Lenders (without giving effect to any termination of the Commitments pursuant to Section 9.2 or otherwise) pro rata based on each Lender's respective Pro Rata Share and the proceeds thereof shall be paid directly to the applicable L/C Issuer
for application to the respective L/C Obligations.  Each Lender hereby irrevocably agrees to make such Revolving Loans immediately upon any such request or deemed request on account of each such Mandatory Borrowing in the amount and in the manner specified in the preceding sentence and on the same such date notwithstanding (A) the amount of 

 

 

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Mandatory Borrowing may not comply with the minimum amount for borrowings of Revolving Loans otherwise required hereunder, (B) the failure of any conditions specified in Section 5.2 to have been satisfied, (C) the existence of a Default or an Event of Default, (D) the failure of any such request or deemed request for Revolving Loans
to be made by the time otherwise required hereunder, (E) the date of such Mandatory Borrowing, or (F) any reduction in the Revolving Committed Amount or any termination of the Commitments.

(iii)           In the event that any Mandatory Borrowing cannot for any reason be made on the date otherwise required above (including, without limitation, as a result of the commencement of a proceeding under the Bankruptcy Code with respect to the applicable Borrower), then each
such Lender hereby agrees that it shall forthwith fund (as of the date the Mandatory Borrowing would otherwise have occurred, but adjusted for any payments received from the applicable Borrower on or after such date and prior to such purchase) its Pro Rata Share in the outstanding L/C Obligations; provided, that in the event any Lender shall fail to fund its Pro Rata Share on the day the Mandatory Borrowing would otherwise have occurred, then the
amount of such Lender's unfunded participation interest therein shall bear interest payable to the applicable L/C Issuer upon demand, at the rate equal to, if paid within two Business Days of such date, the Federal Funds Rate, and thereafter at a rate equal to the Base Rate.  Simultaneously with the making of each such payment by a Lender to such L/C Issuer, such Lender shall, automatically and without any further action on the part of such L/C Issuer or such Lender, acquire a participation in an amount
equal to such payment (excluding the portion of such payment constituting interest owing to such L/C Issuer) in the related unreimbursed drawing portion of the L/C Obligation and in the interest thereon and shall have a claim against the applicable Borrower with respect thereto.  Any payment by the Lenders pursuant to this clause (iii) shall not relieve or otherwise impair the obligations of the applicable Borrower to reimburse the applicable L/C Issuer under a Letter of Credit.

(e)           Obligations Absolute. The obligation of each Borrower to reimburse the applicable L/C Issuer for each drawing under each Letter of Credit issued
at its request shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Credit Agreement under all circumstances, including the following:

(i)           any lack of validity or enforceability of such Letter of Credit, this Credit Agreement, or any other agreement or instrument relating thereto;

(ii)           the existence of any claim, counterclaim, set-off, defense or other right that any Borrower may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), such
L/C Issuer or any other Person, whether in connection with this Credit Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;

(iii)           any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission
or otherwise of any document required in order to make a drawing under such Letter of Credit;

 

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(iv)           any payment by such L/C Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by such L/C Issuer under such Letter of Credit to any Person purporting
to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law; or

(v)           any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Borrower.

The applicable Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with such Borrower's instructions or other irregularity, such Borrower will immediately notify the applicable L/C Issuer.  The applicable Borrower shall
be conclusively deemed to have waived any such claim against the applicable L/C Issuer and its correspondents unless such notice is given as aforesaid.

(f)           Role of L/C Issuers. Each Lender and each Borrower agree that, in paying any drawing under a Letter of Credit, the applicable L/C Issuer shall
not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document.  None of the L/C Issuers, any Agent-Related Person nor any of the respective correspondents, participants or assignees of the L/C Issuers shall be liable to any Lender for (i) any
action taken or omitted in connection herewith at the request or with the approval of the Lenders or the Required Lenders, as applicable, (ii) any action taken or omitted in the absence of gross negligence or willful misconduct or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Letter of Credit Application.  Each
Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided, however, that this assumption is not intended to, and shall not, preclude such Borrower's pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement.  None of
the L/C Issuers, any Agent-Related Person, nor any of the respective correspondents, participants or assignees of the L/C Issuers, shall be liable or responsible for any of the matters described in clauses (i) through (v) of Section 2.2(e) provided, however, that anything in such clauses to the contrary notwithstanding, a Borrower may have a claim against a L/C Issuer, and such L/C Issuer may be liable to such Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary,
damages suffered by such Borrower which such Borrower proves were caused by such L/C Issuer's willful misconduct or gross negligence or such L/C Issuer's willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit.  In furtherance and not in limitation of the foregoing, an L/C Issuer may accept documents that appear on their face to be in order, without responsibility
for further investigation and such L/C Issuer shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.

 

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(g)           Cash Collateral.  If, as of the Letter of Credit Expiration Date, any Letter of Credit for any reason remains outstanding and partially or wholly undrawn, the applicable Borrower shall immediately
Cash Collateralize the then aggregate principal amount of all L/C Obligations owing by it (in an amount equal to such aggregate principal amount determined as of the Letter of Credit Expiration Date).  Each Borrower hereby grants to the Administrative Agent, for the benefit of the L/C Issuers and the Lenders, a security interest in all such cash, deposit accounts and all balances therein and all proceeds of the foregoing.  Cash collateral shall be maintained in blocked, non-interest bearing
deposit accounts at Bank of America.

(h)           Applicability of ISP.   Unless otherwise expressly agreed by the applicable L/C Issuer and the applicable Borrower when a Letter of Credit is issued, the rules of the ISP shall apply to each
Letter of Credit.

(i)           Fronting Fee and Documentary and Processing Charges Payable to L/C Issuers. The applicable Borrower shall pay directly to the applicable L/C
Issuer for its own account a fronting fee with respect to each Letter of Credit in an amount equal to 0.125% times the daily maximum amount available to be drawn under such Letter of Credit (the "L/C Fronting Fee").  The L/C Fronting Fee shall be computed on a quarterly basis in arrears and shall be due and payable on the last Business Day of each Fiscal Quarter (as well
as on the Letter of Credit Expiration Date) for the Fiscal Quarter (or portion thereof) then ending, beginning with the first of such dates to occur after the issuance of such Letter of Credit.  In addition, the applicable Borrower shall pay directly to the applicable L/C Issuer for its own account the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of such L/C Issuer relating to letters of credit as from time to time in effect.  Such
customary fees and standard costs and charges are due and payable on demand and are nonrefundable.

(j)           Conflict with Letter of Credit Application.  In the event of any conflict between the terms hereof and the terms of any Letter of Credit Application, the terms hereof shall control.

(k)           Indemnification of L/C Issuers.

(i)           In addition to its other obligations under this Credit Agreement, each Borrower hereby agrees to protect, indemnify, pay and hold each L/C Issuer harmless from and against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable attorneys' fees) that such L/C Issuer may incur or be subject to as a consequence, direct or indirect, of (A) the issuance of any Letter of Credit for the account of such Borrower or (B) the failure of such L/C Issuer to honor a drawing under a Letter of Credit issued for the account of such Borrower as a result of any act or omission, whether rightful or wrongful, of any present or future de jure or de facto government or Governmental Authority (all such
acts or omissions, herein called "Government Acts").

(ii)           As between the Borrowers and the L/C Issuers, the Borrowers shall assume all risks of the acts, omissions or misuse of any Letter of Credit by the beneficiary thereof.  In the absence of gross negligence
or willful misconduct, no L/C Issuer shall be responsible for:  (A) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for and issuance of any Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (B) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign 

 

 

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any Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, that may prove to be invalid or ineffective for any reason; (C) failure of the beneficiary of a Letter of Credit to comply fully with conditions required in order to draw upon a Letter of Credit; (D) errors, omissions, interruptions or delays
in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (E) errors in interpretation of technical terms; (F) any loss or delay in the transmission or otherwise of any document required in order to make a drawing under a Letter of Credit or of the proceeds thereof; and (G) any consequences arising from causes beyond the control of such L/C Issuer, including, without limitation, any Government Acts.  None of the above shall affect,
impair, or prevent the vesting of an L/C Issuer's rights or powers hereunder.

(iii)           In furtherance and extension and not in limitation of the specific provisions hereinabove set forth, any action taken or omitted by an L/C Issuer, under or in connection with any Letter of Credit or the related certificates,
if taken or omitted in good faith, shall not put such L/C Issuer under any resulting liability to the Borrowers.  It is the intention of the parties that this Credit Agreement shall be construed and applied to protect and indemnify the L/C Issuers against any and all risks involved in the issuance of the Letters of Credit, all of which risks are hereby assumed by the Borrowers, including, without limitation, any and all risks of the acts or omissions, whether rightful or wrongful, of any present or
future Government Acts.  No L/C Issuer shall, in any way, be liable for any failure by such L/C Issuer or anyone else to pay any drawing under any Letter of Credit as a result of any Government Acts or any other cause beyond the control of such L/C Issuer.

(iv)           Nothing in this subsection (k) is intended to limit the reimbursement obligation of the Borrowers contained in this Section 2.2.  The obligations of the Borrowers under this subsection (k) shall survive
the termination of this Credit Agreement.  No act or omission of any current or prior beneficiary of a Letter of Credit shall in any way affect or impair the rights of the applicable L/C Issuer to enforce any right, power or benefit under this Credit Agreement.

(l)           Letter of Credit Amounts.  Unless otherwise specified, all references herein to the amount of a Letter of Credit at any time shall be deemed to
mean the maximum face amount of such Letter of Credit after giving effect to all increases thereof contemplated by such Letter of Credit or the Letter of Credit Application therefor, whether or not such maximum face amount is in effect at such time.

2.3           Continuations and Conversions.

Subject to the terms below, the applicable Borrower shall have the option, on any Business Day prior to the Maturity Date, to continue existing Eurodollar Loans for a subsequent Interest Period, to convert Base Rate Loans into Eurodollar Loans or to convert Eurodollar Loans into Base Rate Loans.  By no later than 11:00 a.m. (a)
on the date of the requested conversion of a Eurodollar Loan to a Base Rate Loan and (b) three Business Days prior to the date of the requested continuation of a Eurodollar Loan or conversion of a Base Rate Loan to a Eurodollar Loan, the applicable Borrower shall provide telephonic notice to the Administrative Agent, followed promptly by a written Notice of Continuation/Conversion in the form of Exhibit 2.3, setting forth whether such Borrower wishes
to continue or convert such Revolving Loans.  Notwithstanding anything herein to the contrary, (A) except as provided in Section 3.11, Eurodollar Loans may only be continued or converted into Base Rate Loans on the last day of the Interest Period applicable thereto, (B) Eurodollar Loans may not be continued nor may Base Rate Loans be converted into Eurodollar 

 

 

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Loans during the existence and continuation of a Default or an Event of Default and (C) any request to continue a Eurodollar Loan that fails to comply with the terms hereof or any failure to request a continuation of a Eurodollar Loan at the end of an Interest Period shall be deemed a request to convert such Eurodollar Loan to a Base
Rate Loan on the last day of the applicable Interest Period.

2.4           Minimum Amounts.

Each request for a borrowing, conversion or continuation shall be subject to the requirements that (a) each Eurodollar Loan shall be in a minimum amount of $5,000,000 and in integral multiples of $1,000,000 in excess thereof, (b) each Base Rate Loan shall be in a minimum amount of $3,000,000 and in integral multiples of $100,000 in excess
thereof (or the remaining amount of outstanding Revolving Loans) and (c) no more than five Eurodollar Loans shall be outstanding hereunder at any one time.  For the purposes of this Section 2.4, separate Eurodollar Loans that begin and end on the same date, as well as Eurodollar Loans that begin and end on different dates, shall all be considered as separate Eurodollar Loans.

2.5           Extension Option.

(a)           Request for Extension.  At any time prior to the first anniversary of the Closing Date, the Company may, on a one-time basis, by notice to the Lenders, request that the Lenders extend the Maturity
Date for one additional year.  At any time after the first anniversary of the Closing Date but prior to the second anniversary of the Closing Date, the Company may, on a one-time basis, by notice to the Lenders, request that the Lenders extend the then current Maturity Date for one additional year.  Each Lender shall, by notice to the Company and the Administrative Agent not later than the 30th day following the
date of any such request from the Company, advise the Company whether or not it agrees to extend the Maturity Date as requested.   Each decision by a Lender shall be in the sole discretion of such Lender, and any Lender that has not so advised the Administrative Agent by the 30th day following the date of such request from the Company shall be deemed to have declined to agree to such extension.  Each of the
parties hereto acknowledges and agrees that no Lender shall be obligated to extend the Maturity Date pursuant to the terms of this Section 2.5.  Any Lender who fails to agree to the extension request of the Company, as set forth herein, shall be referred to, for purposes of this Section, as a "Non-Extending Lender".

(b)           Extension.  If Lenders holding Commitments representing at least 50% of the Revolving Committed Amount agree to any such request for extension of
the Maturity Date (collectively, the "Approving Lenders"), then the Company may extend the Maturity Date for an additional year solely as to the Approving Lenders with a Revolving Committed Amount equal to the aggregate Commitments of the Approving Lenders during such extension period.  If Non-Extending Lenders hold Commitments representing more than 50% of the Revolving Committed Amount, then the Company shall withdraw its extension request
and the Maturity Date will remain unchanged.  With respect to the Non-Extending Lenders, it is understood and agreed that the Maturity Date relating to the Non-Extending Lenders shall remain unchanged and the repayment of all obligations owed to them and the termination of their Commitments shall occur on the then existing Maturity Date without giving effect to such extension request.

2.6           Designation and Termination of Subsidiary Borrowers.

(a)           Each of TNMP and First Choice (each an "Applicant Borrower") may become a Borrower under this Credit Agreement provided that the following conditions precedent are satisfied:

(i)           receipt by the Administrative Agent of a Joinder Agreement duly executed by such Applicant Borrower, together with such organizational documents, supporting resolutions, incumbency certificates, opinions of counsel and other documents or information, in form, 

 

 

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content and scope reasonably satisfactory to the Administrative Agent, as may be required by the Administrative Agent in its sole discretion;

(ii)           in the case of First Choice, (A) the Debt Rating of the Company is BBB- or better from S&P and Baa3 or better from Moody's and (B) the Administrative Agent shall have received a Guaranty Agreement duly executed by the Company guarantying the payment of all Borrower
Obligations of First Choice;

(iii)           in the case of TNMP, either (A) the Debt Rating of TNMP is either (1) BBB- (stable) or better from S&P and Ba1 (positive) or better from Moody's or (2) BB+ (positive) or better from S&P and Baa3 (stable) or better from Moody's or (B) (1) the Debt Rating of
the Company is BBB- or better from S&P and Baa3 or better from Moody's and (2) the Administrative Agent shall have received a Guaranty Agreement duly executed by the Company guarantying the payment of all Borrower Obligations of TNMP; and

(iv)           no Default or Event of Default exists.

(b)           If the Administrative Agent agrees that all of the requirements of this Section 2.6(a) have been satisfied with respect to an Applicant Borrower, then the Administrative Agent shall notify the Company
and the Lenders that such Applicant Borrower has become a Borrower hereunder and the effective date upon which the Applicant Borrower shall constitute a Borrower for purposes hereof, whereupon each of the Lenders agrees to permit such Borrower to receive Loans hereunder, on the terms and conditions set forth herein, and each of the parties agrees that such Borrower otherwise shall be a Borrower for all purposes of this Agreement.

(c)           FCP and, upon execution of a Joinder Agreement as set forth in Section 2.6(a)(i) above and subject to Section 11.17, each of TNMP and First Choice hereby irrevocably appoints the Company as its agent for all purposes relevant to this Credit Agreement and each of the other
Credit Documents, including (i) the giving and receipt of notices and (ii) the execution and delivery of all documents, instruments and certificates contemplated herein and all modifications hereto.  Any acknowledgment, consent, direction, certification or other action which might otherwise be valid or effective only if given or taken by all Borrowers, or by each Borrower acting singly, shall be valid and effective if given or taken only by the Company, whether or not any such other Borrower
joins therein.  Any notice, demand, consent, acknowledgement, direction, certification or other communication delivered to the Company in accordance with the terms of this Credit Agreement shall be deemed to have been delivered to each Borrower.  Notwithstanding the foregoing, each Borrower may give and receive notices applicable to it, execute and deliver documents applicable to it and receive proceeds of Loans requested by it.

(d)           Each of TNMP, First Choice and FCP, in their respective capacities as a Borrower hereunder, may request and accept Credit Extensions in an aggregate amount not to exceed the Subsidiary Borrower Sublimit applicable to such Person.  Except as otherwise provided
in the Credit Documents, the obligations of each Borrower under this Agreement and the other Credit Documents to which it is a party are several and not joint.

(e)           The Company may from time to time, upon not less than 10 Business Days' written notice from the Company to the Administrative Agent (or such shorter period as may be agreed by the Administrative Agent in its sole discretion), terminate TNMP's, First Choice's or FCP's
status as a Borrower; provided that (i) there are no outstanding Loans payable by such Borrower or other amounts payable by such Borrower on account of any Credit Extensions made to it, as of the effective date of such termination (unless such Loans and other Borrower Obligations have been assumed in writing by another 

 

 

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Borrower) and (ii) and no Default or Event of Default exists. The Administrative Agent will promptly notify the Lenders of any such termination of a Borrower's status.

2.7           Evidence of Debt.

(a)           The Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business.  The accounts or records maintained by the Administrative Agent and
each Lender shall be conclusive absent manifest error of the amount of the Credit Extensions made by the Lenders to a Borrower and the interest and payments thereon.  Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of a Borrower hereunder to pay any amount owing with respect to its Borrower Obligations.  In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative
Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.

(b)           In addition to the accounts and records referred to in subsection (a) above, each Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by such Lender of participations in Letters
of Credit.  In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.

SECTION 3

GENERAL PROVISIONS APPLICABLE

TO REVOLVING LOANS

3.1           Interest.

(a)           Interest Rate.  Subject to Sections 3.1(b), (i) all Base Rate Loans shall accrue interest at the Base Rate and (ii) all Eurodollar Loans shall accrue interest at the Adjusted Eurodollar Rate.

(b)           Default Rate of Interest.

(i) After the occurrence, and during the continuation, of an Event of Default pursuant to Section 9.1(a), the principal of and, to the extent permitted by Law, interest on the Revolving Loans and any other amounts owing hereunder or under the other Credit Documents (including without limitation fees and expenses) shall bear interest,
payable on demand, at the Default Rate.

(ii)           After the occurrence, and during the continuation, of an Event of Default (other than an Event of Default pursuant to Section 9.1(a)), at the request of the Required Lenders, the principal of and, to the extent permitted by Law, interest on the Revolving Loan and any
other amounts owing hereunder or under the other Credit Documents (including without limitation fees and expenses) shall bear interest, payable on demand, at the Default Rate.

(c)           Interest Payments.  Interest on Revolving Loans shall be due and payable in arrears on each Interest Payment Date.

 

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3.2           Payments Generally.

(a)           No Deductions; Place and Time of Payments.  All payments to be made by a Borrower shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff.  Except
as otherwise expressly provided herein, all payments by a Borrower hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent's Office in Dollars and in immediately available funds not later than 2:00 p.m. on the date specified herein.  The Administrative Agent will promptly distribute to each Lender its Pro Rata Share (or other applicable share as provided herein) of such payment in like funds as received
by wire transfer to such Lender's Lending Office.  All payments received by the Administrative Agent after 2:00 p.m. shall deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue.

(b)           Payment Dates.  Subject to the definition of "Interest Period," if any payment to be made by a Borrower shall come due on a day
other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be.

(c)           Advances by Administrative Agent.  Unless the applicable Borrower or any Lender has notified the Administrative Agent, prior to the time any payment is required to be made by it to the Administrative
Agent hereunder, that such Borrower or such Lender, as the case may be, will not make such payment, the Administrative Agent may assume that such Borrower or such Lender, as the case may be, has timely made such payment and may (but shall not be so required to), in reliance thereon, make available a corresponding amount to the Person entitled thereto.  If and to the extent that such payment was not in fact made to the Administrative Agent in immediately available funds, then:

(i)           if a Borrower failed to make such payment, each Lender shall forthwith on demand repay to the Administrative Agent the portion of such assumed payment that was made available to such Lender in immediately available funds, together with interest thereon in respect of
each day from and including the date such amount was made available by the Administrative Agent to such Lender to the date such amount is repaid to the Administrative Agent in immediately available funds at the Federal Funds Rate from time to time in effect; and

(ii)           if any Lender failed to make such payment, such Lender shall forthwith on demand pay to the Administrative Agent the amount thereof in immediately available funds, together with interest thereon for the period from the date such amount was made available by the Administrative
Agent to the applicable Borrower to the date such amount is recovered by the Administrative Agent (the "Compensation Period") at a rate per annum equal to the Federal Funds Rate from time to time in effect.  If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender's Revolving Loan included in the applicable Borrowing.  If such Lender does not pay such amount forthwith upon the
Administrative Agent's demand therefor, the Administrative Agent may make a demand therefor upon the applicable Borrower, and such Borrower shall pay such amount to the Administrative Agent, together with interest thereon for the Compensation Period at a rate per annum equal to the rate of interest applicable to such Borrowing.  Nothing herein shall be deemed to relieve any Lender from its obligation to fulfill its Commitment or to prejudice any rights which the 

 

 

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Administrative Agent or a Borrower may have against any Lender as a result of any default by such Lender hereunder.

A notice of the Administrative Agent to any Lender or any Borrower with respect to any amount owing under this subsection (c) shall be conclusive, absent manifest error.

(d)           Several Obligations.  The obligations of the Lenders hereunder to make Revolving Loans and to fund or purchase Participation Interests are several and not joint.  The failure of any
Lender to make any Revolving Loan or to fund or purchase any Participation Interest on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Revolving Loan or fund or purchase its Participation Interest.

(e)           Funding Offices.  Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Revolving Loan in any particular place or manner or to constitute a representation by any Lender
that it has obtained or will obtain the funds for any Revolving Loan in any particular place or manner.

3.3           Prepayments.

(a)           Voluntary Prepayments.  Each Borrower shall have the right to prepay its outstanding Revolving Loans in whole or in part from time to time without premium or penalty; provided, however,
that (i) all prepayments under this Section 3.3(a) shall be subject to Section 3.14, (ii) Eurodollar Loans may only be prepaid on three Business Days' prior written notice to the Administrative Agent, (iii) each such partial prepayment of Eurodollar Loans shall be in the minimum principal amount of $5,000,000 and integral multiples of $1,000,000 and (iv) each such partial prepayment of Base Rate Loans shall be in the minimum principal amount of $500,000 and integral multiples of $100,000 or, in the case of clauses
(iii) and (iv), if less than such minimum amounts, the entire principal amount thereof then outstanding.  Amounts prepaid pursuant to this Section 3.3(a) shall be applied as the applicable Borrower may elect based on the Lenders' Pro Rata Shares; provided, however, if such Borrower fails to specify, such prepayment shall be applied by the Administrative Agent, subject to
Section 3.7, in such manner as it deems reasonably appropriate.

(b)           Mandatory Prepayments.  If at any time (i) the sum of the aggregate principal amount of Revolving Loans outstanding plus the aggregate principal amount of L/C Obligations outstanding exceeds the
Revolving Committed Amount, (ii) the sum of the principal amount of outstanding Revolving Loans plus the principal amount of outstanding L/C Obligations of each of TNMP, First Choice and FCP, as applicable, exceeds the Subsidiary Borrower Sublimit for such Person or (iii) the aggregate principal amount of L/C Obligations outstanding exceeds the Letter of Credit Sublimit, the applicable Borrowers shall immediately make a principal payment to the Administrative Agent and/or Cash Collateralize outstanding L/C
Obligations in a manner, in an amount and in Dollars as is necessary to be in compliance with Sections 2.1 and 2.2, as applicable, and as directed by the Administrative Agent.  All amounts required to be prepaid pursuant to this Section 3.3(b) shall be applied first to Base Rate Loans, second to Eurodollar Loans in direct order of Interest Period maturities and third to
Cash Collateralize outstanding L/C Obligations.  All prepayments pursuant to this Section 3.3(b) shall be subject to Section 3.14.

3.4           Fees.

(a)           Commitment Fees.  In consideration of the Revolving Committed Amount being made available by the Lenders hereunder, the Borrowers agree to pay to the Administrative Agent, 

 

 

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for the pro rata benefit of each Lender based on its Pro Rata Share, a per annum fee equal to the daily average sum of the Applicable Percentage for Commitment Fees for each day during the period of determination multiplied by the Unused Revolving Commitment for each such day (the "Commitment
Fees").  The Commitment Fees shall commence to accrue on the Closing Date and shall be due and payable in arrears on the last Business Day of each Fiscal Quarter (as well as on the Maturity Date and on any date that the Revolving Committed Amount is reduced) for the Fiscal Quarter (or portion thereof) then ending, beginning with the first of such dates to occur after the Closing Date.

(b)           Utilization Fees.  If at any time the aggregate principal amount of outstanding Revolving Loans exceeds an amount equal to fifty percent (50%) of
the Revolving Committed Amount, each Borrower shall pay to the Administrative Agent, for the ratable benefit of the Lenders, a utilization fee (the "Utilization Fees") equal to the product of (i) the average daily aggregate principal amount of its outstanding Revolving Loans, calculated from the date the aggregate principal amount of all outstanding Revolving Loans exceeds an amount equal to fifty percent (50%) of the Revolving Committed Amount
but excluding the date the aggregate principal amount of all outstanding Revolving Loans falls below an amount equal to fifty percent (50%), times (ii) a per annum percentage equal to the Applicable Percentage for Utilization Fees.  The Utilization Fees shall be payable in arrears on the last Business Day of each Fiscal Quarter (as well as on the Maturity Date and on any date that the Revolving Committed Amount is reduced) for the Fiscal Quarter (or portion thereof) then ending, beginning with the first
of such dates to occur after the Closing Date.

(c)           L/C Fees.  Each Borrower shall pay to the Administrative Agent for the account of each Lender in accordance with its Pro Rata Share a
fee for each Letter of Credit issued at its request equal to the Applicable Percentage for L/C Fees times the daily maximum amount available to be drawn under such Letter of Credit (the "L/C Fees").  The L/C Fees shall be computed on a quarterly basis in arrears and shall be due and payable on the last Business Day of each Fiscal Quarter (as well as on the Letter of Credit
Expiration Date) for the Fiscal Quarter (or portion thereof) then ending, beginning with the first of such dates to occur after the issuance of such Letter of Credit.

(d)           Administrative Fees.  The Company agrees to pay to the Administrative Agent, for its own account, an annual fee as agreed to between the Company and the Administrative Agent (the "Administrative
Fees") in the Fee Letter.

3.5           Payment in full at Maturity.

Subject to the terms of Section 2.5, on the Maturity Date, the entire outstanding principal balance of all Revolving Loans, together with accrued but unpaid interest and all fees and other sums owing under the Credit Documents, shall be due and payable in full, unless accelerated sooner pursuant to Section 9.2; provided that
if the Maturity Date is not a Business Day, then such principal, interest, fees and other sums shall be due and payable in full on the next preceding Business Day.

3.6           Computations of Interest and Fees.

(a)           Calculation of Interest and Fees.  Except for Base Rate Loans that are based upon the Prime Rate, in which case interest shall be computed on the basis of the actual number of days elapsed over
a year of 365 or 366 days, as the case may be, all computations of interest and fees hereunder shall be made on the basis of the actual number of days elapsed over a year of 360 days.  Interest shall accrue from and including the first date of Borrowing (or continuation or conversion) to 

 

 

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but excluding the last day occurring in the period for which such interest is payable.  Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

(b)           Usury.  It is the intent of the Lenders and the Borrowers to conform to and contract in strict compliance with applicable usury Law from time to time in effect.  All agreements between
the Lenders and the Borrowers are hereby limited by the provisions of this subsection which shall override and control all such agreements, whether now existing or hereafter arising and whether written or oral.  In no way, nor in any event or contingency (including but not limited to prepayment or acceleration of the maturity of any Borrower Obligation), shall the interest taken, reserved, contracted for, charged, or received under this Credit Agreement, under the Notes or otherwise, exceed the maximum
nonusurious amount permissible under applicable Law.  If, from any possible construction of any of the Credit Documents or any other document, interest would otherwise be payable in excess of the maximum nonusurious amount, any such construction shall be subject to the provisions of this subsection and such documents shall be automatically reduced to the maximum nonusurious amount permitted under applicable Law, without the necessity of execution of any amendment or new document.  If any Lender
shall ever receive anything of value which is characterized as interest on the Revolving Loans under applicable Law and which would, apart from this provision, be in excess of the maximum nonusurious amount, an amount equal to the amount which would have been excessive interest shall, without penalty, be applied to the reduction of the principal amount owing on the Revolving Loans and not to the payment of interest, or refunded to the Borrowers or the other payor thereof if and to the extent such amount which
would have been excessive exceeds such unpaid principal amount of the Revolving Loans.  The right to demand payment of the Revolving Loans or any other Indebtedness evidenced by any of the Credit Documents does not include the right to accelerate the payment of any interest which has not otherwise accrued on the date of such demand, and the Lenders do not intend to charge or receive any unearned interest in the event of such demand.  All interest paid or agreed to be paid to the Lenders with
respect to the Revolving Loans shall, to the extent permitted by applicable Law, be amortized, prorated, allocated, and spread throughout the full stated term (including any renewal or extension) of the Revolving Loans so that the amount of interest on account of the Revolving Loans does not exceed the maximum nonusurious amount permitted by applicable Law.

3.7           Pro Rata Treatment.

Except to the extent otherwise provided herein, each Borrowing, each payment or prepayment of principal of any Revolving Loan, each L/C Credit Extension, each payment of interest, each payment of fees (other than administrative fees paid to the Administrative Agent and fronting, documentary and processing fees paid to the L/C Issuers),
each conversion or continuation of any Revolving Loans and each reduction in the Revolving Committed Amount, shall be allocated pro rata among the relevant Lenders in accordance with their Pro Rata Shares; provided that, if any Lender shall have failed to pay its Pro Rata Share of any Revolving Loan or fund or purchase its Participation Interest, then any amount to which such Lender would otherwise be entitled pursuant to this Section 3.7 shall
instead be payable to the Administrative Agent until the share of such Revolving Loan or such Participation Interest not funded or purchased by such Lender has been repaid.  In the event any principal, interest, fee or other amount paid to any Lender pursuant to this Credit Agreement or any other Credit Document is rescinded or must otherwise be returned by the Administrative Agent, (a) such principal, interest, fee or other amount that had been satisfied by such payment shall be revived, reinstated
and continued in full force and effect as if such payment had not occurred and (b) such Lender shall, upon the request of the Administrative Agent, repay to the Administrative Agent the amount so paid to such Lender, with interest for the period commencing on the date such payment is returned by the Administrative Agent until the date the Administrative Agent receives such repayment at a 

 

 

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rate per annum equal to the Federal Funds Rate if repaid within two (2) Business Days after such request and thereafter the Base Rate.

3.8           Sharing of Payments.

The Lenders agree among themselves that, except to the extent otherwise provided herein, in the event that any Lender shall obtain payment in respect of any Revolving Loan, any L/C Obligations or any other obligation owing to such Lender under this Credit Agreement through the exercise of a right of setoff, banker's lien or counterclaim,
or pursuant to a secured claim under Section 506 of the Bankruptcy Code or other security or interest arising from, or in lieu of, such secured claim, received by such Lender under any applicable Debtor Relief Law or other similar Law or otherwise, or by any other means, in excess of its Pro Rata Share of such payment as provided for in this Credit Agreement, such Lender shall promptly pay in cash or purchase from the other Lenders a participation in such Revolving Loans, L/C Obligations and other obligations
in such amounts, and make such other adjustments from time to time, as shall be equitable to the end that all Lenders share such payment in accordance with their Pro Rata Shares.  The Lenders further agree among themselves that if payment to a Lender obtained by such Lender through the exercise of a right of setoff, banker's lien, counterclaim or other event as aforesaid shall be rescinded or must otherwise be returned, each Lender which shall have shared the benefit of such payment shall, by payment
in cash or a repurchase of a participation theretofore sold, return its share of that benefit (together with its share of any accrued interest payable with respect thereto) to each Lender whose payment shall have been rescinded or otherwise returned.  Each Borrower agrees that (a) any Lender so purchasing such a participation may, to the fullest extent permitted by Law, exercise all rights of payment, including setoff, banker's lien or counterclaim, with respect to such participation as fully as if
such Lender were a holder of such Revolving Loan, L/C Obligations or other obligation in the amount of such participation and (b) the Borrower Obligations that have been satisfied by a payment that has been rescinded or otherwise returned shall be revived, reinstated and continued in full force and effect as if such payment had not occurred.  Except as otherwise expressly provided in this Credit Agreement, if any Lender or the Administrative Agent shall fail to remit to any other Lender an amount payable
by such Lender or the Administrative Agent to such other Lender pursuant to this Credit Agreement on the date when such amount is due, such payments shall be made together with interest thereon for each date from the date such amount is due until the date such amount is paid to the Administrative Agent or such other Lender at a rate per annum equal to the Federal Funds Rate.  If under any applicable Debtor Relief Law or other similar Law, any Lender receives a secured claim in lieu of a setoff to which
this Section 3.8 applies, such Lender shall, to the extent practicable, exercise its rights in respect of such secured claim in a manner consistent with the rights of the Lenders under this Section 3.8 to share in the benefits of any recovery on such secured claim.

3.9           Capital Adequacy.

If any Lender determines that the introduction after the Closing Date of any Law, rule or regulation or other Requirement of Law regarding capital adequacy or any change therein or in the interpretation thereof, or compliance by such Lender (or its Lending Office) therewith, has or would have the effect of reducing the rate of return on
the capital or assets of such Lender or any corporation controlling such Lender as a consequence of such Lender's obligations hereunder (taking into consideration its policies with respect to capital adequacy and such Lender's desired return on capital), then from time to time upon demand of such Lender (with a copy of such demand to the Administrative Agent), the Borrowers shall pay to such Lender such additional amounts as will compensate such Lender for such reduction.

 

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3.10        Eurodollar Provisions.

If the Administrative Agent determines (which determination shall be conclusive and binding upon the Borrowers) in connection with any request for a Eurodollar Loan or a conversion to or continuation thereof that (i) deposits in Dollars are not being offered to banks in the applicable offshore interbank market for the applicable amount
and Interest Period of such Eurodollar Loan, (ii) adequate and reasonable means do not exist for determining the Eurodollar Rate for such Eurodollar Loan, or (iii) the Eurodollar Rate for such Eurodollar Loan in such does not adequately and fairly reflect the cost to the Lenders of funding such Eurodollar Loan, the Administrative Agent will promptly notify the Borrowers and the Lenders.  Thereafter, the obligation of the Lenders to make or maintain Eurodollar Loans shall be suspended until the Administrative
Agent revokes such notice.  Upon receipt of such notice, a Borrower may revoke any pending Notice of Borrowing or Notice of Continuation/Conversion with respect to Eurodollar Loans or, failing that, will be deemed to have converted such request into a request for a Borrowing of or, to the extent permitted hereunder, conversion into a Base Rate Loan in the amount specified therein.

3.11        Illegality.

If any Lender determines that any Requirement of Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make, maintain or fund Eurodollar Loans, or materially restricts the authority of such Lender to purchase or sell, or to take deposits of Dollars
in the London interbank market, or to determine or charge interest rates based upon the Eurodollar Rate, then, on notice thereof by such Lender to the Borrowers through the Administrative Agent, any obligation of such Lender to make or continue Eurodollar Loans or to convert Base Rate Loans to Eurodollar Loans shall be suspended until such Lender notifies the Administrative Agent and the Borrowers that the circumstances giving rise to such determination no longer exist.  Upon receipt of such notice,
the Borrowers shall, upon demand to the Borrowers from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all Eurodollar Loans of such Lender to Base Rate Loans, either on the last day of the Interest Period thereof, if such Lender may lawfully continue to maintain such Eurodollar Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurodollar Loans.  Upon any such prepayment or conversion, the Borrowers shall also pay interest
on the amount so prepaid or converted, together with any amounts due with respect thereto pursuant to Section 3.14.

3.12        Requirements of Law; Reserves on Eurodollar Loans.

(a)           Changes in Law.  If any Lender determines that as a result of the introduction of or any change in, or in the interpretation of, any Requirement of Law, or such Lender's compliance therewith,
there shall be any increase in the cost to such Lender of agreeing to make or making, funding or maintaining Eurodollar Loans, or a reduction in the amount received or receivable by such Lender in connection with any of the foregoing (excluding for purposes of this Section 3.12 any such increased costs or reduction in amount resulting from (i) Taxes or Other Taxes (as to which Section 3.13 shall govern) and (ii) reserve requirements contemplated by subsection (b) below), then from time to time, upon demand of
such Lender (through the Administrative Agent), the Borrowers shall pay to such Lender such additional amounts as will compensate such Lender for such increased cost or reduction in yield.

(b)           Reserves.  The Borrowers shall pay to each Lender (to the extent such Lender has not otherwise been compensated therefor hereunder), as long as such Lender shall be required to maintain reserves
with respect to liabilities or assets consisting of or including Eurodollar funds or deposits (currently known as "Eurodollar liabilities"), additional interest on the unpaid 

 

 

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principal amount of each Eurodollar Loan equal to the actual costs of such reserves allocated to such Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive absent demonstrable error), which, shall be due and payable on each date on which interest is payable on such Loan; provided that
the Borrowers shall have received at least 15 days' prior notice (with a copy to the Administrative Agent) of such additional interest from such Lender.  If a Lender fails to give notice 15 days prior to the relevant Interest Payment Date, such additional interest shall be due and payable 15 days from receipt of such notice.

3.13        Taxes.

(a)           Payment of Taxes.  Any and all payments by the Borrowers to or for the account of the Administrative Agent or any Lender under any Credit Document shall be made free and clear of and without deduction
for any and all present or future income, stamp or other taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or similar charges, and all liabilities with respect thereto, but excluding, in the case of the Administrative Agent and each Lender, taxes imposed on or measured by its net income, and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the Laws of which the Administrative Agent or such Lender, as the case
may be, is organized or maintains its Lending Office (all such non-excluded present or future income, stamp or other taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or similar charges, and liabilities being hereinafter referred to as "Taxes").  If a Borrower shall be required by any Requirement of Law to deduct any Taxes from or in respect of any sum payable under any Credit Document to the Administrative Agent
or any Lender, (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 3.13(a)), the Administrative Agent or such Lender, as the case may be, receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Borrower shall make such deductions, (iii) such Borrower shall pay the full amount deducted to the relevant taxation authority or other Governmental
Authority in accordance with applicable Requirements of Law, and (iv) within 30 days after the date of such payment, such Borrower shall furnish to the Administrative Agent (which shall forward the same to such Lender, if applicable) the original or a certified copy of a receipt evidencing payment thereof, to the extent such receipt is issued therefor, or other written proof of payment thereof that is reasonably satisfactory to the Administrative Agent.

(b)           Additional Taxes.  In addition, the Borrowers agree to pay any and all present or future stamp, court or documentary taxes and any other excise or property taxes or charges or similar levies which
arise from any payment made under any Credit Document or from the execution, delivery, performance, enforcement or registration of, or otherwise with respect to, any Credit Document (hereinafter referred to as "Other Taxes").

(c)           No Deduction for Taxes.  If a Borrower shall be required to deduct or pay any Taxes or Other Taxes from or in respect of any sum payable under any Credit Document to the Administrative Agent or
any Lender, such Borrower shall also pay to the Administrative Agent (for the account of such Lender) or to such Lender, at the time interest is paid, such additional amount that such Lender specifies as necessary to preserve the after-tax yield (after factoring in all taxes, including taxes imposed on or measured by net income) such Lender would have received if such Taxes or Other Taxes had not been imposed.

(d)           Indemnification.  The Borrowers agree to indemnify the Administrative Agent and each Lender for (i) the full amount of Taxes and Other Taxes (including any Taxes or Other Taxes imposed or asserted
by any jurisdiction on amounts payable under this Section 3.13(d)) 

 

 

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paid by the Administrative Agent and such Lender, and (ii) any liability (including penalties, interest and expenses) arising therefrom or with respect thereto.

(e)           Exemption from Taxes.  In the case of any payment hereunder or under any other Credit Document by or on behalf of a Borrower through an account or branch outside the United States, or on behalf
of a Borrower by a payor that is not a United States person, if such Borrower determines that no taxes are payable in respect thereof, such Borrower shall furnish, or shall cause such payor to furnish, to the Administrative Agent, an opinion of counsel reasonably acceptable to the Administrative Agent stating that such payment is exempt from Taxes.  For purposes of this subsection (e), the terms "United States" and "United States person" shall have the meanings specified in Section 7701 of the Code.

(f)           Foreign Lenders.  Each Lender that is a foreign corporation, foreign partnership or foreign trust within the meaning of the Code (a "Foreign
Lender") shall deliver to the Administrative Agent, prior to receipt of any payment subject to withholding under the Code, two duly signed completed copies of either IRS Form W-8BEN or any successor thereto (relating to such Lender and entitling it to an exemption from, or reduction of, withholding tax on all payments to be made to such Lender by the Borrowers pursuant to this Credit Agreement), as appropriate, or IRS Form W-8ECI or any successor thereto (relating to all payments to be made to such Lender
by the Borrowers pursuant to this Credit Agreement) or such other evidence satisfactory to the Company and the Administrative Agent that such Lender is entitled to an exemption from, or reduction of, United States withholding tax. Thereafter and from time to time, each such Lender shall (i) promptly submit to the Administrative Agent such additional duly completed and signed copies of one of such forms (or such successor forms as shall be adopted from time to time by the relevant United States taxing authorities),
as appropriate, as may reasonably be requested by the Company or the Administrative Agent and then be available under then current United States Laws and regulations to avoid, or such evidence as is satisfactory to the Company and the Administrative Agent of any available exemption from or reduction of, United States withholding taxes in respect of all payments to be made to such Lender by the Borrowers pursuant to this Credit Agreement, (ii) promptly notify the Administrative Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction, and (iii) take such steps as shall not be materially disadvantageous to it, in the reasonable judgment of such Lender, and as may be reasonably necessary (including the re-designation of its Lending Office) to avoid any Requirement of Law that a Borrower make any deduction or withholding for taxes from amounts payable to such Lender.  If the forms or other evidence provided by such Lender at the time such Lender first becomes a
party to this Credit Agreement indicate a United States interest withholding tax rate in excess of zero, withholding tax at such rate shall be considered excluded from Taxes unless and until such Lender provides the appropriate forms certifying that a lesser rate applies, whereupon withholding tax at such lesser rate only shall be considered excluded from Taxes for periods governed by such forms; provided, however, that, if at the date of any assignment pursuant to which a Lender becomes a party to this Credit
Agreement, the assignor Lender was entitled to payments under Section 3.13(a) in respect of United States withholding tax with respect to interest paid at such date, then, to such extent, the term Taxes shall include (in addition to withholding taxes that may be imposed in the future or other amounts otherwise includable in Taxes) United States withholding tax, if any, applicable with respect to the assignee Lender on such date.  If such Lender fails to deliver the above forms or other evidence, then
the Administrative Agent may withhold from any interest payment to such Lender an amount equal to the applicable withholding tax imposed by Sections 1441 and 1442 of the Code, without reduction.  If any Governmental Authority asserts that the Administrative Agent did not properly withhold any tax or other amount from payments made in respect of such Lender, such Lender shall indemnify the Administrative Agent therefor, including 

 

 

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all penalties and interest, any taxes imposed by any jurisdiction on the amounts payable to the Administrative Agent under this Section 3.13(f), and costs and expenses (including the reasonable fees and expenses of legal counsel) of the Administrative Agent.  For any period with respect to which a Lender has failed to provide
the Company with the above forms or other evidence (other than if such failure is due to a change in the applicable Law, or in the interpretation or application thereof, occurring after the date on which such form or other evidence originally was required to be provided or if such form or other evidence otherwise is not required), such Lender shall not be entitled to indemnification under subsection (a) or (c) of this Section 3.13 with respect to Taxes imposed by the United States by reason of such failure; provided,
however, that should a Lender become subject to Taxes because of its failure to deliver such form or other evidence required hereunder, the Borrowers shall take such steps as such Lender shall reasonably request to assist such Lender in recovering such Taxes.  The obligation of the Lenders under this Section 3.13(f) shall survive the payment of all Borrower Obligations and the resignation or replacement of the Administrative Agent.

(g)           Reimbursement.  In the event that an additional payment is made under Section 3.13(a) or (c) for the account of any Lender and such Lender, in its reasonable judgment, determines that it has finally
and irrevocably received or been granted a credit against or release or remission for, or repayment of, any tax paid or payable by it in respect of or calculated with reference to the deduction or withholding giving rise to such payment, such Lender shall, to the extent that it determines that it can do so without prejudice to the retention of the amount of such credit, relief, remission or repayment, pay to the applicable Borrower such amount as such Lender shall, in its reasonable judgment, have determined
to be attributable to such deduction or withholding and which will leave such Lender (after such payment) in no worse position than it would have been in if such Borrower had not been required to make such deduction or withholding.  Nothing herein contained shall interfere with the right of a Lender to arrange its tax affairs in whatever manner it thinks fit nor oblige any Lender to claim any tax credit or to disclose any information relating to its tax affairs or any computations in respect thereof
or require any Lender to do anything that would prejudice its ability to benefit from any other credits, reliefs, remissions or repayments to which it may be entitled.

3.14        Compensation.

Upon the written demand of any Lender, each Borrower shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of:

(a)           any continuation, conversion, payment or prepayment of any Eurodollar Loan of such Borrower on a day other than the last day of the Interest Period for such Eurodollar Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise); or

(b)           any failure by such Borrower (for a reason other than the failure of such Lender to make a Eurodollar Loan) to prepay, borrow, continue or convert any Eurodollar Loan on the date or in the amount previously requested by such Borrower.

The amount each such Lender shall be compensated pursuant to this Section 3.14 shall include, without limitation, (i) any loss incurred by such Lender in connection with the re-employment of funds prepaid, repaid, not borrowed or paid, as the case may be and (ii) any reasonable out-of-pocket expenses (including the reasonable fees
and expenses of legal counsel) incurred and reasonably attributable thereto.

For purposes of calculating amounts payable by the Borrowers to the Lenders under this Section 3.14, each Lender shall be deemed to have funded each Eurodollar Loan made by it at the 

 

 

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Eurodollar Rate for such Loan by a matching deposit or other borrowing in the London interbank market for a comparable amount and for a comparable period, whether or not such Eurodollar Loan was in fact so funded.

3.15         Determination and Survival of Provisions.

All determinations by the Administrative Agent or a Lender of amounts owing under Sections 3.9 through 3.14, inclusive, shall, absent manifest error, be conclusive and binding on the parties hereto and all amounts owing thereunder shall be due and payable within ten Business Days of demand therefor.  In determining such amount,
the Administrative Agent or such Lender may use any reasonable averaging and attribution methods.  Section 3.9 through 3.14, inclusive, shall survive the termination of this Credit Agreement and the payment of all Borrower Obligations.

SECTION 4

CONDITIONS PRECEDENT TO CLOSING

4.1           Closing Conditions.

The obligation of the Lenders to enter into this Credit Agreement and make the initial Revolving Loans is subject to satisfaction of the following conditions:

(a)           Executed Credit Documents.  Receipt by the Administrative Agent of duly executed copies of:  (i) this Credit Agreement, (ii) the requested Notes, (iii) an amended and restated Guaranty
Agreement by the Company of the Borrower Obligations of FCP, and (iv) all other Credit Documents, each in form and substance reasonably acceptable to the Lenders in their sole discretion.

(b)           Authority Documents.  Receipt by the Administrative Agent of the following:

(i)           Organizational Documents.  Copies of the articles of incorporation or certificate of limited partnership, as applicable, of the Company and FCP, certified to be true and complete as of a recent
date by the appropriate Governmental Authority of the state or other jurisdiction of its formation and copies of the bylaws or partnership agreement, as applicable, of the Company and FCP, certified by a secretary or assistant secretary (or the equivalent) of such Borrower to be true and correct as of the Closing Date.

(ii)           Resolutions.  Copies of resolutions of the board of directors of each of the Company and FCP approving and adopting this Credit Agreement and the other Credit Documents to which it is a party,
the transactions contemplated herein and therein and authorizing execution and delivery hereof and thereof, certified by a secretary or assistant secretary (or the equivalent) of such Borrower to be true and correct and in full force and effect as of the Closing Date.

