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Exhibit 10.2 $500,000,000 LETTER OF CREDIT AGREEMENT among CONSOLIDATED NATURAL
GAS COMPANY, JPMORGAN CHASE BANK, N. A., as Issuing Lender,
and JPMORGAN CHASE BANK,
N.A.,
Dated as of August 30, 2005 Table of Contents Page
LETTER OF CREDIT AGREEMENT LETTER OF CREDIT AGREEMENT (this " Credit Agreement "), dated as of August 30, 2005 among:
and
The parties hereto hereby agree as follows: SECTION 1. DEFINITIONS AND ACCOUNTING TERMS As used herein, the following terms shall have the meanings herein specified unless the context otherwise requires. Defined terms herein shall include in the singular number the plural and in the plural the singular: " Administrative Agent " means JPMorgan Chase and its successors and assigns in such capacity. " 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 (i) to vote 20% or more of the securities having ordinary voting power for the election of directors of such corporation or (ii) to direct or cause direction of the management and policies of such corporation, whether through the ownership of voting securities, by contract or otherwise. " Applicable Percentage " means, for Letters of Credit issued for the account of, the Borrower, the appropriate applicable percentages, in each case, corresponding to the long-term, unsecured, senior, non-credit-enhanced debt rating of the Borrower in effect at such time, as shown below.
Notwithstanding the above, if at any time there is a split in ratings between S&P and Moody's of one level, the Applicable Percentage and the Commitment Fees will be determined based upon the higher rating, and if at any time there is a split in ratings between S&P and Moody's of two or more levels, the Applicable Percentage and the Commitment Fees shall be determined based upon the ratings level that is one level below the higher of the S&P or Moody's rating. The Applicable Percentages and the Commitment Fees shall be determined and adjusted on the date of any applicable change in the long term unsecured senior, non-credit-enhanced debt rating of the Borrower. The Borrower shall promptly deliver to the Administrative Agent, at the address set forth on Schedule 12.1, information regarding any change in the long-term, unsecured senior, non-credit enhanced debt rating of the Borrower that would change the existing Pricing Level (as set forth in the chart above). " Application " means an application, in such form as the applicable Issuing Lender may specify from time to time, requesting such Issuing Lender to issue a Letter of Credit. " Bankruptcy Code " means the Bankruptcy Code in Title 11 of the United States Code, as amended, modified, succeeded or replaced from time to time. Page 2 " Base Rate " means, for any day, a simple rate per annum equal to the greater of (a) the Prime Rate for such day or (b) the sum of one-half of one percent (.50%) plus the Federal Funds Rate for such day. " Benefitted Lender " has the meaning set forth in Section 12.2 hereof. " Borrower " has the meaning set forth in the preamble hereof. " 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. " Capital Stock " means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing. " Capitalization " means the sum of (a) Total Funded Debt plus (b) Net Worth. " Change of Control " means either: (i) the Borrower shall cease to be a Subsidiary of Dominion Resources or (ii) any person (as such term is defined in Section 13(d) of the Securities and Exchange Act of 1934, as amended) shall acquire, directly or indirectly, beneficial ownership of more than 50% of the outstanding shares of the capital stock of Dominion Resources entitled to vote generally for the election of directors of Dominion Resources. " Closing Date " means the date hereof. " Code " means the Internal Revenue Code of 1986, as amended from time to time. " Commitment " means, with respect to each Lender, such Lender's share of the L/C Commitment based upon such Lender's Commitment Percentage. " Commitment Fees " has the meaning set forth in Section 3.1(a). " Commitment Percentage " means, for each Lender, the percentage identified as its Commitment Percentage opposite such Lender's name on Schedule 1.1 attached hereto, as such percentage may be modified in accordance with the terms of this Credit Agreement. " Consolidated Subsidiary " means, as to any Person, each Subsidiary of such Person (whether now existing or hereafter created or acquired), the financial statements of which are or are required to be consolidated with the financial statements of such Person in accordance with GAAP, including principles of consolidation. " Controlled Group " means (i) the controlled group of corporations as defined in Section 414(b) of the Code and the applicable regulations thereunder or (ii) the group of trades or businesses under common control as defined in Section 414(c) of the Code and the applicable regulations thereunder, of which the Borrower is a part or may become a part. Page 3 " Credit Documents " means this Credit Agreement, the Applications, and all other related agreements and documents issued or delivered hereunder or thereunder or pursuant hereto or thereto. " Credit Exposure " has the meaning set forth in the definition of "Required Lenders" below. " Default " means any event, act or condition which with notice or lapse of time, or both, would constitute an Event of Default. " Defaulting Lender " means, at any time, any Lender that, at such time (a) 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 or (b) has been deemed insolvent or has become subject to a bankruptcy or insolvency proceeding or to a receiver, trustee or similar official. " Dollar ", " dollar " and " $ " means lawful currency of the United States. " Dominion Resources or DRI " means Dominion Resources, Inc., a Virginia corporation, and its successors and permitted assigns. " Effective Date " has the meaning set forth in Section 12.15 hereof. " Eligible Assignee " means: (a) any Lender or Affiliate or Subsidiary of a Lender; and (b) any other commercial bank, financial institution or "accredited investor" (as defined in Regulation D promulgated by the Securities and Exchange Commission) that is either a bank organized or licensed under the laws of the United States of America or any State thereof or that has agreed to provide the information listed in Section 4.2(d) to the extent that it may lawfully do so and that is approved by the Administrative Agent and the Borrower (each such approval not to be unreasonably withheld or delayed); provided that, for purposes of:
Page 4 " ERISA " means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and the rulings issued thereunder. " ERISA Affiliate " means each person (as defined in Section 3(9) of ERISA) which together with the Borrower or any Subsidiary of the Borrower would be deemed to be a member of the same "controlled group" within the meaning of Section 414(b), (c), (m) and (o) of the Code. " Event of Default " has the meaning specified in Section 10.1. " Exchange Act " means the Securities and Exchange Act of 1934, as amended. " Federal Funds Rate " means for any day the rate per annum (rounded upward to the nearest 1/100th of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the 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 immediately preceding 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 quoted to the Administrative Agent on such day on such transactions as determined by the Administrative Agent. " Funded Debt " means, as to any Person, without duplication: (a) all Indebtedness of such Person for borrowed money or which has been incurred in connection with the acquisition of assets (excluding letters of credit, bankers' acceptances, Non-Recourse Debt, Mandatorily Convertible Securities and Trust Preferred Securities), (b) all capital lease obligations (including Synthetic Lease Obligations) of such Person and (c) all Guaranty Obligations of Funded Debt of other Persons. " GAAP " means generally accepted accounting principles in the United States applied on a consistent basis and subject to Section 1.3. " Governmental Authority " means any Federal, state, local or foreign court or governmental agency, authority, instrumentality or regulatory body. " Guaranty Obligations " means, in respect of any Person, any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing any Indebtedness of another Person, including, without limitation, any obligation (a) to purchase or pay, or advance or supply funds for the purchase or payment of, such Indebtedness or (b) entered into primarily for the purpose of assuring the owner of such Indebtedness of the payment thereof (such as, for example, but without limitation, an agreement to advance or provide funds or other support for the payment or purchase of such Indebtedness or to maintain working capital, solvency or other balance sheet conditions of such other Person, including, without limitation, maintenance agreements, comfort letters or similar agreements or arrangements, or to lease or purchase property, securities or services) if such obligation would constitute an indirect guarantee of indebtedness of others, the disclosure of which would be required in such Person's financial statements under GAAP; provided , however , that the term Guaranty Obligations shall not include (i) endorsements for deposit or collection in the ordinary course of business, (ii) Page 5 obligations under purchased power contracts or (iii) obligations of the Borrower otherwise constituting Guaranty Obligations under this definition to provide contingent equity support, to keep well, to purchase assets, goods, securities or services, to take or pay or to maintain financial statement conditions or otherwise in respect of any Subsidiary or Affiliate of the Borrower in connection with the non-utility nonrecourse financing activities of such Subsidiary or Affiliate. " Indebtedness " means, as to any Person, without duplication: (a) all obligations of such Person for borrowed money or evidenced by bonds, debentures, notes or similar instruments; (b) all obligations of such Person for the deferred purchase price of property or services (except trade accounts payable arising in the ordinary course of business, customer deposits, provisions for rate refunds, deferred fuel expenses and obligations in respect of pensions and other post-retirement benefits); (c) all capital lease obligations of such Person; (d) all Indebtedness of others secured by a Lien on any properties, assets or revenues of such Person (other than stock, partnership interests or other equity interests of the Borrower or any of its Subsidiaries in other entities) to the extent of the lesser of the value of the property subject to such Lien or the amount of such Indebtedness; (e) all Guaranty Obligations; and (f) all non-contingent obligations of such Person under any letters of credit or bankers' acceptances. " Indenture " means the Indenture dated as of April 1, 1995 between the Borrower and United States Trust Company of New York, as Trustee, as in effect on the date hereof and without giving effect to any modifications or supplements thereto, or terminations thereof, after the date hereof. " Issuing Lender " means, with respect to any Letter of Credit, the issuer thereof, which shall be JPMorgan Chase and/or any other Lender that agrees to act as an issuing Lender hereunder with the consent of the Borrower, the other Issuing Lenders and the Administrative Agent. " L/C Commitment " means $500,000,000, as reduced from time to time in accordance with Section 2.2. " L/C Fee Payment Date " means each of the first Business Day of each January, April, July and October (as well as on the Maturity Date). " L/C Obligations " means, at any time, an amount equal to the sum of (a) the aggregate then undrawn and unexpired amount of the then outstanding Letters of Credit and (b) the aggregate amount of drawings under Letters of Credit that have not then been reimbursed pursuant to Section 5.5. " L/C Participants " means, with respect to any Letter of Credit, the collective reference to all the Lenders other than the applicable Issuing Lender. " Lenders " means those banks and other financial institutions identified as such on the signature pages hereto and such other institutions that may become Lenders pursuant to Section 12.3(b). " Letter of Credit " has the meaning set forth in Section 5.1(a). Page 6 " Letter of Credit Fees " has the meaning set forth in Section 5.3(a). " Lien " means any mortgage, pledge, hypothecation, assignment, deposit arrangement, security interest, encumbrance, lien (statutory or otherwise), preference, priority or charge of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, any financing or similar statement or notice filed under the Uniform Commercial Code as adopted and in effect in the relevant jurisdiction or other similar recording or notice statute, and any lease in the nature thereof). " Mandatorily Convertible Securities " means any mandatorily convertible equity-linked securities issued by the Borrower, so long as the terms of such securities require no repayments or prepayments and no mandatory redemptions or repurchases, in each case prior to at least 91 days after the later of the termination of the Commitments and the repayment in full of the Reimbursement Obligations and all other amounts due under this Credit Agreement. " Material Adverse Effect " means a material adverse effect, after taking into account applicable insurance, if any, on (a) the operations, financial condition or business of the Borrower, (b) the ability of the Borrower to perform its obligations under