(iii)           Good Standing.  Copies of certificates of good standing, existence or its equivalent with respect to the Company and FCP certified as of a recent date by the appropriate Governmental Authority
of the state or other jurisdiction of its formation.

(iv)           Incumbency.  An incumbency certificate of each of the Company and FCP certified by a secretary or assistant secretary (or the equivalent) of such Borrower to be true and correct as of the Closing
Date.

 

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(c)           Opinions of Counsel.   Receipt by the Administrative Agent of opinions of counsel from outside counsel to the Company and FCP, in form and substance acceptable to the Administrative Agent,
addressed to the Administrative Agent and the Lenders and dated as of the Closing Date.

(d)           Financial Statements.  Receipt by the Administrative Agent of a copy of (i) the annual consolidated financial statements (including balance sheets, income statements and cash flow statements)
of the Company and its Subsidiaries for Fiscal Years 2003 and 2004, audited by independent public accountants of recognized national standing, (ii) the consolidated balance sheet and income statement of the Company and its Subsidiaries for the Fiscal Quarter ended June 30, 2005, together with the related consolidated statement of income for such Fiscal Quarter and a year to date statement of cash flows and (iii) such other financial information regarding the Company as the Administrative Agent may reasonably
request.

(e)           Due Diligence.  The Administrative Agent and the Lenders shall have completed all due diligence with respect to the Company and its Subsidiaries and the transactions contemplated by this Credit
Agreement and the other Credit Documents, in scope and determination reasonably satisfactory to the Administrative Agent and the Lenders.

(f)           Material Adverse Effect.  Since December 31, 2004, there shall have been no development or event relating to or affecting the Company or any of its Subsidiaries that has had or could be reasonably
expected to have a Material Adverse Effect and no Material Adverse Change in the facts and information regarding the Company and its Subsidiaries as represented to date.

(g)           Absence of Market Disruption.  There shall not have occurred a material adverse change in or material disruption of conditions in the financial, banking or capital markets which the Administrative
Agent and the Arrangers, in their sole discretion, deem material in connection with the syndication of the Credit Agreement.

(h)           Litigation.  There shall not exist any material order, decree, judgment, ruling or injunction or any material pending or threatened action, suit, investigation or proceeding against the Company
or any of its Subsidiaries except as represented to date.

(i)           Consents.  All necessary governmental, shareholder and third party consents and approvals, if any, with respect to this Credit Agreement and the Credit Documents and the transactions contemplated
herein and therein have been received and no condition or Requirement of Law exists which would reasonably be likely to restrain, prevent or impose any material adverse conditions on the transactions contemplated hereby and by the other Credit Documents.

(j)           Officer's Certificates.  Receipt by the Administrative Agent of a certificate or certificates executed by an Authorized Officer of the Company as of the Closing Date stating that (i) the Company
and each of its Subsidiaries are in compliance in all material respects with all existing material financial obligations and all material Requirements of Law, (ii) there does not exist any material order, decree, judgment, ruling or injunction or any material pending or threatened action, suit, investigation or proceeding against the Company or any of its Subsidiaries, (iii) the financial statements and information delivered to the Administrative Agent on or before the Closing Date were prepared in good faith
and in accordance with GAAP and (iv) immediately after giving effect to this Credit Agreement, the other Credit Documents and all the transactions contemplated herein or therein to occur on such date, (A) each of the Company and FCP is Solvent, (B) no Default 

 

 

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or Event of Default exists, (C) all representations and warranties contained herein and in the other Credit Documents are true and correct in all material respects, (D) since December 31, 2004, there has been no development or event relating to or affecting the Company or any of its Subsidiaries that has had or could be reasonably
expected to have a Material Adverse Effect and there exists no event, condition or state of facts that could result in or reasonably be expected to result in a Material Adverse Change and (E) the Company is in compliance with each of the financial covenants set forth in Section 7.2, as of June 30, 2005, as demonstrated in the Covenant Compliance Worksheet attached to such certificate.

(k)           Fees and Expenses.  Unless waived by the Person entitled thereto, payment by the Company of all fees and expenses owed by them to the Administrative Agent, the Arrangers and the Lenders on or
before the Closing Date, including, without limitation, as set forth in the Fee Letter.

(l)           Other.  Receipt by the Lenders of such other documents, instruments, agreements or information as reasonably requested by any Lender.

SECTION 5

CONDITIONS TO ALL EXTENSIONS OF CREDIT

5.1           Funding Requirements.

In addition to the conditions precedent stated elsewhere herein, the Lenders shall not be obligated to make Revolving Loans and the L/C Issuers shall not be obligated to issue Letters of Credit unless:

(a)           Notice. The applicable Borrower shall have delivered (i) in the case of any new Revolving Loan, a Notice of Borrowing, duly executed and completed, by the time specified in Section 2.1 and (ii) in the case
of any Letter of Credit, a Letter of Credit Application, duly executed and completed, by the time specified in Section 2.2.

(b)           Representations and Warranties.  The representations and warranties made by the applicable Borrower in any Credit Document (other than the representation and warranties in Section 6.7(a) (but
only with respect to clause (a) of the definition of Material Adverse Effect) and Section 6.9 of the Credit Agreement) are true and correct in all material respects at and as if made as of such date except to the extent they expressly and exclusively relate to an earlier date.  In addition, if the Borrower Obligations of such Borrower are guaranteed by the Company pursuant to a Guaranty Agreement, the representations and warranties made by the Company in any Credit Document (other than the representation
and warranties in Section 6.7(a) (but only with respect to clause (a) of the definition of Material Adverse Effect) and Section 6.9 of the Credit Agreement) are true and correct in all material respects at and as if made as of such date except to the extent they expressly and exclusively relate to an earlier date.

(c)           No Default.  No Default or Event of Default as to the applicable Borrower shall exist and be continuing either prior to or after giving effect to such Credit Extension.  In addition,
if the Borrower Obligations of such Borrower are guaranteed by the Company, no Default or Event of Default with respect to the Company shall exist and be continuing either prior to or after giving effect to such Credit Extension.

(d)           Availability.  Immediately after giving effect to such Credit Extension (and the application of the proceeds thereof), (i) the aggregate principal amount of outstanding Revolving 

 

 

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Loans plus the aggregate principal amount of outstanding L/C Obligations shall not exceed the Revolving Committed Amount, (ii) the principal amount of outstanding Revolving Loans plus the principal amount of outstanding L/C Obligations of each of TNMP, First Choice and FCP, as applicable, shall not exceed the Subsidiary Borrower Sublimit
of such Person, (iii) with respect to each individual Lender, the sum of outstanding principal amount of Revolving Loans of such Lender and outstanding principal amount of L/C Obligations of such Lender shall not exceed such Lender's Pro Rata Share of the Revolving Committed Amount and (iv) the aggregate amount of L/C Obligations shall not exceed the Letter of Credit Sublimit.

The delivery of each Notice of Borrowing or a Letter of Credit Application shall constitute a representation and warranty by the applicable Borrower of the correctness of the matters specified in subsections (b), (c) and (d) above.

SECTION 6

REPRESENTATIONS AND WARRANTIES

To induce the Administrative Agent and the Lenders to enter into this Credit Agreement and to induce the Lenders to extend the credit contemplated hereby, each Borrower represents and warrants to the Administrative Agent and the Lenders as follows:

6.1           Organization and Good Standing.

Each of such Borrower and its Subsidiaries (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (b) is duly qualified and in good standing as a foreign entity authorized to do business in every other jurisdiction where the failure to so qualify would have a Material Adverse
Effect and (c) has the requisite power and authority to own its properties and to carry on its business as now conducted and as proposed to be conducted.

6.2           Due Authorization.

Each of such Borrower and any of its Subsidiaries party to any Credit Document (a) has the requisite power and authority to execute, deliver and perform this Credit Agreement and the other Credit Documents to which it is a party and to incur the obligations herein and therein provided for and (b) has been authorized by all necessary action
to execute, deliver and perform this Credit Agreement and the other Credit Documents to which it is a party.

6.3           No Conflicts.

Neither the execution and delivery of this Credit Agreement and the other Credit Documents, nor the consummation of the transactions contemplated herein and therein, nor performance of and compliance with the terms and provisions hereof and thereof by such Borrower will (a) violate or conflict with any provision of its organizational documents,
(b) violate, contravene or conflict with any law (including without limitation, the Public Utility Holding Company Act of 1935, as amended), regulation (including without limitation, Regulation U and Regulation X), order, writ, judgment, injunction, decree or permit applicable to it, (c) violate, contravene or conflict with contractual provisions of, or cause an event of default under, any indenture, loan agreement, mortgage, deed of trust, contract or other agreement or instrument to which it is a party
or by which it may be bound, the violation of which would have or would be reasonably expected to have a Material Adverse Effect or (d) result in or require the creation of any Lien upon or with respect to its properties.

 

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6.4           Consents.

No consent, approval, authorization or order of, or filing, registration or qualification with, any court or Governmental Authority or third party is required in connection with the execution, delivery or performance of this Credit Agreement or any of the other Credit Documents that has not been obtained or completed.

6.5           Enforceable Obligations.

This Credit Agreement and the other Credit Documents to which it is a party have been duly executed and delivered and constitute the legal, valid and binding obligations of such Borrower enforceable against such Borrower in accordance with their respective terms, except as may be limited by Debtor Relief Laws or similar laws affecting
creditors' rights generally or by general equitable principles.

6.6           Financial Condition.

The financial statements delivered to the Lenders pursuant to Section 4.1(d) and pursuant to Sections 7.1(a) and (b): (i) have been prepared in accordance with GAAP except that the quarterly financial statements are subject to year-end adjustments and have fewer footnotes than annual statements and (ii) present fairly the financial
condition, results of operations and cash flows of such Borrower and its Subsidiaries as of such date and for such periods.  No opinion provided with respect to such Borrower's financial statements pursuant to Section 7.1 (or as to any prior annual financial statements) has been withdrawn.

6.7           No Material Change.

(a)           Since December 31, 2004, there has been no development or event relating to or affecting such Borrower or any of its Subsidiaries which would have or would reasonably be expected to have a Material Adverse Effect.

(b)           Since December 31, 2004, there has been no sale, transfer or other disposition by such Borrower or any of its Subsidiaries of any material part of its business or property, and no purchase or other acquisition by such Borrower or any of its Subsidiaries of any business
or property (including the Capital Stock of any other Person) material in relation to the financial condition of such Borrower or any of its Subsidiaries, in each case which is not (i) reflected in the most recent financial statements delivered to the Lenders pursuant to Section 4.1(d) or 7.1 or in the notes thereto or (ii) otherwise permitted by the terms of this Credit Agreement and communicated to the Lenders.

6.8           No Default.

Neither such Borrower nor any of its Subsidiaries is in default in any respect under any contract, lease, loan agreement, indenture, mortgage, security agreement or other agreement or obligation to which it is a party or by which any of its properties is bound which default would have or would reasonably be expected to have a Material
Adverse Effect.  No Default or Event of Default presently exists and is continuing.

 

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6.9           Litigation.

There are no actions, suits, investigations or legal, equitable, arbitration or administrative proceedings, pending or, to the knowledge of such Borrower, threatened against such Borrower or any of its Subsidiaries which would have or would reasonably be expected to have a Material Adverse Effect.

6.10           Taxes.

Each of such Borrower and its Subsidiaries has filed, or caused to be filed, all material tax returns (federal, state, local and foreign) required to be filed and paid all amounts of taxes shown to be due (including interest and penalties) and has paid all other taxes, fees, assessments and other governmental charges (including mortgage
recording taxes, documentary stamp taxes and intangibles taxes) owed by it, except for such taxes which are not yet delinquent or that are being contested in good faith and by proper proceedings, and against which adequate reserves are being maintained in accordance with GAAP.

6.11           Compliance with Law.

Each of such Borrower and its Subsidiaries is in compliance with all laws, rules, regulations, orders and decrees applicable to it or to its properties, unless such failure to comply would not have or would not reasonably be expected to have a Material Adverse Effect.

6.12           ERISA.

Except as would not result or reasonably be expected to result in a Material Adverse Effect:

(a)           During the five-year period prior to the date on which this representation is made or deemed made: (i) no ERISA Event has occurred, and, to the best knowledge of such Borrower, no event or condition has occurred or exists as a result of which any ERISA Event would be
reasonably expected to occur, with respect to any Plan; (ii) no "accumulated funding deficiency," as such term is defined in Section 302 of ERISA and Section 412 of the Code, whether or not waived, has occurred with respect to any Plan; (iii) each Plan has been maintained, operated, and funded in compliance with its own terms and in material compliance with the provisions of ERISA, the Code, and any other applicable federal or state laws; and (iv) no Lien in favor or the PBGC or a Plan has arisen or is reasonably
likely to arise on account of any Plan.

(b)           The actuarial present value of all "benefit liabilities" under each Single Employer Plan (determined within the meaning of Section 401(a)(2) of the Code, utilizing the actuarial assumptions used to fund such Plans), whether or not vested, did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed made, exceed the current value of the assets of such Plan allocable to such accrued liabilities, except as disclosed in such Borrower's financial statements.

(c)           Neither such Borrower nor any ERISA Affiliate has incurred, or, to the best knowledge of such Borrower, is reasonably expected to incur, any withdrawal liability under ERISA to any Multiemployer Plan or Multiple Employer Plan.  Neither such Borrower nor any
ERISA Affiliate has received any notification that any Multiemployer Plan is in reorganization (within the meaning of Section 4241 of ERISA), is insolvent (within the meaning of Section 4245 of ERISA), or has been terminated (within the meaning of Title IV of ERISA), and no Multiemployer Plan is, to the best knowledge of such Borrower, reasonably expected to be in reorganization, insolvent, or terminated.

 

 

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(d)           No prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code) or breach of fiduciary responsibility has occurred with respect to a Plan which has subjected or would be reasonably likely to subject such Borrower or any ERISA Affiliate
to any liability under Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the Code, or under any agreement or other instrument pursuant to which such Borrower or any ERISA Affiliate has agreed or is required to indemnify any person against any such liability.

(e)           The present value (determined using actuarial and other assumptions which are reasonable with respect to the benefits provided and the employees participating) of the liability of such Borrower and each ERISA Affiliate for post-retirement welfare benefits to be provided
to their current and former employees under Plans which are welfare benefit plans (as defined in Section 3(1) of ERISA), net of all assets under all such Plans allocable to such benefits, are reflected on the financial statements referenced in Section 7.1 in accordance with FASB 106.

(f)           Each Plan which is a welfare plan (as defined in Section 3(1) of ERISA) to which Sections 601-609 of ERISA and Section 4980B of the Code apply has been administered in compliance in all material respects with such sections.

6.13           Use of Proceeds; Margin Stock.

The proceeds of the Credit Extensions to such Borrower hereunder will be used solely for the purposes specified in  Section 7.9.  None of such proceeds will be used for the purpose of (a) (i) purchasing or carrying any Margin Stock or (ii) reducing or retiring any Indebtedness which was originally incurred to purchase
or carry Margin Stock, or (iii) for any other purpose that might constitute this transaction a "purpose credit" within the meaning of Regulation U or (b) for the acquisition of another Person unless the board of directors (or other comparable governing body) or stockholders, as appropriate, of such Person has approved such acquisition.

6.14           Government Regulation.

(a)           In the case of the Company:  the Company is a "holding company" within the meaning of that term under the Public Utility Holding Company Act of 1935, as amended ("PUHCA"), and any issuance of
the Notes by the Company hereunder, the Credit Extensions contemplated by this Credit Agreement and the borrowing, repayment and reborrowing of Loans hereunder is permitted by PUHCA and requires no authorization or approval of any Governmental Authority other than such authorizations and approvals that already have been obtained.

(b)           In the case of FCP and in the case of First Choice or TNMP (if either such Person has become a Borrower hereunder):  such Borrower will constitute a "subsidiary company" within the meaning of that term under PUHCA, and any issuance of the Notes by such Borrower
and the Credit Extensions contemplated by this Credit Agreement and the borrowing, repayment and reborrowing of Loans hereunder is permitted by PUHCA (and the Holdings Company Act Release No. 27934 (December 30, 2004)) and requires no authorization or approval of any Governmental Authority other than such authorizations and approvals that already have been obtained.

(c)           Such Borrower is not an "investment company" registered or required to be registered under the Investment Company Act of 1940, as amended, or controlled by such a company.

 

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6.15           Solvency.

Such Borrower is and, after the consummation of the transactions contemplated by this Credit Agreement, will be Solvent.

6.16           Disclosure.

Neither this Credit Agreement nor any financial statements delivered to the Administrative Agent or the Lenders nor any other document, certificate or statement furnished to the Administrative Agent or the Lenders by or on behalf of a Borrower in connection with the transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements contained therein or herein, taken as a whole, not misleading.

6.17           Environmental Matters.

Except as would not result or reasonably be expected to result in a Material Adverse Effect:  (a) each of the properties of such Borrower and its Subsidiaries (the "Properties") and all operations at the Properties are in substantial compliance with all applicable
Environmental Laws, (b) there is no undocumented or unreported violation of any Environmental Law with respect to the Properties or the businesses operated by such Borrower and its Subsidiaries (the "Businesses") that such Borrower is aware of, and (c) there are no conditions relating to the Businesses or Properties that have given rise to or would reasonably be expected to give rise to a liability under any applicable Environmental Laws.

6.18           Material Leases.

Set forth on Schedule 6.18 hereto is a complete and accurate list of the Material Leases on the date hereof, showing the expiration date and annual rental cost thereof.  PSNM is entitled to exercise all of the rights of lessee purported to be granted to PSNM under
each such Material Lease.

6.19           Material Lease Interest Payments and Discount Rate.

Schedule 6.19 hereto, as most recently provided to the Administrative Agent, sets forth the same (a) amounts with respect to the interest portion of payments under the Material Leases of PSNM and (b) discount rate used to calculate the net present value of all amounts payable
under the Material Leases as have been most recently provided (or that PSNM intends to provide shortly) to Moody's and S&P or as have otherwise been agreed to by the Required Lenders.

 

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SECTION 7

AFFIRMATIVE COVENANTS

Each Borrower covenants and agrees that, until the termination of the Commitments, the termination or expiration of all Letters of Credit and the payment in full of all of its Borrower Obligations:

7.1           Information Covenants.

Such Borrower will furnish, or cause to be furnished, to the Lenders:

(a)           Annual Financial Statements. As soon as available, and in any event within 120 days after the close of each Fiscal Year of such Borrower, a consolidated balance sheet and income statement of such Borrower
and its Subsidiaries, as of the end of such Fiscal Year, together with the related consolidated statements of income and of cash flows for such Fiscal Year, setting forth in comparative form figures for the preceding Fiscal Year, all such financial information described above to be in reasonable form and detail and, in each case, audited by independent certified public accountants of recognized national standing reasonably acceptable to the Required Lenders and whose opinion shall be furnished to the Lenders,
and shall be to the effect that such financial statements have been prepared in accordance with GAAP (except for changes with which such accountants concur) and shall not be limited as to the scope of the audit or qualified in any respect.

(b)           Quarterly Financial Statements. As soon as available, and in any event within 60 days after the close of each Fiscal Quarter of such Borrower (other than the fourth Fiscal Quarter), a consolidated balance
sheet and income statement of such Borrower and its Subsidiaries as of the end of such Fiscal Quarter, together with the related consolidated statement of income for such Fiscal Quarter and a year to date statement of cash flows, in each case setting forth in comparative form figures for the corresponding period of the preceding Fiscal Year, all such financial information described above to be in reasonable form and detail and reasonably acceptable to the Required Lenders, and, in each case, accompanied by a
certificate of a Financial Officer of such Borrower to the effect that such quarterly financial statements fairly present in all material respects the financial condition of such Person and have been prepared in accordance with GAAP, subject to changes resulting from audit and normal year-end audit adjustments and except that the quarterly financial statements have fewer footnotes than annual statements.

(c)           Officer's Certificate.  At the time of delivery of the financial statements provided for in Sections 7.1(a) and 7.1(b) above, a certificate of a Financial Officer substantially in the form
of Exhibit 7.1(c): (i) setting forth calculations demonstrating compliance by the applicable Borrower with the financial covenants set forth in Section 7.2 as of the end of such fiscal period and (ii) stating that no Default or Event of Default exists, or if any Default or Event of Default does exist, specifying the nature and extent thereof and what action such Borrower proposes to take with respect thereto.

(d)           Reports.  Notice of the filing by such Borrower of any Form 10-Q, Form 10-K or Form 8-K with the SEC promptly upon the filing thereof and copies of all financial statements, proxy statements,
notices and reports as such Borrower shall send to its shareholders concurrently with the mailing of any such statements, notices or reports to its shareholders.

(e)           Notices.  Upon such Borrower obtaining knowledge thereof, such Borrower will give written notice to the Administrative Agent within ten days of (i) the occurrence of a Default or Event of Default,
specifying the nature and extent thereof and what action such Borrower proposes to 

 

 

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take with respect thereto and (ii) the occurrence of any of the following with respect to such Borrower or any of its Subsidiaries (A) the pendency or commencement of any litigation, arbitration or governmental proceeding against such Borrower or any of its Subsidiaries which, if adversely determined, would have or would reasonably be
expected to have a Material Adverse Effect, (B) one or more judgments, orders, or decrees shall be entered against such Borrower or any of its Subsidiaries involving a liability of $5,000,000 or more, in the aggregate or (C) the institution of any proceedings against such Borrower or any of its Subsidiaries with respect to, or the receipt of notice by such Person of potential liability or responsibility for violation or alleged violation of, any federal, state or local law, rule or regulation (including, without
limitation, any Environmental Law), the violation of which would have or would reasonably be expected to have a Material Adverse Effect.

(f)           ERISA.  Upon such Borrower or any ERISA Affiliate obtaining knowledge thereof, such Borrower will give written notice to the Administrative Agent promptly (and in any event within ten days) of
any of the following which would result in or reasonably would be expected to result in a Material Adverse Effect: (i) any event or condition, including, but not limited to, any Reportable Event, that constitutes, or would be reasonably expected to lead to, an ERISA Event; (ii) with respect to any Multiemployer Plan, the receipt of notice as prescribed in ERISA or otherwise of any withdrawal liability assessed against such Borrower or any of its ERISA Affiliates, or of a determination that any Multiemployer Plan
is in reorganization or insolvent (both within the meaning of Title IV of ERISA); (iii) the failure to make full payment on or before the due date (including extensions) thereof of all amounts which such Borrower or any of its Subsidiaries or ERISA Affiliates is required to contribute to each Plan pursuant to its terms and as required to meet the minimum funding standard set forth in ERISA and the Code with respect thereto; or (iv) a change in the funding status of any Plan, in each case together with a description
of any such event or condition or a copy of any such notice and a statement by an officer of such Borrower briefly setting forth the details regarding such event, condition, or notice, and the action, if any, which has been or is being taken or is proposed to be taken with respect thereto.  Promptly upon request, such Borrower shall furnish the Lenders with such additional information concerning any Plan as may be reasonably requested, including, but not limited to, copies of each annual report/return
(Form 5500 series), as well as all schedules and attachments thereto required to be filed with the Department of Labor and/or the Internal Revenue Service pursuant to ERISA and the Code, respectively, for each "plan year" (within the meaning of Section 3(39) of ERISA).

(g)           Debt Ratings.   Prompt notice of any change in the Debt Ratings of such Borrower.

(h)           Other Information.  With reasonable promptness upon any such request, such other information regarding the business, properties or financial condition of such Borrower as the Lenders may reasonably
request.

Documents required to be delivered pursuant to Section 7.1(a), (b) or (d) (to the extent any such documents are included in materials otherwise filed with the Securities and Exchange Commission) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which a Borrower posts such documents,
or provides a link thereto on such Borrower's website on the Internet at the website address listed on Schedule 11.1; or (ii) on which such documents are posted on such Borrower's behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that:
(A) a Borrower shall deliver paper copies of such documents to the Administrative Agent or any Lender that requests such Borrower to deliver such paper copies until a written request to cease delivering paper copies is given by the Administrative Agent or such Lender and (B) a Borrower shall notify the Administrative Agent and each Lender (by telecopier or electronic mail) 

 

 

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of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents.  Notwithstanding anything contained herein, in every instance a Borrower shall be required to provide paper
copies of the Officer's Certificate required by Section 7.1(c) to the Administrative Agent.  Except for such Officer's Certificate, the Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Borrowers with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.

7.2          Financial Covenants.

 

     (a)  Debt Capitalization
- Company.  At all times the ratio of (i) Consolidated Indebtedness of the Company to (ii) Consolidated Capitalization of the Company shall be less than or equal to 0.65 to 1.0.  For purposes of such calculation, the portion of Consolidated Indebtedness of the Company attributable to obligations under Material Leases shall be the net present value (using (i) the discount rate (A) set forth in Schedule 6.19,
so long as Schedule 6.19 specifies the same relevant discount rate as is used in calculating such net present value provided to Moody's and S&P or (B) the discount rate used in calculating such net present value provided to Moody's and S&P or (ii) any such other rate as shall be proposed by the Company (and agreed upon by the Required Lenders) of all amounts payable under the Material Leases.

 

       (b)  Debt
Capitalization - TNMP.  At all times subsequent to TNMP becoming a Borrower hereunder in accordance with Section 2.6, the ratio of (i) Consolidated Indebtedness of TNMP to (ii) Consolidated Capitalization of TNMP shall be less than or equal to 0.65 to 1.0.

 

7.3         Preservation of Existence and Franchises.

(a)           Except in a transaction permitted by Section 8.2, such Borrower will do (and will cause each of its Subsidiaries to do) all things necessary to preserve and keep in full force and effect its existence and rights, franchises and authority.

(b)           Such Borrower will maintain (and will cause each of its Subsidiaries to maintain) its properties in good condition and not waste or otherwise permit such properties to deteriorate, reasonable wear and tear excepted.

7.4           Books and Records.

Such Borrower will keep (and will cause each of its Subsidiaries to keep) complete and accurate books and records of its transactions in accordance with good accounting practices on the basis of GAAP (including the establishment and maintenance of appropriate reserves).

7.5           Compliance with Law.

Such Borrower will comply (and will cause each of its Subsidiaries to comply) with all laws (including, without limitation, all Environmental Laws and ERISA laws), rules, regulations and orders, and all applicable restrictions imposed by all Governmental Authorities, applicable to it and its properties, if the failure to comply would have
or would reasonably be expected to have a Material Adverse Effect.

 

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7.6           Payment of Taxes and Other Indebtedness.

Such Borrower will (and will cause each of its Subsidiaries to) pay, settle or discharge (a) all taxes, assessments and governmental charges or levies imposed upon it, or upon its income or profits, or upon any of its properties, before they shall become delinquent, (b) all lawful claims (including claims for labor, materials and supplies)
which, if unpaid, might give rise to a Lien upon any of its properties, and (c) all of its other Indebtedness as it shall become due (to the extent such repayment is not otherwise prohibited by this Credit Agreement); provided, however, that such Borrower and its Subsidiaries shall not be required to pay any such tax, assessment, charge, levy, claim or Indebtedness which is being contested
in good faith by appropriate proceedings and as to which adequate reserves therefor have been established in accordance with GAAP, unless the failure to make any such payment (i) would give rise to an immediate right to foreclose or collect on a Lien securing such amounts or (ii) would have or would be reasonably expected to have a Material Adverse Effect.

7.7           Insurance.

Such Borrower will (and will cause each of its Subsidiaries to) at all times maintain in full force and effect insurance (including worker's compensation insurance and general liability insurance) in such amounts, covering such risks and liabilities and with such deductibles or self-insurance retentions as are in accordance with normal
industry practice.

7.8           Performance of Obligations.

Such Borrower will perform (and will cause each of its Subsidiaries to perform) in all material respects all of its obligations under the terms of all material agreements, indentures, mortgages, security agreements or other debt instruments to which it is a party or by which it is bound.

7.9           Use of Proceeds.

The proceeds of the Credit Extensions may be used solely for working capital, letters of credit, capital expenditures, support for commercial paper and other lawful purposes of such Borrower.

7.10           Audits/Inspections.

Upon reasonable notice and during normal business hours, such Borrower will permit representatives appointed by the Administrative Agent or the Lenders, including, without limitation, independent accountants, agents, attorneys, and appraisers to visit and inspect such Borrower's property, including its books and records, its accounts receivable
and inventory, such Borrower's facilities and its other business assets, and to make photocopies or photographs thereof and to write down and record any information such representative obtains and shall permit the Administrative Agent or such Lender or its representatives to investigate and verify the accuracy of information provided to it and to discuss all such matters with the officers, employees and representatives of such Borrower; provided, that an officer or authorized agent of such Borrower shall be present
during any such discussions between the officers, employees or representatives of such Borrower and the representatives of the Administrative Agent or any Lender.

7.11           Ownership of Certain Subsidiaries.

The Company shall (a) at all times, own and control 100% of the Voting Stock of PSNM, (b) at all times, own and control, directly or indirectly, 100% of the Voting Stock of TNMP, (c) if the Borrower Obligations of First Choice are guarantied by the Company, own and control, directly or indirectly, 100% of 

 

 

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the Voting Stock of First Choice and (d) if the Borrower Obligations of FCP are guarantied by the Company, own and control, directly or indirectly, 100% of the Voting Stock of FCP.

SECTION 8

NEGATIVE COVENANTS

Unless otherwise approved in writing by the Required Lenders, each Borrower covenants and agrees that, until the termination of the Commitments, the termination or expiration of all Letters of Credit and the payment in full of its Borrower Obligations:

8.1           Nature of Business.

Such Borrower will not materially alter the character of its business from that conducted as of the Closing Date.

8.2           Consolidation and Merger.

Such Borrower will not (a) enter into any transaction of merger or (b) consolidate, liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution); provided that, so long as no Default or Event of Default shall exist or be caused thereby (i) a Person may
be merged or consolidated with or into such Borrower so long as such Borrower shall be the continuing or surviving Person and, if the Company is a party to such transaction, the Company is the continuing or surviving corporation and (ii) First Choice and FCP may be merged or consolidated (and may, in connection therewith, change its form of entity) so long as the surviving Person is a Borrower and such surviving Person assumes in writing all Loans and other Borrower Obligations owed by the non-surviving Person.

8.3           Sale or Lease of Assets.

Such Borrower will not (nor will it permit its Subsidiaries to) sell, lease, transfer or otherwise dispose of, any of its assets (including, without limitation, all or substantially all of its assets, whether in one transaction or a series of related transactions) except (a) with respect to the Company, sales of accounts receivable and
energy services contract revenues by PSNM in connection with the PSNM Accounts Receivable Securitization and other sales of accounts receivable and energy services contract revenues so long as such other sales are non-recourse to the Company and are otherwise on customary market terms; (b) with respect to First Choice, the sales of accounts receivable in connection with the First Choice Securitization, (c) with respect to the Company, transfers of assets to PNMR Services Company, a wholly-owned operational services
company, in the ordinary course of business, (d) sales of assets (excluding those permitted in clauses (a), (b) and (c) hereof) for fair value, if the aggregate value of all such transactions in any calendar year, does not exceed 25% of the book value of Total Assets of such Borrower, as calculated as of the end of the most recent Fiscal Quarter, and (e) sale, lease, transfer or
other disposition, at less than fair value, of any other assets of such Borrower and its Subsidiaries, provided that the aggregate book value of such assets shall not exceed $10,000,000 in any calendar year.

8.4           Affiliate Transactions.

Such Borrower will not enter into any transaction or series of transactions, whether or not in the ordinary course of business, with any Affiliate other than on terms and conditions substantially as favorable as would be obtainable in a comparable arm's-length transaction with a Person other than an Affiliate.

 

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8.5           Liens.

Such Borrower will not (nor will it permit its Subsidiaries to) contract, create, incur, assume or permit to exist any Lien with respect to any of its property or assets of any kind (whether real or personal, tangible or intangible), whether now owned or hereafter acquired, securing any Indebtedness other than the following: (a) Liens
securing Borrower Obligations, (b) Liens for taxes not yet due or Liens for taxes being contested in good faith by appropriate proceedings for which adequate reserves determined in accordance with GAAP have been established (and as to which the property subject to any such Lien is not yet subject to foreclosure, sale or loss on account thereof), (c) Liens in respect of property imposed by law arising in the ordinary course of business such as materialmen's, mechanics', warehousemen's, carrier's, landlords'
and other nonconsensual statutory Liens which are not yet due and payable, which have been in existence less than 90 days or which are being contested in good faith by appropriate proceedings for which adequate reserves determined in accordance with GAAP have been established (and as to which the property subject to any such Lien is not yet subject to foreclosure, sale or loss on account thereof), (d) pledges or deposits made in the ordinary course of business to secure payment of worker's compensation insurance,
unemployment insurance, pensions or social security programs, (e) Liens arising from good faith deposits in connection with or to secure performance of tenders, bids, leases, government contracts, performance and return-of-money bonds and other similar obligations incurred in the ordinary course of business (other than obligations in respect of the payment of borrowed money), (f) Liens arising from good faith deposits in connection with or to secure performance of statutory obligations and surety and
appeal bonds, (g) easements, rights-of-way, restrictions (including zoning restrictions), minor defects or irregularities in title and other similar charges or encumbrances not, in any material respect, impairing the use of the encumbered property for its intended purposes, (h) judgment Liens that would not constitute an Event of Default, (i) Liens arising by virtue of any statutory or common law provision relating to banker's liens, rights of setoff or similar rights as to deposit accounts or
other funds maintained with a creditor depository institution, (j) any Lien created or arising over any property which is acquired, constructed or created by such Borrower or its Subsidiaries, but only if (i) such Lien secures only principal amounts (not exceeding the cost of such acquisition, construction or creation) raised for the purposes of such acquisition, construction or creation, together with any costs, expenses, interest and fees incurred in relation thereto or a guarantee given in respect
thereof, (ii) such Lien is created or arises on or before 180 days after the completion of such acquisition, construction or creation, (iii) such Lien is confined solely to the property so acquired, constructed or created and any improvements thereto and (iv) the aggregate principal amount of all Indebtedness at any one time outstanding that is secured by such Liens shall not exceed (A) in the case of the Company and its Subsidiaries, $50,000,000 and (B) in the case of any other Borrower and its Subsidiaries,
$25,000,000, (k) any Lien on Margin Stock, (l)  Liens with respect to the Indebtedness evidenced by the FMB Indenture, but only to the extent of the Insured Series First Mortgage Bonds, and the "permitted encumbrances" under the FMB Indenture, (m) with respect to the Company and PSNM, the assignment of, or Liens on, accounts receivable in connection with PSNM Accounts Receivable Securitization and the filing of related financing statements under the Uniform Commercial Code of the applicable
jurisdictions, (n) with respect to First Choice, (i) the assignment of, or Liens on, accounts receivable in connection with First Choice Securitization and the filing of related financing statements under the Uniform Commercial Code of the applicable jurisdictions and (ii) other Liens in connection with the Constellation Agreement, (o) the assignment of, or Liens on, demand, energy or wheeling revenues, or on capacity reservation or option fees, payable to such Borrower or any of its Subsidiaries with respect
to any wholesale electric service or transmission agreements, the assignment of, or Liens on, revenues from energy services contracts, and the assignment of, or Liens on, capacity reservation or option fees payable to such Borrower or such Subsidiary with respect to asset sales permitted herein, (p) any extension, renewal or replacement (or successive extensions, renewals or replacements), as a whole or in part, of any Liens referred to in the foregoing clauses (a) through (o), for amounts not exceeding
the principal amount of the Indebtedness secured by the Lien so extended, renewed or replaced, provided that such extension, 

 

 

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renewal or replacement Lien is limited to all or a part of the same property or assets that were covered by the Lien extended, renewed or replaced (plus improvements on such property or assets), (q) Liens on Property that is subject to a Material Lease that is classified as an operating lease as of the Closing Date but which is subsequently
converted into a capital lease, (r) Liens securing obligations under Hedging Agreements entered into in the ordinary course of business and not for speculative purposes, (s) Liens granted by bankruptcy-remote special purpose Subsidiaries to secure stranded cost securitization bonds, and (t) Liens on Property, in addition to those otherwise permitted by clauses (a) through (s) above, securing, directly or indirectly, Indebtedness or obligations of such Borrower and its Subsidiaries arising pursuant to
other agreements entered into in the ordinary course of business which do not exceed, in the aggregate at any one time outstanding, (i) in the case of the Company and its Subsidiaries, $50,000,000 and (ii) in the case of any other Borrower and its Subsidiaries, $25,000,000.

8.6           Accounting Changes.

Such Borrower will not (nor will it permit any of its Subsidiaries to) make or permit any change in accounting policies or reporting practices, except as required by GAAP, or as permitted by GAAP, if the amounts involved are not material.

8.7           Burdensome Agreements.

Such Borrower will not (nor will it permit any of its Subsidiaries to) enter into any contractual obligation (other than (i) the Credit Documents, (ii) the Constellation Agreement and related agreements and (iii) with respect to clause (b) only, restrictions on pledges of Capital Stock of any utility Subsidiary or significant Subsidiary
contained in the indentures, if any, executed in connection with the issuance of Specified Securities by the Company pursuant to commitments with Cascade Investment, L.L.C.) that limits the ability (a) of any Subsidiary of such Borrower to make Restricted Payments to such Borrower or to otherwise transfer property to such Borrower or, if the Company guarantees the Borrower Obligations of such Borrower, the Company or (b) of such Borrower (or any guarantor of the Borrower Obligations of such Borrower) to
create, incur, assume or suffer to exist Liens on its property in favor of the Administrative Agent, for the benefit of the Lenders.

SECTION 9

EVENTS OF DEFAULT

9.1           Events of Default.

An Event of Default with respect to a Borrower shall exist upon the occurrence of any of the following specified events (each an "Event of Default"):

(a)           Payment.  Such Borrower shall:  (i) default in the payment when due of any principal of any of its Revolving Loans or L/C Obligations; or (ii) default, and such default shall continue
for three or more Business Days, in the payment when due of any interest on its Loans or L/C Obligations or of any fees or other amounts owing by it hereunder, under any of the other Credit Documents or in connection herewith or therewith.

(b)           Representations.  Any representation, warranty or statement made or deemed to be made by such Borrower herein, in any of the other Credit Documents, or in any statement or certificate delivered
or required to be delivered pursuant hereto or thereto shall prove untrue in any material respect on the date as of which it was deemed to have been made.

 

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(c)           Covenants.  Such Borrower shall:

(i)           default in the due performance or observance of any term, covenant or agreement contained in Sections 7.1(e)(i), 7.2, 7.3(a) (solely with respect to the existence of such Borrower), 7.9, 7.10, 7.11 or 8.1 through 8.7, inclusive; or

(ii)           default in the due performance or observance by it of any term, covenant or agreement (other than those referred to in subsections (a), (b) or (c)(i) of this Section 9.1) contained in this Credit Agreement or any other Credit Document and such default shall continue
unremedied for a period of at least 10 days after the earlier of such Borrower becoming aware of such default or notice thereof given by the Administrative Agent.

(d)           Credit Documents.  Any Credit Document shall fail to be in force and effect or such Borrower shall (or with respect to any Guaranty Agreement with respect to such Borrower, the Company shall)
so assert or any Credit Document shall fail to give the Administrative Agent or the Lenders the rights, powers, liens and privileges purported to be created thereby.

(e)           Bankruptcy, etc.  The occurrence of any of the following with respect to such Borrower or any of its Subsidiaries (i) a court or governmental agency having jurisdiction in the premises shall enter
a decree or order for relief in respect of such Borrower or any of its Subsidiaries in an involuntary case under any applicable Debtor Relief Law now or hereafter in effect, or appoint a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of such Borrower or any of its Subsidiaries or for any substantial part of their property or ordering the winding up or liquidation of its affairs; or (ii) an involuntary case under any applicable Debtor Relief Law now or hereafter in effect
is commenced against such Borrower or any of its Subsidiaries and such petition remains unstayed and in effect for a period of 60 consecutive days; or (iii) such Borrower or any of its Subsidiaries shall commence a voluntary case under any applicable Debtor Relief Law now or hereafter in effect, or consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of such Person or any substantial part of its property or make any general assignment for the benefit of creditors; or (iv) such Borrower or any of its Subsidiaries admit in writing its inability to pay its debts generally as they become due or any action shall be taken by any Person in furtherance of any of the aforesaid purposes.

(f)           Defaults under Other Agreements.

(i)           Such Borrower or any of its Subsidiaries shall default in the due performance or observance (beyond the applicable grace period with respect thereto) of any material obligation or condition of any contract or lease to which it is a party, if such default would have or
would reasonably be expected to have a Material Adverse Effect.

(ii)           With respect to any Indebtedness of such Borrower or any of its Subsidiaries (other than Indebtedness outstanding under this Credit Agreement) in excess of $20,000,000 in the aggregate (A) such Borrower
or any of its Subsidiaries shall (x) default in any payment (beyond the applicable grace period with respect thereto, if any) with respect to such Indebtedness, or (y) default (after giving effect to any applicable grace period) in the observance or performance of any covenant or agreement relating to such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event or condition shall occur or condition exist, the effect of which default or other event
or condition is to cause or permit the holder or the holders of such Indebtedness (or any trustee or agent on behalf of such holders) to cause (determined without regard to 

 

 

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whether any notice or lapse of time is required) such Indebtedness to become due prior to its stated maturity; or (B) such Indebtedness shall be declared due and payable, or required to be prepaid other than by a regularly scheduled required prepayment prior to the stated maturity thereof; or (C) such Indebtedness shall
mature and remain unpaid.

(iii)           a Guarantor Event of Default shall exist with respect to such Borrower.

(g)           Judgments.  Any judgment, order or decree involving a liability of $20,000,000 or more, or one or more judgments, orders, or decrees involving a liability of $40,000,000 or more, in the aggregate,
shall be entered against such Borrower or any of its Subsidiaries and such judgments, orders or decrees shall continue unsatisfied, undischarged and unstayed for a period ending on the first to occur of (i) the last day on which such judgment, order or decree becomes final and unappealable and, where applicable, with the status of a judicial lien or (ii) 60 days; provided that if such judgment, order or decree provides for periodic payments over
time then such Borrower or such Subsidiary shall have a grace period of 30 days with respect to each such periodic payment.

(h)           ERISA.  The occurrence of any of the following events or conditions if any of the same would have or would be reasonably expected to have a Material Adverse Effect:  (i) any "accumulated
funding deficiency," as such term is defined in Section 302 of ERISA and Section 412 of the Code, whether or not waived, shall exist with respect to any Plan, or any lien shall arise on the assets of such Borrower or any ERISA Affiliate in favor of the PBGC or a Plan; (ii) an ERISA Event shall occur with respect to a Single Employer Plan which is, in the reasonable opinion of the Required Lenders, likely to result in the termination of such Plan for purposes of Title IV of ERISA; (iii) an ERISA Event shall occur
with respect to a Multiemployer Plan or Multiple Employer Plan which is, in the reasonable opinion of the Required Lenders, likely to result in (A) the termination of such Plan for purposes of Title IV of ERISA, or (B) such Borrower or any ERISA Affiliate incurring any liability in connection with a withdrawal from, reorganization of (within the meaning of Section 4241 of ERISA), or insolvency (within the meaning of Section 4245 of ERISA) of such Plan; or (iv) any prohibited transaction (within the meaning of
Section 406 of ERISA or Section 4975 of the Code) or breach of fiduciary responsibility shall occur which would be reasonably expected to subject such Borrower or any ERISA Affiliate to any liability under Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the Code, or under any agreement or other instrument pursuant to which such Borrower or any ERISA Affiliate has agreed or is required to indemnify any person against any such liability.

(i)           Change of Control.  There shall occur a Change of Control.

9.2           Acceleration; Remedies.

Upon the occurrence and during the continuation of an Event of Default, the Administrative Agent may or, upon the request and direction of the Required Lenders, shall take the following actions without prejudice to the rights of the Administrative Agent or any Lender to enforce its claims against the applicable Borrower (and the Company
if it guaranties the Borrower Obligations of such Borrower), except as otherwise specifically provided for herein:

(a)           Termination of Commitments.  Declare the Commitments and the obligation of the L/C Issuers to make L/C Credit Extensions to such Borrower terminated whereupon the Commitments and the obligation
of the L/C Issuers to make L/C Credit Extensions to such Borrower shall be immediately terminated.

 

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(b)           Acceleration of Revolving Loans.  Declare the unpaid principal of and any accrued interest in respect of all Revolving Loans, all L/C Obligations and any and all other Borrower Obligations of
any and every kind owing by such Borrower to the Administrative Agent or the Lenders under the Credit Documents to be due, whereupon the same shall be immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by such Borrower.

(c)           Cash Collateral.  Direct such Borrower to Cash Collateralize (and such Borrower agrees that upon receipt of such notice, or upon the occurrence of an Event of Default under Section 9.1(e), it
will immediately Cash Collateralize) L/C Obligations in respect of subsequent drawings under all then outstanding Letters of Credit of such Borrower in an amount equal to the then outstanding principal amount of L/C Obligations.

(d)           Enforcement of Rights.  To the extent permitted by Law enforce any and all rights and interests created and existing under applicable Law and under the Credit Documents, including, without limitation,
all rights of set-off and all rights under any Guaranty Agreement, if applicable.

Notwithstanding the foregoing, if an Event of Default specified in Section 9.1(e) shall occur, then the Commitments and any obligation of the L/C Issuers to make L/C Credit Extensions to such Borrower shall automatically terminate and all Revolving Loans, all L/C Obligations, all accrued interest in respect thereof, all accrued and unpaid
fees and other Borrower Obligations owing to the Administrative Agent and the Lenders by such Borrower hereunder shall immediately become due and payable without the giving of any notice or other action by the Administrative Agent or the Lenders, which notice or other action is expressly waived by such Borrower.

Notwithstanding the fact that enforcement powers reside primarily with the Administrative Agent, each Lender has, to the extent permitted by Law, a separate right of payment and shall be considered a separate "creditor" holding a separate "claim" within the meaning of Section 101(5) of the Bankruptcy Code or any other insolvency statute.

9.3           Allocation of Payments After Event of Default.

Notwithstanding any other provisions of this Credit Agreement, after the occurrence and during the continuation of an Event of Default, all amounts collected or received by the Administrative Agent or any Lender from a Borrower or any of its Subsidiaries on account of amounts outstanding under any of the Credit Documents shall be paid
over or delivered as follows:

FIRST, to the payment of all reasonable out-of-pocket costs and expenses (including the reasonable fees and expenses of legal counsel) of the Administrative Agent, the L/C Issuers or any of the Lenders in connection with enforcing the rights of the Administrative Agent, the L/C Issuers and the Lenders under the Credit Documents against
such Borrower (and the Company if it guaranties the Borrower Obligations of such Borrower), ratably among them in proportion to the amounts described in this clause "FIRST" payable to them;

SECOND, to payment of any fees owed to the Administrative Agent, the L/C Issuers or any Lender by such Borrower, ratably among them in proportion to the amounts described in this clause "SECOND" payable to them;

THIRD, to the payment of all accrued interest payable to the Lenders and the L/C Issuers hereunder by such Borrower, ratably among them in proportion to the amounts described in this clause "THIRD" payable to them;

 

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FOURTH, to the payment of the outstanding principal amount of the Revolving Loans and L/C Obligations of such Borrower, ratably among them in proportion to the amounts described in this clause "FOURTH" payable to them;

FIFTH, to the Administrative Agent, for the account of the L/C Issuers, to Cash Collateralize that portion of the L/C Obligations of such Borrower comprised of the aggregate undrawn amount of Letters of Credit;

SIXTH, to all other Borrower Obligations of such Borrower which shall have become due and payable under the Credit Documents and not repaid pursuant to clauses "FIRST" through "FIFTH" above, ratably among the holders of such Borrower Obligations in proportion to the amounts described in this clause "SIXTH" payable to them; and

SEVENTH, the payment of the surplus, if any, to whomever may be lawfully entitled to receive such surplus.

Amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause "FIFTH" above shall be applied to satisfy drawings under such Letters of Credit as they occur.  If any amount remains on deposit as cash collateral after all Letters of Credit have either been fully drawn or expired, such remaining
amount shall be applied to the other Borrower Obligations of such Borrower, if any, in the order set forth above.

SECTION 10

AGENCY PROVISIONS

10.1           Appointment and Authority.

Each of the Lenders and each L/C Issuer hereby irrevocably appoints Bank of America to act on its behalf as the Administrative Agent hereunder and under the other Credit Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms
hereof or thereof, together with such actions and powers as are reasonably incidental thereto.  The provisions of this Section are solely for the benefit of the Administrative Agent, the Lenders and the L/C Issuers, and neither the Company nor any other Borrower shall have rights as a third party beneficiary of any of such provisions.

10.2           Rights as a Lender.

The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term "Lender" or "Lenders" shall, unless otherwise expressly indicated or unless the context otherwise requires,
include the Person serving as the Administrative Agent hereunder in its individual capacity.  Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Company or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

 

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10.3           Exculpatory Provisions.

The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Credit Documents.  Without limiting the generality of the foregoing, the Administrative Agent:

(a)           shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

(b)           shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Credit Documents that the Administrative Agent is required to exercise as directed in writing
by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Credit Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Credit Document or applicable law; and

(c)           shall not, except as expressly set forth herein and in the other Credit Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Company, its Subsidiaries or any of its Affiliates that is communicated
to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

The Administrative Agent shall not be liable for any action taken or not taken by it (a) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided
in Sections 11.6 and 9.2) or (b) in the absence of its own gross negligence or willful misconduct.  The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Administrative Agent by the Company, a Lender or a L/C Issuer.

The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Credit Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith
or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Credit Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Section 4 or Section 5 or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the Administrative Agent.

10.4           Reliance by Administrative Agent.

The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have
been signed, sent or otherwise authenticated by the proper Person.  The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon.  In determining compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter 

 

 

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of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or a L/C Issuer, the Administrative Agent may presume that such condition is satisfactory to such Lender or such L/C Issuer unless the Administrative Agent shall have received notice to the contrary from such Lender or such L/C Issuer prior to the making
of such Loan or the issuance of such Letter of Credit.  The Administrative Agent may consult with legal counsel (who may be counsel for the Company), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

10.5           Delegation of Duties.

The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Credit Document by or through any one or more sub-agents appointed by the Administrative Agent.  The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its
rights and powers by or through their respective Agent-Related Parties.  The exculpatory provisions of this Section shall apply to any such sub-agent and to the Agent-Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

10.6           Resignation of Administrative Agent.

The Administrative Agent may at any time give notice of its resignation to the Lenders, the L/C Issuers and the Company.  Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Company, to appoint a successor, which shall be a bank with an office in the United States,
or an Affiliate of any such bank with an office in the United States.  If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders and the L/C Issuers, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that
if the Administrative Agent shall notify the Company and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (a) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Credit Documents and (b) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to
each Lender and the L/C Issuers directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this Section.  Upon the acceptance of a successor's appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder
or under the other Credit Documents (if not already discharged therefrom as provided above in this Section).  The fees payable by the Company to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Company and such successor.  After the retiring Administrative Agent's resignation hereunder and under the other Credit Documents, the provisions of this Section and Section 11.5 shall
continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Agent Related Persons in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.

Any resignation by Bank of America as Administrative Agent pursuant to this Section shall also constitute its resignation as a L/C Issuer.  Upon the acceptance of a successor's appointment as Administrative Agent hereunder, (i) such successor shall succeed to and become vested with all of the rights, powers, privileges and
duties of the retiring L/C Issuer, (ii) the retiring L/C Issuer shall be 

 

 

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discharged from all of their respective duties and obligations hereunder or under the other Credit Documents, and (iii) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to the retiring L/C Issuer
to effectively assume the obligations of the retiring L/C Issuer with respect to such Letters of Credit.

10.7           Non-Reliance on Administrative Agent and Other Lenders.

Each Lender and each L/C Issuer acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Agent-Related Persons 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
Lender and each L/C Issuer also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Agent-Related Persons and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Credit Document or any related agreement or any document furnished hereunder or thereunder.

10.8           No Other Duties, Etc.

Anything herein to the contrary notwithstanding, none of the bookrunners, arrangers or agents listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Credit Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or a L/C Issuer hereunder.

10.9           Administrative Agent May File Proofs of Claim.

In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any Borrower, the Administrative Agent (irrespective of whether the principal of any Revolving Loan or L/C Obligation shall then be due and payable as herein expressed
or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on any Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise

(a)           to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Revolving Loans, L/C Obligations and all other Borrower Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable
in order to have the claims of the Lenders, the L/C Issuers and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the L/C Issuers and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, the L/C Issuers and the Administrative Agent under Sections 2.2(i) and (j), 3.4 and 11.5)
allowed in such judicial proceeding; and

(b)           to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and the L/C Issuers to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly
to the Lenders and the L/C Issuers, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the 

 

 

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Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 3.4 and 11.5.

Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or the L/C Issuers any plan of reorganization, arrangement, adjustment or composition affecting the Borrower Obligations or the rights of any Lender or to authorize the Administrative Agent
to vote in respect of the claim of any Lender in any such proceeding.

SECTION 11

MISCELLANEOUS

11.1           Notices; Effectiveness; Electronic Communication.

(a)           Notices Generally.  Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in subsection (b) below), all notices and
other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:

(i)           if to a Borrower, the Administrative Agent or a L/C Issuer, to the address, telecopier number, electronic mail address or telephone number specified for such Person on Schedule 11.1; and

(ii)           if to any other Lender, to the address, telecopier number, electronic mail address or telephone number specified in its Administrative Questionnaire.

Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by telecopier shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening
of business on the next business day for the recipient).  Notices delivered through electronic communications to the extent provided in subsection (b) below, shall be effective as provided in such subsection (b).

(b)           Electronic Communications.  Notices and other communications to the Lenders and the L/C Issuers hereunder may be delivered or furnished by electronic communication (including e-mail and Internet
or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender or any L/C Issuer pursuant to Section 2 if such Lender or such L/C Issuer, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Section by electronic communication.  The
Administrative Agent or a Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.

Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender's receipt of an acknowledgement from the intended recipient (such as by the "return receipt requested" function, as available, return e-mail or other written acknowledgement), provided that
if such notice or other communication is not sent during the 

 

 

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normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at
its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.

(c)           Borrower Materials/The Platform.  The Company and the other Borrowers hereby acknowledge that (i) the Administrative Agent and/or the Arrangers will make available to the Lenders and the L/C Issuers
materials and/or information provided by or on behalf of the Borrowers hereunder (collectively, "Borrower Materials") by posting the Borrower Materials on IntraLinks or another similar electronic system (the "Platform"). THE PLATFORM IS PROVIDED "AS IS" AND "AS AVAILABLE."  THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS
OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM.  In no event shall the Administrative Agent or any of its Agent-Related
Parties (collectively, the "Agent Parties") have any liability to any Borrower, any Lender, any L/C Issuer or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of the Company's, any Borrower's or the Administrative Agent's transmission of Borrower Materials through the Internet, except to the extent that such losses, claims, damages, liabilities or expenses are
determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party; provided, however, that in no event shall any Agent Party have any liability to the Company, any Borrower, any Lender, any L/C Issuer or any other Person for indirect, special, incidental, consequential or punitive
damages (as opposed to direct or actual damages).

(d)           Change of Address, Etc.  Each of the Company, the Borrowers, the Administrative Agent and the L/C Issuers may change its address, telecopier or telephone number for notices and other communications
hereunder by notice to the other parties hereto.  Each other Lender may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the Company, the Administrative Agent and the L/C Issuers.  In addition, each Lender agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, telecopier number and electronic mail address to which
notices and other communications may be sent and (ii) accurate wire instructions for such Lender.

(e)           Reliance by Administrative Agent, L/C Issuers and Lenders.  The Administrative Agent, the L/C Issuers and the Lenders shall be entitled to rely and act upon any notices (including telephonic Notices
of Borrowing) purportedly given by or on behalf of a Borrower even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof.  The Borrowers shall indemnify the Administrative Agent, the L/C Issuers, each Lender and the Agent-Related Parties of each of them from all losses, costs, expenses and liabilities
resulting from the reliance by such Person on each notice purportedly given by or on behalf of a Borrower.  All telephonic notices to and other telephonic communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.

 

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11.2           Right of Set-Off.

In addition to any rights now or hereafter granted under applicable Law or otherwise, and not by way of limitation of any such rights, upon the occurrence of an Event of Default and the commencement of remedies described in Section 9.2, each Lender is authorized at any time and from time to time, without presentment, demand, protest or
other notice of any kind (all of which rights being hereby expressly waived), to set-off and to appropriate and apply any and all deposits (general or special) and any other indebtedness at any time held or owing by such Lender (including, without limitation, branches, agencies or Affiliates of such Lender wherever located) to or for the credit or the account of the applicable Borrower against obligations and liabilities of such Borrower to the Lenders hereunder, under the Notes, the other Credit Documents or
otherwise, irrespective of whether the Administrative Agent or the Lenders shall have made any demand hereunder and although such obligations, liabilities or claims, or any of them, may be contingent or unmatured, and any such set-off shall be deemed to have been made immediately upon the occurrence of an Event of Default even though such charge is made or entered on the books of such Lender subsequent thereto.  The Borrowers hereby agree that any Person purchasing a participation in the Revolving Loans
and Commitments hereunder pursuant to Sections 3.8 or 11.3(d) may exercise all rights of set-off with respect to its participation interest as fully as if such Person were a Lender hereunder.

11.3           Successors and Assigns.

(a)           Successors and Assigns Generally.  The provisions of this Credit Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted
hereby, except that neither the Company nor any other Borrower may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender (except as contemplated by Sections 2.6(e) and 8.2), and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the provisions of subsection (b) of this Section, (ii) by way of participation in accordance with
the provisions of subsection (d) of this Section, (iii) by way of pledge or assignment of a security interest subject to the restrictions of subsection (f) of this Section, or (iv) to an SPC in accordance with the provisions of subsection (h) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void).  Nothing in this Credit Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section and, to the extent expressly contemplated hereby, the Agent-Related Parties of each of the Administrative Agent, the L/C Issuers and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Credit Agreement.

(b)           Assignments by Lenders.  Any Lender may at any time assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Credit Agreement (including all or a portion
of its Commitment and the Loans (including for purposes of this subsection (b), participations in L/C Obligations) at the time owing to it); provided that

(i)           except in the case of an assignment of the entire remaining amount of the assigning Lender's Commitment and the Loans at the time owing to it or in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund with respect to a Lender, the aggregate
amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if "Trade Date" is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $5,000,000 unless
each of the Administrative Agent and, so long as no 

 

 

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Event of Default has occurred and is continuing, the Company otherwise consents (each such consent not to be unreasonably withheld or delayed); provided, however, that concurrent assignments to members
of an Assignee Group and concurrent assignments from members of an Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group) will be treated as a single assignment for purposes of determining whether such minimum amount has been met;

(ii)           each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender's rights and obligations under this Credit Agreement with respect to the Loans or the Commitment assigned;

(iii)           any assignment of a Commitment must be approved by the Administrative Agent, and L/C Issuers (such approval not to be unreasonably withheld or delayed) unless the Person that is the proposed assignee is itself a Lender (whether or not the proposed assignee would otherwise
qualify as an Eligible Assignee); and

(iv)           the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee in the amount, if any, required as set forth in Schedule 11.3,
and the Eligible Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the Eligible Assignee thereunder shall be a party to this Credit Agreement and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Lender under this Credit Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Credit Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender's rights and obligations under this Credit Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 3.9, 3.12, 3.13, 3.14,
and 11.5(b) with respect to facts and circumstances occurring prior to the effective date of such assignment.  Upon request, each Borrower (at its expense) shall execute and deliver a Note to the assignee Lender.  Any assignment or transfer by a Lender of rights or obligations under this Credit Agreement that does not comply with this subsection shall be treated for purposes of this Credit Agreement as a sale by such Lender of
a participation in such rights and obligations in accordance with subsection (d) of this Section.

(c)           Register.  The Administrative Agent, acting solely for this purpose as an agent of the Borrowers, shall maintain at the Administrative Agent's Office a copy of each Assignment and Assumption delivered
to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof from time to time (the "Register").  The entries in the Register shall be conclusive, and the Borrowers, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Credit Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by each of the Borrowers and the L/C Issuers at any reasonable time and from time to time upon reasonable prior notice.  In addition, at any time that a request for a consent for a material or substantive change to the Credit Documents is pending, any Lender may request and receive from the Administrative Agent a copy of the Register.

(d)           Participations.  Any Lender may at any time, without the consent of, or notice to, the Borrowers or the Administrative Agent, sell participations to any Person (other than a natural person or 

 

 

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the Company or any of the Company's Affiliates or Subsidiaries) (each, a "Participant") in all or a portion of such Lender's rights and/or obligations under this Credit Agreement (including all or a portion of its Commitment and/or the Loans (including such Lender's participations
in L/C Obligations) owing to it); provided that (i) such Lender's obligations under this Credit Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrowers, the Administrative Agent, the Lenders and the L/C Issuers shall continue to deal solely and directly with such Lender in connection with such Lender's rights and
obligations under this Credit Agreement.

Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Credit Agreement and to approve any amendment, modification or waiver of any  provision of this Credit Agreement; provided that
such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in the first proviso to Section 11.6 that affects such Participant.  Subject to subsection (e) of this Section, the Borrowers agree that each Participant shall be entitled to the benefits of Sections 3.9, 3.12 3.13 and 3.14 to
the same extent as if it were a Lender and had acquired its interest by assignment pursuant to subsection (b) of this Section.  To the extent permitted by Law, each Participant also shall be entitled to the benefits of Section 3.7 as though it were a Lender, provided such Participant agrees to be subject
to Section 3.8 as though it were a Lender.

(e)           Limitations upon Participant Rights.  A Participant shall not be entitled to receive any greater payment under Section3.9, 3.12, 3.13,
or 3.14 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Company's prior written consent.  A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 3.13 unless
the Company is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrowers, to comply with Section 3.13(f) as though it were a Lender.

(f)           Certain Pledges.  Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Credit Agreement (including under its Note, if any) to secure obligations
of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

(g)           Electronic Execution of Assignments.  The words "execution," "signed," "signature," and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or
the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

(h)           Special Purpose Funding Vehicles.  Notwithstanding anything to the contrary contained herein, any Lender (a "Granting Lender") may
grant to a special purpose funding vehicle identified as such in writing from time to time by the Granting Lender to the Administrative Agent and the Company (an "SPC") the option to provide all or any part of any Loan that such Granting Lender would otherwise be obligated to make pursuant to this Credit Agreement; provided that (i) nothing herein shall constitute a commitment by any
SPC to fund any Loan, and (ii) if an SPC elects not to exercise such option or otherwise fails to make all or any part of such Loan, the Granting Lender shall be obligated to make such Loan pursuant to the terms hereof.  Each party hereto hereby agrees that (i) neither the grant to any SPC nor the exercise by any SPC of such option shall increase the costs or expenses or otherwise increase or 

 

 

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change the obligations of the Borrowers under this Agreement (including its obligations under Section 3.9, 3.12, 3.12 and 3.14), (ii)
no SPC shall be liable for any indemnity or similar payment obligation under this Credit Agreement for which a Lender would be liable, and (iii) the Granting Lender shall for all purposes, including the approval of any amendment, waiver or other modification of any provision of any Credit Document, remain the lender of record hereunder.  The making of a Committed Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender to the same extent, and as if, such Loan were made by such Granting
Lender.  In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Credit Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior debt of any SPC, it will not institute against, or join any other Person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency, or liquidation proceeding under the laws of the United States or
any State thereof.  Notwithstanding anything to the contrary contained herein, any SPC may (A) with notice to, but without prior consent of any Borrower and the Administrative Agent and with the payment of a processing fee in the amount of $2,500, assign all or any portion of its right to receive payment with respect to any Loan to the Granting Lender and (B) disclose on a confidential basis any non-public information relating to its funding of Loans to any rating agency, commercial paper dealer or
provider of any surety or guarantee or credit or liquidity enhancement to such SPC.

11.4           No Waiver; Remedies Cumulative.

No failure or delay on the part of the Administrative Agent or any Lender in exercising any right, power or privilege hereunder or under any other Credit Document and no course of dealing between the Borrowers and the Administrative Agent or any Lender shall operate as a waiver thereof; nor shall any single or partial exercise of any right,
power or privilege hereunder or under any other Credit Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder or thereunder.  The rights and remedies provided herein are cumulative and not exclusive of any rights or remedies which the Administrative Agent or any Lender would otherwise have.  No notice to or demand on the Borrowers in any case shall entitle the Borrowers to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the rights of the Administrative Agent or the Lenders to any other or further action in any circumstances without notice or demand.

11.5           Attorney Costs, Expenses, Taxes and Indemnification by Borrowers.

(a)           Each Borrower agrees, on a joint and several basis (provided that with respect to TNMP only, its obligations shall be limited by applicable regulatory requirements, if any), (i) to pay or reimburse the Administrative Agent and the Arrangers for all costs and expenses
incurred in connection with the development, preparation, negotiation and execution of this Credit Agreement and the other Credit Documents and any amendment, waiver, consent or other modification of the provisions hereof and thereof (whether or not the transactions contemplated hereby or thereby are consummated), and the consummation and administration of the transactions contemplated hereby and thereby, including all reasonable fees and expenses of legal counsel, and (ii) to pay or reimburse the Administrative
Agent and each Lender for all costs and expenses incurred in connection with the enforcement, attempted enforcement, or preservation of any rights or remedies under this Credit Agreement or the other Credit Documents (including all such costs and expenses incurred during any "workout" or restructuring in respect of the Borrower Obligations and during any legal proceeding, including any proceeding under any Debtor Relief Law), including all reasonable fees and expenses of legal counsel.  The foregoing
costs and expenses shall include all search, filing, recording, and appraisal charges and fees and taxes related thereto, and other out-of-pocket expenses incurred by the Administrative Agent and the Arrangers and the cost of independent public accountants and other outside experts retained by the Administrative Agent, the Arrangers or any Lender.  Other than costs and expenses 

 

 

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payable in connection with the closing of the transactions contemplated by this Credit Agreement pursuant to Section 11.5(a) (which shall be payable on the Closing Date unless otherwise agreed by the Administrative Agent and the Arrangers), all amounts due under this Section 11.5 shall be payable within ten Business Days after demand
therefor.  The agreements in this Section shall survive the termination of the Commitments and repayment of all other Borrower Obligations.

(b)           Whether or not the transactions contemplated hereby are consummated, the Borrowers shall, on a joint and several basis (provided that with respect to TNMP only, its obligations shall be limited by applicable regulatory requirements, if any), indemnify and hold harmless
each Agent-Related Person, each Lender and their respective Affiliates, directors, officers, employees, counsel, agents and attorneys-in-fact (collectively the "Indemnitees") from and against any and all liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs, expenses and disbursements (including the reasonable fees and expenses of legal counsel) of any kind or nature whatsoever which may at any time
be imposed on, incurred by or asserted against any such Indemnitee in any way relating to or arising out of or in connection with (i) the execution, delivery, enforcement, performance or administration of any Credit Document or any other agreement, letter or instrument delivered in connection with the transactions contemplated thereby or the consummation of the transactions contemplated thereby, (ii) any Commitment, Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal
by an L/C Issuer to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), or (iii) any actual or alleged presence or release of Hazardous Substances on or from any property currently or formerly owned or operated by the Company, any Subsidiary of the Company, or any Environmental Claim related in any way to the Company or any Subsidiary of the Company, (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory (including any investigation of, preparation for, or defense of any pending or threatened claim, investigation, litigation or proceeding) and regardless of whether any Indemnitee is a party thereto or (v) any civil penalty or fine assessed by the Office of Foreign Assets Control (the "OFAC") against, and all reasonable costs
and expenses (including counsel fees and disbursements) incurred in connection with defense thereof, by the Administrative Agent or any Lender as a result of conduct of the Borrower that violates a sanction enforced by OFAC (all the foregoing, collectively, the "Indemnified Liabilities"), in all cases, whether or not caused by or arising, in whole or in part, out of the negligence of the Indemnitee; provided that
such indemnity shall not, as to any Indemnitee, be available to the extent that such liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs, expenses or disbursements are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee.  No Indemnitee shall be liable for any damages arising from the use by others of any information or other materials
obtained through IntraLinks or other similar information transmission systems in connection with this Credit Agreement, nor shall any Indemnitee have any liability for any indirect or consequential damages relating to this Credit Agreement or any other Credit Document or arising out of its activities in connection herewith or therewith (whether before or after the Closing Date).

(c)           To the extent that a Borrower for any reason fails to indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof), a L/C Issuer or any Agent-Related Party of any
of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), such L/C Issuer or such Agent-Related Party, as the case may be, such Lender's Pro Rata Share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such 

 

 

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unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent) or such L/C Issuer in its capacity as such,
or against any Agent-Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) or such L/C Issuer in connection with such capacity.  The obligations of the Lenders under this subsection (c) are subject to the provisions of Section 3.2(d).

All amounts due under this Section 11.5 shall be payable within ten Business Days after demand therefor.  The agreements in this Section shall survive the resignation of the Administrative Agent, the replacement of any Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all the other Borrower
Obligations.

11.6           Amendments, Etc.

No amendment or waiver of any provision of this Credit Agreement or any other Credit Document, and no consent to any departure by the Company or any other Borrower therefrom, shall be effective unless in writing signed by the Required Lenders and the Company or the applicable Borrower, as the case may be, and acknowledged by the Administrative
Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, waiver or consent shall:

(a)           waive any condition set forth in Section 4.1 without the written consent of each Lender;

(b)           extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 9.2) without the written consent of such Lender;

(c)           postpone any date fixed by this Credit Agreement or any other Credit Document for any payment (excluding mandatory prepayments) of principal, interest, fees or other amounts due to the Lenders (or any of them) or any scheduled or mandatory reduction of the Revolving
Committed Amount hereunder or under any other Credit Document without the written consent of each Lender directly affected thereby;

(d)           reduce the principal of, or the rate of interest specified herein on, any Loan or L/C Borrowing, or (subject to clause (iv) of the second proviso to this Section 11.6) any fees or other amounts payable
hereunder or under any other Credit Document without the written consent of each Lender directly affected thereby; provided, however, that only the consent of the Required Lenders shall be necessary  to amend the definition of "Default Rate" or to waive any obligation to pay interest or Letter of Credit Fees at the Default Rate;

(e)           change Section 3.8 or Section 9.3 in a manner that would alter the pro rata sharing of payments required thereby without the written
consent of each Lender;

(f)           change any provision of this Section or the definition of "Required Lenders" or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent
hereunder without the written consent of each Lender;

(g)           without the written consent of each Lender, increase any Subsidiary Borrower Sublimit except as permitted by Section 2.1(g); or

 

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(h)           except as contemplated by Section 2.6(e), release any Borrower from its obligations, including any obligations as a Guarantor, or consent to the assignment or transfer by any Borrower of any of its rights
and obligations under (or in respect of) the Credit Documents without the written consent of each Lender;

and, provided further, that (i) no amendment, waiver or consent shall, unless in writing and signed by the applicable L/C Issuer in addition to the Lenders required above, affect the rights or duties of a L/C
Issuer under this Credit Agreement or any other agreement relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Credit Agreement or any other Credit Document; (iii) Section 11.3(h) may not be amended, waived or otherwise modified
without the consent of each Granting Lender all or any part of whose Loans are being funded by an SPC at the time of such amendment, waiver or other modification; and (iv) a Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto.  Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of such Lender may not
be increased or extended without the consent of such Lender.

11.7           Counterparts.

This Credit Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument.

11.8           Headings.

The headings of the sections and subsections hereof are provided for convenience only and shall not in any way affect the meaning or construction of any provision of this Credit Agreement.

11.9           Survival of Indemnification and Representations and Warranties.

(a)           Survival of Indemnification.  All indemnities set forth herein shall survive the execution and delivery of this Credit Agreement, the making of any Credit Extension and the repayment of the Revolving
Loans and other Borrower Obligations and the termination of the Commitments hereunder.

(b)           Survival of Representations and Warranties.  All representations and warranties made hereunder and in any other Credit Document or other document delivered pursuant hereto or thereto or in connection
herewith or therewith shall survive the execution and delivery hereof and thereof.  Such representations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default or Event of Default at the time of any Credit Extension, and shall continue in full force and effect
as long as any Loan or any other Borrower Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

11.10           Governing Law; Venue; Service.

(a)           THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE 

 

 

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WITH THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, BUT EXCLUDING ALL OTHER CHOICE OF LAW AND CONFLICTS OF LAW RULES).  Any legal action or proceeding with respect to this Credit Agreement or any other Credit Document may be brought in the courts of the State
of New York or of the United States for the Southern District of New York, and, by execution and delivery of this Credit Agreement, each Borrower hereby irrevocably accepts for itself and in respect of its Property, generally and unconditionally, the jurisdiction of such courts.

(b)           Each Borrower irrevocably consents to the service of process in any action or proceeding with respect to this Credit Agreement or any other Credit Document by the mailing of copies thereof by registered or certified mail, postage prepaid, to it at the address for notices
pursuant to Section 11.1, such service to become effective ten days after such mailing.  Nothing herein shall affect the right of a Lender to serve process in any other manner permitted by Law.

11.11           Waiver of Jury Trial; Waiver of Consequential Damages.

EACH OF THE PARTIES TO THIS CREDIT AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY.  Each of the parties to this Credit Agreement agrees
not to assert any claim against any other party hereto, Administrative Agent, any Lender, any of their Affiliates, or any of their respective directors, officers, employees, attorneys or agents, on any theory of liability, for special, indirect, consequential or punitive damages arising out of or otherwise relating to any of the transactions contemplated herein and in the other Credit Documents.

11.12           Severability.

If any provision of any of the Credit Documents is determined to be illegal, invalid or unenforceable, such provision shall be fully severable and the remaining provisions shall remain in full force and effect and shall be construed without giving effect to the illegal, invalid or unenforceable provisions.

11.13           Further Assurances.

Each Borrower agrees, upon the request of the Administrative Agent, to promptly take such actions, as reasonably requested, as is necessary to carry out the intent of this Credit Agreement and the other Credit Documents.

11.14           Confidentiality.

Each of the Administrative Agent, the Lenders and each L/C Issuer agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its and its Affiliates' respective partners, directors, officers, employees, agents, advisors and representatives (it
being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any
other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Credit Document or any action or proceeding relating to this Credit Agreement or any other Credit Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any 

 

 

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prospective assignee of or Participant in, any of its rights or obligations under this Credit Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrowers and their obligations, (g) with the consent of the Company or (h) to the extent such
Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to the Administrative Agent, any Lender, any L/C Issuer or any of their respective Affiliates on a nonconfidential basis from a source other than a Borrower.

For purposes of this Section, "Information" means all information received from a Borrower or any Subsidiary or any of their respective businesses, other than any such information that is available to the Administrative Agent, any Lender or any L/C Issuer on a nonconfidential
basis prior to disclosure by a Borrower or any Subsidiary, provided that, in the case of information received from a Borrower or any Subsidiary after the date hereof, such information is clearly identified at the time of delivery as confidential.  Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised
the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

11.15           Entirety.

This Credit Agreement together with the other Credit Documents and the Fee Letters represent the entire agreement of the parties hereto and thereto, and supersede all prior agreements and understandings, oral or written, if any, including any commitment letters or correspondence relating to the Credit Documents or the transactions contemplated
herein and therein.

11.16           Binding Effect; Continuing Agreement.

(a)           This Credit Agreement shall become effective at such time when all of the conditions set forth in Section 5.1 have been satisfied or waived by the Lenders and it shall have been executed by the Company and the Administrative Agent, and the Administrative Agent shall
have received copies hereof (telefaxed or otherwise) which, when taken together, bear the signatures of each Lender, and thereafter this Credit Agreement shall be binding upon and inure to the benefit of the Borrowers, the Administrative Agent and each Lender and their respective successors and assigns.

(b)           This Credit Agreement shall be a continuing agreement and shall remain in full force and effect until all Revolving Loans, interest, fees and other Borrower Obligations have been paid in full and all Letters of Credit and Commitments have been terminated.  Upon
termination, the Borrowers shall have no further obligations (other than the indemnification provisions and other provisions that by their terms survive) under the Credit Documents; provided that should any payment, in whole or in part, of the Borrower Obligations be rescinded or otherwise required to be restored or returned by the Administrative Agent or any Lender, whether as a result of any proceedings in bankruptcy or reorganization or otherwise,
then the Credit Documents shall automatically be reinstated and all amounts required to be restored or returned and all costs and expenses incurred by the Administrative Agent or any Lender in connection therewith shall be deemed included as part of the Borrower Obligations.

11.17           Regulatory Statement.

Pursuant to the terms of an order issued by the New Mexico Public Regulation Commission and a stipulation that has been approved by the New Mexico Public Regulation Commission, the Company is required to include the following separateness covenants in any debt instrument:

 

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The Company, PSNM and TNMP are being operated as separate corporate and legal entities.  In agreeing to make loans to the Company, the Company's lenders are relying solely on the creditworthiness of the Company based
on the assets owned by the Company, and the repayment of the loan will be made solely from the assets of the Company and not from any assets of PSNM or TNMP; and the Company's lenders will not take any steps for the purpose of procuring the appointment of an administrative receiver or the making of an administrative order for instituting any bankruptcy, reorganization, insolvency, wind up or liquidation or any like proceeding under applicable law in
respect of PSNM or TNMP.

11.18           USA Patriot Act Notice.

Each Lender and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrowers that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the "Act"), it is required to obtain,
verify and record information that identifies the Borrowers, which information includes the names and addresses of the Borrowers and other information that will allow such Lender or the Administrative Agent, as applicable, to identify the Borrowers in accordance with the Act.

11.19           Acknowledgment.

Section 7 and Section 8 of this Credit Agreement contain affirmative and negative covenants applicable to each Borrower.  Each of the parties to this Credit Agreement acknowledges and agrees that any such covenants that require a Borrower to cause any of its Subsidiaries to take or to refrain from taking specified actions will
be enforceable unless prohibited by applicable law or regulatory requirement.

11.20           Replacement of Lenders.

If (a) any Lender requests compensation under Section 3.12, (b) a Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.13, or (c) a Lender (a "Non-Consenting Lender") does not consent to a proposed change, waiver, discharge or termination with
respect to any Credit Document that has been approved by the Required Lenders as provided in Section 11.6 but requires unanimous consent of all Lenders or all Lenders directly affected thereby (as applicable) or (d) any Lender is a Defaulting Lender, then the Company may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by,
Section 11.3), all of its interests, rights and obligations under this Agreement and the related Credit Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:

(i)           the Company shall have paid to the Administrative Agent the assignment fee specified in Section 11.3(b);

(ii)           such Lender shall have received payment of an amount equal to the outstanding principal of its Revolving Loans and L/C Obligations, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Credit Documents (including any
amounts under Section 3.14) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Company (in the case of all other amounts);

 

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(iii)           in the case of any such assignment resulting from a claim for compensation under Section 3.12 or payments required to be made pursuant to Section 3.13, such assignment will result in a reduction in such compensation or payments thereafter; and

(iv)           such assignment does not conflict with applicable Laws; and

(v)           in the case of any such assignment resulting from a Non-Consenting Lender's failure to consent to a proposed change, waiver, discharge or termination with respect to any Credit Document, the applicable replacement bank, financial institution or Fund consents to the proposed
change, waiver, discharge or termination; provided that the failure by such Non-Consenting Lender to execute and deliver an Assignment and Assumption shall not impair the validity of the removal of such Non-Consenting Lender and the mandatory assignment of such Non-Consenting Lender's Commitments and outstanding Revolving Loans and participations in L/C Obligations pursuant to this Section shall nevertheless be effective without the execution by such Non-Consenting Lender of an Assignment and Assumption.

 

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Company to require such assignment and delegation cease to apply.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

  

75

  

Signature Page to Amended and Restated Credit Agreement

PNM Resources, Inc.

Each of the parties hereto has caused a counterpart of this Credit Agreement to be duly executed and

delivered as of the date first above written.

BORROWERS:                                                   PNM
RESOURCES, INC.,

a New Mexico corporation

By:  /s/ Terry R. Horn

Name:  Terry R. Horn

Title:  Vice President, Corporate Secretary and

Acting Chief Financial Officer

FIRST CHOICE POWER, L.P.,

a Texas limited partnership

By:  First Choice Power GP, LLC,

        its general partner

By:  /s/ Terry R. Horn

Name:  Terry R. Horn

Title:  Vice President, Secretary and Treasurer

 

  

76

  

Signature Page to Amended and Restated Credit Agreement

PNM Resources, Inc.

AGENT:                                                              
 BANK OF AMERICA, N.A.,

as Administrative Agent

By:  /s/ Michelle A. Schoenfeld

Name:  Michelle A. Schoenfeld

Title:  Senior Vice President

LENDERS:                                                           BANK
OF AMERICA, N.A.,

as a Lender and L/C Issuer

By:  /s/ Michelle A. Schoenfeld

Name:  Michelle A. Schoenfeld

Title:  Senior Vice President

 

  

77

  

Signature Page to Amended and Restated Credit Agreement

PNM Resources, Inc.

WACHOVIA BANK, NATIONAL ASSOCIATION,

as a Lender and L/C Issuer

By:  /s/ Frederick W. Price

Name:  Frederick W. Price

Title:  Managing Director

 

  

78

  

Signature Page to Amended and Restated Credit Agreement

PNM Resources, Inc.

UNION BANK OF CALIFORNIA, N.A.

By:  /s/ Robert J. Cole

Name:  Robert J. Cole

Title:  Vice President

 

  

79

  

Signature Page to Amended and Restated Credit Agreement

PNM Resources, Inc.

JPMORGAN CHASE BANK, N.A.

By:  /s/ Thomas L. Casey

Name:  Thomas L. Casey

Title:  Vice President

 

  

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Signature Page to Amended and Restated Credit Agreement

PNM Resources, Inc.

CITIBANK, N.A.

By:  /s/ Nietzsche Rodricks

Name:  Nietzsche Rodricks

Title:  Vice President

 

  

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Signature Page to Amended and Restated Credit Agreement

PNM Resources, Inc.

MERRILL LYNCH BANK USA

By:  /s/ Louis Alder

Name:  Louis Alder

Title:  Director

 

  

82

  

Signature Page to Amended and Restated Credit Agreement

PNM Resources, Inc.

MORGAN STANLEY BANK

By:  /s/ Daniel Twenge

Name:  Daniel Twenge

Title:  Vice President

 

  

83

  

Signature Page to Amended and Restated Credit Agreement

PNM Resources, Inc.

UBS LOAN FINANCE LLC

By:  /s/ Wilfred V. Saint

Name:  Wilfred V. Saint

Title:  Banking Products Services, US

By:  /s/ Doris Mesa

Name:  Doris Mesa

Title:  Banking Products Services, US

 

  

84

  

Signature Page to Amended and Restated Credit Agreement

PNM Resources, Inc.

LEHMAN BROTHERS BANK, FSB

By:  /s/ Janine M. Shugan

Name:  Janine M. Shugan

Title:  Authorized Signatory

 

  

85

  

Signature Page to Amended and Restated Credit Agreement

PNM Resources, Inc.

 

WILLIAM STREET COMMITMENT CORPORATION

By:  /s/ Mark Walton

Name:  Mark Walton

Title:  Assistant Vice President

 

  

86

  

Signature Page to Amended and Restated Credit Agreement

PNM Resources, Inc.

CREDIT SUISSE, CAYMAN ISLANDS BRANCH

By:  /s/ Sarah Wu

Name:  Sarah Wu

Title:  Director

 

  

87

  

Signature Page to Amended and Restated Credit Agreement

PNM Resources, Inc.

WELLS FARGO BANK, N.A.

By:  /s/ Daniel A. Conklin

Name:  Daniel A. Conklin

Title:  Vice President

 

  

88

  

Signature Page to Amended and Restated Credit Agreement

PNM Resources, Inc.

U S BANK NATIONAL ASSOCIATION

By:  /s/ James W. Henken

Name:  James W. Henken

Title:  Vice President

 

  

89

  

Signature Page to Amended and Restated Credit Agreement

PNM Resources, Inc.

HSBC BANK USA, NATIONAL ASSOCIATION

By:  /s/ Diana Walters

Name:  Diana Walters

Title:  Managing Director

 

  

90

  

Signature Page to Amended and Restated Credit Agreement

PNM Resources, Inc.

MELLON BANK, N.A.

By:  /s/ Mark W. Rogers

Name:  Mark W. Rogers

Title:  Vice President

 

  

91

  

Signature Page to Amended and Restated Credit Agreement

PNM Resources, Inc.

ROYAL BANK OF CANADA

By:  /s/ David A. McCluskey

Name:  David A. McCluskey

Title:  Authorized Signatory

 

  

92

  

Signature Page to Amended and Restated Credit Agreement

PNM Resources, Inc.

BANK OF ALBUQUERQUE, N.A.

By:  /s/ Myka C. Gentry

Name:  Myka C. Gentry

Title:  Vice President

 

  

93

  

Signature Page to Amended and Restated Credit Agreement

PNM Resources, Inc.

COMPASS BANK

By:  /s/ Kamal Ali

Name:  Kamal Ali

Title:  Vice President

 

  

94

  

Signature Page to Amended and Restated Credit Agreement

PNM Resources, Inc. 

       SOUTHWEST SECURITIES BANK (formerly First Savings Bank, FSB)

       By:  /s/ Lonnie R. Warren

       Name:  Lonnie R. Warren

       Title:  Senior Vice President

 

  

95

  

SCHEDULE 1.1(a)

PRO RATA SHARES

	
Lender
	
Commitment
	
Pro Rata Share

	
Bank of America, N.A.
	
$60,000,000
	
10.000000000%

	
Wachovia Bank, National Association
	
$60,000,000
	
10.000000000%

	
Union Bank of California, N.A.
	
$60,000,000
	
10.000000000%

	
JPMorgan Chase Bank, N.A.
	
$42,000,000
	
7.000000000%

	
Citibank, N.A.
	
$42,000,000
	
7.000000000%

	
Merrill Lynch Bank USA
	
$32,000,000
	
5.333333333%

	
Morgan Stanley Bank
	
$32,000,000
	
5.333333333%

	
UBS Loan Finance LLC
	
$32,000,000
	
5.333333333%

	
Lehman Brothers Bank, FSB
	
$32,000,000
	
5.333333333%

	
William Street Commitment Corporation
	
$32,000,000
	
5.333333333%

	
Credit Suisse, Cayman Islands Branch
	
$32,000,000
	
5.333333333%

	
Wells Fargo Bank, N.A.
	
$19,500,000
	
3.250000000%

	
U. S. Bank National Association
	
$25,000,000
	
4.166666667%

	
HSBC Bank USA, National Association
	
$25,000,000
	
4.166666667%

	
Mellon Bank, N.A.
	
$21,000,000
	
3.500000000%

	
Royal Bank of Canada
	
$21,000,000
	
3.500000000%

	
Bank of Albuquerque, N.A.
	
$12,500,000
	
2.083333334%

	
Compass Bank
	
$10,000,000
	
1.666666667%

	
Southwest Securities Bank
	
$10,000,000
	
1.666666667%

	  	  	  
	
Total
	
$600,000,000
	
100.000000000%

 

  

  

  

SCHEDULE 1.1(c)

EXISTING LETTERS OF CREDIT

	
Issuer
	
L/C Number
	
Issuance Date
	
Expiry Date
	
Beneficiary Name

 
	
Outstanding Amount

	
Wachovia Bank, 

National 

Association
	
SM214639
	
7/7/2005
	
1/31/2006
	
TXU Generation 

Company, LP
	
$10,000,000.00

 

  

  

  

SCHEDULE 6.18

MATERIAL LEASES

Description                                                                                                              Expiration                                Annual
Rent

Palo Verde Unit 1

 

Facility Lease dated as of December 16, 1985 between                                                                                                             1/15/2015                                
$  5,580,122.54

PNM and U.S. Bank National Association (successor to

State Street Bank and Trust Company, successor

to The First National Bank of Boston), as Owner Trustee under

 a Trust Agreement dated as of  December 16, 1985, with MFS

Leasing Corp. as Owner Participant, as amended.

Facility Lease dated as of  December 16, 1985 between                                                                                                            1/15/2015                           
    $ 15,693,862.76

PNM and U.S. Bank National Association (successor to

State Street Bank and Trust Company, successor

to The First National Bank of Boston), as Owner Trustee under

a Trust Agreement dated as of  December 16, 1985, with Daimler

Chrysler Services North America LLC (as successor to Chrysler

Financial Corporation), as Owner Participant, as amended.

Facility Lease dated as of  December 15, 1986 between                                                                                                           1/15/2015                                
$   4,757,769.00

PNM and U.S. Bank National Association (successor to

State Street Bank and Trust Company, successor

to The First National Bank of Boston), as Owner Trustee under

a Trust Agreement dated as of  December 15, 1986, with Palo

Verde 1- PNM [December 75] Corporation (successor-in-interest

to  Chase Manhattan Realty Leasing Corporation), as Owner

Participant (Unit 1), as amended.

Facility Lease dated as of July 31, 1986 between                                                                                                              1/15/2015              $    6,974,313.00

PNM and U.S. Bank National Association (successor to

State Street Bank and Trust Company, successor

to The First National Bank of Boston), as Owner Trustee under

a Trust Agreement dated as of July 31, 1986, with Palo

Verde 1- PNM [August 50] Corporation (successor-in-interest

to  Chase Manhattan Realty Leasing Corporation), as Owner

Participant  (Unit 1), as amended.

Total – Unit 1                                                                                                                                             
$ 33,006,067.10

 

  

  

  

 

           Description                                                                                                    Expiration                                 Annual
Rent

Palo Verde Unit 2

Facility Lease dated as of August  12, 1986 between                                                                                                           
1/15/2016                                 $  5,742, 060.00

PNM and U.S. Bank National Association (successor to

State Street Bank and Trust Company, successor

to The First National Bank of Boston), as Owner Trustee under

 a Trust Agreement dated as of  August 12, 1986, with MFS

Leasing Corp. as Owner Participant, as amended.

Facility Lease dated as of August 12,  1986 between                                                                                                           
1/15/2016                                   $  9,958,478.04

PNM and U.S. Bank National Association (successor to

State Street Bank and Trust Company, successor

to The First National Bank of Boston), as Owner Trustee under

a Trust Agreement dated as of August 12, 1986, with CGI

Capital, Inc., as Owner Participant, as amended.

Facility Lease dated as of August 12, 1986 between                                                                                                           
1/15/2016                                   $  9,569,653.00

PNM and U.S. Bank National Association (successor to

State Street Bank and Trust Company, successor

to The First National Bank of Boston), as Owner Trustee under

a Trust Agreement dated as of August 12, 1986, with Palo Verde

Leasing Corporation (successor-in-interest to First Chicago Lease

Holdings, Inc.) as Owner Participant, as amended.

Facility Lease dated as of August 12, 1986 between                                                                                                           
1/15/2016                                   $  4,743,012.00

PNM and U.S. Bank National Association (successor to

State Street Bank and Trust Company, successor

to The First National Bank of Boston), as Owner Trustee under

a Trust Agreement dated as of August 12, 1986, with MFS Leasing

Corp. (successor-in-interest to Beneficial Leasing Group, Inc.),

as Owner Participant, as amended.

Facility Lease dated as of December 15, 1986 between                                                                                                   
   1/15/2016                                    $  3,272,560.40

PNM and U.S. Bank National Association (successor to

State Street Bank and Trust Company, successor

to The First National Bank of Boston), as Owner Trustee under

a Trust Agreement dated as of December 15, 1986, with Palo

Verde 2- PNM [December 35] Corporation (successor-in-interest

to  Chase Manhattan Realty Leasing Corporation), as Owner

Participant  (Unit 2), as amended.

Total – Unit 2                                                                                                                                   
$ 33,285,763.44

 

  

  

  

           Description                                                                                            Expiration                                            
        Annual Rent

Eastern Interconnection Project (EIP)

Amended and Restated Lease dated as of September 1,                                                                                          4/1/2015             $
2,675,739.30*

1993, between PNM as Lessee, and U.S. Bank National                                         
$ 2,844,913.50

Association (successor to  State Street Bank

and Trust Company,( as successor to The First National

Bank of Boston), as Owner Trustee under a Trust

Agreement dated as of January 2, 1985, with General

Foods Credit Corporation, as Lessor.

Total EIP                                                                                                                                       $
2,675,739.30*

                                                                                                                                       $
2,844,913.50

                                                                                                                                                    
 * 1994 Only

 

  

  

  

SCHEDULE 6.19

MATERIAL LEASE INTEREST PAYMENTS AND DISCOUNT RATE

[See attached Excel Table]

 

  

  

  

Schedule 6.19

Material Lease Interest Payments and Discount Rates

	
EIP (Discount Rate:  12.85%)
	  	
PVNGS (Discount Rate:  10.25%)

 

	
Year
	
Total Payment ($000)
	
Interest Payment ($000)
	
Principal Payment

 ($000)
	
Loan Balance EofY ($000)
	  	
Year
	
Total Payment

($000)
	
Interest Payment ($000)
	
Principal Payment

 ($000)
	
Loan Balance EofY ($000)

	
2005
	
1,299.597
	
328.435
	
971.162
	
1,890.229
	  	
2005
	
14,380.430
	
12,148.338
	
2,232.092
	
116,288.282

	
2006
	
608.408
	
231.380
	
377.028
	
1,513.201
	  	
2006
	
15,239.058
	
11,919.549
	
3,319.509
	
112,968.773

	
2007
	
642.648
	
180.402
	
462.245
	
1,050.955
	  	
2007
	
16,147.881
	
11,579.299
	
4,568.582
	
108,400.191

	
2008
	
683.422
	
117.815
	
565.607
	
485.348
	  	
2008
	
17,117.049
	
11,111.020
	
6,006.029
	
102,394.162

	
2009
	
58.795
	
62.474
	
(3.678)
	
489.027
	  	
2009
	
14,895.517
	
10,495.402
	
4,400.115
	
97,994.046

	
2010
	
112.898
	
62.962
	
49.936
	
439.091
	  	
2010
	
13,670.429
	
10,044.390
	
3,626.039
	
94,368.007

	
2011
	
53.990
	
56.485
	
(2.495)
	
441.586
	  	
2011
	
14,513.604
	
9,672.721
	
4,840.883
	
89,527.124

	
2012
	
498.398
	
56.811
	
441.586
	
0.000
	  	
2012
	
26,655.935
	
9,176.530
	
17,479.405
	
72,047.719

	
2013
	  	  	  	  	  	
2013
	
29,233.436
	
7,384.891
	
21,848.545
	
50,199.174

	
2014
	  	  	  	  	  	
2014
	
34,358.781
	
5,145.415
	
29,213.366
	
20,985.809

	
2015
	  	  	  	  	  	
2015
	
19,428.445
	
2,151.045
	
17,277.400
	
3,708.409

	
2016
	  	  	  	  	  	
2016
	
4,088.521
	
380.112
	
3,708.409
	
                            -

	
2017
	  	  	  	  	  	
2017
	  	  	  	  
	
2018
	  	  	  	  	  	
2018
	  	  	  	  
	
2019
	  	  	  	  	  	
2019
	  	  	  	  
	
Total
	
3,958.155
	
1,096.764
	
2,861.390
	  	  	
Total
	
219,729.086
	
101,208.712
	
118,520.374
	  

8/11/2005

 

  

  

  

SCHEDULE 11.1

NOTICES

BORROWER:

PNM Resources, Inc.

Alvarado Square

Albuquerque, NM  87158

Attention:  Wendy Carlson, Treasurer

Telephone:  505.241.2115

Telecopier:  505.241.2369

Electronic Mail:  wcarlso@pnm.com

Website Address:  www.pnmresouces.com

FCP:

First Choice Power, L.P.

c/o PNM Resources, Inc.

Alvarado Square

Albuquerque, NM  87158

Attention:  Wendy Carlson, Treasurer

Telephone:  505.241.2115

Telecopier:  505.241.2369

Electronic Mail:  wcarlso@pnm.com

Website Address:  www.pnmresouces.com

ADMINISTRATIVE AGENT:

Administrative Agent’s Office

(for payments and Requests for Credit Extensions):

Bank of America, N.A.

901 Main Street

Dallas, TX  75202

Mail Code:  TX1-492-14-12

Attention:  Credit Services/Jacqueline Archuleta

Telephone:  214.209.2135

Telecopier: 214.290.8372

Electronic Mail:  jacqueline.archuleta@bankofamerica.com

Account No.  1292000883

Ref:  PNM Resources

Account Name:  Corporate Loans

ABA# 111000012

 

  

1

  

Other Notices as Administrative Agent:

Bank of America, N.A.

Agency Management

100 North Tryon Street, 14th Floor

Charlotte, NC  28225

Mail Code:  NC1-007-14-24

Attention:  Maria A. McClain

Telephone:  704.388.1935

Telecopier: 704.409.0913

Electronic Mail:  maria.a.mcclain@bankofamerica.com

L/C ISSUERS:

Bank of America, N.A.

Bank of America, N.A.

Trade Operations-Los Angeles #22621

333 S. Beaudry Avenue, 19th Floor

Mail Code:  CA9-703-19-23

Los Angeles, CA 90017-1466

Attention:      Sandra Leon, Vice President

Telephone:  213.345.5231

Telecopier:  213.345.6694

Electronic Mail:  Sandra.Leon@bankofamerica.com

Wachovia Bank, National Association

Wachovia Bank, National Association

301 S. College Street

Mail Code:  0760

Charlotte, NC  28288

Attention:      Rick Price, Managing Director

Telephone:  704.374.4062

Telecopier:  704.383.6647

Electronic Mail:  rick.price@wachovia.com

 

  

2

  

SCHEDULE 11.3

PROCESSING AND RECORDING FEES

                      The Administrative Agent will charge a processing and recordation fee (an "Assignment Fee") in the amount of $2,500 for each assignment; provided, however,
that in the event of two or more concurrent assignments to members of the same Assignee Group (which may be effected by a suballocation of an assigned amount among members of such Assignee Group) or two or more concurrent assignments by members of the same Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group), the Assignment Fee will be $2,500 plus the amount set forth below:

	
Transaction
	
Assignment Fee

	  	  
	
First four concurrent assignments or suballocations to members of an Assignee Group (or from members of an Assignee Group, as applicable)

 
	
-0-

	
Each additional concurrent assignment or suballocation to a member of such Assignee Group (or from a member of such Assignee Group, as applicable)
	
$500

 

  

  

  

EXHIBIT 1.1A

FORM OF

GUARANTY AGREEMENT

THIS GUARANTY AGREEMENT, dated as of _____________, 200__ (this "Guaranty"), is made by PNM RESOURCES, INC., a New Mexico corporation (the "Guarantor"), for the benefit of each of the lenders (each a "Lender"
and collectively the "Lenders") now or hereafter party to that certain Amended and Restated Credit Agreement, dated as of August 15, 2005 (as amended, modified, supplemented or restated from time to time, the "Credit Agreement") among the Guarantor, First Choice  Power, L.P., a Texas limited partnership ("FCP",
together with the Guarantor and, subject to compliance with Section 2.6 of the Credit Agreement, certain Subsidiaries of the Guarantor from time to time, individually a “Borrower” and collectively  the “Borrowers”), the Lenders and Bank of America, N.A., as administrative agent for the Lenders (the "Administrative
Agent"), and for the benefit of the Administrative Agent (the Lenders and the Administrative Agent are collectively referred to herein as the "Benefited Parties").  All capitalized terms used but not otherwise defined herein shall have the respective meanings assigned thereto in the Credit Agreement.

RECITALS

              WHEREAS, in accordance with Section 2.6 of the Credit Agreement, the Guarantor desires that (a) ____________, a ___________ become a Borrower in accordance with the terms thereof (the "Subsidiary Borrower")
and (b) the Lenders provide Credit Extensions to the Subsidiary Borrower in accordance with the terms of the Credit Agreement;

              WHEREAS, this Guaranty is one of the conditions precedent to the ability of the Subsidiary Borrower to become a Borrower under the Credit Agreement and receive Credit Extensions from the Lenders; and

              WHEREAS, the Lenders are relying on this Guaranty, inter alia, to permit the Subsidiary Borrower to become a Borrower and to make Credit Extensions to the Subsidiary Borrower.

              NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, and other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

1.           Guaranty.  The Guarantor hereby absolutely and unconditionally guarantees, as a guaranty of
payment and performance and not merely as a guaranty of collection, prompt payment when due, whether at stated maturity, by required prepayment, upon acceleration, demand or otherwise, and at all times thereafter, of any and all existing and future indebtedness and liabilities of every kind, nature and character, direct or indirect, absolute or contingent, liquidated or unliquidated, voluntary or involuntary and whether for principal, interest, premiums, fees, indemnities, damages, costs, expenses or otherwise,
of the Subsidiary Borrower to the Benefited Parties, whenever arising, under the Credit Agreement (including all renewals, extensions, amendments, refinancings and other modifications thereof and all costs, attorneys' fees and expenses incurred by the Benefited Parties in connection with the collection or enforcement thereof), and whether recovery upon such indebtedness and liabilities may be or hereafter become unenforceable or shall be an allowed
or disallowed claim under any proceeding or case commenced by or against the Guarantor or the Subsidiary Borrower under any Debtor Relief Laws, and including interest that accrues after the commencement by or against the Subsidiary Borrower of any proceeding under any Debtor Relief Laws (collectively, the "Guaranteed Obligations").  The books and 

 

 

 

 

records of the Administrative Agent or any Lender showing the amount of the Guaranteed Obligations shall be admissible in evidence in any action or proceeding, and shall be binding upon the Guarantor and conclusive for the purpose of establishing the amount of the Guaranteed Obligations in absence of manifest error.  This Guaranty
shall not be affected by the genuineness, validity, regularity or enforceability of the Guaranteed Obligations or any instrument or agreement evidencing any Guaranteed Obligations, or by the existence, validity, enforceability, perfection, non-perfection or extent of any collateral therefor, or by any fact or circumstance relating to the Guaranteed Obligations which might otherwise constitute a defense to the obligations of the Guarantor under this Guaranty, and the Guarantor hereby irrevocably waives, to the
extent permitted by law, any defenses it may now have or hereafter acquire in any way relating to any or all of the foregoing. 

2.           No Setoff or Deductions; Taxes; Payments. The Guarantor shall make all payments hereunder free and clear
of and without deduction for any and all present or future income, stamp or other taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or similar charges, and all liabilities with respect thereto, but excluding, in the case of a Benefited Party, taxes imposed on or measured by its net income, and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the Laws of which such Benefited Party is organized or maintains its
Lending Office (all such non-excluded present or future income, stamp or other taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or similar charges, and liabilities being hereinafter referred to as "Taxes").  If the Guarantor shall be required by any Requirement of Law to deduct any Taxes from or in respect of any sum payable hereunder to any Benefited Party, (i) the sum payable shall be increased as necessary
so that after making all required deductions, such Benefited Party receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Guarantor shall make such deductions, (iii) the Guarantor shall pay the full amount deducted to the relevant taxation authority or other Governmental Authority in accordance with applicable Requirements of Law, (iv) the Guarantor shall pay to such Benefited Party, at the time interest is paid, such additional amount that such Benefited Party specifies
as necessary to preserve the after-tax yield (after factoring in all taxes, including taxes imposed on or measured by net income) such Benefited Party would have received if such Taxes had not been imposed, and (v) within 30 days after the date of such payment, the Guarantor shall furnish to the Administrative Agent (which shall forward the same to such Benefited Party, if applicable) the original or a certified copy of a receipt evidencing payment thereof, to the extent such receipt is issued therefor, or other
written proof of payment thereof that is reasonably satisfactory to the Administrative Agent.  The obligations of the Guarantor under this paragraph shall survive the payment in full of the Guaranteed Obligations and termination of this Guaranty. 

3.           Rights of Benefited Parties.  The Guarantor consents and agrees that the Benefited Parties
may, at any time and from time to time, without notice or demand, and without affecting the enforceability or continuing effectiveness hereof:  (a) amend, extend, renew, compromise, discharge, accelerate or otherwise change the time for payment or the terms of the Guaranteed Obligations or any part thereof; (b) take, hold, exchange, enforce, waive, release, fail to perfect, sell, or otherwise dispose of any security for the payment of this Guaranty or any Guaranteed Obligations; (c) apply such security
and direct the order or manner of sale thereof as the Administrative Agent or the Lenders in their sole discretion may determine; and (d) release or substitute one or more of any endorsers or other guarantors of any of the Guaranteed Obligations.  Without limiting the generality of the foregoing, the Guarantor consents to the taking of, or failure to take, any action which might in any manner or to any extent vary the risks of the Guarantor under this Guaranty or which, but for this provision, might
operate as a discharge of the Guarantor.

4.           Certain Waivers.  The Guarantor waives (a) any defense arising by reason of any disability
or other defense of the Subsidiary Borrower or any other guarantor, or the cessation from any 

 

 

 

 

cause whatsoever (including any act or omission of any Benefited Party) of the liability of the Subsidiary Borrower; (b) any defense based on any claim that the Guarantor's obligations exceed or are more burdensome than those of the Subsidiary Borrower; (c) the benefit of any statute of limitations affecting the Guarantor's liability
hereunder; (d) any right to proceed against the Subsidiary Borrower, proceed against or exhaust any security for the Indebtedness, or pursue any other remedy in the Benefited Parties' power whatsoever; (e) any benefit of and any right to participate in any security now or hereafter held by the Benefited Parties; and (f) to the fullest extent permitted by law, any and all other defenses or benefits that may be derived from or afforded by applicable law limiting the liability of or exonerating guarantors or sureties.  The
Guarantor expressly waives all setoffs and counterclaims and all presentments, demands for payment or performance, notices of nonpayment or nonperformance, protests, notices of protest, notices of dishonor and all other notices or demands of any kind or nature whatsoever with respect to the Guaranteed Obligations, and all notices of acceptance of this Guaranty or of the existence, creation or incurrence of new or additional Guaranteed Obligations. 

5.           Obligations Independent.  The obligations of the Guarantor hereunder are those of a primary
obligor, and not merely as surety, and are independent of the Guaranteed Obligations and the obligations of any other guarantor, and a separate action may be brought against the Guarantor to enforce this Guaranty whether or not the Subsidiary Borrower or any other Person is joined as a party.

6.           Subrogation.  The Guarantor shall not exercise any right of subrogation, contribution, indemnity,
reimbursement or similar rights with respect to any payments it makes under this Guaranty until all of the Guaranteed Obligations and any amounts payable under this Guaranty have been indefeasibly paid and performed in full and the Commitments have been terminated.  If any amounts are paid to the Guarantor in violation of the foregoing limitation, then such amounts shall be held in trust for the benefit of the Benefited Parties and shall forthwith be paid to the Benefited Parties to reduce the amount
of the Guaranteed Obligations, whether matured or unmatured.

7.           Termination; Reinstatement.  This Guaranty is a continuing and irrevocable guaranty of all
Guaranteed Obligations now or hereafter existing and shall remain in full force and effect until all Guaranteed Obligations and any other amounts payable under this Guaranty are indefeasibly paid in full in cash and the Commitments are terminated.  Notwithstanding the foregoing, this Guaranty shall continue in full force and effect or be revived, as the case may be, if any payment by or on behalf of the Subsidiary Borrower or the Guarantor is made, or any Benefited Party exercises its right of setoff,
in respect of the Guaranteed Obligations and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Benefited Parties in their discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Laws or otherwise, all as if such payment had not been made or such setoff had not occurred and whether
or not the Benefited Parties are in possession of or have released this Guaranty and regardless of any prior revocation, rescission, termination or reduction.  The obligations of the Guarantor under this paragraph shall survive termination of this Guaranty.

8.           Subordination.  The Guarantor hereby subordinates the payment of all obligations and indebtedness
of the Subsidiary Borrower owing to the Guarantor, whether now existing or hereafter arising, including but not limited to any obligation of the Subsidiary Borrower to the Guarantor as subrogee of the Benefited Parties or resulting from the Guarantor's performance under this Guaranty, to the indefeasible payment in full in cash of all Guaranteed Obligations.  If the Administrative Agent or the Lenders so request, any such obligation or indebtedness of the Subsidiary Borrower to the Guarantor shall be
enforced and performance received by the Guarantor as trustee for the Benefited Parties and the proceeds thereof shall be paid over to the Benefited Parties on account of the Guaranteed Obligations, but without reducing or affecting in any manner the liability of the Guarantor under this Guaranty.

 

 

 

9.           Stay of Acceleration.  In the event that acceleration of the time for payment of any of the
Guaranteed Obligations is stayed, in connection with any case commenced by or against the Guarantor or the Subsidiary Borrower under any Debtor Relief Laws, or otherwise, all such amounts shall nonetheless be payable by the Guarantor immediately upon demand by the Administrative Agent or the Lenders.

10.           Expenses.  The Guarantor shall pay on demand all costs and expenses (including attorneys'
fees) in any way relating to the enforcement or protection of the rights of the Administrative Agent or the Lenders under this Guaranty or in respect of the Guaranteed Obligations, including any incurred during any "workout" or restructuring in respect of the Guaranteed Obligations and any incurred in the preservation, protection or enforcement of any rights of the Administrative Agent or the Lenders in any proceeding any Debtor Relief Laws.  The obligations of the Guarantor under this paragraph shall
survive the payment in full of the Guaranteed Obligations and termination of this Guaranty.

11.           Miscellaneous.  No provision of this Guaranty may be waived, amended, supplemented or modified,
except by a written instrument executed by the Administrative Agent, on behalf of the Benefited Parties, and the Guarantor.  No failure by any Benefited Party to exercise, and no delay in exercising, any right, remedy or power hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy or power hereunder preclude any other or further exercise thereof or the exercise of any other right, power or remedy.  The remedies herein provided are cumulative
and not exclusive of any remedies provided by law or in equity.  The unenforceability or invalidity of any provision of this Guaranty shall not affect the enforceability or validity of any other provision herein.  Unless otherwise agreed by each affected Benefited Party and the Guarantor in writing, this Guaranty is not intended to supersede or otherwise affect any other guaranty now or hereafter given by the Guarantor for the benefit of such Benefited Party or any term or provision thereof.

12.           Condition of Subsidiary Borrower.  The Guarantor acknowledges and agrees that it has the sole
responsibility for, and has adequate means of, obtaining from the Subsidiary Borrower and any other guarantor such information concerning the financial condition, business and operations of the Subsidiary Borrower and any such other guarantor as the Guarantor requires, and that no Benefited Party has any duty, and the Guarantor is not relying on any Benefited Party at any time, to disclose to the Guarantor any information relating to the business, operations or financial condition of the Subsidiary Borrower or
any other guarantor (the guarantor waiving any duty on the part of the Benefited Parties to disclose such information and any defense relating to the failure to provide the same).

13.           Setoff.  If and to the extent any payment is not made when due hereunder, each Benefited Party
may setoff and charge from time to time any amount so due against any or all of the Guarantor's accounts or deposits with such Benefited Party.

14.           Indemnification and Survival.  Without limitation on any other obligations of the Guarantor
or remedies of the Benefited Parties under this Guaranty, the Guarantor shall, to the fullest extent permitted by law, indemnify and hold harmless each Benefited Party and their respective Affiliates, directors, officers, employees, counsel, agents and attorneys-in-fact (collectively the "Indemnitees") from and against any and all liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs, expenses and
disbursements (including the reasonable fees and expenses of legal counsel) of any kind or nature whatsoever which may at any time be imposed on, incurred by or asserted against any such Indemnitee in any way relating to or arising out of or in connection with any failure of any Guaranteed Obligations to be the legal, valid and binding obligations of the Subsidiary Borrower enforceable against the Subsidiary Borrower in accordance with their terms.  The obligations of the Guarantor under this paragraph
shall survive the payment in full of the Guaranteed Obligations and termination of this Guaranty.

 

 

 

15.           GOVERNING LAW; Assignment; Jurisdiction;
Notices.  THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, BUT EXCLUDING ALL OTHER CHOICE OF LAW AND CONFLICTS OF LAW RULES).  This Guaranty shall (a) bind the Guarantor and its successors
and assigns, provided that the Guarantor may not assign its rights or obligations under this Guaranty without the prior written consent of the Benefited Parties (and any attempted assignment without such consent shall be void), and (b) inure to the benefit of the Benefited Parties and their successors and assigns and the Benefited Parties may, without notice to the Guarantor and without affecting the Guarantor's obligations hereunder, assign, sell or grant participations in the Guaranteed Obligations and this
Guaranty, in whole or in part.  The Guarantor hereby irrevocably (i) submits to the non-exclusive jurisdiction of the courts of the State of New York or of the United States for the Southern District of New York in any action or proceeding arising out of or relating to this Guaranty, and (ii) waives to the fullest extent permitted by law any defense asserting an inconvenient forum in connection therewith.  Service of process in connection with such action or proceeding shall be binding on
the Guarantor if sent to the Guarantor by registered or certified mail at its address specified on Schedule 11.1 to the Credit Agreement or such other address as from time to time notified by the Guarantor.  The Guarantor agrees that each Benefited Party may disclose to any assignee of or participant in, or any prospective assignee of or participant in, any of its rights or obligations of all or part of the Guaranteed Obligations any and all information in such Benefited Party's possession concerning
the Guarantor, this Guaranty and any security for this Guaranty.  All notices and other communications to the Guarantor under this Guaranty shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier to the Guarantor at its address set forth below or at such other address in the United States as may be specified by the Guarantor in a written notice delivered to the Administrative Agent at such office as the Administrative
Agent may designate for such purpose from time to time in a written notice to the Guarantor. 

16.           WAIVER OF JURY TRIAL.  TO THE EXTENT ALLOWED BY APPLICABLE LAW, THE GUARANTOR, AND EACH BENEFITED
PARTY EACH IRREVOCABLY WAIVES TRIAL BY JURY WITH RESPECT TO ANY ACTION, CLAIM, SUIT OR PROCEEDING ON, ARISING OUT OF OR RELATING TO THIS GUARANTY OR THE GUARANTEED OBLIGATIONS.

17.           REPRESENTATIONS AND WARRANTIES.  All representations and warranties
of the Guarantor set forth in the Credit Agreement are true and correct in all material respects. 

Executed this ___ day of ________________, _____.

PNM RESOURCES, INC,

as Guarantor

By:                                                                       

Name:                                                                       

Title:                                                                       

 

  

  

  

EXHIBIT 1.1B

FORM OF

JOINDER AGREEMENT

           THIS JOINDER AGREEMENT (this "Joinder Agreement"), dated as of _____________, , is entered into by [TNMP][First
Choice], a ____________ (the "Applicant Borrower") for the benefit of BANK OF AMERICA, N.A., in its capacity as Administrative Agent (the "Administrative Agent") under that certain Amended and Restated Credit Agreement, dated as of August 15, 2005, among PNM Resources, Inc. (the "Company"), First Choice Power,
L.P., a Texas limited partnership ("FCP", together with the Company and, subject to compliance with Section 2.6 of the Credit Agreement, certain Subsidiaries of the Company from time to time, individually a “Borrower” and collectively the “Borrowers”), Bank of America, N.A., as Administrative Agent,
and the Lenders identified therein (as the same may be amended, modified, extended or restated from time to time, the "Credit Agreement").  All capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Credit Agreement.

           The Applicant Borrower hereby agrees as follows:

           1.           Upon its execution of this Joinder Agreement, and the satisfaction of the conditions set forth in Section 2.6 of the Credit Agreement, the Applicant Borrower will be deemed to be a Borrower for all purposes
of the Credit Agreement and agrees to be bound by all of the terms, provisions and conditions contained in the Credit Agreement, including without limitation, all of the affirmative and negative covenants set forth in Sections 7 and 8 of the Credit Agreement.  Furthermore, the Applicant Borrower agrees that all of the representations and warranties in the Credit Agreement applicable to the Applicant Borrower are true and correct in all material respects as of the date hereof.

           2.           The Applicant Borrower agrees to deliver to the Administrative Agent all documentation required by Section 2.6 of the Credit Agreement or otherwise requested by the Administrative Agent, including, without
limitation, organizational documents, resolutions, an incumbency certificate and opinions.

           3.           The address of the Applicant Borrower for purposes of Section 11.1 of the Credit Agreement is the same address as the Company.

           4.           This Joinder Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument.

           5.           THIS JOINDER AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401
AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, BUT EXCLUDING ALL OTHER CHOICE OF LAW AND CONFLICTS OF LAW RULES).

 

  

  

  

           IN WITNESS WHEREOF, the Applicant Borrower has caused this Joinder Agreement to be duly executed by its authorized officer as of the day and year first above written.

[APPLICANT BORROWER]

By:  ____________________________                                                    

Name:  _____________________                                                    

Title:  ___________________________                                                    

Acknowledged and accepted:

	
  
	
BANK OF AMERICA, N.A.,

	
  
	
as Administrative Agent

By:  ____________________________                                                    

Name: _____________________

Title:  ___________________________                                                    

 

  

  

  

EXHIBIT 2.1(b)

FORM OF

NOTICE OF BORROWING

	
TO:
	
BANK OF AMERICA, N.A., as Administrative Agent

	
RE:
	
Amended and Restated Credit Agreement dated as of August 15, 2005 among PNM Resources, Inc. (the "Company"), First Choice Power, L.P., a Texas limited partnership ("FCP", together with the Company and, subject to compliance with Section 2.6 of the Credit Agreement, certain Subsidiaries
of the Company from time to time, individually a “Borrower” and collectively the “Borrowers”), Bank of America, N.A., as Administrative Agent, and the Lenders identified therein (as the same may be amended, modified, extended or restated from time to time, the "Credit Agreement")

DATE:                                _____________, ______

	
1.
	
This Notice of Borrowing is made pursuant to the terms of the Credit Agreement.  All capitalized terms used herein unless otherwise defined shall have the meanings set forth in the Credit Agreement.

	
2.
	
Please be advised that __________, as a Borrower, is requesting Revolving Loans on the terms set forth below:

	
  
	
(a)
	
Principal amount of requested

	
            Revolving Loans
	
$___________________

	
  
	
(b)
	
Date of requested Revolving

	
                Loans
	
____________________

	
  
	
(c)
	
Interest rate applicable to the

requested Revolving Loans:

(i)           ________                      Base Rate

(ii)           ________                     Adjusted Eurodollar Rate for an Interest Period

            of:

________ one month

________ two months

________ three months

________ six months

	
3.
	
The representations and warranties made by the undersigned in any Credit Document (other than the representation and warranties in Section 6.7(a) (but only with respect to clause (a) of the definition of Material Adverse Effect) and Section 6.9 of the Credit Agreement)are true and correct  in all material respects at and as if made on the date of the requested Revolving Loans except to 

 

 

 

 

	 	
the extent they expressly relate to an earlier date.  In addition, if the Borrower Obligations of the undersigned are guaranteed by the Company pursuant to a Guaranty Agreement, the representations and warranties made by the Company in any Credit Document (other than the representation and warranties in Section 6.7(a) (but only with respect to clause(a) of the definition of Material Adverse Effect)and Section6.9
of the Credit Agreement)are true and correct in all material respects at and as if made on the date of the requested Revolving Loans except to the extent they expressly and exclusively relate to an earlier date.

 

	
4.
	
No Default or Event of Default as to the undersigned exists or shall be continuing either prior to or after giving effect to the Revolving Loans made pursuant to this Notice of Borrowing.  In addition, if the Borrower Obligations of the undersigned are guaranteed by the Company, no Default or Event of Default with respect to the Company exists or shall be continuing either prior to or after giving effect
to the Revolving Loans made pursuant to this Notice of Borrowing.

	
5.
	
Subsequent to the funding of the requested Revolving Loan, the aggregate principal amount of Revolving Loans outstanding plus the aggregate principal amount of outstanding L/C Obligations will be $________________ which is less than or equal the then Revolving Committed Amount.  In addition, if the undersigned is FCP, TNMP or First Choice then, with respect to the undersigned, the principal amount of its
outstanding Revolving Loans plus the principal amount  of outstanding L/C Obligations shall not exceed the Subsidiary Borrower Sublimit.

[BORROWER],

a _______________

By:  __________________________                                                              

Name:  ________________________                                                                         

Title:  _________________________                                                             

 

  

  

  

EXHIBIT 2.1(e)

FORM OF NOTE

Lender:  ______________                                                                                                                                          _____________,
200_

FOR VALUE RECEIVED, _____________, a _____________ (the "Borrower"), hereby promises to pay to the order of the Lender referenced above (the "Lender"), at the Administrative Agent’s Office set forth in
that certain Amended and Restated Credit Agreement dated as of August 15, 2005 (as amended, modified, extended or restated from time to time, the "Credit Agreement") among PNM Resources, Inc. (the "Company"), First Choice Power, L.P., a Texas limited partnership (“FCP”), certain subsidiaries of the Company
from time to time as a Borrower, the Lenders party thereto (including the Lender) and Bank of America, N.A., as Administrative Agent (the "Administrative Agent") (or at such other place or places as the holder of this Note may designate), the aggregate unpaid principal amount of the Revolving Loans made by the Lender to the Borrower under the Credit Agreement, in lawful money and in immediately available funds, on the dates and in the principal
amounts provided in the Credit Agreement, and to pay interest on the unpaid principal amount of each Revolving Loan made by the Lender to the Borrower, at such office, in like money and funds, for the period commencing on the date of each such Revolving Loan until each such Revolving Loan shall be paid in full, at the rates per annum and on the dates provided in the Credit Agreement.

This Note is one of the Notes referred to in the Credit Agreement and evidences Revolving Loans made by the Lender to the Borrower thereunder.  Capitalized terms used in this Note have the respective meanings assigned to them in the Credit Agreement and the terms and conditions of the Credit Agreement are expressly incorporated
herein and made a part hereof.

The Credit Agreement provides for the acceleration of the maturity of the Revolving Loans evidenced by this Note upon the occurrence of certain events (and for payment of collection costs in connection therewith) and for prepayments of Revolving Loans upon the terms and conditions specified therein.  In the event this Note is
not paid when due at any stated or accelerated maturity, the Borrower agrees to pay, in addition to principal and interest, all costs of collection, including reasonable attorney fees.

The date, amount, type, interest rate and duration of Interest Period (if applicable) of each Revolving Loan made by the Lender to the Borrower, and each payment made on account of the principal thereof, shall be recorded by the Lender on its books; provided that the failure
of the Lender to make any such recordation or endorsement shall not affect the obligations of the Borrower to make a payment when due of any amount owing under the Credit Agreement or under this Note in respect of the Revolving Loans to be evidenced by this Note, and each such recordation or endorsement shall be prima facie evidence of such information, absent manifest error.

Except as permitted by Section 11.3(b) of the Credit Agreement, this Note may not be assigned by the Lender to any other Person.

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, BUT EXCLUDING ALL OTHER CHOICE OF LAW AND CONFLICTS OF LAW RULES).

 

 

 

IN WITNESS WHEREOF, the Borrower has caused this Note to be executed as of the date first above written.

[BORROWER],

a _______________

By: __________________________                                                               

Name:  _______________________                                                                         

Title:  ________________________                                                              

 

  

  

  

EXHIBIT 2.3

FORM OF

NOTICE OF CONTINUATION/CONVERSION

	
TO:
	
BANK OF AMERICA, N.A., as Administrative Agent

	
RE:
	
Amended and Restated Credit Agreement dated as of August 15, 2005 among PNM Resources, Inc. (the "Company"), First Choice Power, L.P., a Texas limited partnership ("FCP", together with the Company and, subject to compliance with Section 2.6 of the Credit Agreement, certain Subsidiaries
of the Company from time to time, individually a “Borrower” and collectively the “Borrowers”), Bank of America, N.A., as Administrative Agent, and the Lenders named therein (as the same may be amended, modified, extended or restated from time to time, the "Credit Agreement")

	
DATE:
	
_____________, 200_

_________________________________________________________________

	
1.
	
This Notice of Continuation/Conversion is made pursuant to the terms of the Credit Agreement.  All capitalized terms used herein unless otherwise defined shall have the meanings set forth in the Credit Agreement.

	
2.
	
Please be advised that __________, as a Borrower, is requesting that a portion of the current outstanding Revolving Loans advanced to it in the amount of  _________________ , currently accruing interest at _________________, be extended or converted
as of ______, 200__ at the interest rate option set forth in paragraph 3 below.

	
3.
	
The interest rate option applicable to the extension or conversion of all or part of the existing Revolving Loans referenced above shall be:

	
         a.
	
________
	
the Base Rate

	
         b.
	
________
	
the Adjusted Eurodollar Rate for an Interest Period of:

	 	
________ one month

	 	
________ two months

	 	
________ three months

	 	
________ six months

4.           As of the date hereof, no Default or Event of Default has occurred and is continuing.

 

  

  

  

[BORROWER],

a _______________

By:  _______________________                                                              

Name:  _____________________                                                                         

Title: ______________________                                                               

 

  

  

  

EXHIBIT 7.1(c)

FORM OF

COMPLIANCE CERTIFICATE

TO:                      BANK OF AMERICA, N.A., as Administrative Agent

	
RE:
	
Amended and Restated Credit Agreement dated as of August 15, 2005 among PNM Resources, Inc. (the "Company"), First Choice Power, L.P., a Texas limited partnership ("FCP", together with the Company and, subject to compliance with Section 2.6 of the Credit Agreement, certain Subsidiaries
of the Company from time to time, as Borrowers), Bank of America, N.A., as Administrative Agent, and the Lenders named therein (as the same may be amended, modified, extended or restated from time to time, the "Credit Agreement")

	
DATE:
	
_____________, 200__

_____________________________________________________________________________________________________________________

           Pursuant to the terms of the Credit Agreement, I, ______________, a Financial Officer of ____________ (the “Borrower”), hereby certify on behalf of the Borrower that, as of the quarter ending ________,
200__, the statements below are accurate and complete in all respects (all capitalized terms used below shall have the meanings set forth in the Credit Agreement):

	 	
a.
	
Attached hereto as Schedule 1 are calculations (calculated as of the date of the financial statements referred to in paragraph c. below) demonstrating compliance by the Borrower with the financial covenants contained in Section 7.2 of the Credit Agreement. [not applicable for First Choice or FCP]

	 	
b.
	
No Default or Event of Default exists under the Credit Agreement, except as indicated on a separate page attached hereto, together with an explanation of the action taken or proposed to be taken by the Borrower with respect thereto.

	 	
c.
	
The quarterly/annual financial statements for the fiscal quarter/year ended __________, 200__ which accompany this certificate fairly present in all material respects the financial condition of the Borrower and its Subsidiaries and have been prepared in accordance with GAAP, subject to changes resulting from normal year-end audit adjustments and except that the quarterly financial statements have fewer footnotes
than annual statements.

 

  

  

  

[BORROWER],

a _______________

By:  _____________________                                                              

Name:  ___________________                                                                         

Title:  ____________________                                                              

 

  

  

  

SCHEDULE 1

TO EXHIBIT 7.1(c)

[COMPANY]

FINANCIAL COVENANT CALCULATIONS

	
A.
	
Debt Capitalization

 
	  
	  	
1.           Consolidated Indebtedness of the Company*
	
$__________________                                

	  	
2.           Consolidated Capitalization of the Company
	
$__________________                                

	  	
3.           Debt to Capitalization Ratio (Line A1  ̧ A2)
	
_____________  to 1.0

	  	
Maximum Permitted
	
.65 to 1.0

	  	  	  

	
  
	 

 _____________________________
* For purposes of such calculation, the portion of Consolidated Indebtedness attributable to obligations under Material Leases shall be the net present value (using (i) the discount rate (A) set forth in Schedule 6.19 of
the Credit Agreement, so long as such Schedule 6.19 specifies the same relevant discount rate as is used in calculating such net present value provided to Moody’s and S&P or (B) the discount rate used in calculating such net present value provided to Moody’s and S&P or (ii) any such  other rate as shall be proposed by the Company (and agreed upon by the Required Lenders) of all amounts payable under the Material Leases.

 

  

  

  

SCHEDULE 1

TO EXHIBIT 7.1(c)

[TNMP]

FINANCIAL COVENANT CALCULATIONS

	
A.
	
Debt Capitalization

 
	  
	  	
1.           Consolidated Indebtedness of TNMP
	
$_________________                                

	  	
2.           Consolidated Capitalization of TNMP
	
$_________________                                

	  	
3.           Debt to Capitalization Ratio (Line B1  ̧ B2)
	
 ___________ to 1.0

	  	
Maximum Permitted
	
0.65 to 1.0

	  	  	  

 

  

  

  

EXHIBIT 11.3(b)

FORM OF

ASSIGNMENT AND ASSUMPTION

           This Assignment and Assumption (the "Assignment and Assumption") is dated as of the Effective Date set forth below and is entered into by and between ______________ (the "Assignor")
and _______________________ (the "Assignee").  Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below  (as amended, the "Credit Agreement"), receipt of a copy of which is hereby acknowledged by the Assignee.  The Standard Terms and Conditions set forth in Schedule 1 attached hereto (the
"Standard Terms and Conditions") are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

           For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of
the Effective Date inserted by the Administrative Agent as contemplated below (a) all of the Assignor’s rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below (including without limitation any Letters of Credit, guarantees, and
swingline loans included in such facilities) and (b) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to,
contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (a) above (the rights and obligations sold and assigned pursuant to clauses (a) and (b) above being referred to herein collectively as, the "Assigned Interest").  Such sale and assignment is without recourse to the Assignor and, except as expressly provided
in this Assignment and Assumption, without representation or warranty by the Assignor.

1.           Assignor:                                           ______________________________

	
2.
	
Assignee:
	
______________________________

	 	
and is an Affiliate/Approved Fund of _________________

	
3.
	
Borrower:
	
PNM Resources, Inc.

	
4.
	
Administrative Agent:
	
Bank of America, N.A., as the Administrative Agent under the Credit Agreement

 

  

  

  

	
5.
	
Credit Agreement:
	
Amended and Restated Credit Agreement dated as of August 15, 2004 among the Company, First Choice Power, L.P., a Texas limited partnership ("FCP", together with the Company and, subject to compliance with Section 2.6 of the Credit Agreement, certain Subsidiaries of the Company from time to time, individually a “Borrower”
and collectively the “Borrowers”), the Lenders party thereto and the Administrative Agent.

	
6.
	
Assigned Interest:

	
Aggregate Amount of Commitment/Loans for all Lenders
	
Amount of Commitment/Loans Assigned
	
Percentage Assigned of Commitment/Loans

	
$
	
$
	
%

7.           After giving effect to the foregoing assignment, the Assignor and the Assignee shall have the following Commitments, Pro Rata Shares, outstanding Loans and Participation Interests:

	  	
Commitments
	
Pro Rata Share
	
Outstanding

Revolving

Loans
	
Participation Interests in

Letters of Credit

	
Assignor
	  	  	  	  
	
Assignee
	  	  	  	  

8.           Trade Date:                                ______________

Effective Date:   _____________ ___, 200__

 

  

  

  

The terms set forth in this Assignment and Assumption are hereby agreed to:

                                                                ASSIGNOR

	 	 	
[NAME OF ASSIGNOR]

                                                                By: ________________________                                                     

                                                                Name: ______________________                                                     

                                                                Title: _______________________                                                     

                                                                ASSIGNEE

                                                                [NAME
OF ASSIGNEE]

                                                                By:
________________________                                                      

                                                                Name: ______________________                                                     

                                                                Title: _______________________                                                     

Consented to and Accepted if applicable:

BANK OF AMERICA, N.A.,

as Administrative Agent and L/C Issuer

By: __________________________                                                     

Name: ________________________                                                     

Title: _________________________                                                     

WACHOVIA BANK, NATIONAL ASSOCIATION

as L/C Issuer

By: __________________________                                                     

Name: ________________________                                                     

Title: _________________________                                                     

Consented to if applicable:

PNM RESOURCES, INC.

By: __________________________                                                     

Name: ________________________                                                     

Title: _________________________                                                     

 

  

  

  

SCHEDULE 1

TO EXHIBIT 11.3(b)

TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

           1.           Representations and Warranties.

           1.1           Assignor.  The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii)
the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Credit Document, (ii) the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Documents or any collateral thereunder, (iii) the financial condition of the Company any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Credit Document or (iv) the performance or observance by the Company, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Credit Document.

           1.2.           Assignee.  The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary,
to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all requirements of an Eligible Assignee under the Credit Agreement (subject to receipt of such consents as may be required under the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations
of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 7.1 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent
or any other Lender, and (v) if it is a foreign lender, attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Credit Documents are required to be performed by it as a Lender.

           2.           Payments.  From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest
(including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date.

           3.           General Provisions.  This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns.  This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one 

 

 

 

 

instrument.  Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption.  This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the
State of New York.exh10-3_010510.htm

EXHIBIT 10.3

 

 

 

$400,000,000

CREDIT AGREEMENT

among

PUBLIC SERVICE COMPANY OF NEW MEXICO

as Borrower,

THE LENDERS IDENTIFIED HEREIN,

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent

UNION BANK OF CALIFORNIA, N.A.

as Syndication Agent

AND

BANK OF AMERICA, N.A.,

CITIBANK, N.A.

and

JPMORGAN CHASE BANK, N.A.

as Co-Documentation Agents

DATED AS OF AUGUST 17, 2005

WACHOVIA CAPITAL MARKETS, LLC

and

UNION BANK OF CALIFORNIA, N.A.

as Joint Lead Arrangers and Co-Book Managers

 

  

  

  

 

TABLE OF CONTENTS

	
SECTION 1  DEFINITIONS AND ACCOUNTING TERMS 
	
1

	
          1.1        Definitions. 
	
1

	
          1.2        Computation of Time Periods and Other Definitional Provisions. 
	
15

	
          1.3        Accounting Terms/Calculation of Financial Covenants. 
	
15

	
          1.4        Time.     
	
15

	
          1.5        Rounding of Financial Covenants.
	
16

	
          1.6        References to Agreements and Requirement of Laws.
	
16

	
          1.7        Letter of Credit Amounts. 
	
16

	 	 
	
SECTION 2  CREDIT FACILITY 
	
16

	
          2.1        Revolving Loans. 
	
16

	
          2.2        Letter of Credit Subfacility. 
	
17

	
          2.3        Continuations and Conversions. 
	
24

	
          2.4        Minimum Amounts.
	
25

	
          2.5        Extension Option. 
	
25

	
          2.6        Evidence of Debt. 
	
26

	 	 
	
SECTION 3  GENERAL PROVISIONS APPLICABLE TO REVOLVING LOANS 
	
26

	
          3.1        Interest. 
	
26

	
          3.2        Payments Generally. 
	
27

	
          3.3        Prepayments.
	
28

	
          3.4        Fees.  
	
28

	
          3.5        Payment in full at Maturity. 
	
29

	
          3.6        Computations of Interest and Fees. 
	
29

	
          3.7        Pro Rata Treatment. 
	
30

	
          3.8        Sharing of Payments.
	
31

	
          3.9        Capital Adequacy.
	
31

	
          3.10      Eurodollar Provisions. 
	
31

	
          3.11      Illegality.
	
32

	
          3.12      Requirements of Law; Reserves on Eurodollar Loans. 
	
32

	
          3.13      Taxes.
	
33

	
          3.14      Compensation. 
	
35

	
          3.15      Determination and Survival of Provisions. 
	
36

	 	 
	
SECTION 4  CONDITIONS PRECEDENT TO CLOSING
	
36

	
          4.1        Closing Conditions. 
	
36

	 	 
	
SECTION 5  CONDITIONS TO ALL EXTENSIONS OF CREDIT 
	
38

	
          5.1        Funding Requirements. 
	
38

	 	 
	
SECTION 6  REPRESENTATIONS AND WARRANTIES 
	
39

	
          6.1        Organization and Good Standing. 
	
39

	
          6.2        Due Authorization.
	
39

	
          6.3        No Conflicts. 
	
39

	
          6.4        Consents. 
	
39

	
          6.5        Enforceable Obligations. 
	
40

	
          6.6        Financial Condition. 
	
40

 

 

 

i

 

	 	 

	
          6.7        No Material Change.
	
40

	
          6.8        No Default. 
	
40

	
          6.9       Litigation.
	
41

	
          6.10     Taxes.
	
41

	
          6.11     Compliance with Law.
	
41

	
          6.12     ERISA.
	
41

	
          6.13     Use of Proceeds; Margin Stock. 
	
42

	
          6.14     Government Regulation.
	
42

	
          6.15     Solvency. 
	
42

	
          6.16     Disclosure.
	
42

	
          6.17     Environmental Matters.
	
43

	
          6.18     Material Leases.
	
43

	
          6.19     Material Lease Interest Payments and Discount Rate. 
	
43

	 	 
	
SECTION 7  AFFIRMATIVE COVENANTS
	
43

	
          7.1        Information Covenants. 
	
43

	
          7.2        Financial Covenants. 
	
45

	
          7.3        Preservation of Existence and Franchises. 
	
45

	
          7.4        Books and Records.
	
46

	
          7.5        Compliance with Law. 
	
46

	
          7.6        Payment of Taxes and Other Indebtedness. 
	
46

	
          7.7        Insurance. 
	
46

	
          7.8        Performance of Obligations. 
	
46

	
          7.9        Use of Proceeds. 
	
46

	
          7.10      Audits/Inspections. 
	
47

	
        
	
 

	
SECTION 8  NEGATIVE COVENANTS
	
47

	
          8.1        Nature of Business. 
	
47

	
          8.2        Consolidation and Merger.
	
47

	
          8.3        Sale or Lease of Assets.
	
47

	
          8.4        Affiliate Transactions.
	
48

	
          8.5        Liens. 
	
48

	
          8.6        Accounting Changes.
	
49

	
       
	
 

	
SECTION 9  EVENTS OF DEFAULT
	
49

	
          9.1        Events of Default. 
	
49

	
          9.2        Acceleration; Remedies.
	
51

	
          9.3        Allocation of Payments After Event of Default. 
	
52

	 	 
	
SECTION 10  AGENCY PROVISIONS 
	
53

	
          10.1      Appointment and Authority.
	
53

	
          10.2      Rights as a Lender. 
	
53

	
          10.3      Exculpatory Provisions. 
	
53

	
          10.4      Reliance
by Administrative Agent. 
	
54

	
          10.5      Delegation of Duties.
	
54

	
          10.6      Resignation of Administrative Agent. 
	
55

	
          10.7      Non-Reliance on Administrative Agent and Other Lenders.
	
55

	
          10.8      No Other Duties, Etc.
	
56

	
          10.9      Administrative Agent May File Proofs of Claim.
	
56

	 	 
	
SECTION 11  MISCELLANEOUS 
	
56

 

 

ii

 

	
          11.1      Notices; Effectiveness; Electronic Communication.
	
56

	
          11.2      Right of Set-Off. 
	
58

	
          11.3      Successors and Assigns. 
	
59

	
          11.4      No Waiver; Remedies Cumulative. 
	
62

	
          11.5      Attorney Costs, Expenses, Taxes and Indemnification by Borrowers. 
	
62

	
          11.6      Amendments, Etc. 
	
63

	
          11.7      Counterparts.
	
64

	
          11.8      Headings. 
	
64

	
          11.9      Survival of Indemnification and Representations and Warranties. 
	
65

	
          11.10    Governing Law; Venue; Service.
	
65

	
          11.11    Waiver of Jury Trial; Waiver of Consequential Damages. 
	
65

	
          11.12    Severability. 
	
66

	
          11.13    Further Assurances. 
	
66

	
          11.14    Confidentiality. 
	
66

	
          11.15    Entirety. 
	
66

	
          11.16    Binding Effect; Continuing Agreement. 
	
67

	
          11.17    Regulatory Statement. 
	
67

	
          11.18    USA Patriot Act Notice. 
	
67

	
          11.19    Acknowledgment. 
	
68

	
          11.20    Replacement of Lenders. 
	
68

  

 

iii

 

SCHEDULES

 

	 Schedule 1.1(a) 	 Pro Rata Shares
	 Schedule 1.1(c)	 Existing Letters of Credit
	 Schedule 6.18	 Material Leases
	 Schedule 6.19	 Material Lease Interest Payments and Discount Rate
	 Schedule 11.1 	 Notices
	 Schedule 11.3	 Processing and Recording Fees

 

 

EXHIBITS 

 

	 Exhibit 2.1(b)   	 Form of Notice of Borrowing
	 Exhibit 2.1(e)     	 Form of Note
	 Exhibit 2.3       	 Form of Notice of Continuation/Conversion
	 Exhibit 4.1(l)	 Form of Account Designation Letter
	 Exhibit 7.1(c)   	 Form of Compliance Certificate
	 Exhibit 11.3(b)    	 Form of Assignment and Assumption

 

 

 

  

iv  

  

EXHIBIT 10.3

CREDIT AGREEMENT

THIS CREDIT AGREEMENT (this "Credit Agreement") is entered into as of August 17, 2005 among PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico corporation, as Borrower, the Lenders and WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative Agent.

RECITALS

WHEREAS, the Borrower has requested the Lenders to provide a senior credit facility to the Borrower in an aggregate principal amount of $400,000,000; and

WHEREAS, the Lenders party hereto have agreed to make the requested senior credit facility available to the Borrower on the terms and conditions hereinafter set forth.

NOW, THEREFORE, IN CONSIDERATION of the premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

SECTION 1

DEFINITIONS AND ACCOUNTING TERMS

1.1           Definitions.

The following terms shall have the meanings specified herein unless the context otherwise requires.  Defined terms herein shall include in the singular number the plural and in the plural the singular:

"Account Designation Letter" means the Notice of Account Designation Letter dated the Closing Date from the Borrower to the Administrative Agent in substantially the form of Exhibit 4.1(l).

"Adjusted Eurodollar Rate" means the Eurodollar Rate plus the Applicable Percentage.

"Administrative Agent" means Wachovia Bank, National Association or any successor administrative agent appointed pursuant to Section 10.9.

"Administrative Agent's Office" means the Administrative Agent's address and, as appropriate, account as set forth on Schedule 11.1 or such other address or account with as the Administrative Agent may from
time to time notify the Borrower and the Lenders.

"Administrative Fees" has the meaning set forth in Section 3.4(d).

"Administrative Questionnaire" means an Administrative Questionnaire in a form supplied by the Administrative Agent.

"Affiliate" means, with respect to any Person, any other Person directly or indirectly controlling (including but not limited to all directors and officers of such Person), controlled by or under direct or indirect common control with such Person.  A Person shall
be deemed to control a corporation if such Person possesses, directly or indirectly, the power (a) to vote 10% or more of the 

 

 

 

 

securities having ordinary voting power for the election of directors of such corporation or (b) to direct or cause direction of the management and policies of such corporation, whether through the ownership of voting securities, by contract or otherwise.

"Agent-Related Persons" means the Administrative Agent, together with its Affiliates and the officers, directors, employees, agents and attorneys-in-fact of the Administrative Agent and its Affiliates.

"Applicable Percentage" means, for Eurodollar Loans, L/C Fees, Commitment Fees and Utilization Fees, the appropriate applicable percentages, in each case (subject to the exception indicated below), corresponding to the Debt Rating in effect as of the most recent Calculation
Date as shown below:

	
Pricing Level
	
Debt Rating*
	
Applicable Percentage for Eurodollar Loans and L/C Fees
	
Applicable Percentage for Commitment Fees
	
Applicable Percentage for Utilization Fees

	
I
	
> A-/A3
	
0.350%
	
0.080%
	
0.100%

	
II
	
BBB+/Baa1
	
0.400%
	
0.100%
	
0.100%

	
III
	
BBB/Baa2
	
0.500%
	
0.125%
	
0.100%

	
IV
	
BBB-/Baa3
	
0.650%
	
0.150%
	
0.100%

	
V
	
BB+/Ba1
	
0.875%
	
0.200%
	
0.125%

	
VI
	
<BB+ or unrated/

<Ba1 or unrated
	
1.250%
	
0.300%
	
0.250%

The Applicable Percentage shall be determined and adjusted on the date (each a "Calculation Date") one Business Day after the date on which the Borrower's Debt Rating is upgraded or downgraded in a manner which requires a change in the then applicable Pricing Level set forth
above.  If at any time there is a split in the Borrower's Debt Ratings between S&P and Moody's, the Applicable Percentage shall be determined by the higher of the two Debt Ratings (i.e. the lower pricing), provided that if the two Debt Ratings are more than one level apart, the Applicable Percentage shall be based on the Debt Rating which is one level lower than the higher rating.  If the Borrower does not have a Debt Rating from either S&P or Moody's, then, with respect to the Debt
Rating, Pricing Level VI shall apply. Each Applicable Percentage shall be effective from one Calculation Date until the next Calculation Date.  Any adjustment in the Applicable Percentage shall be applicable to all existing Eurodollar Loans as well as any new Eurodollar Loans made.  The applicable Pricing Level for Applicable Percentage, as of the Closing Date, is Pricing Level III.

"Approved Fund" means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an
entity or an Affiliate of an entity that administers or manages a Lender.

"Arrangers" means Wachovia Capital Markets, LLC and Union Bank of California together with their successors and/or assigns.

"Assignment and Assumption" means an Assignment and Assumption substantially in the form of Exhibit 11.3(b).

 

2

 

"Authorized Officer" means any of the president, chief executive officer, chief financial officer or treasurer of the Borrower.

"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the United States Code, as amended, modified, succeeded or replaced from time to time.

"Base Rate" means for any day a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such day as publicly announced from time to time by the Administrative Agent as its "prime rate" (the "Prime
Rate").  The Prime Rate is a rate set by the Administrative Agent based upon various factors including the Administrative Agent's costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate.  Any change in such rate announced by the Administrative Agent shall take effect at the opening of business on the day specified in the public announcement of such change.

"Base Rate Loan" means any Revolving Loan bearing interest at a rate determined by reference to the Base Rate.

"Borrower" means Public Service Company of New Mexico, a New Mexico corporation, together with its successors and permitted assigns.

"Borrower Obligations" means, without duplication, all of the obligations of the Borrower to the Lenders and the Administrative Agent, whenever arising, under this Credit Agreement, the Notes, or any of the other Credit Documents.

"Borrowing" means a borrowing consisting of simultaneous Revolving Loans of the same Type and, in the case of Eurodollar Loans, having the same Interest Period made by each of the Lenders pursuant to Section 2.1.

"Business Day" means any day other than a Saturday, a Sunday, a legal holiday or a day on which banking institutions are authorized or required by Law or other governmental action to close in New York, New York or Charlotte, North Carolina; provided that
in the case of Eurodollar Loans such day is also a day on which dealings are conducted by and between banks in the London interbank market.

"Capital Stock" means (a) in the case of a corporation, all classes of capital stock of such corporation, (b) in the case of a partnership, partnership interests (whether general or limited), (c) in the case of a limited liability company, membership interests and (d) any
other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person; including, in each case, all warrants, rights or options to purchase any of the foregoing.

"Cash Collateralize" means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the applicable L/C Issuer and the Lenders, as collateral for the L/C Obligations, cash or deposit account balances pursuant to documentation in form and substance
satisfactory to the Administrative Agent and the applicable L/C Issuer.

"Change of Control" means the failure of PNM Resources, Inc., a New Mexico corporation, to own and control 100% of the Voting Stock of the Borrower.

 

3

 

"Closing Date" means the date of this Credit Agreement, which is the first date all the conditions precedent in Section 5.1 are satisfied or waived in accordance with Section 5.1.

"Code" means the Internal Revenue Code of 1986 and the rules and regulations promulgated thereunder, as amended, modified, succeeded or replaced from time to time.

"Commitment" means, as to each Lender, its obligation to (a) make Revolving Loans to the Borrower pursuant to Section 2.1 and (b) fund or purchase Participation Interests in L/C Obligations pursuant to Section 2.2, in an aggregate principal amount at any one time outstanding
not to exceed such Lender's Pro Rata Share of the Revolving Committed Amount as set forth opposite such Lender's name on Schedule 1.1(a) or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Credit Agreement.

"Compensation Period" has the meaning set forth in Section 3.2(c)(ii).

"Compliance Certificate" means a fully completed and duly executed officer's certificate in the form of Exhibit 7.1(c), together with a Covenant Compliance Worksheet.

"Consolidated Capitalization" means the sum of (a) all of the shareholders' equity or net worth of the Borrower and its Subsidiaries, as determined in accordance with GAAP plus (b) Consolidated Indebtedness.

"Consolidated Indebtedness" means, as of any date of determination, with respect to the Borrower and its Subsidiaries on a consolidated basis, an amount equal to all Indebtedness of the Borrower and its Subsidiaries as of such date.

"Contingent Obligation" means, with respect to any Person, any direct or indirect liability of such Person with respect to any Indebtedness, liability or other obligation (the "primary obligation") of another Person (the "primary obligor"), whether or not contingent, (a)
to purchase, repurchase or otherwise acquire such primary obligation or any property constituting direct or indirect security therefor, (b) to advance or provide funds (i) for the payment or discharge of any such primary obligation or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency or any balance sheet item, level of income or financial condition of the primary obligor, (c) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of the primary obligor in respect thereof to make payment of such primary obligation or (d) otherwise to assure or hold harmless the owner of any such primary obligation against loss or failure or inability to perform in respect thereof; provided, however, that, with respect to the Borrower and its Subsidiaries,
the term Contingent Obligation shall not include endorsements for collection or deposit in the ordinary course of business.  The amount of any Contingent Obligation of any Person shall be deemed to be an amount equal to the maximum amount of such Person's liability with respect to the stated or determinable amount of the primary obligation for which such Contingent Obligation is incurred or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such
Person is required to perform thereunder).

"Covenant Compliance Worksheet" shall mean a fully completed worksheet in the form of Schedule I to Exhibit 7.1(c).

"Credit Agreement" has the meaning set forth in the Preamble hereof.

 

4

 

"Credit Documents" means this Credit Agreement, the Notes, any Notice of Borrowing, any Notice of Continuation/Conversion, and any other document, agreement or instrument entered into or executed in connection with the foregoing.

"Credit Exposure" has the meaning set forth in the definition of "Required Lenders".

"Credit Extension" means each of the following: (a) a Borrowing and (b) an L/C Credit Extension.

"Debt Rating" means the long term unsecured senior non-credit enhanced debt rating of the Borrower by S&P and Moody's.

"Debtor Relief Laws" means the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

"Default" means any event, act or condition which with notice or lapse of time, or both, would constitute an Event of Default.

"Default Rate" means an interest rate equal to two percent (2%) plus the rate that otherwise would be applicable (or if no rate is applicable, the Base Rate plus two percent (2%) per annum).

"Defaulting Lender" means, at any time, any Lender that, (a) has failed to make a Revolving Loan or purchase or fund a Participation Interest (but only for so long as such Revolving Loan is not made or such Participation Interest is not purchased or funded), (b) has failed
to pay to the Administrative Agent or any Lender an amount owed by such Lender pursuant to the terms of this Credit Agreement (but only for so long as such amount has not been repaid) or (c) has been deemed insolvent or has become subject to a bankruptcy or insolvency proceeding or to a receiver, trustee or similar official.

"Dollars" and "$" means dollars in lawful currency of the United States of America.

"Eligible Assignee" means (a) a Lender, (b) an Affiliate of a Lender, (c) an Approved Fund and (d) any other Person (other than a natural person) approved by the Administrative Agent, each L/C Issuer and the Borrower (such approval not to be unreasonably withheld or delayed); provided that
(i) the Borrower's consent is not required during the existence and continuation of a Default or an Event of Default, (ii) approval by the Borrower shall be deemed given if no objection is received by the assigning Lender and the Administrative Agent from the Borrower within five Business Days after notice of such proposed assignment has been delivered to the Borrower and (iii) neither the Borrower nor any Subsidiary or Affiliate of the Borrower shall qualify as an Eligible Assignee.

"Environmental Claims" means any and all administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, accusations, allegations, notices of noncompliance or violation, investigations (other than internal reports prepared by any Person in
the ordinary course of its business and not in response to any third party action or request of any kind) or proceedings relating in any way to any actual or alleged violation of or liability under any 

 

 

5

 

Environmental Law or relating to any permit issued, or any approval given, under any such Environmental Law (collectively, "Claims"), including, without limitation, (a) any and all Claims by Governmental Authorities for enforcement, cleanup, removal, response, remedial
or other actions or damages pursuant to any applicable Environmental Law and (b) any and all Claims by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief resulting from Hazardous Substances or arising from alleged injury or threat of injury to human health or the environment.

"Environmental Laws" shall mean any and all federal, state and local laws, statutes, ordinances, rules, regulations, permits, licenses, approvals, rules of common law and orders of courts or Governmental Authorities, relating to the protection of human health or occupational
safety or the environment, now or hereafter in effect and in each case as amended from time to time, including, without limitation, requirements pertaining to the manufacture, processing, distribution, use, treatment, storage, disposal, transportation, handling, reporting, licensing, permitting, investigation or remediation of Hazardous Substances.

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor statute, and all rules and regulations from time to time promulgated thereunder.

"ERISA Affiliate" means any Person (including any trade or business, whether or not incorporated) that would be deemed to be under "common control" with, or a member of the same "controlled group" as, the Borrower or any of its Subsidiaries, within the meaning of Sections
414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA.

"ERISA Event" means: (a) a Reportable Event with respect to a Plan or a Multiemployer Plan, (b) a complete or partial withdrawal by the Borrower, any of its Subsidiaries or any ERISA Affiliate from a Multiemployer Plan, or the receipt by the Borrower, any of its Subsidiaries
or any ERISA Affiliate of notice from a Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA or that it intends to terminate or has terminated under Section 4041A of ERISA, (c) the distribution by the Borrower, any of its Subsidiaries or any ERISA Affiliate under Section 4041 or 4041A of ERISA of a notice of intent to terminate any Plan or the taking of any action to terminate any Plan, (d) the commencement of proceedings by the PBGC under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any Plan, or the receipt by the Borrower, any of its Subsidiaries or any ERISA Affiliate of a notice from any Multiemployer Plan that such action has been taken by the PBGC with respect to such Multiemployer Plan, (e) the institution of a proceeding by any fiduciary of any Multiemployer Plan against the Borrower, any of its Subsidiaries or any ERISA Affiliate to enforce Section 515 of ERISA, which is not dismissed within thirty (30) days,
(f) the imposition upon the Borrower, any of its Subsidiaries or any ERISA Affiliate of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, or the imposition or threatened imposition of any Lien upon any assets of the Borrower, any of its Subsidiaries or any ERISA Affiliate as a result of any alleged failure to comply with the Code or ERISA in respect of any Plan, (g) the engaging in or otherwise becoming liable for a nonexempt Prohibited Transaction
by the Borrower, any of its Subsidiaries or any ERISA Affiliate, (h) a violation of the applicable requirements of Section 404 or 405 of ERISA or the exclusive benefit rule under Section 401(a) of the Code by any fiduciary of any Plan for which the Borrower, any of its Subsidiaries or any ERISA Affiliate may be directly or indirectly liable, (i) the adoption of an amendment to any Plan that, pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA, would result in the loss of tax-exempt status of the
trust of which such Plan is a part if the Borrower, any of its Subsidiaries or any ERISA Affiliate fails to timely provide security to such 

 

 

6

 

Plan in accordance with the provisions of such sections or (j) the withdrawal of the Borrower, any of its Subsidiaries or any ERISA Affiliate from a Multiple Employer Plan during a play year in which it was a substantial employer (as such term is defined in Section 4001(a)(2) of ERISA), or the termination of a Multiple Employer
Plan.

"Eurodollar Loan" means a Revolving Loan bearing interest based at a rate determined by reference to the Adjusted Eurodollar Rate.

"Eurodollar Rate" means, for any Interest Period with respect to a Eurodollar Loan, the rate per annum equal to the British Bankers Association LIBOR Rate ("BBA LIBOR"), as published by Reuters (or other commercially
available source providing quotations of BBA LIBOR as designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period.  If such rate is not available at such time for any reason, then the "Eurodollar Rate" for such Interest Period shall be the rate per annum determined by
the Administrative Agent to be the rate at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Loan being made, continued or converted by the Administrative Agent and with a term equivalent to such Interest Period would be offered by the Administrative Agent’s London Branch to major banks in the London interbank eurodollar market at their request at approximately 4:00 p.m. (London time) two Business Days prior
to the commencement of such Interest Period.

"Event of Default" has the meaning set forth in Section 9.1.

"Exchange Act" means the Securities Exchange Act of 1934, and the rules and regulations promulgated thereunder, as amended, modified, succeeded or replaced from time to time.

"Existing Credit Agreement" means that certain Credit Agreement, dated as of November 21, 2003, among the Borrower, the lenders party thereto, and Bank of America, N.A., as administrative agent, as previously amended, modified or supplemented prior to the Closing Date.

"Existing Letters of Credit" means the letters of credit set forth on Schedule 1.1(c).

"Federal Funds Rate" means, for any day, the rate per annum equal to the weighted average (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) 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 on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall
be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to the Administrative Agent on such day on such transactions as determined by the Administrative Agent.

"Fee Letters" means those certain letter agreements, each dated as of August 9, 2005, among (a) the Borrower and Union Bank of California and (b) the Borrower, Wachovia Bank, N.A. and Wachovia Capital Markets LLC, in each case as amended, modified, supplemented or restated
from time to time.

 

7

 

"Financial Officer" means the chief financial officer, vice president-finance, principal accounting officer or treasurer of the Borrower.

"First Mortgage Bonds" means those first mortgage bonds issued pursuant to the FMB Indenture.

"Fiscal Quarter" means each of the calendar quarters ending as of the last day of each March, June, September and December.

"Fiscal Year" means the calendar year ending December 31.

"FMB Indenture" means the Indenture of Mortgage and Deed of Trust, dated as of June 1, 1947, between the Borrower and The Bank of New York (formerly Irving Trust Company), as trustee thereunder, as supplemented and amended.

"Foreign Lender" has the meaning set forth in Section 3.13(f).

"Fund" means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.

"GAAP" means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting
Standards Board (or agencies with similar functions of comparable stature and authority within the U.S. accounting profession) or that are promulgated by any Governmental Authority having appropriate jurisdiction.

"Government Acts" has the meaning set forth in Section 2.2(k).

"Governmental Authority" means any domestic or foreign nation or government, any state or other political subdivision thereof and any central bank thereof, any municipal, local, city or county government, and any entity exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to government (including, without limitation, any state dental board) and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.

"Granting Lender" has the meaning specified in Section 11.3(g).

"Hazardous Substances" means any substances or materials (a) that are or become defined as hazardous wastes, hazardous substances, pollutants, contaminants or toxic substances under any Environmental Law, (b) that are defined by any Environmental Law as toxic, explosive,
corrosive, ignitable, infectious, radioactive, mutagenic or otherwise hazardous, (c) the presence of which require investigation or response under any Environmental Law, (d) that constitute a nuisance, trespass or health or safety hazard to Persons or neighboring properties, (e) that consist of underground or aboveground storage tanks, whether empty, filled or partially filled with any substance, or (f) that contain, without limitation, asbestos, polychlorinated biphenyls, urea formaldehyde foam insulation, petroleum
hydrocarbons, petroleum derived substances or wastes, crude oil, nuclear fuel, natural gas or synthetic gas.

 

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"Hedging Agreements" means, collectively, interest rate protection agreements, equity index agreements, foreign currency exchange agreements, option agreements or other interest or exchange rate or commodity price hedging agreements
(other than forward contracts for the delivery of power or gas written by the Borrower to its jurisdictional and wholesale customers in the ordinary course of business).

"Indebtedness" means, with respect to any Person (without duplication), (a) all indebtedness and obligations of such Person for borrowed money or in respect of loans or advances of any kind, (b) all obligations of such Person evidenced by notes, bonds, debentures or similar
instruments, (c) all reimbursement obligations of such Person with respect to surety bonds, letters of credit and bankers' acceptances (in each case, whether or not drawn or matured and in the stated amount thereof), (d) all obligations of such Person to pay the deferred purchase price of property or services, (e) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person, (f) all obligations of such Person as lessee under
leases that are or are required to be, in accordance with GAAP, recorded as capital leases, to the extent such obligations are required to be so recorded, (g) the net termination obligations of such Person under any Hedging Agreements, calculated as of any date as if such agreement or arrangement were terminated as of such date in accordance with the applicable rules under GAAP, (h) all Contingent Obligations of such Person, (i) all obligations and liabilities of such Person incurred in connection with any transaction
or series of transactions providing for the financing of assets through one or more securitizations or in connection with, or pursuant to, any synthetic lease or similar off-balance sheet financing, (j) the aggregate amount of uncollected accounts receivable of such Person subject at the time of determination to a sale of receivables (or similar transaction) to the extent such transaction is effected with recourse to such Person (whether or not such transaction would be reflected on the balance sheet of such
Person in accordance with GAAP), (k) all obligations, contingent or otherwise, under the Material Leases and (l) all indebtedness referred to in clauses (a) through (k) above secured by any Lien on any property or asset owned or held by such Person regardless of whether the indebtedness secured thereby shall have been assumed by such Person or is nonrecourse to the credit of such Person.

"Indemnified Liabilities" has the meaning set forth in Section 11.5(b).

"Indemnitees" has the meaning set forth in Section 11.5(b).

"Insured Series First Mortgage Bonds" means First Mortgage Bonds in the aggregate principal amount of $65,000,000 pledged by the Borrower to secure guarantees of $65,000,000 principal amount of pollution control revenue bonds issued by the City of Farmington, New Mexico,
for the benefit of the Borrower, which pollution control revenue bonds are also supported by a municipal bond insurance policy issued by AMBAC Indemnity Corporation.

"Interest Payment Date" means, (a) as to any Eurodollar Loan, the last day of each Interest Period applicable to such Loan and the Maturity Date; provided, however,
that if any Interest Period for a Eurodollar Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates and (b) as to any Base Rate Loan, the last Business Day of each Fiscal Quarter and the Maturity Date.

 

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"Interest Period" means, as to each Eurodollar Loan, the period commencing on the date such Eurodollar Loan is disbursed or converted to or continued as a Eurodollar Loan and ending on the date one, two, three or six months thereafter, as selected by the Borrower in its
Notice of Borrowing or Notice of Continuation/Conversion; provided that:

(a)           any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business
Day;

(b)           any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end
of such Interest Period; and

(c)           no Interest Period shall extend beyond the Maturity Date.

"ISP" means, with respect to any Letter of Credit, the "International Standby Practices 1998" published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance).

"Laws" means, collectively, all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any
Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

 

"L/C Borrowing" means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made.

"L/C Credit Extension" means, with respect to any Letter of Credit, the issuance thereof, the extension of the expiry date thereof, the renewal or increase of the amount thereof or any extension of credit resulting from a drawing thereunder that has not been reimbursed.

"L/C Fees" has the meaning set forth in Section 3.4(c).

"L/C Fronting Fee" has the meaning set forth in Section 2.2(i).

"L/C Issuer" means Wachovia Bank, National Association or any other Lender that agrees to issue Letters of Credit hereunder, in each case, in its capacity as an issuer of Letters of Credit hereunder, or any successor issuer of Letters of Credit hereunder.

 "L/C Obligations" means, as of any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all
L/C Borrowings.  For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.7.  For all purposes of this Credit Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be 

 

 

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drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be "outstanding" in the amount so remaining available to be drawn.

"Lender" means any of the Persons identified as a "Lender" on the signature pages hereto, and any Eligible Assignee which may become a Lender by way of assignment in accordance with the terms hereof, together with their successors and permitted assigns.

"Lending Office" means, as to any Lender, the office or offices of such Lender described as such in such Lender's Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Borrower and the Administrative Agent.

"Letter of Credit" means any letter of credit issued hereunder and shall include the Existing Letters of Credit.

"Letter of Credit Application" means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by the applicable L/C Issuer.

"Letter of Credit Expiration Date" means the day that is ten days prior to the Maturity Date then in effect (or, if such day is not a Business Day, the next preceding Business Day).

"Letter of Credit Sublimit" means an amount equal to FOUR HUNDRED MILLION DOLLARS ($400,000,000).  The Letter of Credit Sublimit is part of, and not in addition to, the Revolving Committed Amount.

"Lien" means any mortgage, pledge, hypothecation, assignment, security interest, lien (statutory or otherwise), preference, priority, charge or other encumbrance of any nature, whether voluntary or involuntary, including, without limitation, the interest of any vendor or
lessor under any conditional sale agreement, title retention agreement, capital lease or any other lease or arrangement having substantially the same effect as any of the foregoing.

"Mandatory Borrowing" has the meaning set forth in Section 2.2(d).

"Margin Stock" has the meaning ascribed to such term in Regulation U.

"Material Adverse Change" means a material adverse change in the condition (financial or otherwise), operations, business, performance, properties or assets of the Borrower and its Subsidiaries, taken as a whole.

"Material Adverse Effect" means a material adverse effect upon (a) the business, assets, liabilities (actual or contingent), operations, condition (financial or otherwise) or prospects of the Borrower and its Subsidiaries, taken as a whole, (b) the ability of the Borrower
to perform its obligations under this Credit Agreement or any of the other Credit Documents or (c) the legality, validity or enforceability of this Credit Agreement or any of the other Credit Documents or the rights and remedies of the Administrative Agent and the Lenders hereunder and thereunder.

"Material Lease" means any lease to the Borrower of its leasehold interests in (i) Unit 1 or Unit 2, and related common facilities, of the Palo Verde Nuclear Generating Station or (ii) the electric transmission line, and related facilities, known as the Eastern Interconnection
Project, including, without limitation, any lease set forth on Schedule 6.18 hereto.

 

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"Maturity Date" means August 17, 2006 or if the Maturity Date is automatically extended pursuant to Section 2.5(a), August 17, 2010 or with respect to some or all of the Lenders if such date is otherwise extended pursuant to Section 2.5, August 17, 2011 and/or
August 17, 2012.

"Moody's" means Moody's Investors Service, Inc. and its successors.

"Multiemployer Plan" means any "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA to which the Borrower, any of its Subsidiaries or any ERISA Affiliate makes, is making or is obligated to make contributions or has made or been obligated to make contributions.

"Multiple Employer Plan" means a Single Employer Plan to which the Borrower, any of its Subsidiaries or any ERISA Affiliate and at least one employer other than the Borrower, any of its Subsidiaries or any ERISA Affiliate are contributing sponsors.

"Nonrenewal Notice Date" has the meaning set forth in Section 2.2(b)(iii).

"Notes" means the promissory notes of the Borrower in favor of each of the Lenders evidencing the Revolving Loans provided pursuant to Section 2.1, individually or collectively, as appropriate, as such promissory notes may be amended, modified, supplemented, extended, renewed
or replaced from time to time and as evidenced in the form of Exhibit 2.1(e).

"Notice of Borrowing" means a request by the Borrower for a Revolving Loan in the form of Exhibit 2.1(b).

"Notice of Continuation/Conversion" means a request by the Borrower to continue an existing Eurodollar Loan to a new Interest Period or to convert a Eurodollar Loan to a Base Rate Loan or a Base Rate Loan to a Eurodollar Loan, in the form of Exhibit
2.3.

"Other Taxes" has the meaning set forth in Section 3.13(b).

"PBGC" means the Pension Benefit Guaranty Corporation and any successor thereto.

"Participant" has the meaning set forth in Section 11.3(d).

"Participation Interest" means (a) the purchase by a Lender of a participation in Letters of Credit or L/C Obligations as provided in Section 2.2 or (b) the purchase by a Lender of a participation in any Revolving Loan as provided in Section 3.8.

"Person" means any individual, partnership, joint venture, firm, corporation, limited liability company, association, trust or other enterprise (whether or not incorporated), or any Governmental Authority.

"Plan" means any "employee benefit plan" (within the meaning of Section 3(3) of ERISA) which is covered by ERISA and with respect to which the Borrower, any of its Subsidiaries or any ERISA Affiliate is (or, if such plan were terminated at such time, would under Section 4069
of ERISA be deemed to be) an "employer" within the meaning of Section 3(5) of ERISA.

"PSNM Accounts Receivable Securization" means the electric and gas accounts receivable securitization program that was approved by the New Mexico Public Regulation 

 

 

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Commission in Case 3838 and was executed by the Borrower and Bank of America, N.A. (successor by merger to Fleet National Bank), or an Affiliate thereof, on April 8, 2003, and any amendments, replacements or extensions thereof (so long as such amendments, replacements or extensions are not materially less favorable to the Borrower
and its Subsidiaries).

"Prime Rate" has the meaning set forth in the definition of Base Rate in this Section 1.1.

"Pro Rata Share" means, with respect to each Lender at any time, a fraction (expressed as a percentage, carried out to the ninth decimal place), the numerator of which is the amount of the Commitment of such Lender at such time and the denominator of which is the amount
of the Revolving Committed Amount at such time; provided that if the Commitment of each Lender to make Revolving Loans and the obligation of the L/C Issuers to make L/C Credit Extensions have been terminated pursuant to Section 9.2 or otherwise, then the Pro Rata Share of each Lender shall be determined based on such Lender's percentage ownership of the sum of the aggregate amount of outstanding Revolving Loans plus the aggregate amount of outstanding
L/C Obligations.  The initial Pro Rata Share of each Lender is set forth opposite the name of such Lender on Schedule 1.1(a) or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable.

"Prohibited Transaction" means any transaction described in (a) Section 406 of ERISA that is not exempt by reason of Section 408 of ERISA or by reason of a Department of Labor prohibited transaction individual or class exemption or (b) Section 4975(c) of the Code that is
not exempt by reason of Section 4975(c)(2) or 4975(d) of the Code.

"Property" means any right, title or interest in or to any property or asset of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.

"Register" has the meaning set forth in Section 11.3(c).

"Regulations T, U and X" means Regulations T, U and X, respectively, of the Federal Reserve Board, and any successor regulations.

"Reportable Event" means (a) any "reportable event" within the meaning of Section 4043(c) of ERISA for which the notice under Section 4043(a) of ERISA has not been waived by the PBGC (including any failure to meet the minimum funding standard of, or timely make any required
installment under, Section 412 of the Code or Section 302 of ERISA, regardless of the issuance of any waivers in accordance with Section 412(d) of the Code), (b) any such "reportable event" subject to advance notice to the PBGC under Section 4043(b)(3) of ERISA, (c) any application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code, and (d) a cessation of operations described in Section 4062(e) of ERISA.

"Required Lenders" means Lenders whose aggregate Credit Exposure (as hereinafter defined) constitutes more than 50% of the Credit Exposure of all Lenders at such time; provided, however, that if any Lender shall be a Defaulting Lender at such time then there shall be excluded
from the determination of Required Lenders the aggregate principal amount of Credit Exposure of such Lender at such time.  For purposes of the preceding sentence, the term "Credit Exposure" as applied to each Lender shall mean (a) at any time prior to the termination of the Commitments, the Pro Rata Share of such Lender of the Revolving Committed Amount multiplied by the Revolving Committed Amount and (b) at any time after the termination of the Commitments, the sum of (i) the principal balance of the
outstanding Revolving Loans of such Lender plus (ii) such Lender's Participation Interests in the face amount of the outstanding Letters of Credit.

 

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"Requirement of Law" means, with respect to any Person, the organizational documents of such Person and any Law applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject or otherwise pertaining to any or all
of the transactions contemplated by this Credit Agreement and the other Credit Documents.

"Responsible Officer" means the president, the chief executive officer, the co-chief executive officer, the chief financial officer, any executive officer, vice president-finance, principal accounting officer or treasurer of the Borrower, and any other officer or similar
official thereof responsible for the administration of the obligations of the Borrower in respect of this Credit Agreement and the other Credit Documents.

"Revolving Committed Amount" means FOUR HUNDRED MILLION DOLLARS ($400,000,000) or such lesser amount, as it may be reduced from time to time in accordance with Section 2.1(d).

"Revolving Loans" or "Loans" has the meaning set forth in Section 2.1(a).

"S&P" means Standard & Poor's Rating Service, a division of The McGraw-Hill Companies, Inc. and its successors.

"Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

"Single Employer Plan" means any Plan which is covered by Title IV of ERISA, but which is not a Multiemployer Plan or Multiple Employer Plan.

"Solvent" means, with respect to any Person as of a particular date, that on such date (a) such Person is able to pay its debts and other liabilities, Contingent Obligations and other commitments as they mature in the normal course of business, (b) such Person does not intend
to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to pay as such debts and liabilities mature in their ordinary course, (c) such Person is not engaged in a business or a transaction, and is not about to engage in a business or a transaction, for which such Person's assets would constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which such Person is engaged or is to engage, (d) the fair value of the assets
of such Person is greater than the total amount of liabilities, including, without limitation, Contingent Obligations, of such Person and (e) the present fair saleable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured.

"SPC" has the meaning set forth in Section 11.3(g).

"Subsidiary" means, as to any Person, (a) any corporation more than 50% of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time, any class
or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person directly or indirectly through Subsidiaries, and (b) any partnership, association, joint venture or other entity in which such person directly or indirectly through Subsidiaries has more than a 50% equity interest at any time.  Any 

 

 

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reference to Subsidiary herein, unless otherwise identified, shall mean a Subsidiary, direct or indirect, of the Borrower.  Any reference to a Subsidiary of the Borrower herein shall not include any Subsidiary that is inactive, has minimal or no assets and does not generate revenues.

"Taxes" has the meaning set forth in Section 3.13(a).

"Total Assets" means all assets of the Borrower as shown on its most recent quarterly consolidated balance sheet, as determined in accordance with GAAP.

"Type" means, with respect to a Revolving Loan, its character as a Base Rate Loan or a Eurodollar Loan.

"Unreimbursed Amount" has the meaning specified in Section 2.2(d)(i).

"Unused Revolving Commitment" means, for any date of determination, the amount by which (a) the aggregate Revolving Committed Amount on such date exceeds (b) the sum of the aggregate principal amount of outstanding Revolving Loans plus the aggregate principal amount of outstanding
L/C Obligations on such date.

"Utilization Fees" has the meaning set forth in Section 3.4(b).

"Voting Stock" means the Capital Stock of a Person that is then outstanding and normally entitled to vote in the election of directors and other securities of such Person convertible into or exercisable for such Capital Stock (whether or not such securities are then currently
convertible or exercisable).

1.2           Computation of Time Periods and Other Definitional Provisions.

For purposes of computation of periods of time hereunder, the word "from" means "from and including" and the words "to" and "until" each mean "to but excluding."  References in this Credit Agreement to "Articles", "Sections", "Schedules" or "Exhibits" shall be to Articles, Sections, Schedules or Exhibits of or to this Credit
Agreement unless otherwise specifically provided.

1.3           Accounting Terms/Calculation of Financial Covenants.

Except as otherwise expressly provided herein, all accounting terms used herein or incorporated herein by reference shall be interpreted, and all financial statements and certificates and reports as to financial matters required to be delivered to the Administrative Agent or the Lenders hereunder shall be prepared, in accordance with GAAP
applied on a consistent basis. Notwithstanding anything to the contrary in this Credit Agreement, for purposes of calculation of the financial covenants set forth in Section 7.2, all accounting determinations and computations thereunder shall be made in accordance with GAAP as in effect as of the date of this Credit Agreement applied on a basis consistent with the application used in preparing the most recent financial statements of the Borrower referred to in Section 4.1(d).  In the event that
any changes in GAAP after such date are required to be applied to the Borrower and would affect the computation of the financial covenants contained in Section 7.2, such changes shall be followed only from and after the date this Credit Agreement shall have been amended to take into account any such changes.

1.4           Time.

All references to time herein shall be references to Central Standard Time or Central Daylight Time, as the case may be, unless specified otherwise.

 

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1.5           Rounding of Financial Covenants.

Any financial ratios required to be maintained by the Borrower pursuant to this Credit Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number
(with a rounding-up if there is no nearest number).

1.6           References to Agreements and Requirement of Laws.

Unless otherwise expressly provided herein: (a) references to organization documents, agreements (including the Credit Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements,
extensions, supplements and other modifications are not prohibited by any Credit Document and (b) references to any Requirement of Law shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Requirement of Law.

1.7           Letter of Credit Amounts.

Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at such time; provided, however, that with respect to
any Letter of Credit that, by its terms or the terms of any Letter of Credit related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.

SECTION 2

CREDIT FACILITY

2.1           Revolving Loans.

(a)           Revolving Loan Commitment.   Subject to the terms and conditions set forth herein, each Lender severally agrees to make revolving loans (each a "Revolving
Loan" or "Loan" and collectively the "Revolving Loans" or "Loans") in Dollars to the Borrower, at any time and from time to time, during the period from and including the Closing Date to but not including the Maturity Date (or such earlier date if the Commitments have been terminated as provided herein); provided, however,
that after giving effect to any Borrowing (i) the sum of the aggregate principal amount of outstanding Revolving Loans plus the aggregate principal amount of outstanding L/C Obligations shall not exceed the Revolving Committed Amount and (ii) with respect to each individual Lender, the sum of the aggregate principal amount of outstanding Revolving Loans plus the aggregate principal amount of outstanding L/C Obligations of such Lender shall not exceed such Lender's Pro Rata Share of the Revolving Committed Amount.  Subject
to the terms of this Credit Agreement (including Section 3.3), the Borrower may borrow, repay and reborrow Revolving Loans.

(b)           Method of Borrowing for Revolving Loans.  By no later than 11:00 a.m. (i) on the date of the requested Borrowing of Revolving Loans that will be Base Rate Loans and (ii) three Business Days prior
to the date of the requested Borrowing of Revolving Loans that will be 

 

 

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Eurodollar Loans, the Borrower shall telephone the Administrative Agent as well as submit a written Notice of Borrowing in the form of Exhibit 2.1(b) to the Administrative Agent setting forth (A) the amount requested, (B) the date of the requested Borrowing, (C) the
Type of Revolving Loan, (D) with respect to Revolving Loans that will be Eurodollar Loans, the Interest Period applicable thereto, and (E) certification that the Borrower has complied in all respects with Section 5.  If the Borrower shall fail to specify (1) an Interest Period in the case of a Eurodollar Loan, then such Eurodollar Loan shall be deemed to have an Interest Period of one month or (2) the Type of Revolving Loan requested, then such Revolving Loan shall be deemed to be a Base Rate Loan.  All
Revolving Loans made on the Closing Date shall be Base Rate Loans.  Thereafter, all or any portion of the Revolving Loans may be converted into Eurodollar Loans in accordance with the terms of Section 2.3.

(c)           Funding of Revolving Loans.  Upon receipt of a Notice of Borrowing, the Administrative Agent shall promptly inform the Lenders as to the terms thereof.  Each such Lender shall make its
Pro Rata Share of the requested Revolving Loans available to the Administrative Agent in immediately available funds at the Administrative Agent's Office not later than 1:00 p.m. on the Business Day specified in the applicable Notice of Borrowing.  Upon satisfaction of the conditions set forth in Section 5, the amount of the requested Revolving Loans will then be made available to the Borrower by the Administrative Agent either by (i) crediting the account of the Borrower on the books of the Administrative
Agent with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Borrower.

(d)           Reductions of Revolving Committed Amount.  Upon at least three Business Days' notice, the Borrower shall have the right to permanently terminate or reduce the aggregate unused amount of the Revolving
Committed Amount at any time or from time to time; provided that (i) each partial reduction shall be in an aggregate amount at least equal to $5,000,000 and in integral multiples of $1,000,000 above such amount and (ii) no reduction shall be made which would reduce the Revolving Committed Amount to an amount less than the sum of the aggregate principal amount of outstanding Revolving Loans plus the aggregate principal amount of outstanding L/C Obligations.  Any reduction in (or termination of) the Revolving
Committed Amount shall be permanent and may not be reinstated.

(e)           Notes.  At the request of any Lender, the Revolving Loans made by such Lender shall be evidenced by a duly executed promissory note of the Borrower to such Lender in substantially the form of Exhibit
2.1(e).

2.2           Letter of Credit Subfacility.

(a)           The Letter of Credit Commitment.

(i)           Subject to the terms and conditions set forth herein and other terms and conditions that the applicable L/C Issuer may reasonably require, (A) each L/C Issuer agrees, in reliance upon the agreements of the other Lenders set forth in this Section 2.2, from time to time
on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue standby Letters of Credit in Dollars for the account of the Borrower and to amend Letters of Credit previously issued by it, in each case in accordance with subsection (b) below and (B) the Lenders severally agree to participate in such Letters of Credit issued for the account of the Borrower; provided, however,
that after giving effect to the issuance of any Letter of Credit (1) the sum of the aggregate principal amount of outstanding Revolving Loans plus the aggregate principal 

 

 

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amount of outstanding L/C Obligations shall not exceed the Revolving Committed Amount, (2) with respect to each individual Lender, the sum of the aggregate principal amount of outstanding Revolving Loans of such Lender plus the aggregate principal amount of outstanding L/C Obligations of such Lender shall not exceed such Lender's
Pro Rata Share of the Revolving Committed Amount and (3) the aggregate amount of L/C Obligations shall not at any time exceed the Letter of Credit Sublimit.  Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.

(ii)           An L/C Issuer shall be under no obligation to issue or amend any Letter of Credit if:

(A)           any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such L/C Issuer from issuing such Letter of Credit, or any Requirement of Law applicable to such L/C Issuer or any request or directive (whether
or not having the force of law) from any Governmental Authority with jurisdiction over such L/C Issuer shall prohibit, or request that such L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which such L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon such L/C Issuer any
unreimbursed loss, cost or expense which was not applicable on the Closing Date and which such L/C Issuer in good faith deems material to it;

(B)           the expiry date of such requested Letter of Credit would occur more than twelve months after the date of issuance, unless the Required Lenders have approved such expiry date;

(C)           the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all the Lenders have approved such expiry date;

(D)           the issuance of such Letter of Credit would violate one or more policies of such L/C Issuer;

(E)           such Letter of Credit is in an initial amount less than $100,000 (unless otherwise agreed to by such L/C Issuer), is to be used for a purpose other than as permitted by Section 7.9, or is denominated in a currency other than Dollars; or

(F)           a default of any Lender's obligations to fund under Section 2.2(d) exists or any Lender is at such time a Defaulting Lender hereunder, unless the applicable L/C Issuer has entered into satisfactory
arrangements with the Borrower or such Lender to eliminate such L/C Issuer's risk with respect to such Lender.

(iii)           An L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) such L/C Issuer would have no obligation at such time to issue such Letter of 

 

 

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Credit in its amended form under the terms hereof or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.

(b)           Procedures for Issuance and Amendment of Letters of Credit.

(i)           Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Borrower delivered to an L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible
Officer of the Borrower.  The Letter of Credit Application must be received by the applicable L/C Issuer and the Administrative Agent not later than 11:00 a.m. at least two Business Days (or such later date and time as such L/C Issuer may agree in a particular instance in its sole discretion) prior to the proposed issuance date or date of amendment, as applicable.  In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form
and detail satisfactory to the applicable L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day), (B) the amount thereof, (C) the expiry date thereof, (D) the name and address of the beneficiary thereof, (E) the documents to be presented by such beneficiary in case of any drawing thereunder, (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder and (G) such other matters as such L/C Issuer may require.  In
the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the applicable L/C Issuer (1) the Letter of Credit to be amended, (2) the proposed date of amendment thereof (which shall be a Business Day), (3) the nature of the proposed amendment and (4) such other matters as such L/C Issuer may require.

(ii)           Promptly after receipt of any Letter of Credit Application, the applicable L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the Borrower and,
if not, such L/C Issuer will provide the Administrative Agent with a copy thereof.  Upon receipt by the applicable L/C Issuer of confirmation from the Administrative Agent that the requested issuance or amendment is permitted in accordance with the terms hereof, then, subject to the terms and conditions hereof, such L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of the Borrower or enter into the applicable amendment, as the case may be, in each case in accordance with
such L/C Issuer's usual and customary business practices.

(iii)           If the Borrower so requests in any applicable Letter of Credit Application, the applicable L/C Issuer may, in its sole and absolute discretion, agree to issue a Letter of Credit that has automatic renewal provisions (each, an "Auto-Renewal
Letter of Credit"); provided that any such Auto-Renewal Letter of Credit must permit such L/C Issuer to prevent any such renewal at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the "Nonrenewal Notice Date") in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued.  Unless
otherwise directed by the applicable L/C Issuer, the Borrower shall not be required to make a specific request to such L/C Issuer for any such renewal.  Once an Auto-Renewal Letter of Credit has been issued, the Lenders shall be deemed to have authorized (but may not require) the applicable L/C Issuer to permit the renewal of such Letter of Credit at any time to an expiry date not later than the Letter of Credit Expiration Date; provided, however, that such L/C Issuer shall not permit any such renewal
if (A) such L/C Issuer 

 

 

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has determined that it would have no obligation at such time to issue such Letter of Credit in its renewed form under the terms hereof (by reason of the provisions of Section 2.2(a)(ii) or otherwise), or (B) it has received notice (which may be by telephone or
in writing) on or before the day that is five Business Days before the Nonrenewal Notice Date (1) from the Administrative Agent that the Required Lenders have elected not to permit such renewal or (2) from the Administrative Agent, any Lender or the Borrower that one or more of the applicable conditions specified in Section 5 is not then satisfied.

(iv)           Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the applicable L/C Issuer will also deliver to the Borrower and the Administrative Agent a true and complete
copy of such Letter of Credit or amendment.

(c)           Participations.

(i)           On the Closing Date, each Lender shall be deemed to have purchased without recourse a risk participation from the applicable L/C Issuer in each Existing Letter of Credit and the obligations arising thereunder and any collateral relating thereto, in each case in an amount
equal to its Pro Rata Share of the obligations under such Existing Letter of Credit, and shall absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and be obligated to pay to such L/C Issuer therefor and discharge when due, its Pro Rata Share of the obligations arising under such Existing Letter of Credit.

(ii)           Each Lender, upon issuance of a Letter of Credit, shall be deemed to have purchased without recourse a risk participation from the applicable L/C Issuer in such Letter of Credit and the obligations arising thereunder and any collateral relating thereto, in each case
in an amount equal to its Pro Rata Share of the obligations under such Letter of Credit, and shall absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and be obligated to pay to such L/C Issuer therefor and discharge when due, its Pro Rata Share of the obligations arising under such Letter of Credit.

(d)         Reimbursement.

(i)           In the event of any drawing under any Letter of Credit, the applicable L/C Issuer will promptly notify the Borrower.  The Borrower shall reimburse the applicable L/C Issuer on the day of drawing under any Letter of Credit either with the proceeds of a Revolving
Loan obtained hereunder or otherwise in immediately available funds.  If the Borrower shall fail to reimburse the applicable L/C Issuer as provided hereinabove (the "Unreimbursed Amount"), the unreimbursed amount of such drawing shall bear interest at a per annum rate equal to the Base Rate plus two percent (2%).

(ii)           Subsequent to a drawing under any Letter of Credit, unless the Borrower shall immediately notify the applicable L/C Issuer of its intent to otherwise reimburse such L/C Issuer, the Borrower shall be deemed to have requested a Base Rate Loan in the amount of the drawing
as described herein, the proceeds of which will be used to satisfy the reimbursement obligations.  On any day on which the Borrower shall be deemed to have requested a Revolving Loan borrowing to reimburse a drawing under a Letter of Credit, the Administrative Agent shall give notice to the Lenders that a Revolving Loan 

 

 

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has been deemed requested in connection with a drawing under a Letter of Credit, in which case a Revolving Loan borrowing comprised solely of Base Rate Loans (each such borrowing, a "Mandatory Borrowing") shall be immediately made from all Lenders (without giving effect
to any termination of the Commitments pursuant to Section 9.2 or otherwise) pro rata based on each Lender's respective Pro Rata Share and the proceeds thereof shall be paid directly to the applicable L/C Issuer for application to the respective L/C Obligations.  Each Lender hereby irrevocably agrees to make such Revolving Loans immediately upon any such request or deemed
request on account of each such Mandatory Borrowing in the amount and in the manner specified in the preceding sentence and on the same such date notwithstanding (A) the amount of Mandatory Borrowing may not comply with the minimum amount for borrowings of Revolving Loans otherwise required hereunder, (B) the failure of any conditions specified in Section 5.2 to have been satisfied, (C) the existence of a Default or an Event of Default, (D) the
failure of any such request or deemed request for Revolving Loans to be made by the time otherwise required hereunder, (E) the date of such Mandatory Borrowing, or (F) any reduction in the Revolving Committed Amount or any termination of the Commitments.

(iii)           In the event that any Mandatory Borrowing cannot for any reason be made on the date otherwise required above (including, without limitation, as a result of the commencement of a proceeding under the Bankruptcy Code with respect to the Borrower), then each such Lender
hereby agrees that it shall forthwith fund (as of the date the Mandatory Borrowing would otherwise have occurred, but adjusted for any payments received from the Borrower on or after such date and prior to such purchase) its Pro Rata Share in the outstanding L/C Obligations; provided, that in the event any Lender shall fail to fund its Pro Rata Share on the day the Mandatory Borrowing would otherwise have occurred, then the amount of such Lender's
unfunded participation interest therein shall bear interest payable to the applicable L/C Issuer upon demand, at the rate equal to, if paid within two Business Days of such date, the Federal Funds Rate, and thereafter at a rate equal to the Base Rate.  Simultaneously with the making of each such payment by a Lender to such L/C Issuer, such Lender shall, automatically and without any further action on the part of such L/C Issuer or such Lender, acquire a participation in an amount equal to such payment
(excluding the portion of such payment constituting interest owing to such L/C Issuer) in the related unreimbursed drawing portion of the L/C Obligation and in the interest thereon and shall have a claim against the Borrower with respect thereto.  Any payment by the Lenders pursuant to this clause (iii) shall not relieve or otherwise impair the obligations of the Borrower to reimburse the applicable L/C Issuer under a Letter of Credit.

(e)           Obligations Absolute. The obligation of the Borrower to reimburse the applicable L/C Issuer for each drawing under each Letter of Credit shall
be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Credit Agreement under all circumstances, including the following:

(i)           any lack of validity or enforceability of such Letter of Credit, this Credit Agreement, or any other agreement or instrument relating thereto;

(ii)           the existence of any claim, counterclaim, set-off, defense or other right that the Borrower may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), such
L/C Issuer or any other Person, whether in connection with this 

 

 

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Credit Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;

(iii)           any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission
or otherwise of any document required in order to make a drawing under such Letter of Credit;

(iv)           any payment by such L/C Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by such L/C Issuer under such Letter of Credit to any Person purporting
to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law; or

(v)           any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower.

The Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with the Borrower's instructions or other irregularity, the Borrower will immediately notify the applicable L/C Issuer.  The Borrower shall be conclusively deemed
to have waived any such claim against the applicable L/C Issuer and its correspondents unless such notice is given as aforesaid.

(f)           Role of L/C Issuers. Each Lender and the Borrower agree that, in paying any drawing under a Letter of Credit, the applicable L/C Issuer shall
not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document.  None of the L/C Issuers, any Agent-Related Person nor any of the respective correspondents, participants or assignees of the L/C Issuers shall be liable to any Lender for (i) any
action taken or omitted in connection herewith at the request or with the approval of the Lenders or the Required Lenders, as applicable, (ii) any action taken or omitted in the absence of gross negligence or willful misconduct or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Letter of Credit Application.  The
Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided, however, that this assumption is not intended to, and shall not, preclude the Borrower's pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement.  None of the
L/C Issuers, any Agent-Related Person, nor any of the respective correspondents, participants or assignees of the L/C Issuers, shall be liable or responsible for any of the matters described in clauses (i) through (v) of Section 2.2(e); provided, however, that anything in such clauses to the contrary notwithstanding, the Borrower may have a claim against a L/C Issuer, and such L/C Issuer may be liable to the Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary,
damages suffered by the Borrower which the Borrower proves were caused by such L/C Issuer's willful misconduct or gross negligence or such L/C Issuer's willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit.  In 

 

 

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furtherance and not in limitation of the foregoing, an L/C Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation and such L/C Issuer shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign
a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.

(g)           Cash Collateral.  If, as of the Letter of Credit Expiration Date, any Letter of Credit for any reason remains outstanding and partially or wholly undrawn, the Borrower shall immediately Cash Collateralize
the then aggregate principal amount of all L/C Obligations (in an amount equal to such aggregate principal amount determined as of the Letter of Credit Expiration Date).  The Borrower hereby grants to the Administrative Agent, for the benefit of the L/C Issuers and the Lenders, a security interest in all such cash, deposit accounts and all balances therein and all proceeds of the foregoing.  Cash collateral shall be maintained in blocked, non-interest bearing deposit accounts at the Administrative
Agent.

(h)           Applicability of ISP.  Unless otherwise expressly agreed by the applicable L/C Issuer and the Borrower when a Letter of Credit is issued, the rules of the ISP shall apply to each Letter of Credit.

(i)           Fronting Fee and Documentary and Processing Charges Payable to L/C Issuers. The Borrower shall pay directly to the applicable L/C Issuer for
its own account a fronting fee with respect to each Letter of Credit in an amount equal to 0.125% times the daily maximum amount available to be drawn under such Letter of Credit (the "L/C Fronting Fee").  The L/C Fronting Fee shall be computed on a quarterly basis in arrears and shall be due and payable on the last Business Day of each Fiscal Quarter (as well as on the Letter
of Credit Expiration Date) for the Fiscal Quarter (or portion thereof) then ending, beginning with the first of such dates to occur after the issuance of such Letter of Credit.  In addition, the Borrower shall pay directly to the applicable L/C Issuer for its own account the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of such L/C Issuer relating to letters of credit as from time to time in effect.  Such customary fees and standard
costs and charges are due and payable on demand and are nonrefundable.

(j)           Conflict with Letter of Credit Application.  In the event of any conflict between the terms hereof and the terms of any Letter of Credit Application, the terms hereof shall control.

(k)           Indemnification of L/C Issuers.

(i)           In addition to its other obligations under this Credit Agreement, the Borrower hereby agrees to protect, indemnify, pay and hold each L/C Issuer harmless from and against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable attorneys' fees) that such L/C Issuer may incur or be subject to as a consequence, direct or indirect, of (A) the issuance of any Letter of Credit or (B) the failure of such L/C Issuer to honor a drawing under a Letter of Credit as a result of any act or omission, whether rightful or wrongful, of any present or future de jure or de facto government or Governmental Authority (all such acts or omissions, herein called "Government
Acts").

(ii)           As between the Borrower and the L/C Issuers, the Borrower shall assume all risks of the acts, omissions or misuse of any Letter of Credit by the beneficiary thereof.  In the absence of gross negligence or willful
misconduct, no L/C Issuer shall be 

 

 

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responsible for:  (A) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for and issuance of any Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged;
(B) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, that may prove to be invalid or ineffective for any reason; (C) failure of the beneficiary of a Letter of Credit to comply fully with conditions required in order to draw upon a Letter of Credit; (D) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in cipher; (E) errors in interpretation of technical terms; (F) any loss or delay in the transmission or otherwise of any document required in order to make a drawing under a Letter of Credit or of the proceeds thereof; and (G) any consequences arising from causes beyond the control of such L/C Issuer, including, without limitation, any Government Acts.  None of the above shall affect, impair, or prevent the vesting of an L/C Issuer's rights or powers
hereunder.

(iii)           In furtherance and extension and not in limitation of the specific provisions hereinabove set forth, any action taken or omitted by an L/C Issuer, under or in connection with any Letter of Credit or the related certificates,
if taken or omitted in good faith, shall not put such L/C Issuer under any resulting liability to the Borrower.  It is the intention of the parties that this Credit Agreement shall be construed and applied to protect and indemnify the L/C Issuers against any and all risks involved in the issuance of the Letters of Credit, all of which risks are hereby assumed by the Borrower, including, without limitation, any and all risks of the acts or omissions, whether rightful or wrongful, of any present or future
Government Acts.  No L/C Issuer shall, in any way, be liable for any failure by such L/C Issuer or anyone else to pay any drawing under any Letter of Credit as a result of any Government Acts or any other cause beyond the control of such L/C Issuer.

(iv)           Nothing in this subsection (l) is intended to limit the reimbursement obligation of the Borrower contained in this Section 2.2.  The obligations of the Borrower under this subsection (l) shall survive the termination
of this Credit Agreement.  No act or omission of any current or prior beneficiary of a Letter of Credit shall in any way affect or impair the rights of the applicable L/C Issuer to enforce any right, power or benefit under this Credit Agreement.

(l)           Letter of Credit Amounts.  Unless otherwise specified, all references herein to the amount of a Letter of Credit at any time shall be deemed to
mean the maximum face amount of such Letter of Credit after giving effect to all increases thereof contemplated by such Letter of Credit or the Letter of Credit Application therefor, whether or not such maximum face amount is in effect at such time.

2.3           Continuations and Conversions.

Subject to the terms below, the Borrower shall have the option, on any Business Day prior to the Maturity Date, to continue existing Eurodollar Loans for a subsequent Interest Period, to convert Base Rate Loans into Eurodollar Loans or to convert Eurodollar Loans into Base Rate Loans.  By no later than 11:00 a.m. (a) on the date
of the requested conversion of a Eurodollar Loan to a Base Rate Loan and (b) three Business Days prior to the date of the requested continuation of a Eurodollar Loan or conversion of a Base Rate Loan to a Eurodollar Loan, the Borrower shall provide telephonic notice to the Administrative Agent, 

 

 

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followed promptly by a written Notice of Continuation/Conversion in the form of Exhibit 2.3, setting forth whether the Borrower wishes to continue or convert such Revolving Loans.  Notwithstanding anything herein to the contrary, (A) except as provided in Section
3.11, Eurodollar Loans may only be continued or converted into Base Rate Loans on the last day of the Interest Period applicable thereto, (B) Eurodollar Loans may not be continued nor may Base Rate Loans be converted into Eurodollar Loans during the existence and continuation of a Default or an Event of Default and (C) any request to continue a Eurodollar Loan that fails to comply with the terms hereof or any failure to request a continuation of a Eurodollar Loan at the end of an Interest Period shall be deemed
a request to convert such Eurodollar Loan to a Base Rate Loan on the last day of the applicable Interest Period.

2.4           Minimum Amounts.

Each request for a borrowing, conversion or continuation shall be subject to the requirements that (a) each Eurodollar Loan shall be in a minimum amount of $5,000,000 and in integral multiples of $1,000,000 in excess thereof, (b) each Base Rate Loan shall be in a minimum amount of $3,000,000 and in integral multiples of $100,000 in excess
thereof (or the remaining amount of outstanding Revolving Loans) and (c) no more than five Eurodollar Loans shall be outstanding hereunder at any one time.  For the purposes of this Section 2.4, separate Eurodollar Loans that begin and end on the same date, as well as Eurodollar Loans that begin and end on different dates, shall all be considered as separate Eurodollar Loans.

2.5           Extension Option.

(a)           Automatic Extension.  Upon receipt by the Administrative Agent of a written representation from the Borrower that all approvals have been received as are necessary to extend the Maturity Date to
August 17, 2010, together with a copy of any regulatory approval and such other agreements, information or opinions as the Administrative Agent may reasonably request, (i) the Maturity Date shall be automatically extended to August 17, 2010 without any other action or any consent by the Lenders and (ii) the Administrative Agent shall promptly inform the Lenders as to the extension of the Maturity Date.

(b)           Request for Additional Extensions.  If the Maturity Date has been extended to August 17, 2010 in accordance with the terms of clause (a) above, then at any time prior to the first anniversary of
the Closing Date, the Borrower may, on a one-time basis, by notice to the Lenders, request that the Lenders extend the Maturity Date for one additional year.  At any time after the first anniversary of the Closing Date but prior to the second anniversary of the Closing Date, the Borrower may, on a one-time basis, by notice to the Lenders, request that the Lenders extend the then current Maturity Date for one additional year.  Each Lender shall, by notice to the Borrower and the Administrative
Agent not later than the 30th day following the date of any such request from the Borrower, advise the Borrower whether or not it agrees to extend the Maturity Date as requested.   Each decision by a Lender shall be in the sole discretion of such Lender, and any Lender that has not so advised the Administrative Agent by the 30th day following
the date of such request from the Borrower shall be deemed to have declined to agree to such extension.  Each of the parties hereto acknowledges and agrees that no Lender shall be obligated to extend the Maturity Date pursuant to the terms of this Section 2.5.  Any Lender who fails to agree to the extension request of the Borrower, as set forth herein, shall be referred to, for purposes of this Section, as a "Non-Extending Lender".

(c)           Extension.  If Lenders holding Commitments representing at least 50% of the Revolving Committed Amount agree to any such request for extension of
the Maturity Date (collectively, the "Approving Lenders"), then the Borrower may, subject to receipt of all approvals with respect thereto, if any, extend the Maturity Date for an additional year solely as to the Approving Lenders with a Revolving Committed Amount equal to the aggregate Commitments of the Approving Lenders during such extension period; provided that the Maturity Date shall never extend beyond any date for which the Borrower does
not have approval.  If Non-Extending Lenders hold Commitments representing more than 50% of the Revolving 

 

 

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Committed Amount, then the Borrower shall withdraw its extension request and the Maturity Date will remain unchanged.  With respect to the Non-Extending Lenders, it is understood and agreed that the Maturity Date relating to the Non-Extending Lenders shall remain unchanged and the repayment of all obligations owed to them and
the termination of their Commitments shall occur on the then existing Maturity Date without giving effect to such extension request.

2.6           Evidence of Debt.

(a)           The Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business.  The accounts or records maintained by the Administrative Agent and
each Lender shall be conclusive absent manifest error of the amount of the Credit Extensions made by the Lenders to the Borrower and the interest and payments thereon.  Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to its Borrower Obligations.  In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the
Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.

(b)           In addition to the accounts and records referred to in subsection (a) above, each Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by such Lender of participations in Letters
of Credit.  In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.

SECTION 3

GENERAL PROVISIONS APPLICABLE

TO REVOLVING LOANS

3.1           Interest.

(a)           Interest Rate.  Subject to Sections 3.1(b), (i) all Base Rate Loans shall accrue interest at the Base Rate and (ii) all Eurodollar Loans shall accrue interest at the Adjusted Eurodollar Rate.

(b)           Default Rate of Interest.

(i) After the occurrence, and during the continuation, of an Event of Default pursuant to Section 9.1(a), the principal of and, to the extent permitted by Law, interest on the Revolving Loans and any other amounts owing hereunder or under the other Credit Documents (including without limitation fees and expenses) shall bear interest,
payable on demand, at the Default Rate.

(ii)           After the occurrence, and during the continuation, of an Event of Default (other than an Event of Default pursuant to Section 9.1(a)), at the request of the Required Lenders, the principal of and, to the extent permitted by Law, interest on the Revolving Loan and any
other amounts owing hereunder or under the other Credit Documents (including without limitation fees and expenses) shall bear interest, payable on demand, at the Default Rate.

 

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(c)           Interest Payments.  Interest on Revolving Loans shall be due and payable in arrears on each Interest Payment Date.

3.2           Payments Generally.

(a)           No Deductions; Place and Time of Payments.  All payments to be made by the Borrower shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff.  Except
as otherwise expressly provided herein, all payments by the Borrower hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent's Office in Dollars and in immediately available funds not later than 2:00 p.m. on the date specified herein.  The Administrative Agent will promptly distribute to each Lender its Pro Rata Share (or other applicable share as provided herein) of such payment in like funds as received
by wire transfer to such Lender's Lending Office.  All payments received by the Administrative Agent after 2:00 p.m. shall deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue.

(b)           Payment Dates.  Subject to the definition of "Interest Period," if any payment to be made by the Borrower shall come due on a day
other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be.

(c)           Advances by Administrative Agent.  Unless the Borrower or any Lender has notified the Administrative Agent, prior to the time any payment is required to be made by it to the Administrative Agent
hereunder, that the Borrower or such Lender, as the case may be, will not make such payment, the Administrative Agent may assume that the Borrower or such Lender, as the case may be, has timely made such payment and may (but shall not be so required to), in reliance thereon, make available a corresponding amount to the Person entitled thereto.  If and to the extent that such payment was not in fact made to the Administrative Agent in immediately available funds, then:

(i)           if the Borrower failed to make such payment, each Lender shall forthwith on demand repay to the Administrative Agent the portion of such assumed payment that was made available to such Lender in immediately available funds, together with interest thereon in respect of
each day from and including the date such amount was made available by the Administrative Agent to such Lender to the date such amount is repaid to the Administrative Agent in immediately available funds at the Federal Funds Rate from time to time in effect; and

(ii)           if any Lender failed to make such payment, such Lender shall forthwith on demand pay to the Administrative Agent the amount thereof in immediately available funds, together with interest thereon for the period from the date such amount was made available by the Administrative
Agent to the Borrower to the date such amount is recovered by the Administrative Agent (the "Compensation Period") at a rate per annum equal to the Federal Funds Rate from time to time in effect.  If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender's Revolving Loan included in the applicable Borrowing.  If such Lender does not pay such amount forthwith upon the Administrative
Agent's demand therefor, the Administrative Agent may make a demand therefor upon the Borrower, and the Borrower shall pay such amount to the Administrative Agent, together with interest thereon for the Compensation 

 

 

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Period at a rate per annum equal to the rate of interest applicable to such Borrowing.  Nothing herein shall be deemed to relieve any Lender from its obligation to fulfill its Commitment or to prejudice any rights which the Administrative Agent or the Borrower may have against any Lender as a result of any default by such Lender
hereunder.

A notice of the Administrative Agent to any Lender or the Borrower with respect to any amount owing under this subsection (c) shall be conclusive, absent manifest error.

(d)           Several Obligations.  The obligations of the Lenders hereunder to make Revolving Loans and to fund or purchase Participation Interests are several and not joint.  The failure of any
Lender to make any Revolving Loan or to fund or purchase any Participation Interest on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Revolving Loan or fund or purchase its Participation Interest.

(e)           Funding Offices.  Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Revolving Loan in any particular place or manner or to constitute a representation by any Lender
that it has obtained or will obtain the funds for any Revolving Loan in any particular place or manner.

3.3           Prepayments.

(a)           Voluntary Prepayments.  The Borrower shall have the right to prepay the Revolving Loans in whole or in part from time to time without premium or penalty; provided, however,
that (i) all prepayments under this Section 3.3(a) shall be subject to Section 3.14, (ii) Eurodollar Loans may only be prepaid on three Business Days' prior written notice to the Administrative Agent, (iii) each such partial prepayment of Eurodollar Loans shall be in the minimum principal amount of $5,000,000 and integral multiples of $1,000,000 and (iv) each such partial prepayment of Base Rate Loans shall be in the minimum principal amount of $500,000 and integral multiples of $100,000 or, in the case of clauses
(iii) and (iv), if less than such minimum amounts, the entire principal amount thereof then outstanding.  Amounts prepaid pursuant to this Section 3.3(a) shall be applied as the Borrower may elect based on the Lenders' Pro Rata Shares; provided, however, if the Borrower fails to specify, such prepayment shall be applied by the Administrative Agent, subject to Section 3.7,
in such manner as it deems reasonably appropriate.

(b)           Mandatory Prepayments.  If at any time (i) the sum of the aggregate principal amount of Revolving Loans outstanding plus the aggregate principal amount of L/C Obligations outstanding exceeds the
Revolving Committed Amount or (ii) the aggregate principal amount of L/C Obligations outstanding exceeds the Letter of Credit Sublimit, the Borrower shall immediately make a principal payment to the Administrative Agent and/or Cash Collateralize outstanding L/C Obligations in a manner, in an amount and in Dollars as is necessary to be in compliance with Sections 2.1 and 2.2, as applicable, and as directed by the Administrative Agent.  All amounts required to be prepaid pursuant to this Section
3.3(b) shall be applied first to Base Rate Loans, second to Eurodollar Loans in direct order of Interest Period maturities and third to Cash Collateralize outstanding L/C Obligations.  All prepayments pursuant to this Section 3.3(b) shall be subject to Section 3.14.

3.4           Fees.

(a)           Commitment Fees.  In consideration of the Revolving Committed Amount being made available by the Lenders hereunder, the Borrower agrees to pay to the Administrative Agent, 

 

 

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for the pro rata benefit of each Lender based on its Pro Rata Share, a per annum fee equal to the daily average sum of the Applicable Percentage for Commitment Fees for each day during the period of determination multiplied by the Unused Revolving Commitment for each such day (the "Commitment
Fees").  The Commitment Fees shall commence to accrue on the Closing Date and shall be due and payable in arrears on the last Business Day of each Fiscal Quarter (as well as on the Maturity Date and on any date that the Revolving Committed Amount is reduced) for the Fiscal Quarter (or portion thereof) then ending, beginning with the first of such dates to occur after the Closing Date.

 

(b)           Utilization Fees.  If at any time the aggregate principal amount of outstanding Revolving Loans exceeds an amount equal to fifty percent (50%) of
the Revolving Committed Amount, the Borrower shall pay to the Administrative Agent, for the ratable benefit of the Lenders, a utilization fee (the "Utilization Fees") equal to the product of (i) the average daily aggregate principal amount of outstanding Revolving Loans, calculated from the date the aggregate principal amount of outstanding Revolving Loans exceeds an amount equal to fifty percent (50%) of the Revolving Committed Amount but excluding
the date the aggregate principal amount of outstanding Revolving Loans falls below an amount equal to fifty percent (50%), times (ii) a per annum percentage equal to the Applicable Percentage for Utilization Fees.  The Utilization Fees shall be payable in arrears on the last Business Day of each Fiscal Quarter (as well as on the Maturity Date and on any date that the Revolving Committed Amount is reduced) for the Fiscal Quarter (or portion thereof) then ending, beginning with the first of such dates
to occur after the Closing Date.

(c)           L/C Fees.  The Borrower shall pay to the Administrative Agent for the account of each Lender in accordance with its Pro Rata Share a
fee for each Letter of Credit equal to the Applicable Percentage for L/C Fees times the daily maximum amount available to be drawn under such Letter of Credit (the "L/C Fees").  The L/C Fees shall be computed on a quarterly basis in arrears and shall be due and payable on the last Business Day of each Fiscal Quarter (as well as on the Letter of Credit Expiration Date) for
the Fiscal Quarter (or portion thereof) then ending, beginning with the first of such dates to occur after the issuance of such Letter of Credit.

(d)           Administrative Fees.  The Borrower agrees to pay to the Administrative Agent, for its own account, an annual fee as agreed to between the Borrower and the Administrative Agent (the "Administrative
Fees") in the Fee Letter.

3.5           Payment in full at Maturity.

Subject to the terms of Section 2.5, on the Maturity Date, the entire outstanding principal balance of all Revolving Loans, together with accrued but unpaid interest and all fees and other sums owing under the Credit Documents, shall be due and payable in full, unless accelerated sooner pursuant to Section 9.2; provided that
if the Maturity Date is not a Business Day, then such principal, interest, fees and other sums shall be due and payable in full on the next preceding Business Day.

3.6           Computations of Interest and Fees.

(a)           Calculation of Interest and Fees.  Except for Base Rate Loans that are based upon the Prime Rate, in which case interest shall be computed on the basis of the actual number of days elapsed over
a year of 365 or 366 days, as the case may be, all computations of interest and fees hereunder shall be made on the basis of the actual number of days elapsed over a year of 360 days.  Interest shall accrue from and including the first date of Borrowing (or continuation or conversion) to but excluding the last day occurring in the period for which such interest is payable.  Each 

 

 

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determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

(b)           Usury.  It is the intent of the Lenders and the Borrower to conform to and contract in strict compliance with applicable usury Law from time to time in effect.  All agreements between
the Lenders and the Borrower are hereby limited by the provisions of this subsection which shall override and control all such agreements, whether now existing or hereafter arising and whether written or oral.  In no way, nor in any event or contingency (including but not limited to prepayment or acceleration of the maturity of any Borrower Obligation), shall the interest taken, reserved, contracted for, charged, or received under this Credit Agreement, under the Notes or otherwise, exceed the maximum
nonusurious amount permissible under applicable Law.  If, from any possible construction of any of the Credit Documents or any other document, interest would otherwise be payable in excess of the maximum nonusurious amount, any such construction shall be subject to the provisions of this subsection and such documents shall be automatically reduced to the maximum nonusurious amount permitted under applicable Law, without the necessity of execution of any amendment or new document.  If any Lender
shall ever receive anything of value which is characterized as interest on the Revolving Loans under applicable Law and which would, apart from this provision, be in excess of the maximum nonusurious amount, an amount equal to the amount which would have been excessive interest shall, without penalty, be applied to the reduction of the principal amount owing on the Revolving Loans and not to the payment of interest, or refunded to the Borrower or the other payor thereof if and to the extent such amount which
would have been excessive exceeds such unpaid principal amount of the Revolving Loans.  The right to demand payment of the Revolving Loans or any other Indebtedness evidenced by any of the Credit Documents does not include the right to accelerate the payment of any interest which has not otherwise accrued on the date of such demand, and the Lenders do not intend to charge or receive any unearned interest in the event of such demand.  All interest paid or agreed to be paid to the Lenders with
respect to the Revolving Loans shall, to the extent permitted by applicable Law, be amortized, prorated, allocated, and spread throughout the full stated term (including any renewal or extension) of the Revolving Loans so that the amount of interest on account of the Revolving Loans does not exceed the maximum nonusurious amount permitted by applicable Law.

3.7           Pro Rata Treatment.

Except to the extent otherwise provided herein, each Borrowing, each payment or prepayment of principal of any Revolving Loan, each L/C Credit Extension, each payment of interest, each payment of fees (other than administrative fees paid to the Administrative Agent and fronting, documentary and processing fees paid to the L/C Issuers),
each conversion or continuation of any Revolving Loans and each reduction in the Revolving Committed Amount, shall be allocated pro rata among the relevant Lenders in accordance with their Pro Rata Shares; provided that, if any Lender shall have failed to pay its Pro Rata Share of any Revolving Loan or fund or purchase its Participation Interest, then any amount to which such Lender would otherwise be entitled pursuant to this Section 3.7 shall
instead be payable to the Administrative Agent until the share of such Revolving Loan or such Participation Interest not funded or purchased by such Lender has been repaid.  In the event any principal, interest, fee or other amount paid to any Lender pursuant to this Credit Agreement or any other Credit Document is rescinded or must otherwise be returned by the Administrative Agent, (a) such principal, interest, fee or other amount that had been satisfied by such payment shall be revived, reinstated
and continued in full force and effect as if such payment had not occurred and (b) such Lender shall, upon the request of the Administrative Agent, repay to the Administrative Agent the amount so paid to such Lender, with interest for the period commencing on the date such payment is returned by the Administrative Agent until the date the Administrative Agent receives such repayment at a rate per annum equal to the Federal Funds Rate if repaid within two (2) Business Days after such request and thereafter the
Base Rate.

 

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3.8           Sharing of Payments.

The Lenders agree among themselves that, except to the extent otherwise provided herein, in the event that any Lender shall obtain payment in respect of any Revolving Loan, any L/C Obligations or any other obligation owing to such Lender under this Credit Agreement through the exercise of a right of setoff, banker's lien or counterclaim,
or pursuant to a secured claim under Section 506 of the Bankruptcy Code or other security or interest arising from, or in lieu of, such secured claim, received by such Lender under any applicable Debtor Relief Law or other similar Law or otherwise, or by any other means, in excess of its Pro Rata Share of such payment as provided for in this Credit Agreement, such Lender shall promptly pay in cash or purchase from the other Lenders a participation in such Revolving Loans, L/C Obligations and other obligations
in such amounts, and make such other adjustments from time to time, as shall be equitable to the end that all Lenders share such payment in accordance with their Pro Rata Shares.  The Lenders further agree among themselves that if payment to a Lender obtained by such Lender through the exercise of a right of setoff, banker's lien, counterclaim or other event as aforesaid shall be rescinded or must otherwise be returned, each Lender which shall have shared the benefit of such payment shall, by payment
in cash or a repurchase of a participation theretofore sold, return its share of that benefit (together with its share of any accrued interest payable with respect thereto) to each Lender whose payment shall have been rescinded or otherwise returned.  The Borrower agrees that (a) any Lender so purchasing such a participation may, to the fullest extent permitted by Law, exercise all rights of payment, including setoff, banker's lien or counterclaim, with respect to such participation as fully as if such
Lender were a holder of such Revolving Loan, L/C Obligations or other obligation in the amount of such participation and (b) the Borrower Obligations that have been satisfied by a payment that has been rescinded or otherwise returned shall be revived, reinstated and continued in full force and effect as if such payment had not occurred.  Except as otherwise expressly provided in this Credit Agreement, if any Lender or the Administrative Agent shall fail to remit to any other Lender an amount payable
by such Lender or the Administrative Agent to such other Lender pursuant to this Credit Agreement on the date when such amount is due, such payments shall be made together with interest thereon for each date from the date such amount is due until the date such amount is paid to the Administrative Agent or such other Lender at a rate per annum equal to the Federal Funds Rate.  If under any applicable Debtor Relief Law or other similar Law, any Lender receives a secured claim in lieu of a setoff to which
this Section 3.8 applies, such Lender shall, to the extent practicable, exercise its rights in respect of such secured claim in a manner consistent with the rights of the Lenders under this Section 3.8 to share in the benefits of any recovery on such secured claim.

3.9           Capital Adequacy.

If any Lender determines that the introduction after the Closing Date of any Law, rule or regulation or other Requirement of Law regarding capital adequacy or any change therein or in the interpretation thereof, or compliance by such Lender (or its Lending Office) therewith, has or would have the effect of reducing the rate of return on
the capital or assets of such Lender or any corporation controlling such Lender as a consequence of such Lender's obligations hereunder (taking into consideration its policies with respect to capital adequacy and such Lender's desired return on capital), then from time to time upon demand of such Lender (with a copy of such demand to the Administrative Agent), the Borrower shall pay to such Lender such additional amounts as will compensate such Lender for such reduction.

3.10           Eurodollar Provisions.

If the Administrative Agent determines (which determination shall be conclusive and binding upon the Borrower) in connection with any request for a Eurodollar Loan or a conversion to or continuation thereof that (i) deposits in Dollars are not being offered to banks in the 

 

 

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applicable offshore interbank market for the applicable amount and Interest Period of such Eurodollar Loan, (ii) adequate and reasonable means do not exist for determining the Eurodollar Rate for such Eurodollar Loan, or (iii) the Eurodollar Rate for such Eurodollar Loan in such does not adequately and fairly reflect the cost to the
Lenders of funding such Eurodollar Loan, the Administrative Agent will promptly notify the Borrower and the Lenders.  Thereafter, the obligation of the Lenders to make or maintain Eurodollar Loans shall be suspended until the Administrative Agent revokes such notice.  Upon receipt of such notice, the Borrower may revoke any pending Notice of Borrowing or Notice of Continuation/Conversion with respect to Eurodollar Loans or, failing that, will be deemed to have converted such request into a
request for a Borrowing of or, to the extent permitted hereunder, conversion into a Base Rate Loan in the amount specified therein.

3.11        Illegality.

If any Lender determines that any Requirement of Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make, maintain or fund Eurodollar Loans, or materially restricts the authority of such Lender to purchase or sell, or to take deposits of Dollars
in the London interbank market, or to determine or charge interest rates based upon the Eurodollar Rate, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, any obligation of such Lender to make or continue Eurodollar Loans or to convert Base Rate Loans to Eurodollar Loans shall be suspended until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist.  Upon receipt of such notice, the
Borrower shall, upon demand to the Borrower from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all Eurodollar Loans of such Lender to Base Rate Loans, either on the last day of the Interest Period thereof, if such Lender may lawfully continue to maintain such Eurodollar Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurodollar Loans.  Upon any such prepayment or conversion, the Borrower shall also pay interest on
the amount so prepaid or converted, together with any amounts due with respect thereto pursuant to Section 3.14.

3.12        Requirements of Law; Reserves on Eurodollar Loans.

(a)           Changes in Law.  If any Lender determines that as a result of the introduction of or any change in, or in the interpretation of, any Requirement of Law, or such Lender's compliance therewith,
there shall be any increase in the cost to such Lender of agreeing to make or making, funding or maintaining Eurodollar Loans, or a reduction in the amount received or receivable by such Lender in connection with any of the foregoing (excluding for purposes of this Section 3.12 any such increased costs or reduction in amount resulting from (i) Taxes or Other Taxes (as to which Section 3.13 shall govern) and (ii) reserve requirements contemplated by subsection (b) below), then from time to time, upon demand of
such Lender (through the Administrative Agent), the Borrower shall pay to such Lender such additional amounts as will compensate such Lender for such increased cost or reduction in yield.

(b)           Reserves.  The Borrower shall pay to each Lender (to the extent such Lender has not otherwise been compensated therefor hereunder), as long as such Lender shall be required to maintain reserves
with respect to liabilities or assets consisting of or including Eurodollar funds or deposits (currently known as "Eurodollar liabilities"), additional interest on the unpaid principal amount of each Eurodollar Loan equal to the actual costs of such reserves allocated to such Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive absent demonstrable error), which shall be due and payable on each date on which interest is payable on such Loan; provided that
the Borrower shall have received at least 15 

 

 

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days' prior notice (with a copy to the Administrative Agent) of such additional interest from such Lender.  If a Lender fails to give notice 15 days prior to the relevant Interest Payment Date, such additional interest shall be due and payable 15 days from receipt of such notice.

3.13        Taxes.

(a)           Payment of Taxes.  Any and all payments by the Borrower to or for the account of the Administrative Agent or any Lender under any Credit Document shall be made free and clear of and without deduction
for any and all present or future income, stamp or other taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or similar charges, and all liabilities with respect thereto, but excluding, in the case of the Administrative Agent and each Lender, taxes imposed on or measured by its net income, and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the Laws of which the Administrative Agent or such Lender, as the case
may be, is organized or maintains its Lending Office (all such non-excluded present or future income, stamp or other taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or similar charges, and liabilities being hereinafter referred to as "Taxes").  If the Borrower shall be required by any Requirement of Law to deduct any Taxes from or in respect of any sum payable under any Credit Document to the Administrative
Agent or any Lender, (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 3.13(a)), the Administrative Agent or such Lender, as the case may be, receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions, (iii) the Borrower shall pay the full amount deducted to the relevant taxation authority or other Governmental
Authority in accordance with applicable Requirements of Law, and (iv) within 30 days after the date of such payment, the Borrower shall furnish to the Administrative Agent (which shall forward the same to such Lender, if applicable) the original or a certified copy of a receipt evidencing payment thereof, to the extent such receipt is issued therefor, or other written proof of payment thereof that is reasonably satisfactory to the Administrative Agent.

(b)           Additional Taxes.  In addition, the Borrower agrees to pay any and all present or future stamp, court or documentary taxes and any other excise or property taxes or charges or similar levies which
arise from any payment made under any Credit Document or from the execution, delivery, performance, enforcement or registration of, or otherwise with respect to, any Credit Document (hereinafter referred to as "Other Taxes").

(c)           No Deduction for Taxes.  If the Borrower shall be required to deduct or pay any Taxes or Other Taxes from or in respect of any sum payable under any Credit Document to the Administrative Agent
or any Lender, the Borrower shall also pay to the Administrative Agent (for the account of such Lender) or to such Lender, at the time interest is paid, such additional amount that such Lender specifies as necessary to preserve the after-tax yield (after factoring in all taxes, including taxes imposed on or measured by net income) such Lender would have received if such Taxes or Other Taxes had not been imposed.

(d)           Indemnification.  The Borrower agrees to indemnify the Administrative Agent and each Lender for (i) the full amount of Taxes and Other Taxes (including any Taxes or Other Taxes imposed or asserted
by any jurisdiction on amounts payable under this Section 3.13(d)) paid by the Administrative Agent and such Lender, and (ii) any liability (including penalties, interest and expenses) arising therefrom or with respect thereto.

 

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(e)           Exemption from Taxes.  In the case of any payment hereunder or under any other Credit Document by or on behalf of the Borrower through an account or branch outside the United States, or on behalf
of the Borrower by a payor that is not a United States person, if the Borrower determines that no taxes are payable in respect thereof, the Borrower shall furnish, or shall cause such payor to furnish, to the Administrative Agent, an opinion of counsel reasonably acceptable to the Administrative Agent stating that such payment is exempt from Taxes.  For purposes of this subsection (e), the terms "United States" and "United States person" shall have the meanings specified in Section 7701 of the Code.

(f)           Foreign Lenders.  Each Lender that is a foreign corporation, foreign partnership or foreign trust within the meaning of the Code (a "Foreign
Lender") shall deliver to the Administrative Agent, prior to receipt of any payment subject to withholding under the Code, two duly signed completed copies of either IRS Form W-8BEN or any successor thereto (relating to such Lender and entitling it to an exemption from, or reduction of, withholding tax on all payments to be made to such Lender by the Borrower pursuant to this Credit Agreement), as appropriate, or IRS Form W-8ECI or any successor thereto (relating to all payments to be made to such Lender
by the Borrower pursuant to this Credit Agreement) or such other evidence satisfactory to the Borrower and the Administrative Agent that such Lender is entitled to an exemption from, or reduction of, United States withholding tax. Thereafter and from time to time, each such Lender shall (i) promptly submit to the Administrative Agent such additional duly completed and signed copies of one of such forms (or such successor forms as shall be adopted from time to time by the relevant United States taxing authorities),
as appropriate, as may reasonably be requested by the Borrower or the Administrative Agent and then be available under then current United States Laws and regulations to avoid, or such evidence as is satisfactory to the Borrower and the Administrative Agent of any available exemption from or reduction of, United States withholding taxes in respect of all payments to be made to such Lender by the Borrower pursuant to this Credit Agreement, (ii) promptly notify the Administrative Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction, and (iii) take such steps as shall not be materially disadvantageous to it, in the reasonable judgment of such Lender, and as may be reasonably necessary (including the re-designation of its Lending Office) to avoid any Requirement of Law that the Borrower make any deduction or withholding for taxes from amounts payable to such Lender.  If the forms or other evidence provided by such Lender at the time such Lender first becomes
a party to this Credit Agreement indicate a United States interest withholding tax rate in excess of zero, withholding tax at such rate shall be considered excluded from Taxes unless and until such Lender provides the appropriate forms certifying that a lesser rate applies, whereupon withholding tax at such lesser rate only shall be considered excluded from Taxes for periods governed by such forms; provided, however, that, if at the date of any assignment pursuant to which a Lender becomes a party to this Credit
Agreement, the assignor Lender was entitled to payments under Section 3.13(a) in respect of United States withholding tax with respect to interest paid at such date, then, to such extent, the term Taxes shall include (in addition to withholding taxes that may be imposed in the future or other amounts otherwise includable in Taxes) United States withholding tax, if any, applicable with respect to the assignee Lender on such date.  If such Lender fails to deliver the above forms or other evidence, then
the Administrative Agent may withhold from any interest payment to such Lender an amount equal to the applicable withholding tax imposed by Sections 1441 and 1442 of the Code, without reduction.  If any Governmental Authority asserts that the Administrative Agent did not properly withhold any tax or other amount from payments made in respect of such Lender, such Lender shall indemnify the Administrative Agent therefor, including all penalties and interest, any taxes imposed by any jurisdiction on the
amounts payable to the Administrative Agent under this Section 3.13(f), and costs and expenses (including the reasonable fees and expenses of legal 

 

 

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counsel) of the Administrative Agent.  For any period with respect to which a Lender has failed to provide the Borrower with the above forms or other evidence (other than if such failure is due to a change in the applicable Law, or in the interpretation or application thereof, occurring after the date on which such form
or other evidence originally was required to be provided or if such form or other evidence otherwise is not required), such Lender shall not be entitled to indemnification under subsection (a) or (c) of this Section 3.13 with respect to Taxes imposed by the United States by reason of such failure; provided, however, that should a Lender become subject to Taxes because of its failure to deliver such form or other evidence required hereunder, the Borrower shall take such steps as such Lender shall reasonably request
to assist such Lender in recovering such Taxes.  The obligation of the Lenders under this Section 3.13(f) shall survive the payment of all Borrower Obligations and the resignation or replacement of the Administrative Agent.

(g)           Reimbursement.  In the event that an additional payment is made under Section 3.13(a) or (c) for the account of any Lender and such Lender, in its reasonable judgment, determines that it has finally
and irrevocably received or been granted a credit against or release or remission for, or repayment of, any tax paid or payable by it in respect of or calculated with reference to the deduction or withholding giving rise to such payment, such Lender shall, to the extent that it determines that it can do so without prejudice to the retention of the amount of such credit, relief, remission or repayment, pay to the Borrower such amount as such Lender shall, in its reasonable judgment, have determined to be attributable
to such deduction or withholding and which will leave such Lender (after such payment) in no worse position than it would have been in if the Borrower had not been required to make such deduction or withholding.  Nothing herein contained shall interfere with the right of a Lender to arrange its tax affairs in whatever manner it thinks fit nor oblige any Lender to claim any tax credit or to disclose any information relating to its tax affairs or any computations in respect thereof or require any Lender
to do anything that would prejudice its ability to benefit from any other credits, reliefs, remissions or repayments to which it may be entitled.

3.14        Compensation.

Upon the written demand of any Lender, the Borrower shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of:

(a)           any continuation, conversion, payment or prepayment of any Eurodollar Loan on a day other than the last day of the Interest Period for such Eurodollar Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise); or

(b)           any failure by the Borrower (for a reason other than the failure of such Lender to make a Eurodollar Loan) to prepay, borrow, continue or convert any Eurodollar Loan on the date or in the amount previously requested by the Borrower.

The amount each such Lender shall be compensated pursuant to this Section 3.14 shall include, without limitation, (i) any loss incurred by such Lender in connection with the re-employment of funds prepaid, repaid, not borrowed or paid, as the case may be and (ii) any reasonable out-of-pocket expenses (including the reasonable fees
and expenses of legal counsel) incurred and reasonably attributable thereto.

For purposes of calculating amounts payable by the Borrower to the Lenders under this Section 3.14, each Lender shall be deemed to have funded each Eurodollar Loan made by it at the Eurodollar Rate for such Loan by a matching deposit or other borrowing in the London interbank market for a comparable amount and for a comparable period,
whether or not such Eurodollar Loan was in fact so funded.

 

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3.15        Determination and Survival of Provisions.

All determinations by the Administrative Agent or a Lender of amounts owing under Sections 3.9 through 3.14, inclusive, shall, absent manifest error, be conclusive and binding on the parties hereto and all amounts owing thereunder shall be due and payable within ten Business Days of demand therefor.  In determining such amount,
the Administrative Agent or such Lender may use any reasonable averaging and attribution methods.  Section 3.9 through 3.14, inclusive, shall survive the termination of this Credit Agreement and the payment of all Borrower Obligations.

SECTION 4

CONDITIONS PRECEDENT TO CLOSING

4.1           Closing Conditions.

The obligation of the Lenders to enter into this Credit Agreement and make the initial Revolving Loans is subject to satisfaction of the following conditions:

(a)           Executed Credit Documents.  Receipt by the Administrative Agent of duly executed copies of:  (i) this Credit Agreement, (ii) the Notes, and (iii) all other Credit Documents, each in
form and substance reasonably acceptable to the Lenders in their sole discretion.

(b)           Authority Documents.  Receipt by the Administrative Agent of the following:

(i)           Organizational Documents.  Copies of the articles of incorporation of the Borrower certified to be true and complete as of a recent date by the appropriate Governmental Authority of the state
or other jurisdiction of its formation and copies of the bylaws of the Borrower certified by a secretary or assistant secretary (or the equivalent) of the Borrower to be true and correct as of the Closing Date.

(ii)           Resolutions.  Copies of resolutions of the board of directors of the Borrower approving and adopting this Credit Agreement and the other Credit Documents to which it is a party, the transactions
contemplated herein and therein and authorizing execution and delivery hereof and thereof, certified by a secretary or assistant secretary (or the equivalent) of the Borrower to be true and correct and in full force and effect as of the Closing Date.

(iii)           Good Standing.  Copies of certificates of good standing, existence or its equivalent with respect to the Borrower certified as of a recent date by the appropriate Governmental Authority of the
state or other jurisdiction of its formation.

(iv)           Incumbency.  An incumbency certificate of the Borrower certified by a secretary or assistant secretary (or the equivalent) of the Borrower to be true and correct as of the Closing Date.

(c)           Opinions of Counsel.   Receipt by the Administrative Agent of opinions of counsel from outside counsel to the Borrower, in form and substance acceptable to the Administrative Agent, addressed
to the Administrative Agent and the Lenders and dated as of the Closing Date.

 

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(d)           Financial Statements.  Receipt by the Administrative Agent of a copy of (i) the annual consolidated financial statements (including balance sheets, income statements and cash flow statements)
of the Borrower and its Subsidiaries for Fiscal Years 2003 and 2004, audited by independent public accountants of recognized national standing, (ii) the consolidated balance sheet and income statement of the Borrower and its Subsidiaries for the Fiscal Quarter ended June 30, 2005, together with the related consolidated statement of income for such Fiscal Quarter and a year to date statement of cash flows and (iii) such other financial information regarding the Borrower as the Administrative Agent may
reasonably request.

(e)           Due Diligence.  The Administrative Agent and the Lenders shall have completed all due diligence with respect to the Borrower and its Subsidiaries and the transactions contemplated by this Credit
Agreement and the other Credit Documents, in scope and determination reasonably satisfactory to the Administrative Agent and the Lenders.

(f)           Material Adverse Effect.  Since December 31, 2004, there shall have been no development or event relating to or affecting the Borrower or any of its Subsidiaries that has had or could be reasonably
expected to have a Material Adverse Effect and no Material Adverse Change in the facts and information regarding the Borrower and its Subsidiaries as represented to date.

(g)           Absence of Market Disruption.  There shall not have occurred a material adverse change in or material disruption of conditions in the financial, banking or capital markets which the Administrative
Agent and the Arrangers, in their sole discretion, deem material in connection with the syndication of the Credit Agreement.

(h)           Litigation.  There shall not exist any material order, decree, judgment, ruling or injunction or any material pending or threatened action, suit, investigation or proceeding against the Borrower
or any of its Subsidiaries except as represented to date.

(i)           Consents.  All necessary governmental, shareholder and third party consents and approvals, if any, with respect to this Credit Agreement and the Credit Documents and the transactions contemplated
herein and therein have been received and no condition or Requirement of Law exists which would reasonably be likely to restrain, prevent or impose any material adverse conditions on the transactions contemplated hereby and by the other Credit Documents.

(j)           Officer's Certificates.  Receipt by the Administrative Agent of a certificate or certificates executed by an Authorized Officer of the Borrower as of the Closing Date stating that (i) the Borrower
and each of its Subsidiaries are in compliance in all material respects with all existing material financial obligations and all material Requirements of Law, (ii) there does not exist any material order, decree, judgment, ruling or injunction or any material pending or threatened action, suit, investigation or proceeding against the Borrower or any of its Subsidiaries, (iii) the financial statements and information delivered to the Administrative Agent on or before the Closing Date were prepared in good faith
and in accordance with GAAP and (iv) immediately after giving effect to this Credit Agreement, the other Credit Documents and all the transactions contemplated herein or therein to occur on such date, (A) the Borrower is Solvent, (B) no Default or Event of Default exists, (C) all representations and warranties contained herein and in the other Credit Documents are true and correct in all material respects, (D) since December 31, 2004, there has been no development or event relating to or affecting the Borrower
or any of its Subsidiaries that has had or could be reasonably expected to have a Material Adverse Effect and there exists no event, condition or state of facts that could result in or reasonably be expected to result in a Material Adverse Change and (E) the Borrower is in compliance with each of the financial 

 

 

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covenants set forth in Section 7.2, as of June 30, 2005, as demonstrated in Covenant Compliance Worksheet attached to such certificate.

(k)           Existing Credit Agreement.  Receipt by the Administrative Agent of evidence that all amounts outstanding under the Existing Credit Agreement have been paid in full and the commitments thereunder
terminated or that such payments will be made and commitments terminated simultaneously with the execution and delivery of the Credit Documents.

(l)           Account Designation Letter.  Receipt by the Administrative Agent of an executed counterpart of the Account Designation Letter.

(m)           Fees and Expenses.  Unless waived by the Person entitled thereto, payment by the Borrower of all fees and expenses owed by them to the Administrative Agent, the Arrangers and the Lenders on or
before the Closing Date, including, without limitation, as set forth in the Fee Letter.

(n)           Other.  Receipt by the Lenders of such other documents, instruments, agreements or information as reasonably requested by any Lender.

SECTION 5

CONDITIONS TO ALL EXTENSIONS OF CREDIT

5.1           Funding Requirements.

In addition to the conditions precedent stated elsewhere herein, the Lenders shall not be obligated to make Revolving Loans and the L/C Issuers shall not be obligated to issue Letters of Credit unless:

(a)           Notice. The Borrower shall have delivered (i) in the case of any new Revolving Loan, a Notice of Borrowing, duly executed and completed, by the time specified in Section 2.1 and (ii) in the case of any
Letter of Credit, a Letter of Credit Application, duly executed and completed, by the time specified in Section 2.2.

(b)           Representations and Warranties.  The representations and warranties made by the Borrower in any Credit Document (other than the representation and warranties in Section 6.7(a) (but only with respect
to clause (a) of the definition of Material Adverse Effect) and Section 6.9 of the Credit Agreement) are true and correct in all material respects at and as if made as of such date except to the extent they expressly and exclusively relate to an earlier date.

(c)           No Default.  No Default or Event of Default shall exist and be continuing either prior to or after giving effect to such Credit Extension.

(d)           Availability.  Immediately after giving effect to such Credit Extension (and the application of the proceeds thereof), (i) the aggregate principal amount of outstanding Revolving Loans plus the
aggregate principal amount of outstanding L/C Obligations shall not exceed the Revolving Committed Amount, (ii) with respect to each individual Lender, the sum of outstanding principal amount of Revolving Loans of such Lender and outstanding principal amount of L/C Obligations of such Lender shall not exceed such Lender's Pro Rata Share of the Revolving Committed Amount and (iii) the aggregate amount of L/C Obligations shall not exceed the Letter of Credit Sublimit.

 

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The delivery of each Notice of Borrowing or a Letter of Credit Application shall constitute a representation and warranty by the Borrower of the correctness of the matters specified in subsections (b), (c) and (d) above.

SECTION 6

REPRESENTATIONS AND WARRANTIES

To induce the Administrative Agent and the Lenders to enter into this Credit Agreement and to induce the Lenders to extend the credit contemplated hereby, the Borrower represents and warrants to the Administrative Agent and the Lenders as follows:

6.1           Organization and Good Standing.

Each of the Borrower and its Subsidiaries (a) is a corporation, duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (b) is duly qualified and in good standing as a foreign entity authorized to do business in every other jurisdiction where the failure to so qualify would have a Material
Adverse Effect and (c) has the requisite power and authority to own its properties and to carry on its business as now conducted and as proposed to be conducted.

6.2           Due Authorization.

The Borrower (a) has the requisite power and authority to execute, deliver and perform this Credit Agreement and the other Credit Documents and to incur the obligations herein and therein provided for and (b) has been authorized by all necessary action to execute, deliver and perform this Credit Agreement and the other Credit Documents.

6.3           No Conflicts.

Neither the execution and delivery of this Credit Agreement and the other Credit Documents, nor the consummation of the transactions contemplated herein and therein, nor performance of and compliance with the terms and provisions hereof and thereof by the Borrower will (a) violate or conflict with any provision of its organizational documents,
(b) violate, contravene or conflict with any law (including without limitation, the Public Utility Holding Company Act of 1935, as amended), regulation (including without limitation, Regulation U and Regulation X), order, writ, judgment, injunction, decree or permit applicable to it, (c) violate, contravene or conflict with contractual provisions of, or cause an event of default under, any indenture, loan agreement, mortgage, deed of trust, contract or other agreement or instrument to which it is a party
or by which it may be bound, the violation of which would have or would be reasonably expected to have a Material Adverse Effect or (d) result in or require the creation of any Lien upon or with respect to its properties.

6.4           Consents.

(a)           With respect to the initial Maturity Date, other than the filing of annual short-term financing plans with the New Mexico Public Regulation Commission in the normal course of business, and such Commission's actions thereon, no consent, approval, authorization or order
of, or filing, registration or qualification with, any court or Governmental Authority or third party is required in connection with the execution, delivery or performance of this Credit Agreement or any of the other Credit Documents that has not been obtained or completed.

 

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(b)           If the Maturity Date has been extended pursuant to Section 2.5, other than the approval of the New Mexico Public Regulation Commission (which will have been obtained before such extension of the Maturity
Date may become effective), no consent, approval, authorization or order of, or filing, registration or qualification with, any court or Governmental Authority or third party is required in connection with the execution, delivery or performance of this Credit Agreement or any of the other Credit Documents that has not been obtained or completed.

6.5           Enforceable Obligations.

This Credit Agreement and the other Credit Documents have been duly executed and delivered and constitute the legal, valid and binding obligations of the Borrower enforceable against the Borrower in accordance with their respective terms, except as may be limited by Debtor Relief Laws or similar laws affecting creditors' rights generally
or by general equitable principles.

6.6           Financial Condition.

The financial statements delivered to the Lenders pursuant to Section 4.1(d) and pursuant to Sections 7.1(a) and (b): (i) have been prepared in accordance with GAAP except that the quarterly financial statements are subject to year-end adjustments and have fewer
footnotes than annual statements and (ii) present fairly the financial condition, results of operations and cash flows of the Borrower and its Subsidiaries as of such date and for such periods.  No opinion provided with respect to the Borrower's financial statements pursuant to Section 7.1 (or as to any prior annual financial statements) has been withdrawn.

6.7           No Material Change.

(a)           Since December 31, 2004, there has been no development or event relating to or affecting the Borrower or any of its Subsidiaries which would have or would reasonably be expected to have a Material Adverse Effect.

(b)           Since December 31, 2004, there has been no sale, transfer or other disposition by the Borrower or any of its Subsidiaries of any material part of its business or property, and no purchase or other acquisition by the Borrower or any of its Subsidiaries of any business
or property (including the Capital Stock of any other Person) material in relation to the financial condition of the Borrower or any of its Subsidiaries, in each case which is not (i) reflected in the most recent financial statements delivered to the Lenders pursuant to Section 4.1(d) or 7.1 or in the notes thereto or (ii) otherwise permitted by the terms of this Credit Agreement and communicated to the Lenders.

6.8           No Default.

Neither the Borrower nor any of its Subsidiaries is in default in any respect under any contract, lease, loan agreement, indenture, mortgage, security agreement or other agreement or obligation to which it is a party or by which any of its properties is bound which default would have or would reasonably be expected to have a Material Adverse
Effect.  No Default or Event of Default presently exists and is continuing.

 

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6.9          Litigation.

There are no actions, suits, investigations or legal, equitable, arbitration or administrative proceedings, pending or, to the knowledge of the Borrower, threatened against the Borrower or any of its Subsidiaries which would have or would reasonably be expected to have a Material Adverse Effect.

6.10       Taxes.

Each of the Borrower and its Subsidiaries has filed, or caused to be filed, all material tax returns (federal, state, local and foreign) required to be filed and paid all amounts of taxes shown to be due (including interest and penalties) and has paid all other taxes, fees, assessments and other governmental charges (including mortgage
recording taxes, documentary stamp taxes and intangibles taxes) owed by it, except for such taxes which are not yet delinquent or that are being contested in good faith and by proper proceedings, and against which adequate reserves are being maintained in accordance with GAAP.

6.11        Compliance with Law.

Each of the Borrower and its Subsidiaries is in compliance with all laws, rules, regulations, orders and decrees applicable to it or to its properties, unless such failure to comply would not have or would not reasonably be expected to have a Material Adverse Effect.

6.12        ERISA.

Except as would not result or reasonably be expected to result in a Material Adverse Effect:

(a)           During the five-year period prior to the date on which this representation is made or deemed made: (i) no ERISA Event has occurred, and, to the best knowledge of the Borrower, no event or condition has occurred or exists as a result of which any ERISA Event would be
reasonably expected to occur, with respect to any Plan; (ii) no "accumulated funding deficiency," as such term is defined in Section 302 of ERISA and Section 412 of the Code, whether or not waived, has occurred with respect to any Plan; (iii) each Plan has been maintained, operated, and funded in compliance with its own terms and in material compliance with the provisions of ERISA, the Code, and any other applicable federal or state laws; and (iv) no Lien in favor or the PBGC or a Plan has arisen or is reasonably
likely to arise on account of any Plan.

(b)           The actuarial present value of all "benefit liabilities" under each Single Employer Plan (determined within the meaning of Section 401(a)(2) of the Code, utilizing the actuarial assumptions used to fund such Plans), whether or not vested, did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed made, exceed the current value of the assets of such Plan allocable to such accrued liabilities, except as disclosed in the Borrower's financial statements.

(c)           Neither the Borrower nor any ERISA Affiliate has incurred, or, to the best knowledge of the Borrower, is reasonably expected to incur, any withdrawal liability under ERISA to any Multiemployer Plan or Multiple Employer Plan.  Neither the Borrower nor any ERISA
Affiliate has received any notification that any Multiemployer Plan is in reorganization (within the meaning of Section 4241 of ERISA), is insolvent (within the meaning of Section 4245 of ERISA), or has been terminated (within the meaning of Title IV of ERISA), and no Multiemployer Plan is, to the best knowledge of the Borrower, reasonably expected to be in reorganization, insolvent, or terminated.

 

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(d)           No prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code) or breach of fiduciary responsibility has occurred with respect to a Plan which has subjected or would be reasonably likely to subject the Borrower or any ERISA Affiliate
to any liability under Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the Code, or under any agreement or other instrument pursuant to which the Borrower or any ERISA Affiliate has agreed or is required to indemnify any person against any such liability.

(e)           The present value (determined using actuarial and other assumptions which are reasonable with respect to the benefits provided and the employees participating) of the liability of the Borrower and each ERISA Affiliate for post-retirement welfare benefits to be provided
to their current and former employees under Plans which are welfare benefit plans (as defined in Section 3(1) of ERISA), net of all assets under all such Plans allocable to such benefits, are reflected on the financial statements referenced in Section 7.1 in accordance with FASB 106.

(f)           Each Plan which is a welfare plan (as defined in Section 3(1) of ERISA) to which Sections 601-609 of ERISA and Section 4980B of the Code apply has been administered in compliance in all material respects with such sections.

6.13         Use of Proceeds; Margin Stock.

The proceeds of the Credit Extensions hereunder will be used solely for the purposes specified in  Section 7.9.  None of such proceeds will be used for the purpose of (a) (i) purchasing or carrying any Margin Stock or (ii) reducing or retiring any Indebtedness which was originally incurred to purchase or carry
Margin Stock, or (iii) for any other purpose that might constitute this transaction a "purpose credit" within the meaning of Regulation U or (b) for the acquisition of another Person unless the board of directors (or other comparable governing body) or stockholders, as appropriate, of such Person has approved such acquisition.

6.14        Government Regulation.

(a)           The Borrower is not a "holding company" within the meaning of the Public Utility Holding Company Act of 1935, as amended ("PUHCA").  The issuance of the Notes by the Borrower and the Credit Extensions
contemplated by this Credit Agreement are not subject to regulation under PUHCA  or subject to regulation by the Securities and Exchange Commission

(b)           The Borrower is not an "investment company" registered or required to be registered under the Investment Company Act of 1940, as amended, or controlled by such a company.

6.15         Solvency.

The Borrower is and, after the consummation of the transactions contemplated by this Credit Agreement, will be Solvent.

6.16         Disclosure.

Neither this Credit Agreement nor any financial statements delivered to the Administrative Agent or the Lenders nor any other document, certificate or statement furnished to the Administrative Agent or the Lenders by or on behalf of the Borrower in connection with the transactions contemplated hereby contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the statements contained therein or herein, taken as a whole, not misleading.

 

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6.17        Environmental Matters.

Except as would not result or reasonably be expected to result in a Material Adverse Effect:  (a) each of the properties of the Borrower and its Subsidiaries (the "Properties") and all operations at the Properties are in substantial compliance with all applicable
Environmental Laws, (b) there is no undocumented or unreported violation of any Environmental Law with respect to the Properties or the businesses operated by the Borrower and its Subsidiaries (the "Businesses") that the Borrower is aware of, and (c) there are no conditions relating to the Businesses or Properties that have given rise to or would reasonably be expected to give rise to a liability under any applicable Environmental Laws.

6.18        Material Leases.

Set forth on Schedule 6.18 hereto is a complete and accurate list of the Material Leases on the date hereof, showing the expiration date and annual rental cost thereof.  The Borrower is entitled to exercise all of the rights of lessee purported to be granted to
the Borrower under each such Material Lease.

6.19        Material Lease Interest Payments and Discount Rate.

Schedule 6.19 hereto, as most recently provided to the Administrative Agent, sets forth the same (a) amounts with respect to the interest portion of payments under the Material Leases and (b) discount rate used to calculate the net present value of all amounts payable under
the Material Leases as have been most recently provided (or that the Borrower intends to provide shortly) to Moody's and S&P or as have otherwise been agreed to by the Required Lenders.

SECTION 7

AFFIRMATIVE COVENANTS

The Borrower covenants and agrees that, until the termination of the Commitments, the termination or expiration of all Letters of Credit and the payment in full of all Borrower Obligations:

7.1           Information Covenants.

The Borrower will furnish, or cause to be furnished, to the Lenders:

(a)           Annual Financial Statements. As soon as available, and in any event within 120 days after the close of each Fiscal Year, a consolidated balance sheet and income statement of the Borrower and its Subsidiaries,
as of the end of such Fiscal Year, together with the related consolidated statements of income and of cash flows for such Fiscal Year, setting forth in comparative form figures for the preceding Fiscal Year, all such financial information described above to be in reasonable form and detail and, in each case, audited by independent certified public accountants of recognized national standing reasonably acceptable to the Required Lenders and whose opinion shall be furnished to the Lenders, and shall be to the effect
that such financial statements have been prepared in accordance with GAAP (except for changes with which such accountants concur) and shall not be limited as to the scope of the audit or qualified in any respect.

(b)           Quarterly Financial Statements. As soon as available, and in any event within 60 days after the close of each Fiscal Quarter (other than the fourth Fiscal Quarter), a consolidated 

 

 

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balance sheet and income statement of the Borrower and its Subsidiaries as of the end of such Fiscal Quarter, together with the related consolidated statement of income for such Fiscal Quarter and a year to date statement of cash flows, in each case setting forth in comparative form figures for the corresponding period of the preceding
Fiscal Year, all such financial information described above to be in reasonable form and detail and reasonably acceptable to the Required Lenders, and, in each case, accompanied by a certificate of a Financial Officer of the Borrower to the effect that such quarterly financial statements fairly present in all material respects the financial condition of such Person and have been prepared in accordance with GAAP, subject to changes resulting from audit and normal year-end audit adjustments and except that the
quarterly financial statements have fewer footnotes than annual statements.

(c)           Officer's Certificate.  At the time of delivery of the financial statements provided for in Sections 7.1(a) and 7.1(b) above, a certificate of a Financial Officer substantially in the form
of Exhibit 7.1(c): (i) setting forth calculations demonstrating compliance by the Borrower with the financial covenants set forth in Section 7.2 as of the end of such fiscal period and (ii) stating that no Default or Event of Default exists, or if any Default or Event of Default does exist, specifying the nature and extent thereof and what action the Borrower proposes to take with respect thereto.

(d)           Reports.  Notice of the filing by the Borrower of any Form 10-Q, Form 10-K or Form 8-K with the SEC promptly upon the filing thereof and copies of all financial statements, proxy statements, notices
and reports as the Borrower shall send to its shareholders concurrently with the mailing of any such statements, notices or reports to its shareholders.

(e)           Notices.  Upon the Borrower obtaining knowledge thereof, the Borrower will give written notice to the Administrative Agent within ten days of (i) the occurrence of a Default or Event of Default,
specifying the nature and extent thereof and what action the Borrower proposes to take with respect thereto and (ii) the occurrence of any of the following with respect to the Borrower or any of its Subsidiaries (A) the pendency or commencement of any litigation, arbitration or governmental proceeding against the Borrower or any of its Subsidiaries which, if adversely determined, would have or would reasonably be expected to have a Material Adverse Effect, (B) one or more judgments, orders, or decrees shall be
entered against the Borrower or any of its Subsidiaries involving a liability of $5,000,000 or more, in the aggregate or (C) the institution of any proceedings against the Borrower or any of its Subsidiaries with respect to, or the receipt of notice by such Person of potential liability or responsibility for violation or alleged violation of, any federal, state or local law, rule or regulation (including, without limitation, any Environmental Law), the violation of which would have or would reasonably be expected
to have a Material Adverse Effect.

(f)           ERISA.  Upon the Borrower or any ERISA Affiliate obtaining knowledge thereof, the Borrower will give written notice to the Administrative Agent promptly (and in any event within ten days) of any
of the following which would result in or reasonably would be expected to result in a Material Adverse Effect: (i) any event or condition, including, but not limited to, any Reportable Event, that constitutes, or would be reasonably expected to lead to, an ERISA Event; (ii) with respect to any Multiemployer Plan, the receipt of notice as prescribed in ERISA or otherwise of any withdrawal liability assessed against the Borrower or any of its ERISA Affiliates, or of a determination that any Multiemployer Plan is
in reorganization or insolvent (both within the meaning of Title IV of ERISA); (iii) the failure to make full payment on or before the due date (including extensions) thereof of all amounts which the Borrower or any of its Subsidiaries or ERISA Affiliates is required to contribute to each Plan pursuant to its terms and as required to meet the minimum funding standard set forth in ERISA and the Code with respect thereto; or (iv) a change in the funding status of any Plan, in each case together with a description
of any such event or condition or a copy of any such notice and a statement by an officer of the Borrower briefly setting forth the 

 

 

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details regarding such event, condition, or notice, and the action, if any, which has been or is being taken or is proposed to be taken with respect thereto.  Promptly upon request, the Borrower shall furnish the Lenders with such additional information concerning any Plan as may be reasonably requested, including, but not
limited to, copies of each annual report/return (Form 5500 series), as well as all schedules and attachments thereto required to be filed with the Department of Labor and/or the Internal Revenue Service pursuant to ERISA and the Code, respectively, for each "plan year" (within the meaning of Section 3(39) of ERISA).

(g)           Debt Ratings.   Prompt notice of any change in its Debt Ratings.

(h)           Other Information.  With reasonable promptness upon any such request, such other information regarding the business, properties or financial condition of the Borrower as the Lenders may reasonably
request.

Documents required to be delivered pursuant to Section 7.1(a), (b) or (d) (to the extent any such documents are included in materials otherwise filed with the Securities and Exchange Commission) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Borrower posts such documents,
or provides a link thereto on the Borrower's website on the Internet at the website address listed on Schedule 11.1; or (ii) on which such documents are posted on the Borrower's behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that:
(A) the Borrower shall deliver paper copies of such documents to the Administrative Agent or any Lender that requests the Borrower to deliver such paper copies until a written request to cease delivering paper copies is given by the Administrative Agent or such Lender and (B) the Borrower shall notify the Administrative Agent and each Lender (by telecopier or electronic mail) of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e.,
soft copies) of such documents.  Notwithstanding anything contained herein, in every instance the Borrower shall be required to provide paper copies of the Officer's Certificate required by Section 7.1(c) to the Administrative Agent.  Except for such Officer's Certificate, the Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Borrower with
any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.

7.2           Financial Covenant.

At all times the ratio of (i) Consolidated Indebtedness to (ii) Consolidated Capitalization shall be less than or equal to .65 to 1.0.  For purposes of such calculation, the portion of Consolidated Indebtedness attributable to obligations under Material Leases shall be the net present value (using (i) the discount rate
(A) set forth in Schedule 6.19, so long as Schedule 6.19 specifies the same relevant discount rate as is used in calculating such net present value provided to Moody's and S&P or (B) the discount rate used in calculating such net present value provided to Moody's and S&P or (ii) any such other rate as shall be proposed by the Borrower (and agreed upon by the Required
Lenders) of all amounts payable under the Material Leases.

7.3           Preservation of Existence and Franchises.

(a)           The Borrower will do (and will cause each of its Subsidiaries to do) all things necessary to preserve and keep in full force and effect its existence and rights, franchises and authority.

 

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(b)           The Borrower will maintain (and will cause each of its Subsidiaries to maintain) its properties in good condition and not waste or otherwise permit such properties to deteriorate, reasonable wear and tear excepted.

7.4           Books and Records.

The Borrower will keep (and will cause each of its Subsidiaries to keep) complete and accurate books and records of its transactions in accordance with good accounting practices on the basis of GAAP (including the establishment and maintenance of appropriate reserves).

7.5           Compliance with Law.

The Borrower will comply (and will cause each of its Subsidiaries to comply) with all laws (including, without limitation, all Environmental Laws and ERISA laws), rules, regulations and orders, and all applicable restrictions imposed by all Governmental Authorities, applicable to it and its properties, if the failure to comply would have
or would reasonably be expected to have a Material Adverse Effect.

7.6           Payment of Taxes and Other Indebtedness.

The Borrower will (and will cause each of its Subsidiaries to) pay, settle or discharge (a) all taxes, assessments and governmental charges or levies imposed upon it, or upon its income or profits, or upon any of its properties, before they shall become delinquent, (b) all lawful claims (including claims for labor, materials and supplies)
which, if unpaid, might give rise to a Lien upon any of its properties, and (c) all of its other Indebtedness as it shall become due (to the extent such repayment is not otherwise prohibited by this Credit Agreement); provided, however, that the Borrower and its Subsidiaries shall not be required to pay any such tax, assessment, charge, levy, claim or Indebtedness which is being contested
in good faith by appropriate proceedings and as to which adequate reserves therefor have been established in accordance with GAAP, unless the failure to make any such payment (i) would give rise to an immediate right to foreclose or collect on a Lien securing such amounts or (ii) would have or would be reasonably expected to have a Material Adverse Effect.

7.7           Insurance.

The Borrower will (and will cause each of its Subsidiaries to) at all times maintain in full force and effect insurance (including worker's compensation insurance and general liability insurance) in such amounts, covering such risks and liabilities and with such deductibles or self-insurance retentions as are in accordance with normal
industry practice.

7.8           Performance of Obligations.

The Borrower will perform (and will cause each of its Subsidiaries to perform) in all material respects all of its obligations under the terms of all material agreements, indentures, mortgages, security agreements or other debt instruments to which it is a party or by which it is bound.

7.9           Use of Proceeds.

The proceeds of the Credit Extensions may be used solely (a) to repay amounts under the Existing Credit Agreement, (b) to pay fees and expenses required by the Credit Document, (c) for letters of credit, and (d) for general corporate purposes of the Borrower (including, but not limited to, working capital, commercial paper and capital
expenditures).

 

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7.10           Audits/Inspections.

Upon reasonable notice and during normal business hours, the Borrower will permit representatives appointed by the Administrative Agent or the Lenders, including, without limitation, independent accountants, agents, attorneys, and appraisers to visit and inspect the Borrower's property, including its books and records, its accounts receivable
and inventory, the Borrower's facilities and its other business assets, and to make photocopies or photographs thereof and to write down and record any information such representative obtains and shall permit the Administrative Agent or such Lender or its representatives to investigate and verify the accuracy of information provided to it and to discuss all such matters with the officers, employees and representatives of the Borrower; provided, that an officer or authorized agent of the Borrower shall be present
during any such discussions between the officers,  employees or representatives of the Borrower and the representatives of the Administrative Agent or any Lender.

SECTION 8

NEGATIVE COVENANTS

Unless otherwise approved in writing by the Required Lenders, the Borrower covenants and agrees that, until the termination of the Commitments, the termination or expiration of all Letters of Credit and the payment in full of all Borrower Obligations:

8.1           Nature of Business.

The Borrower will not materially alter the character of its business from that conducted as of the Closing Date.

8.2           Consolidation and Merger.

The Borrower will not (a) enter into any transaction of merger or (b) consolidate, liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution); provided that, so long as no Default or Event of Default shall exist or be caused thereby, a Person may be
merged or consolidated with or into the Borrower so long as the Borrower shall be the continuing or surviving Person.

8.3           Sale or Lease of Assets.

The Borrower will not (nor will it permit its Subsidiaries to) sell, lease, transfer or otherwise dispose of, any of its assets (including, without limitation, all or substantially all of its assets, whether in one transaction or a series of related transactions) except (a) sales of accounts receivable and energy services contract revenues
in connection with the PSNM Accounts Receivable Securitization and other sales of accounts receivable and energy services contract revenues so long as such other sales are non-recourse to the Borrower and are otherwise on customary market terms; (b) sales of assets (excluding those permitted in clause (a) hereof) for fair value, if the aggregate value of all such transactions in any calendar year, does not exceed 25% of the book value of Total
Assets, as calculated as of the end of the most recent Fiscal Quarter; and (c) sale, lease, transfer or other disposition, at less than fair value, of any other assets, provided that the aggregate book value of such assets shall not exceed $10,000,000 in any calendar year.

 

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8.4           Affiliate Transactions.

The Borrower will not enter into any transaction or series of transactions, whether or not in the ordinary course of business, with any Affiliate other than on terms and conditions substantially as favorable as would be obtainable in a comparable arm's-length transaction with a Person other than an Affiliate.

8.5           Liens.

The Borrower will not (nor will it permit its Subsidiaries to) contract, create, incur, assume or permit to exist any Lien with respect to any of its property or assets of any kind (whether real or personal, tangible or intangible), whether now owned or hereafter acquired, securing any Indebtedness other than the following: (a) Liens securing
Borrower Obligations, (b) Liens for taxes not yet due or Liens for taxes being contested in good faith by appropriate proceedings for which adequate reserves determined in accordance with GAAP have been established (and as to which the property subject to any such Lien is not yet subject to foreclosure, sale or loss on account thereof), (c) Liens in respect of property imposed by law arising in the ordinary course of business such as materialmen's, mechanics', warehousemen's, carrier's, landlords' and
other nonconsensual statutory Liens which are not yet due and payable, which have been in existence less than 90 days or which are being contested in good faith by appropriate proceedings for which adequate reserves determined in accordance with GAAP have been established (and as to which the property subject to any such Lien is not yet subject to foreclosure, sale or loss on account thereof), (d) pledges or deposits made in the ordinary course of business to secure payment of worker's compensation insurance,
unemployment insurance, pensions or social security programs, (e) Liens arising from good faith deposits in connection with or to secure performance of tenders, bids, leases, government contracts, performance and return-of-money bonds and other similar obligations incurred in the ordinary course of business (other than obligations in respect of the payment of borrowed money), (f) Liens arising from good faith deposits in connection with or to secure performance of statutory obligations and surety and
appeal bonds, (g) easements, rights-of-way, restrictions (including zoning restrictions), minor defects or irregularities in title and other similar charges or encumbrances not, in any material respect, impairing the use of the encumbered property for its intended purposes, (h) judgment Liens that would not constitute an Event of Default, (i) Liens arising by virtue of any statutory or common law provision relating to banker's liens, rights of setoff or similar rights as to deposit accounts or
other funds maintained with a creditor depository institution, (j) any Lien created or arising over any property which is acquired, constructed or created by the Borrower or its Subsidiaries, but only if (i) such Lien secures only principal amounts (not exceeding the cost of such acquisition, construction or creation) raised for the purposes of such acquisition, construction or creation, together with any costs, expenses, interest and fees incurred in relation thereto or a guarantee given in respect
thereof, (ii) such Lien is created or arises on or before 180 days after the completion of such acquisition, construction or creation, (iii) such Lien is confined solely to the property so acquired, constructed or created and any improvements thereto and (iv) the aggregate principal amount of all Indebtedness secured by such Liens shall not exceed $25,000,000 at any one time outstanding, (k) any Lien on Margin Stock, (l) Liens with respect to the Indebtedness evidenced by the FMB Indenture, but
only to the extent of the Insured Series First Mortgage Bonds, and the "permitted encumbrances" under the FMB Indenture, (m) the assignment of, or Liens on, accounts receivable in connection with PSNM Accounts Receivable Securitization and the filing of related financing statements under the Uniform Commercial Code of the applicable jurisdictions, (n) the assignment of, or Liens on, demand, energy or wheeling revenues, or on capacity reservation or option fees, payable to the Borrower with respect
to any wholesale electric service or transmission agreements, the assignment of, or Liens on, revenues from energy services contracts, and the assignment of, or Liens on, capacity reservation or option fees payable to the Borrower with respect to asset sales permitted herein, (o) any extension, renewal or replacement (or successive extensions, renewals or replacements), as a whole or in part, of any Liens referred to in the foregoing clauses (a)
through (n), for amounts not exceeding the principal amount of the Indebtedness secured by the Lien so 

 

 

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extended, renewed or replaced, provided that such extension, renewal or replacement Lien is limited to all or a part of the same property or assets that were covered by the Lien extended, renewed or replaced (plus improvements on such property or assets), (p) Liens on Property that is subject to a Material Lease that is classified
as an operating lease as of the Closing Date but which is subsequently converted into a capital lease, (q) Liens securing obligations under Hedging Agreements entered into in the ordinary course of business and not for speculative purposes, and (r) Liens on Property, in addition to those otherwise permitted by clauses (a) through (q) above, securing, directly or indirectly, Indebtedness or obligations arising pursuant to other agreements entered into in the ordinary course of business which do not exceed,
in the aggregate at any one time outstanding, $25,000,000.

8.6           Accounting Changes.

The Borrower will not (nor will it permit any of its Subsidiaries to) make or permit, any change in accounting policies or reporting practices, except as required by GAAP, or as permitted by GAAP, if the amounts involved are not material.

SECTION 9

EVENTS OF DEFAULT

9.1           Events of Default.

An Event of Default shall exist upon the occurrence of any of the following specified events (each an "Event of Default"):

(a)           Payment.  The Borrower shall:  (i) default in the payment when due of any principal of any of the Revolving Loans or L/C Obligations; or (ii) default, and such default shall continue
for three or more Business Days, in the payment when due of any interest on the Loans or L/C Obligations or of any fees or other amounts owing hereunder, under any of the other Credit Documents or in connection herewith or therewith.

(b)           Representations.  Any representation, warranty or statement made or deemed to be made by the Borrower herein, in any of the other Credit Documents, or in any statement or certificate delivered
or required to be delivered pursuant hereto or thereto shall prove untrue in any material respect on the date as of which it was deemed to have been made.

(c)           Covenants.  The Borrower shall:

(i)           default in the due performance or observance of any term, covenant or agreement contained in Sections 7.1(e)(i), 7.2, 7.3(a) (solely with respect to the existence of the Borrower), 7.9, 7.10 or 8.1 through 8.6 inclusive; or

(ii)           default in the due performance or observance by it of any term, covenant or agreement (other than those referred to in subsections (a), (b) or (c)(i) of this Section 9.1) contained in this Credit Agreement or any other Credit Document and such default shall continue
unremedied for a period of at least 10 days after the earlier of the Borrower becoming aware of such default or notice thereof given by the Administrative Agent.

 

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(d)           Credit Documents.  Any Credit Document shall fail to be in force and effect or the Borrower shall so assert or any Credit Document shall fail to give the Administrative Agent or the Lenders the
rights, powers, liens and privileges purported to be created thereby.

(e)           Bankruptcy, etc.  The occurrence of any of the following with respect to the Borrower or any of its Subsidiaries (i) a court or governmental agency having jurisdiction in the premises shall enter
a decree or order for relief in respect of the Borrower or any of its Subsidiaries in an involuntary case under any applicable Debtor Relief Law now or hereafter in effect, or appoint a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Borrower or any of its Subsidiaries or for any substantial part of their property or ordering the winding up or liquidation of its affairs; or (ii) an involuntary case under any applicable Debtor Relief Law now or hereafter in effect
is commenced against the Borrower or any of its Subsidiaries and such petition remains unstayed and in effect for a period of 60 consecutive days; or (iii) the Borrower or any of its Subsidiaries shall commence a voluntary case under any applicable Debtor Relief Law now or hereafter in effect, or consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official of such Person or any substantial part of its property or make any general assignment for the benefit of creditors; or (iv) the Borrower or any of its Subsidiaries admit in writing its inability to pay its debts generally as they become due or any action shall be taken by any Person in furtherance of any of the aforesaid purposes.

(f)           Defaults under Other Agreements.

(i)           The Borrower or any of its Subsidiaries shall default in the due performance or observance (beyond the applicable grace period with respect thereto) of any material obligation or condition of any contract or
lease to which it is a party, if such default would have or would reasonably be expected to have a Material Adverse Effect.

(ii)           With respect to any Indebtedness of the Borrower or any of its Subsidiaries (other than Indebtedness outstanding under this Credit Agreement) in excess of $20,000,000 in the aggregate (A) the Borrower
or such Subsidiary shall (x) default in any payment (beyond the applicable grace period with respect thereto, if any) with respect to such Indebtedness, or (y) default (after giving effect to any applicable grace period) in the observance or performance of any covenant or agreement relating to such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event or condition shall occur or condition
exist, the effect of which default or other event or condition is to cause or permit the holder or the holders of such Indebtedness (or any trustee or agent on behalf of such holders) to cause (determined without regard to whether any notice or lapse of time is required) such Indebtedness to become due prior to its stated maturity; or (B) such Indebtedness shall be declared due and payable, or required to be prepaid other than by a regularly scheduled required prepayment prior to the stated maturity thereof;
or (C) such Indebtedness shall mature and remain unpaid.

(g)           Judgments.  Any judgment, order or decree involving a liability of $20,000,000 or more, or one or more judgments, orders, or decrees involving a liability of $40,000,000 or more, in the aggregate,
shall be entered against the Borrower or any of its Subsidiaries and such judgments, orders or decrees shall continue unsatisfied, undischarged and unstayed for a period ending on the first to occur of (i) the last day on which such judgment, order or decree becomes final and unappealable and, where applicable, with the status of a judicial lien or (ii) 60 days; provided that if such judgment, order or decree provides for periodic payments over
time then the Borrower or such Subsidiary shall have a grace period of 30 days with respect to each such periodic payment.

 

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(h)           ERISA.  The occurrence of any of the following events or conditions if any of the same would have or would be reasonably expected to have a Material Adverse Effect:  (i) any "accumulated
funding deficiency," as such term is defined in Section 302 of ERISA and Section 412 of the Code, whether or not waived, shall exist with respect to any Plan, or any lien shall arise on the assets of the Borrower or any ERISA Affiliate in favor of the PBGC or a Plan; (ii) an ERISA Event shall occur with respect to a Single Employer Plan which is, in the reasonable opinion of the Required Lenders, likely to result in the termination of such Plan for purposes of Title IV of ERISA; (iii) an ERISA Event shall occur
with respect to a Multiemployer Plan or Multiple Employer Plan which is, in the reasonable opinion of the Required Lenders, likely to result in (A) the termination of such Plan for purposes of Title IV of ERISA, or (B) the Borrower or any ERISA Affiliate incurring any liability in connection with a withdrawal from, reorganization of (within the meaning of Section 4241 of ERISA), or insolvency (within the meaning of Section 4245 of ERISA) of such Plan; or (iv) any prohibited transaction (within the meaning of
Section 406 of ERISA or Section 4975 of the Code) or breach of fiduciary responsibility shall occur which would be reasonably expected to subject the Borrower or any ERISA Affiliate to any liability under Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the Code, or under any agreement or other instrument pursuant to which the Borrower or any ERISA Affiliate has agreed or is required to indemnify any person against any such liability.

(i)           Change of Control.  There shall occur a Change of Control.

9.2           Acceleration; Remedies.

Upon the occurrence and during the continuation of an Event of Default, the Administrative Agent may or, upon the request and direction of the Required Lenders, shall take the following actions without prejudice to the rights of the Administrative Agent or any Lender to enforce its claims against the Borrower, except as otherwise specifically
provided for herein:

(a)           Termination of Commitments.  Declare the Commitments and the obligation of the L/C Issuers to make L/C Credit Extensions terminated whereupon the Commitments and the obligation of the L/C Issuers
to make L/C Credit Extensions shall be immediately terminated.

(b)           Acceleration of Revolving Loans.  Declare the unpaid principal of and any accrued interest in respect of all Revolving Loans, all L/C Obligations and any and all other Borrower Obligations of
any and every kind owing by the Borrower to the Administrative Agent or the Lenders under the Credit Documents to be due, whereupon the same shall be immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.

(c)           Cash Collateral.  Direct the Borrower to Cash Collateralize (and the Borrower agrees that upon receipt of such notice, or upon the occurrence of an Event of Default under Section 9.1(e), it will
immediately Cash Collateralize) L/C Obligations in respect of subsequent drawings under all then outstanding Letters of Credit in an amount equal to the then outstanding principal amount of L/C Obligations.

(d)           Enforcement of Rights.  To the extent permitted by Law enforce any and all rights and interests created and existing under applicable Law and under the Credit Documents, including, without limitation,
all rights of set-off.

 

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Notwithstanding the foregoing, if an Event of Default specified in Section 9.1(e) shall occur, then the Commitments and any obligation of the L/C Issuers to make L/C Credit Extensions shall automatically terminate and all Revolving Loans, all L/C Obligations, all accrued interest in respect thereof, all accrued and unpaid fees and other
Borrower Obligations owing to the Administrative Agent and the Lenders hereunder shall immediately become due and payable without the giving of any notice or other action by the Administrative Agent or the Lenders, which notice or other action is expressly waived by the Borrower.

Notwithstanding the fact that enforcement powers reside primarily with the Administrative Agent, each Lender has, to the extent permitted by Law, a separate right of payment and shall be considered a separate "creditor" holding a separate "claim" within the meaning of Section 101(5) of the Bankruptcy Code or any other insolvency statute.

9.3           Allocation of Payments After Event of Default.

Notwithstanding any other provisions of this Credit Agreement, after the occurrence and during the continuation of an Event of Default, all amounts collected or received by the Administrative Agent or any Lender on account of amounts outstanding under any of the Credit Documents shall be paid over or delivered as follows:

FIRST, to the payment of all reasonable out-of-pocket costs and expenses (including the reasonable fees and expenses of legal counsel) of the Administrative Agent, the L/C Issuers or any of the Lenders in connection with enforcing the rights of the Administrative Agent, the L/C Issuers and the Lenders under the Credit Documents, ratably
among them in proportion to the amounts described in this clause "FIRST" payable to them;

SECOND, to payment of any fees owed to the Administrative Agent, the L/C Issuers or any Lender, ratably among them in proportion to the amounts described in this clause "SECOND" payable to them;

THIRD, to the payment of all accrued interest payable to the Lenders, and the L/C Issuers hereunder, ratably among them in proportion to the amounts described in this clause "THIRD" payable to them;

FOURTH, to the payment of the outstanding principal amount of the Revolving Loans and L/C Obligations, ratably among them in proportion to the amounts described in this clause "FOURTH" payable to them;

FIFTH, to the Administrative Agent, for the account of the L/C Issuers, to Cash Collateralize that portion of the L/C Obligations comprised of the aggregate undrawn amount of Letters of Credit;

SIXTH, to all other Borrower Obligations which shall have become due and payable under the Credit Documents and not repaid pursuant to clauses "FIRST" through "FIFTH" above, ratably among the holders of such Borrower Obligations in proportion to the amounts described in this clause "SIXTH" payable to them; and

SEVENTH, the payment of the surplus, if any, to whomever may be lawfully entitled to receive such surplus.

Amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause "FIFTH" above shall be applied to satisfy drawings under such Letters of Credit as they occur.  If any amount remains on deposit as cash collateral after all Letters of Credit have either been fully drawn or 

 

 

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expired, such remaining amount shall be applied to the other Borrower Obligations, if any, in the order set forth above.

SECTION 10

AGENCY PROVISIONS

10.1        Appointment and Authority.

Each of the Lenders and each L/C Issuer hereby irrevocably appoints Wachovia Bank, National Association to act on its behalf as the Administrative Agent hereunder and under the other Credit Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative
Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto.  The provisions of this Section are solely for the benefit of the Administrative Agent, the Lenders and the L/C Issuers, and the Borrower shall not have rights as a third party beneficiary of any of such provisions.

10.2        Rights as a Lender.

The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term "Lender" or "Lenders" shall, unless otherwise expressly indicated or unless the context otherwise requires,
include the Person serving as the Administrative Agent hereunder in its individual capacity.  Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

10.3        Exculpatory Provisions.

The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Credit Documents.  Without limiting the generality of the foregoing, the Administrative Agent:

(a)           shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

(b)           shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Credit Documents that the Administrative Agent is required to exercise as directed in writing
by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Credit Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Credit Document or applicable law; and

(c)           shall not, except as expressly set forth herein and in the other Credit Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower, its Subsidiaries or any of its Affiliates that is communicated
to or 

 

 

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obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

The Administrative Agent shall not be liable for any action taken or not taken by it (a) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided
in Sections 11.6 and 9.2) or (b) in the absence of its own gross negligence or willful misconduct.  The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Administrative Agent by the Borrower, a Lender or a L/C Issuer.

The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Credit Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith
or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Credit Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Section 4 or Section 5 or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the Administrative Agent.

10.4        Reliance by Administrative Agent.

The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have
been signed, sent or otherwise authenticated by the proper Person.  The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon.  In determining compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or a L/C Issuer, the Administrative
Agent may presume that such condition is satisfactory to such Lender or such L/C Issuer unless the Administrative Agent shall have received notice to the contrary from such Lender or such L/C Issuer prior to the making of such Loan or the issuance of such Letter of Credit.  The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance
with the advice of any such counsel, accountants or experts.

10.5        Delegation of Duties.

The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Credit Document by or through any one or more sub-agents appointed by the Administrative Agent.  The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its
rights and powers by or through their respective Agent-Related Parties.  The exculpatory provisions of this Section shall apply to any such sub-agent and to the Agent-Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

 

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10.6        Resignation of Administrative Agent.

The Administrative Agent may at any time give notice of its resignation to the Lenders, the L/C Issuers and the Borrower.  Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor, which shall be a bank with an office in the United States,
or an Affiliate of any such bank with an office in the United States.  If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders and the L/C Issuers, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that
if the Administrative Agent shall notify the Borrower and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (a) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Credit Documents and (b) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to
each Lender and the L/C Issuers directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this Section.  Upon the acceptance of a successor's appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder
or under the other Credit Documents (if not already discharged therefrom as provided above in this Section).  The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor.  After the retiring Administrative Agent's resignation hereunder and under the other Credit Documents, the provisions of this Section and Section 11.5 shall
continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Agent Related Persons in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.

Any resignation by Wachovia Bank, National Association as Administrative Agent pursuant to this Section shall also constitute its resignation as a L/C Issuer.  Upon the acceptance of a successor's appointment as Administrative Agent hereunder, (i) such successor shall succeed to and become vested with all of the rights,
powers, privileges and duties of the retiring L/C Issuer, (ii) the retiring L/C Issuer shall be discharged from all of their respective duties and obligations hereunder or under the other Credit Documents, and (iii) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to the retiring L/C Issuer to effectively assume the obligations of the retiring L/C Issuer with respect to such
Letters of Credit.

10.7        Non-Reliance on Administrative Agent and Other Lenders.

Each Lender and each L/C Issuer acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Agent-Related Persons 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
Lender and each L/C Issuer also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Agent-Related Persons and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Credit Document or any related agreement or any document furnished hereunder or thereunder.

 

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10.8        No Other Duties, Etc.

Anything herein to the contrary notwithstanding, none of the Bookrunners, Arrangers or Agents listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Credit Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or a L/C Issuer hereunder.

10.9        Administrative Agent May File Proofs of Claim.

In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Borrower, the Administrative Agent (irrespective of whether the principal of any Revolving Loan or L/C Obligation shall then be due and payable as herein expressed
or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise

(a)           to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Revolving Loans, L/C Obligations and all other Borrower Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable
in order to have the claims of the Lenders, the L/C Issuers and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the L/C Issuers and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, the L/C Issuers and the Administrative Agent under Sections 2.2(i) and (j), 3.4 and 11.5)
allowed in such judicial proceeding; and

(b)           to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and the L/C Issuers to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly
to the Lenders and the L/C Issuers, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 3.4 and 11.5.

Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or the L/C Issuers any plan of reorganization, arrangement, adjustment or composition affecting the Borrower Obligations or the rights of any Lender or to authorize the Administrative Agent
to vote in respect of the claim of any Lender in any such proceeding.

SECTION 11

MISCELLANEOUS

11.1        Notices; Effectiveness; Electronic Communication.

(a)           Notices Generally.  Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in subsection (b) below), all notices and
other 

 

 

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communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as
follows:

(i)           if to the Borrower, the Administrative Agent or a L/C Issuer, to the address, telecopier number, electronic mail address or telephone number specified for such Person on Schedule 11.1; and

(ii)           if to any other Lender, to the address, telecopier number, electronic mail address or telephone number specified in its Administrative Questionnaire.

Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by telecopier shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening
of business on the next business day for the recipient).  Notices delivered through electronic communications to the extent provided in subsection (b) below, shall be effective as provided in such subsection (b).

(b)           Electronic Communications.  Notices and other communications to the Lenders and the L/C Issuers hereunder may be delivered or furnished by electronic communication (including e-mail and Internet
or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender or any L/C Issuer pursuant to Section 2 if such Lender or such L/C Issuer, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Section by electronic communication.  The
Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.

Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender's receipt of an acknowledgement from the intended recipient (such as by the "return receipt requested" function, as available, return e-mail or other written acknowledgement), provided that
if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available
and identifying the website address therefor.

(c)           Borrower Materials/The Platform.  The Borrower hereby acknowledges that (i) the Administrative Agent and/or the Arrangers will make available to the Lenders and the L/C Issuers materials and/or
information provided by or on behalf of the Borrower hereunder (collectively, "Borrower Materials") by posting the Borrower Materials on IntraLinks or another similar electronic system (the "Platform"). THE PLATFORM IS PROVIDED "AS IS" AND "AS AVAILABLE."  THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY
OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE 

 

 

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BORROWER MATERIALS OR THE PLATFORM.  In no event shall the Administrative Agent or any of its Agent-Related Parties (collectively, the "Agent Parties") have any liability to the Borrower, any Lender, any L/C Issuer or any other Person for losses, claims, damages,
liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of the Borrower's or the Administrative Agent's transmission of Borrower Materials through the Internet, except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party; provided, however,
that in no event shall any Agent Party have any liability to the Borrower, any Lender, any L/C Issuer or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages).

(d)           Change of Address, Etc.  Each of the Borrower, the Administrative Agent and the L/C Issuers may change its address, telecopier or telephone number for notices and other communications hereunder
by notice to the other parties hereto.  Each other Lender may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the Borrower, the Administrative Agent and the L/C Issuers.  In addition, each Lender agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, telecopier number and electronic mail address to which notices
and other communications may be sent and (ii) accurate wire instructions for such Lender.

(e)           Reliance by Administrative Agent, L/C Issuers and Lenders.  The Administrative Agent, the L/C Issuers and the Lenders shall be entitled to rely and act upon any notices (including telephonic Notices
of Borrowing) purportedly given by or on behalf of the Borrower even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof.  The Borrower shall indemnify the Administrative Agent, the L/C Issuers, each Lender and the Agent-Related Parties of each of them from all losses, costs, expenses and liabilities
resulting from the reliance by such Person on each notice purportedly given by or on behalf of the Borrower.  All telephonic notices to and other telephonic communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.

11.2        Right of Set-Off.

In addition to any rights now or hereafter granted under applicable Law or otherwise, and not by way of limitation of any such rights, upon the occurrence of an Event of Default and the commencement of remedies described in Section 9.2, each Lender is authorized at any time and from time to time, without presentment, demand, protest or
other notice of any kind (all of which rights being hereby expressly waived), to set-off and to appropriate and apply any and all deposits (general or special) and any other indebtedness at any time held or owing by such Lender (including, without limitation, branches, agencies or Affiliates of such Lender wherever located) to or for the credit or the account of the Borrower against obligations and liabilities of the Borrower to the Lenders hereunder, under the Notes, the other Credit Documents or otherwise,
irrespective of whether the Administrative Agent or the Lenders shall have made any demand hereunder and although such obligations, liabilities or claims, or any of them, may be contingent or unmatured, and any such set-off shall be deemed to have been made immediately upon the occurrence of an Event of Default even though such charge is made or entered on the books of such Lender subsequent thereto.  The Borrower hereby agrees that any Person purchasing a participation in the Revolving Loans and Commitments
hereunder pursuant to Sections 3.8 or 11.3(e) may exercise all rights of set-off with respect to its participation interest as fully as if such Person were a Lender hereunder.

 

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11.3        Successors and Assigns.

(a)           Successors and Assigns Generally.  The provisions of this Credit Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted
hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the provisions of subsection (b) of this Section, (ii) by way of participation in accordance with the provisions of subsection (d) of this Section, (iii) by way of pledge
or assignment of a security interest subject to the restrictions of subsection (f) of this Section, or (iv) to an SPC in accordance with the provisions of subsection (h) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void).  Nothing in this Credit Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors
and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section and, to the extent expressly contemplated hereby, the Agent-Related Parties of each of the Administrative Agent, the L/C Issuers and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Credit Agreement.

(b)           Assignments by Lenders.  Any Lender may at any time assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Credit Agreement (including all or a portion
of its Commitment and the Loans (including for purposes of this subsection (b), participations in L/C Obligations) at the time owing to it); provided that

(i)           except in the case of an assignment of the entire remaining amount of the assigning Lender's Commitment and the Loans at the time owing to it or in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund with respect to a Lender, the aggregate
amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if "Trade Date" is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $5,000,000 unless
each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed); provided, however, that concurrent assignments to members of an Assignee Group and concurrent assignments from members of an Assignee Group to a single Eligible Assignee (or to an Eligible
Assignee and members of its Assignee Group) will be treated as a single assignment for purposes of determining whether such minimum amount has been met;

(ii)           each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender's rights and obligations under this Credit Agreement with respect to the Loans or the Commitment assigned;

(iii)           any assignment of a Commitment must be approved by the Administrative Agent, and L/C Issuers (such approval not to be unreasonably withheld or delayed) unless the Person that is the proposed assignee is itself a Lender (whether or not the proposed assignee would otherwise
qualify as an Eligible Assignee); and

(iv)           the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee in the 

 

 

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amount, if any, required as set forth in Schedule 11.3, and the Eligible Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the Eligible Assignee thereunder shall be a party to this Credit Agreement and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Lender under this Credit Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Credit Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender's rights and obligations under this Credit Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 3.9, 3.12, 3.13, 3.14,
and 11.5(b) with respect to facts and circumstances occurring prior to the effective date of such assignment.  Upon request, the Borrower (at its expense) shall execute and deliver a Note to the assignee Lender.  Any assignment or transfer by a Lender of rights or obligations under this Credit Agreement that does not comply with this subsection shall be treated for purposes of this Credit Agreement as a sale by such Lender of
a participation in such rights and obligations in accordance with subsection (d) of this Section.

(c)           Register.  The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at the Administrative Agent's Office a copy of each Assignment and Assumption delivered
to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof from time to time (the "Register").  The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Credit Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by the Borrower and the L/C Issuers at any reasonable time and from time to time upon reasonable prior notice.  In addition, at any time that a request for a consent for a material or substantive change to the Credit Documents is pending, any Lender may request and receive from the Administrative Agent a copy of the Register.

(d)           Participations.  Any Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to any Person (other than a natural person or the
Borrower or any of the Borrower's Affiliates or Subsidiaries) (each, a "Participant") in all or a portion of such Lender's rights and/or obligations under this Credit Agreement (including all or a portion of its Commitment and/or the Loans (including such Lender's participations in L/C Obligations) owing to it); provided that (i) such Lender's obligations under this Credit Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent, the Lenders and the L/C Issuers shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Credit Agreement.

Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Credit Agreement and to approve any amendment, modification or waiver of any  provision of this Credit Agreement; provided that
such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in the first proviso to Section 11.6 that affects such Participant.  Subject to subsection (e) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.9, 3.12 3.13 and 3.14 to
the same extent as if it were a Lender and had acquired its interest by assignment pursuant to subsection (b) of this Section.  To 

 

 

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the extent permitted by Law, each Participant also shall be entitled to the benefits of Section 3.7 as though it were a Lender, provided such
Participant agrees to be subject to Section 3.8 as though it were a Lender.

(e)           Limitations upon Participant Rights.  A Participant shall not be entitled to receive any greater payment under Section3.9, 3.12, 3.13,
or 3.14 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower's prior written consent.  A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 3.13 unless
the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 3.13(f) as though it were a Lender.

(f)           Certain Pledges.  Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Credit Agreement (including under its Note, if any) to secure obligations
of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

(g)           Electronic Execution of Assignments.  The words "execution," "signed," "signature," and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or
the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

(h)           Special Purpose Funding Vehicles.  Notwithstanding anything to the contrary contained herein, any Lender (a "Granting Lender") may
grant to a special purpose funding vehicle identified as such in writing from time to time by the Granting Lender to the Administrative Agent and the Borrower (an "SPC") the option to provide all or any part of any Loan that such Granting Lender would otherwise be obligated to make pursuant to this Credit Agreement; provided that (i) nothing herein shall constitute a commitment by
any SPC to fund any Loan, and (ii) if an SPC elects not to exercise such option or otherwise fails to make all or any part of such Loan, the Granting Lender shall be obligated to make such Loan pursuant to the terms hereof.  Each party hereto hereby agrees that (i) neither the grant to any SPC nor the exercise by any SPC of such option shall increase the costs or expenses or otherwise increase or change the obligations of the Borrower under this Agreement (including its obligations under Section 3.9, 3.12,
3.12 and 3.14), (ii) no SPC shall be liable for any indemnity or similar payment obligation under this Credit Agreement for which a Lender would be liable, and (iii) the Granting Lender shall for all purposes, including the approval of any amendment, waiver or other modification of any provision of any Credit Document, remain the lender of record hereunder.  The making of a Committed Loan by an SPC hereunder shall utilize the Commitment
of the Granting Lender to the same extent, and as if, such Loan were made by such Granting Lender.  In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Credit Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior debt of any SPC, it will not institute against, or join any other Person in instituting against, such SPC any bankruptcy, reorganization,
arrangement, insolvency, or liquidation proceeding under the laws of the United States or any State thereof.  Notwithstanding anything to the contrary contained herein, any SPC may (A) with notice to, but without prior consent of the Borrower and the Administrative Agent and with the payment of a processing fee in the amount of $2,500, assign all or any portion of its right to receive payment with respect to any Loan to the Granting Lender and (B) disclose on a confidential basis any non-public information
relating to its funding of Loans to any rating agency, commercial paper dealer or provider of any surety or guarantee or credit or liquidity enhancement to such SPC.

 

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11.4        No Waiver; Remedies Cumulative.

No failure or delay on the part of the Administrative Agent or any Lender in exercising any right, power or privilege hereunder or under any other Credit Document and no course of dealing between the Borrower and the Administrative Agent or any Lender shall operate as a waiver thereof; nor shall any single or partial exercise of any right,
power or privilege hereunder or under any other Credit Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder or thereunder.  The rights and remedies provided herein are cumulative and not exclusive of any rights or remedies which the Administrative Agent or any Lender would otherwise have.  No notice to or demand on the Borrower in any case shall entitle the Borrower to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Administrative Agent or the Lenders to any other or further action in any circumstances without notice or demand.

11.5        Attorney Costs, Expenses, Taxes and Indemnification by Borrower.

(a)           The Borrower agrees (i) to pay or reimburse the Administrative Agent and the Arrangers for all costs and expenses incurred in connection with the development, preparation, negotiation and execution of this Credit Agreement and the other Credit Documents and any amendment,
waiver, consent or other modification of the provisions hereof and thereof (whether or not the transactions contemplated hereby or thereby are consummated), and the consummation and administration of the transactions contemplated hereby and thereby, including all reasonable fees and expenses of legal counsel, and (ii) to pay or reimburse the Administrative Agent and each Lender for all costs and expenses incurred in connection with the enforcement, attempted enforcement, or preservation of any rights or remedies
under this Credit Agreement or the other Credit Documents (including all such costs and expenses incurred during any "workout" or restructuring in respect of the Borrower Obligations and during any legal proceeding, including any proceeding under any Debtor Relief Law), including all reasonable fees and expenses of legal counsel.  The foregoing costs and expenses shall include all search, filing, recording, and appraisal charges and fees and taxes related thereto, and other out-of-pocket expenses incurred
by the Administrative Agent and the Arrangers and the cost of independent public accountants and other outside experts retained by the Administrative Agent, the Arrangers or any Lender.  Other than costs and expenses payable in connection with the closing of the transactions contemplated by this Credit Agreement pursuant to Section 11.5(a) (which shall be payable on the Closing Date unless otherwise agreed by the Administrative Agent and the Arrangers), all amounts due under this Section 11.5 shall
be payable within ten Business Days after demand therefor.  The agreements in this Section shall survive the termination of the Commitments and repayment of all other Borrower Obligations.

(b)           Whether or not the transactions contemplated hereby are consummated, the Borrower shall indemnify and hold harmless each Agent-Related Person, each Lender and their respective Affiliates, directors, officers, employees, counsel, agents and attorneys-in-fact (collectively
the "Indemnitees") from and against any and all liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs, expenses and disbursements (including the reasonable fees and expenses of legal counsel) of any kind or nature whatsoever which may at any time be imposed on, incurred by or asserted against any such Indemnitee in any way relating to or arising out of or in connection with (i) the execution, delivery,
enforcement, performance or administration of any Credit Document or any other agreement, letter or instrument delivered in connection with the transactions contemplated thereby or the consummation of the transactions contemplated thereby, (ii) any Commitment, Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any 

 

 

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refusal by an L/C Issuer to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), or (iii) any actual or alleged presence or release of Hazardous Substances on or from any property currently or formerly owned or
operated by the Borrower, any Subsidiary of the Borrower, or any Environmental Claim related in any way to the Borrower or any Subsidiary of the Borrower, (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory (including any investigation of, preparation for, or defense of any pending or threatened claim, investigation, litigation or proceeding) and regardless of whether any Indemnitee is a party thereto
or (v) any civil penalty or fine assessed by Office of Foreign Assets Control (the "OFAC") against, and all reasonable costs and expenses (including counsel fees and disbursements) incurred in connection with defense thereof, by the Administrative Agent or any Lender as a result of conduct of the Borrower that violates a sanction enforced by OFAC (all the foregoing, collectively, the "Indemnified
Liabilities"), in all cases, whether or not caused by or arising, in whole or in part, out of the negligence of the Indemnitee; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs, expenses or disbursements are determined by a court of competent jurisdiction by final and nonappealable judgment
to have resulted from the gross negligence or willful misconduct of such Indemnitee.  No Indemnitee shall be liable for any damages arising from the use by others of any information or other materials obtained through IntraLinks or other similar information transmission systems in connection with this Credit Agreement, nor shall any Indemnitee have any liability for any indirect or consequential damages relating to this Credit Agreement or any other Credit Document or arising out of its activities in
connection herewith or therewith (whether before or after the Closing Date).

(c)           To the extent that the Borrower for any reason fails to indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof), a L/C Issuer or any Agent-Related Party of
any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), such L/C Issuer or such Agent-Related Party, as the case may be, such Lender's Pro Rata Share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent) or such L/C Issuer in its capacity as such, or against any Agent-Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) or such L/C Issuer in connection with such capacity.  The obligations of the Lenders under this subsection (c) are subject to the provisions of Section 3.2(d).

All amounts due under this Section 11.5 shall be payable within ten Business Days after demand therefor.  The agreements in this Section shall survive the resignation of the Administrative Agent, the replacement of any Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all the other Borrower
Obligations.

11.6        Amendments, Etc.

No amendment or waiver of any provision of this Credit Agreement or any other Credit Document, and no consent to any departure by the Borrower therefrom, shall be effective unless in writing signed by the Required Lenders and the Borrower and acknowledged by the Administrative Agent, and each such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, waiver or consent shall:

 

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(a)           waive any condition set forth in Section 4.1 without the written consent of each Lender;

(b)           extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 9.2) without the written consent of such Lender;

(c)           postpone any date fixed by this Credit Agreement or any other Credit Document for any payment (excluding mandatory prepayments) of principal, interest, fees or other amounts due to the Lenders (or any of them) or any scheduled or mandatory reduction of the Revolving
Committed Amount hereunder or under any other Credit Document without the written consent of each Lender directly affected thereby;

(d)           reduce the principal of, or the rate of interest specified herein on, any Loan or L/C Borrowing, or (subject to clause (iv) of the second proviso to this Section 11.6) any fees or other amounts payable
hereunder or under any other Credit Document without the written consent of each Lender directly affected thereby; provided, however, that only the consent of the Required Lenders shall be necessary  to amend the definition of "Default Rate" or to waive any obligation to pay interest or Letter of Credit Fees at the Default Rate;

(e)           change Section 3.8 or Section 9.3 in a manner that would alter the pro rata sharing of payments required thereby without the written
consent of each Lender; or

(f)           change any provision of this Section or the definition of "Required Lenders" or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent
hereunder without the written consent of each Lender;

and, provided further, that (i) no amendment, waiver or consent shall, unless in writing and signed by the applicable L/C Issuer in addition to the Lenders required above, affect the rights or duties of a L/C
Issuer under this Credit Agreement or any other agreement relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Credit Agreement or any other Credit Document; (iii) Section 11.3(h) may not be amended, waived or otherwise modified
without the consent of each Granting Lender all or any part of whose Loans are being funded by an SPC at the time of such amendment, waiver or other modification; and (iv) a Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto.  Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of such Lender may not
be increased or extended without the consent of such Lender.

11.7        Counterparts.

This Credit Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument.

11.8        Headings.

The headings of the sections and subsections hereof are provided for convenience only and shall not in any way affect the meaning or construction of any provision of this Credit Agreement.

 

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11.9        Survival of Indemnification and Representations and Warranties.

(a)           Survival of Indemnification.  All indemnities set forth herein shall survive the execution and delivery of this Credit Agreement, the making of any Credit Extension and the repayment of the Revolving
Loans and other Borrower Obligations and the termination of the Commitments hereunder.

(b)           Survival of Representations and Warranties.  All representations and warranties made hereunder and in any other Credit Document or other document delivered pursuant hereto or thereto or in connection
herewith or therewith shall survive the execution and delivery hereof and thereof.  Such representations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default or Event of Default at the time of any Credit Extension, and shall continue in full force and effect
as long as any Loan or any other Borrower Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

11.10      Governing Law; Venue; Service.

(a)           THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF
THE NEW YORK GENERAL OBLIGATIONS LAW, BUT EXCLUDING ALL OTHER CHOICE OF LAW AND CONFLICTS OF LAW RULES).  Any legal action or proceeding with respect to this Credit Agreement or any other Credit Document may be brought in the courts of the State of New York or of the United States for the Southern District of New York, and, by execution and delivery of this Credit Agreement, the Borrower hereby irrevocably accepts for itself and in respect of its Property,
generally and unconditionally, the jurisdiction of such courts.

(b)           The Borrower irrevocably consents to the service of process in any action or proceeding with respect to this Credit Agreement or any other Credit Document by the mailing of copies thereof by registered or certified mail, postage prepaid, to it at the address for notices
pursuant to Section 11.1, such service to become effective ten days after such mailing.  Nothing herein shall affect the right of a Lender to serve process in any other manner permitted by Law.

11.11     Waiver of Jury Trial; Waiver of Consequential Damages.

EACH OF THE PARTIES TO THIS CREDIT AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY.  Each of the parties to this Credit Agreement agrees
not to assert any claim against any other party hereto, Administrative Agent, any Lender, any of their Affiliates, or any of their respective directors, officers, employees, attorneys or agents, on any theory of liability, for special, indirect, consequential or punitive damages arising out of or otherwise relating to any of the transactions contemplated herein and in the other Credit Documents.

 

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11.12      Severability.

If any provision of any of the Credit Documents is determined to be illegal, invalid or unenforceable, such provision shall be fully severable and the remaining provisions shall remain in full force and effect and shall be construed without giving effect to the illegal, invalid or unenforceable provisions.

11.13      Further Assurances.

The Borrower agrees, upon the request of the Administrative Agent, to promptly take such actions, as reasonably requested, as is necessary to carry out the intent of this Credit Agreement and the other Credit Documents.

11.14      Confidentiality.

Each of the Administrative Agent, the Lenders and each L/C Issuer agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its and its Affiliates' respective partners, directors, officers, employees, agents, advisors and representatives (it
being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority purporting to have jurisdiction over it or an Affiliate (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process,
(d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Credit Document or any action or proceeding relating to this Credit Agreement or any other Credit Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations
under this Credit Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (g) with the consent of the Borrower or (h) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to the Administrative Agent, any Lender, any L/C Issuer or any of their respective Affiliates on a nonconfidential basis from a source
other than the Borrower.

For purposes of this Section, "Information" means all information received from the Borrower or any Subsidiary or any of their respective businesses, other than any such information that is available to the Administrative Agent, any Lender or any L/C Issuer on a nonconfidential
basis prior to disclosure by the Borrower or any Subsidiary, provided that, in the case of information received from the Borrower or any Subsidiary after the date hereof, such information is clearly identified at the time of delivery as confidential.  Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised
the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

11.15      Entirety.

This Credit Agreement together with the other Credit Documents and the Fee Letters represent the entire agreement of the parties hereto and thereto, and supersede all prior agreements and understandings, oral or written, if any, including any commitment letters or correspondence relating to the Credit Documents or the transactions contemplated
herein and therein.

 

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11.16      Binding Effect; Continuing Agreement.

(a)           This Credit Agreement shall become effective at such time when all of the conditions set forth in Section 5.1 have been satisfied or waived by the Lenders and it shall have been executed by the Borrower and the Administrative Agent, and the Administrative Agent shall
have received copies hereof (telefaxed or otherwise) which, when taken together, bear the signatures of each Lender, and thereafter this Credit Agreement shall be binding upon and inure to the benefit of the Borrower, the Administrative Agent and each Lender and their respective successors and assigns.

(b)           This Credit Agreement shall be a continuing agreement and shall remain in full force and effect until all Revolving Loans, interest, fees and other Borrower Obligations have been paid in full and all Letters of Credit and Commitments have been terminated.  Upon
termination, the Borrower shall have no further obligations (other than the indemnification provisions and other provisions that by their terms survive) under the Credit Documents; provided that should any payment, in whole or in part, of the Borrower Obligations be rescinded or otherwise required to be restored or returned by the Administrative Agent or any Lender, whether as a result of any proceedings in bankruptcy or reorganization or otherwise,
then the Credit Documents shall automatically be reinstated and all amounts required to be restored or returned and all costs and expenses incurred by the Administrative Agent or any Lender in connection therewith shall be deemed included as part of the Borrower Obligations.

11.17      Regulatory Statement.

Pursuant to the terms of an order issued by the New Mexico Public Regulation Commission, the Borrower is required to include the following separateness covenants in any debt instrument:

(a)           The Borrower and its corporate parent, PNM Resources, Inc. ("Parent") are being operated as separate corporate and legal entities.  In agreeing to
make loans to Parent, Parent's lenders are relying solely on the creditworthiness of Parent based on the assets owned by Parent, and the repayment of the loan will be made solely from the assets of Parent and not from any assets of the Borrower; and the Parent's lenders will not take any steps for the purpose of procuring the appointment of an administrative receiver or the making of an
administrative order for instituting any bankruptcy, reorganization, insolvency, wind up or liquidation or any like proceeding under applicable law in respect of the Borrower.

(b)           Notwithstanding any of the foregoing set forth in this Section 11.17, the Borrower and the Lenders hereby acknowledge and agree that (i) this Credit Agreement and the Notes evidence Indebtedness of the Borrower and not of
the Parent, (ii) the Lenders are not, and shall not at any time be deemed to be, "Parent's lenders" under this Credit Agreement and the Notes, (iii) as set forth in this Credit Agreement and the Notes, the Borrower is responsible for the repayment of all amounts outstanding hereunder, (iv) the Lenders reserve all rights to pursue any and all remedies available at law and otherwise (including, without limitation, in bankruptcy) should the Borrower breach any of the its obligations under this Credit Agreement and/or
the Notes.

11.18      USA Patriot Act Notice.

Each Lender and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the "Act"), it is required to obtain, verify and record information that identifies the Borrower, which
information includes the name and address of the Borrower and other 

 

 

67

 

information that will allow such Lender or the Administrative Agent, as applicable, to identify the Borrower in accordance with the Act.

11.19      Acknowledgment.

Section 7 and Section 8 of this Credit Agreement contain affirmative and negative covenants applicable to the Borrower.  Each of the parties to this Credit Agreement acknowledges and agrees that any such covenants that require the Borrower to cause any of its Subsidiaries to take or to refrain from taking specified actions will
be enforceable unless prohibited by applicable law or regulatory requirement.

11.20      Replacement of Lenders.

If (a) any Lender requests compensation under Section 3.12, (b) the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.13, or (c) a Lender (a "Non-Consenting Lender") does not consent to a proposed change, waiver, discharge or termination with
respect to any Credit Document that has been approved by the Required Lenders as provided in Section 11.6 but requires unanimous consent of all Lenders or all Lenders directly affected thereby (as applicable) or (d) any Lender is a Defaulting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by,
Section 11.3), all of its interests, rights and obligations under this Agreement and the related Credit Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:

(i)           the Borrower shall have paid to the Administrative Agent the assignment fee specified in Section 11.3(b);

(ii)           such Lender shall have received payment of an amount equal to the outstanding principal of its Revolving Loans and L/C Obligations, accrued interest thereon, accrued fees and all other amounts payable to it hereunder
and under the other Credit Documents (including any amounts under Section 3.14) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);

(iii)           in the case of any such assignment resulting from a claim for compensation under Section 3.12 or payments required to be made pursuant to Section 3.13, such assignment will result in a reduction in such compensation
or payments thereafter; and

(iv)           such assignment does not conflict with applicable Laws; and

(v)           in the case of any such assignment resulting from a Non-Consenting Lender's failure to consent to a proposed change, waiver, discharge or termination with respect to any Credit Document, the applicable replacement
bank, financial institution or Fund consents to the proposed change, waiver, discharge or termination; provided that the failure by such Non-Consenting Lender to execute and deliver an Assignment and Assumption shall not impair the validity of the removal of such Non-Consenting Lender and the mandatory assignment of such Non-Consenting Lender's Commitments and outstanding Revolving Loans and participations in L/C Obligations pursuant to this Section shall nevertheless be effective without the execution by such
Non-Consenting Lender of an Assignment and Assumption.

 

 

68

 

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

  

69

  

Signature Page to Credit Agreement

Public Service Company of New Mexico

Each of the parties hereto has caused a counterpart of this Credit Agreement to be duly executed and

delivered as of the date first above written.

BORROWER:                                                      PUBLIC
SERVICE COMPANY OF NEW MEXICO,

    a New Mexico corporation

By:  /s/ Terry Horn

Name:  Terry Horn

Title:  Vice President and Corporate Secretary

 

  

70

  

Signature Page to Credit Agreement

Public Service Company of New Mexico

AGENT:                                                          WACHOVIA
BANK, NATIONAL ASSOCIATION,

  as Administrative Agent and as Lender

By:  /s/ Frederick W. Price

Name:  Frederick W. Price

Title:  Managing Director

 

  

71

  

Signature Page to Credit Agreement

Public Service Company of New Mexico

LENDERS:                                                    
      UNION BANK OF CALIFORNIA, N.A.

By:  /s/ Robert J. Cole

Name:  Robert J. Cole

Title:  Vice President

 

  

72

  

Signature Page to Credit Agreement

Public Service Company of New Mexico

BANK OF AMERICA, N.A.,

By:  /s/ Michelle A. Schoenfeld

Name:  Michelle A. Schoenfeld

Title:  Senior Vice President

 

  

73

  

Signature Page to Credit Agreement

Public Service Company of New Mexico

JPMORGAN CHASE BANK, N.A.

By:  /s/ Thomas Casey

Name:  Thomas Casey

Title:  Vice President

 

  

74

  

Signature Page to Credit Agreement

Public Service Company of New Mexico

CITIBANK, N.A.

By:  /s/ Stuart Glen

Name:  Stuart Glen

Title:  Director

 

  

75

  

Signature Page to Credit Agreement

Public Service Company of New Mexico

MERRILL LYNCH BANK USA

By:  /s/ Louis Alder

Name:  Louis Alder

Title:  Director

 

  

76

  

Signature Page to Credit Agreement

Public Service Company of New Mexico

MORGAN STANLEY BANK

By:  /s/ Daniel Twenge

Name:  Daniel Twenge

Title:  Vice President

 

  

77

  

Signature Page to Credit Agreement

Public Service Company of New Mexico

UBS LOAN FINANCE LLC

By:  /s/ Wilfred V. Saint

Name:  Wilfred V. Saint

Title:  Director Banking Products Services, US

By:  /s/ Sailoz Sikka

Name:  Sailoz Sikka

Title:  Associate Director Banking Products Services, US

 

  

78

  

Signature Page to Credit Agreement

Public Service Company of New Mexico

LEHMAN BROTHERS BANK, FSB

By:  /s/ Gary T. Taylor

Name:  Gary T. Taylor

Title:  Senior Vice President

 

  

79

  

Signature Page to Credit Agreement

Public Service Company of New Mexico

WILLIAM STREET COMMITMENT CORPORATION

By:  /s/ Mark Walton

Name:  Mark Walton

Title:  Assistant Vice President

 

  

80

  

Signature Page to Credit Agreement

Public Service Company of New Mexico

CREDIT SUISSE, CAYMAN ISLANDS BRANCH

By:  /s/ Sarah Wu

Name:  Sarah Wu

Title:  Director

By:  /s/ Denise Alvarez

Name:  Denise Alvarez

Title:  Associate

 

  

81

  

Signature Page to Credit Agreement

Public Service Company of New Mexico

WELLS FARGO BANK, N.A.

By:  /s/ Daniel A. Conklin

Name:  Daniel A. Conklin

Title:  Vice President

 

  

82

  

Signature Page to Credit Agreement

Public Service Company of New Mexico

U S BANK NATIONAL ASSOCIATION

By:  /s/ James W. Henken

Name:  James W. Henken

Title:  Vice President

 

  

83

  

Signature Page to Credit Agreement

Public Service Company of New Mexico

HSBC BANK USA, NATIONAL ASSOCIATION

By:  /s/ Jose Aldeanueva

Name:  Jose Aldeanueva

Title:  Vice President

 

  

84

  

Signature Page to Credit Agreement

Public Service Company of New Mexico

MELLON BANK, N.A.

By:  /s/ Richard A. Matthews

Name:  Richard A. Matthews

Title:  First Vice President

 

  

85

  

Signature Page to Credit Agreement

Public Service Company of New Mexico

ROYAL BANK OF CANADA

By:  /s/ David A. McCluskey

Name:  David A. McCluskey

Title:  Authorized Signatory

 

  

86

  

Signature Page to Credit Agreement

Public Service Company of New Mexico

BANK OF ALBUQUERQUE, N.A.

By:  /s/ Myka C. Gentry

Name:  Myka C. Gentry

Title:  Vice President

 

  

87

  

Signature Page to Credit Agreement

Public Service Company of New Mexico

COMPASS BANK

By:  /s/ Gary W. Millhollon

Name:  Gary W. Millhollon

Title:  Senior Vice President

 

  

88

  

SCHEDULE 1.1(a)

PRO RATA SHARES

	
Lender
	
Commitment
	
Pro Rata Share

	
Wachovia Bank, National Association
	
$35,000,000
	
8.750000000%

	
Union Bank of California, N.A.
	
$35,000,000
	
8.750000000%

	
Bank of America, N.A.
	
$35,000,000
	
8.750000000%

	
JPMorgan Chase Bank
	
$27,000,000
	
6.750000000%

	
Citibank, N.A.
	
$27,000,000
	
6.750000000%

	
Merrill Lynch Bank USA
	
$23,000,000
	
5.750000000%

	
Morgan Stanley Bank
	
$23,000,000
	
5.750000000%

	
UBS Loan Finance LLC
	
$23,000,000
	
5.750000000%

	
Lehman Brothers Bank, FSB
	
$23,000,000
	
5.750000000%

	
William Street Commitment Corporation
	
$23,000,000
	
5.750000000%

	
Credit Suisse, Cayman Islands Branch
	
$23,000,000
	
5.750000000%

	
Wells Fargo Bank, N.A.
	
$25,500,000
	
6.375000000%

	
U. S. Bank National Association
	
$18,000,000
	
4.500000000%

	
HSBC Bank USA, National Association
	
$18,000,000
	
4.500000000%

	
Mellon Bank, N.A.
	
$14,000,000
	
3.500000000%

	
Royal Bank of Canada
	
$14,000,000
	
3.500000000%

	
Bank of Albuquerque, N.A.
	
$8,500,000
	
2.125000000%

	
Compass Bank
	
$5,000,000
	
1.250000000%

	
Total
	
$400,000,000.00
	
100.000000000%

 

  

  

  

SCHEDULE 1.1(c)

EXISTING LETTERS OF CREDIT

	
Issuer
	
L/C Number
	
Issuance Date
	
Expiry Date
	
Beneficiary

Name

 
	
Outstanding Amount

	
Wachovia

 
	
SM206009W
	
12/4/2003 (renewed 11/22/04)

 
	
12/9/2005
	
California Independent Systems
	
$1,500,000.00

 

	
Wachovia

 
	
SM206018W
	
12/9/2003 (renewed 11/22/04)

 
	
12/9/2005
	
California Power Exchange
	
$3,000,000.00

 

	
Wachovia

 
	
SM206957W
	
12/12/2004 (renewed 11/22/04)

 
	
1/31/2006
	
Nevada Power Company
	
$266,000.00

 

 

  

  

  

SCHEDULE 6.18

MATERIAL LEASES

Description                                                                                                                  Expiration                                Annual
Rent

Palo Verde Unit 1

 

Facility Lease dated as of December 16, 1985 between                                                                                                             1/15/2015                                
$  5,580,122.54

PNM and U.S. Bank National Association (successor to

State Street Bank and Trust Company, successor

to The First National Bank of Boston), as Owner Trustee under

 a Trust Agreement dated as of  December 16, 1985, with MFS

Leasing Corp. as Owner Participant, as amended.

Facility Lease dated as of  December 16, 1985 between                                                                                                            1/15/2015                                
$ 15,693,862.76

PNM and U.S. Bank National Association (successor to

State Street Bank and Trust Company, successor

to The First National Bank of Boston), as Owner Trustee under

a Trust Agreement dated as of  December 16, 1985, with Daimler

Chrysler Services North America LLC (as successor to Chrysler

Financial Corporation), as Owner Participant, as amended.

Facility Lease dated as of  December 15, 1986 between                                                                                                            1/15/2015                                
$   4,757,769.00

PNM and U.S. Bank National Association (successor to

State Street Bank and Trust Company, successor

to The First National Bank of Boston), as Owner Trustee under

a Trust Agreement dated as of  December 15, 1986, with Palo

Verde 1- PNM [December 75] Corporation (successor-in-interest

to  Chase Manhattan Realty Leasing Corporation), as Owner

Participant (Unit 1), as amended.

Facility Lease dated as of July 31, 1986 between                                                                                                                  
     1/15/2015        $    6,974,313.00

PNM and U.S. Bank National Association (successor to

State Street Bank and Trust Company, successor

to The First National Bank of Boston), as Owner Trustee under

a Trust Agreement dated as of July 31, 1986, with Palo

Verde 1- PNM [August 50] Corporation (successor-in-interest

to  Chase Manhattan Realty Leasing Corporation), as Owner

Participant  (Unit 1), as amended.

Total – Unit 1                                                                                                                                                      $ 
33,006,067.10

 

  

  

  

 

Description                                                                                                      Expiration                                  Annual
Rent

Palo Verde Unit 2

Facility Lease dated as of August  12, 1986 between                                                                                                           
1/15/2016                                 $  5,742, 060.00

PNM and U.S. Bank National Association (successor to

State Street Bank and Trust Company, successor

to The First National Bank of Boston), as Owner Trustee under

 a Trust Agreement dated as of  August 12, 1986, with MFS

Leasing Corp. as Owner Participant, as amended.

Facility Lease dated as of August 12,  1986 between                                                                                                          
1/15/2016                                   $  9,958,478.04

PNM and U.S. Bank National Association (successor to

State Street Bank and Trust Company, successor

to The First National Bank of Boston), as Owner Trustee under

a Trust Agreement dated as of August 12, 1986, with CGI

Capital, Inc., as Owner Participant, as amended.

Facility Lease dated as of August 12, 1986 between                                                                                                           
1/15/2016                                   $  9,569,653.00

PNM and U.S. Bank National Association (successor to

State Street Bank and Trust Company, successor

to The First National Bank of Boston), as Owner Trustee under

a Trust Agreement dated as of August 12, 1986, with Palo Verde

Leasing Corporation (successor-in-interest to First Chicago Lease

Holdings, Inc.) as Owner Participant, as amended.

Facility Lease dated as of August 12, 1986 between                                                                                                           
1/15/2016                                   $  4,743,012.00

PNM and U.S. Bank National Association (successor to

State Street Bank and Trust Company, successor

to The First National Bank of Boston), as Owner Trustee under

a Trust Agreement dated as of August 12, 1986, with MFS Leasing

Corp. (successor-in-interest to Beneficial Leasing Group, Inc.),

as Owner Participant, as amended.

Facility Lease dated as of December 15, 1986 between                                                                                               
        1/15/2016                                   $  3,272,560.40

PNM and U.S. Bank National Association (successor to

State Street Bank and Trust Company, successor

to The First National Bank of Boston), as Owner Trustee under

a Trust Agreement dated as of December 15, 1986, with Palo

Verde 2- PNM [December 35] Corporation (successor-in-interest

to  Chase Manhattan Realty Leasing Corporation), as Owner

Participant  (Unit 2), as amended.

Total – Unit 2                                                                                                                                               
$ 33,285,763.44

 

  

  

  

Description                                                                                                     Expiration                                       Annual
Rent

Eastern Interconnection Project (EIP)

Amended and Restated Lease dated as of September 1,                                                                              4/1/2015        $2,675,739.30*

1993, between PNM as Lessee, and U.S. Bank National                                                                                                                                             
   $ 2,844,913.50

Association (successor to  State Street Bank

and Trust Company,( as successor to The First National

Bank of Boston), as Owner Trustee under a Trust

Agreement dated as of January 2, 1985, with General

Foods Credit Corporation, as Lessor.

Total EIP                                                                                                                                                                                                           
                            $ 2,675,739.30*

                                                                                                                                                 $
2,844,913.50

                                                                                                                                                   
* 1994 Only

 

  

  

  

SCHEDULE 6.19

MATERIAL LEASE INTEREST PAYMENTS AND DISCOUNT RATE

[See attached Excel Table]

 

  

  

  

Schedule 6.19

Material Lease Interest Payments and Discount Rates

	
EIP (Discount Rate:  12.85%)
	  	
PVNGS (Discount Rate:  10.25%)

 

	
Year
	
Total Payment ($000)
	
Interest Payment ($000)
	
Principal Payment

 ($000)
	
Loan Balance EofY ($000)
	  	
Year
	
Total Payment

($000)
	
Interest Payment ($000)
	
Principal Payment

 ($000)
	
Loan Balance EofY ($000)

	
2005
	
1,299.597
	
328.435
	
971.162
	
1,890.229
	  	
2005
	
14,380.430
	
12,148.338
	
2,232.092
	
116,288.282

	
2006
	
608.408
	
231.380
	
377.028
	
1,513.201
	  	
2006
	
15,239.058
	
11,919.549
	
3,319.509
	
112,968.773

	
2007
	
642.648
	
180.402
	
462.245
	
1,050.955
	  	
2007
	
16,147.881
	
11,579.299
	
4,568.582
	
108,400.191

	
2008
	
683.422
	
117.815
	
565.607
	
485.348
	  	
2008
	
17,117.049
	
11,111.020
	
6,006.029
	
102,394.162

	
2009
	
58.795
	
62.474
	
(3.678)
	
489.027
	  	
2009
	
14,895.517
	
10,495.402
	
4,400.115
	
97,994.046

	
2010
	
112.898
	
62.962
	
49.936
	
439.091
	  	
2010
	
13,670.429
	
10,044.390
	
3,626.039
	
94,368.007

	
2011
	
53.990
	
56.485
	
(2.495)
	
441.586
	  	
2011
	
14,513.604
	
9,672.721
	
4,840.883
	
89,527.124

	
2012
	
498.398
	
56.811
	
441.586
	
0.000
	  	
2012
	
26,655.935
	
9,176.530
	
17,479.405
	
72,047.719

	
2013
	  	  	  	  	  	
2013
	
29,233.436
	
7,384.891
	
21,848.545
	
50,199.174

	
2014
	  	  	  	  	  	
2014
	
34,358.781
	
5,145.415
	
29,213.366
	
20,985.809

	
2015
	  	  	  	  	  	
2015
	
19,428.445
	
2,151.045
	
17,277.400
	
3,708.409

	
2016
	  	  	  	  	  	
2016
	
4,088.521
	
380.112
	
3,708.409
	
                         -

	
2017
	  	  	  	  	  	
2017
	  	  	  	  
	
2018
	  	  	  	  	  	
2018
	  	  	  	  
	
2019
	  	  	  	  	  	
2019
	  	  	  	  
	
Total
	
3,958.155
	
1,096.764
	
2,861.390
	  	  	
Total
	
219,729.086
	
101,208.712
	
118,520.374
	  

8/11/2005

 

  

  

  

SCHEDULE 11.1

NOTICES

BORROWER:

Public Service Company of New Mexico

414 Silver Avenue, MS 2702

Albuquerque, NM 87102

Attention:  Wendy Carlson, Treasurer

Telephone:  505.241.2115

Telecopier:  505.241.2369

Electronic Mail:  wcarlso@pnm.com

Website Address:  www.pnmresouces.com

ADMINISTRATIVE AGENT:

Administrative Agent’s Office

(for payments and Requests for Credit Extensions):

Wachovia Bank, National Association

201 S. College Street

Mail Code:  NC0680

Charlotte, NC  28244-0002

Attention:         Agency Services

Telephone:  704.374.2698

Telecopier:  704.383.3612

Electronic Mail:  doug.burnett@wachovia.com

Other Notices as Administrative Agent:

Wachovia Bank, National Association

301 S. College Street

Mail Code:  0760

Charlotte, NC  28288

Attention:         Rick Price, Managing Director

Telephone:  704.374.4062

Telecopier:  704.383.6647

Electronic Mail:  rick.price@wachovia.com

L/C ISSUERS:

Wachovia Bank, N.A.

Wachovia Bank, National Association

301 S. College Street

Mail Code:  0760

Charlotte, NC  28288

Attention:         Rick Price, Managing Director

Telephone:  704.374.4062

Telecopier:  704.383.6647

 

 

 

 

Electronic Mail:  rick.price@wachovia.com

Bank of America, N.A.

Bank of America, N.A.

Trade Operations-Los Angeles #22621

333 S. Beaudry Avenue, 19th Floor

Mail Code:  CA9-703-19-23

Los Angeles, CA 90017-1466

Attention:         Sandra Leon, Vice President

Telephone:  213.345.5231

Telecopier:  213.345.6694

Electronic Mail:  Sandra.Leon@bankofamerica.com

  

  

  

SCHEDULE 11.3

PROCESSING AND RECORDING FEES

The Administrative Agent will charge a processing and recordation fee (an "Assignment Fee") in the amount of $2,500 for each assignment; provided, however,
that in the event of two or more concurrent assignments to members of the same Assignee Group (which may be effected by a suballocation of an assigned amount among members of such Assignee Group) or two or more concurrent assignments by members of the same Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group), the Assignment Fee will be $2,500 plus the amount set forth below:

	
Transaction
	
Assignment Fee

	  	  
	
First four concurrent assignments or suballocations to members of an Assignee Group (or from members of an Assignee Group, as applicable)

 
	
-0-

	
Each additional concurrent assignment or suballocation to a member of such Assignee Group (or from a member of such Assignee Group, as applicable)
	
$500

  

  

  

EXHIBIT 2.1(b)

FORM OF

NOTICE OF BORROWING

TO:                      WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative Agent

	
RE:
	
Credit Agreement dated as of August 17, 2005 among Public Service Company of New Mexico (the "Borrower"), Wachovia Bank, National Association, (the “Administrative Agent”), and the Lenders identified therein (as the same may be amended, modified, extended or restated from time
to time, the "Credit Agreement")

DATE:                _____________, ______

	
1.
	
This Notice of Borrowing is made pursuant to the terms of the Credit Agreement.  All capitalized terms used herein unless otherwise defined shall have the meanings set forth in the Credit Agreement.

	
2.
	
Please be advised that the Borrower is requesting Revolving Loans on the terms set forth below:

	
  
	
(a)
	
Principal amount of requested

	
            Revolving Loans
	
$___________________

	
  
	
(b)
	
Date of requested Revolving

	
            Loans
	
____________________

	
  
	
(c)
	
Interest rate applicable to the

requested Revolving Loans:

(i)           ________             Base Rate

(ii)           ________            Adjusted Eurodollar Rate for an Interest Period

           of:

________ one month

________ two months

________ three months

________ six months

	
3.
	
The representations and warranties made by the undersigned in any Credit Document (other than the representation and warranties in Section 6.7(a) (but only with respect to clause (a) of the definition of Material Adverse Effect) and Section 6.9 of the Credit Agreement)are true and correct in all material respects at and as if made on the date of the requested Revolving Loans except to   the extent
they expressly relate to an earlier date.

	
4.
	
No Default or Event of Default as to the undersigned exists or shall be continuing either prior to  or after giving effect to the Revolving Loans made pursuant to this Notice of Borrowing.

 

1

 

	
5.
	
Subsequent to the funding of the requested Revolving Loan, the aggregate amount of Revolving Loans outstanding plus the aggregate principal amount of outstanding L/C Obligations will be $________________ which is less than or equal the Revolving Committed Amount.

PUBLIC SERVICE COMPANY OF NEW MEXICO,

a New Mexico corporation

By: _________________________                                                               

Name: _______________________                                                                          

Title: ________________________                                                               

 

  

2

  

EXHIBIT 2.1(e)

FORM OF NOTE

Lender:  ______________                                                                                                                              _____________,
200_

      

FOR VALUE RECEIVED, PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico corporation (the "Borrower"), hereby promises to pay to the order of the Lender referenced above (the "Lender"), at the Administrative Agent’s
Office set forth in that certain Credit Agreement dated as of August 17, 2005 (as amended, modified, extended or restated from time to time, the "Credit Agreement") among the Borrower, the Lenders party thereto (including the Lender) and Wachovia Bank, National Association, as Administrative Agent (the "Administrative Agent") (or at such other place or places as the holder of this
Note may designate), the aggregate unpaid principal amount of the Revolving Loans made by the Lender to the Borrower under the Credit Agreement, in lawful money and in immediately available funds, on the dates and in the principal amounts provided in the Credit Agreement (but, in any event, no later than the Maturity Date), and to pay interest on the unpaid principal amount of each Revolving Loan made by the Lender, at such office, in like money and funds, for the period commencing on the date of each Revolving
Loan until each Revolving Loan shall be paid in full, at the rates per annum and on the dates provided in the Credit Agreement.

This Note is one of the Notes referred to in the Credit Agreement and evidences Revolving Loans made by the Lender to the Borrower thereunder.  Capitalized terms used in this Note have the respective meanings assigned to them in the Credit Agreement and the terms and conditions of the Credit Agreement are expressly incorporated
herein and made a part hereof.

The Credit Agreement provides for the acceleration of the maturity of the Revolving Loans evidenced by this Note upon the occurrence of certain events (and for payment of collection costs in connection therewith) and for prepayments of Revolving Loans upon the terms and conditions specified therein.  In the event this Note is
not paid when due at any stated or accelerated maturity, the Borrower agrees to pay, in addition to principal and interest, all costs of collection, including reasonable attorney fees.

The date, amount, type, interest rate and duration of Interest Period (if applicable) of each Revolving Loan made by the Lender to the Borrower, and each payment made on account of the principal thereof, shall be recorded by the Lender on its books; provided that the failure
of the Lender to make any such recordation or endorsement shall not affect the obligations of the Borrower to make a payment when due of any amount owing under the Credit Agreement or under this Note in respect of the Revolving Loans to be evidenced by this Note, and each such recordation or endorsement shall be prima facie evidence of such information, absent manifest error.

Except as permitted by Section 11.3(b) of the Credit Agreement, this Note may not be assigned by the Lender to any other Person.

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

  

  

  

IN WITNESS WHEREOF, the Borrower has caused this Note to be executed as of the date first above written.

PUBLIC SERVICE COMPANY OF NEW MEXICO,

a New Mexico corporation

By: _____________________________                                                               

Name: ___________________________                                                                          

Title: ____________________________                                                               

  

  

  

EXHIBIT 2.3

FORM OF

NOTICE OF CONTINUATION/CONVERSION

TO:                      WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative Agent

	
RE:
	
Credit Agreement dated as of August 17, 2005 among Public Service Company of New Mexico (the "Borrower"), Wachovia Bank, National Association, (the “Administrative Agent”), and the Lenders identified therein (as the same may be amended, modified, extended or restated from time
to time, the "Credit Agreement")

	
DATE:
	
_____________, 200_

_____________________________________________________________________________________________________

	
1.
	
This Notice of Continuation/Conversion is made pursuant to the terms of the Credit Agreement.  All capitalized terms used herein unless otherwise defined shall have the meanings set forth in the Credit Agreement.

	
2.
	
Please be advised that the Borrower, is requesting that a portion of the current outstanding evolving Loans in the amount of $_____________, currently accruing interest at _________, be extended or converted as of _______,
200__ at the interest rate option set forth in paragraph 3 below.

	
3.
	
The interest rate option applicable to the extension or conversion of all or part of the existing Revolving Loans referenced above shall be:

	 	
a.
	
________
	
the Base Rate

	 	
b.
	
________
	
the Adjusted Eurodollar Rate for an Interest Period of:

	 	
________ one month

	 	
________ two months

	 	
________ three months

	 	
________ six months

4.           As of the date hereof, no Default or Event of Default has occurred and is continuing.

  

  

  

PUBLIC SERVICE COMPANY OF NEW MEXICO,

a New Mexico corporation

By: _____________________________                                                               

Name: ___________________________                                                                          

Title: ____________________________                                                               

  

  

  

EXHIBIT 4.1(l)

FORM OF

ACCOUNT DESIGNATION LETTER

[Date]

Wachovia Bank, National Association

Charlotte Plaza

201 S. College Street, CP-23

Charlotte, North Carolina 28288-0680

Attention:  Syndication Agency Services

Ladies and Gentlemen:

           This Account Designation Letter is delivered to you by PUBLIC SERVICE COMPANY OF NEW MEXICO (the “Borrower”), a New Mexico corporation, under Section 4.1(l) of the Credit Agreement, dated as of August
17, 2005 (as amended, restated or otherwise modified from time to time, the “Credit Agreement”), by and among the Borrower, the Lenders party thereto, and Wachovia Bank, National Association, as administrative agent (the “Administrative Agent”).

           The Administrative Agent is hereby authorized to disburse all Loan proceeds into the following account, unless the Company shall designate, in writing to the Administrative Agent, one or more other accounts:

A/C# ______

ABA _______

Reference:

Notwithstanding the foregoing, on the effective date of the Credit Agreement, funds borrowed under the Credit Agreement shall be sent to the institutions and/or persons designated on the attached payment instructions.

           IN WITNESS WHEREOF, the undersigned has executed this Account Designation Letter this ____ day of August, 2005.

PUBLIC SERVICE COMPANY OF NEW MEXICO

                                                             By: _____________________________                                                     

                                                                Name:

                                                                Title:

  

  

  

EXHIBIT 7.1(c)

FORM OF

COMPLIANCE CERTIFICATE

TO:                      WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative Agent

	
RE:
	
Credit Agreement dated as of August 17, 2005 among Public Service Company of New Mexico (the "Borrower"), Wachovia Bank, National Association, (the “Administrative Agent”), and the Lenders identified therein (as the same may be amended, modified, extended or restated from time
to time, the "Credit Agreement")

	
DATE:
	
_____________, 200__

__________________________________________________________________________________________________________________________________

           Pursuant to the terms of the Credit Agreement, I, ______________, Chief Financial Officer of Public Service Company of New Mexico, hereby certify on behalf of the Borrower that, as of the quarter ending ________, 200__, the statements below are accurate and complete in all
respects (all capitalized terms used below shall have the meanings set forth in the Credit Agreement):

	 	
a.
	
Attached hereto as Schedule 1 are calculations (calculated as of the date of the financial statements referred to in paragraph c. below) demonstrating compliance by the Borrower with the financial covenants contained in Section 7.2 of the Credit Agreement.

	 	
b.
	
No Default or Event of Default exists under the Credit Agreement, except as indicated on a separate page attached hereto, together with an explanation of the action taken or proposed to be taken by the Borrower with respect thereto.

	 	
c.
	
The quarterly/annual financial statements for the fiscal quarter/year ended __________, 200__ which accompany this certificate fairly present in all material respects the financial condition of the Borrower and its Subsidiaries and have been prepared in accordance with GAAP, subject to changes resulting from normal year-end audit adjustments and except that the quarterly financial statements have fewer footnotes
than annual statements.

  

  

  

PUBLIC SERVICE COMPANY OF NEW MEXICO,

a New Mexico corporation

By: ___________________________________                                                                

Name: _________________________________                                                                          

Title: __________________________________                                                               

  

  

  

SCHEDULE 1

TO EXHIBIT 7.1(c)

FINANCIAL COVENANT CALCULATIONS

	
A.
	
Debt Capitalization

 
	  
	  	
1.           Consolidated Indebtedness of the Borrower*
	
$ _____________________                               

	  	
2.           Consolidated Capitalization of the Borrower
	
$ _____________________                               

	  	
3.           Debt to Capitalization Ratio (Line A1  ̧ A2)
	
_________________ to 1.0

	  	
Maximum Permitted
	
.65 to 1.0

	  	  	  

 ________________________
* For purposes of such calculation, the portion of Consolidated Indebtedness attributable to obligations under Material Leases shall be the net present value (using (i) the discount rate (A) set forth in Schedule 6.19 of
the Credit Agreement, so long as such Schedule 6.19 specifies the same relevant discount rate as is used in calculating such net present value provided to Moody’s and S&P or (B) the discount rate used in calculating such net present value provided to Moody’s and S&P or (ii) any such other rate as shall be proposed by the Company (and agreed upon by the Required Lenders) of all amounts payable under the Material Leases.

  

  

  

	
  
	 

EXHIBIT 11.3(b)

FORM OF

ASSIGNMENT AND ASSUMPTION

           This Assignment and Assumption (the "Assignment and Assumption") is dated as of the Effective Date set forth below and is entered into by and between ______________ (the "Assignor")
and _______________________ (the "Assignee").  Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below  (as amended, the "Credit Agreement"), receipt of a copy of which is hereby acknowledged by the Assignee.  The Standard Terms and Conditions set forth in Schedule 1 attached hereto (the
"Standard Terms and Conditions") are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

           For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of
the Effective Date inserted by the Administrative Agent as contemplated below (a) all of the Assignor’s rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below (including without limitation any Letters of Credit, guarantees, and
swingline loans included in such facilities) and (b) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to,
contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (a) above (the rights and obligations sold and assigned pursuant to clauses (a) and (b) above being referred to herein collectively as, the "Assigned Interest").  Such sale and assignment is without recourse to the Assignor and, except as expressly provided
in this Assignment and Assumption, without representation or warranty by the Assignor.

1.           Assignor:                                           ______________________________

	
2.
	
Assignee:
	
______________________________

	 	
and is an Affiliate/Approved Fund of _________________

	
3.
	
Borrower:
	
Public Service Company of New Mexico

	
4.
	
Administrative Agent:
	
Wachovia Bank, National Association, as the Administrative Agent under the Credit Agreement

  

  

  

	
5.
	
Credit Agreement:
	
Credit Agreement dated as of August 15, 2005 among the Borrower, the Administrative Agent, and the Lenders identified therein.

	
6.
	
Assigned Interest:

	
Aggregate Amount of Commitment/Loans for all Lenders
	
Amount of Commitment/Loans Assigned
	
Percentage Assigned of Commitment/Loans

	
$
	
$
	
%

7.           After giving effect to the foregoing assignment, the Assignor and the Assignee shall have the following Commitments, Pro Rata Shares, outstanding Loans and Participation Interests:

	  	
Commitments
	
Pro Rata Share
	
Outstanding

Revolving

Loans
	
Participation Interests in

Letters of Credit

	
Assignor
	  	  	  	  
	
Assignee
	  	  	  	  

8.           Trade Date:                                ______________

Effective Date:   _____________ ___, 200__

  

  

  

The terms set forth in this Assignment and Assumption are hereby agreed to:

                                                                ASSIGNOR

	 	
[NAME OF ASSIGNOR]

                                                                By:
__________________________                                                      

                                                                Name: ________________________                                                     

                                                                Title: _________________________                                                     

                                                                ASSIGNEE

                                                                [NAME
OF ASSIGNEE]

                                                                By: __________________________                                                     

                                                                Name: ________________________                                                     

                                                                Title: _________________________                                                     

Consented to and Accepted if applicable:

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent and L/C Issuer

By: _________________________                                                     

Name: _______________________                                                     

Title: ________________________                                                     

Consented to if applicable:

PUBLIC SERVICE COMPANY OF NEW MEXICO.

By: ________________________                                                     

Name: ______________________                                                     

Title: _______________________                                                     

  

  

  

SCHEDULE 1

TO EXHIBIT 11.3(b)

TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

           1.           Representations and Warranties.

           1.1           Assignor.  The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii)
the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Credit Document, (ii) the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Credit Document or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Credit Document.

           1.2.           Assignee.  The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary,
to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all requirements of an Eligible Assignee under the Credit Agreement (subject to receipt of such consents as may be required under the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations
of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 7.1 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent
or any other Lender, and (v) if it is a foreign lender, attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Credit Documents are required to be performed by it as a Lender.

           2.           Payments.  From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest
(including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date.

           3.           General Provisions.  This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns.  This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one 

 

 

 

 

instrument.  Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption.  This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the
State of New York.

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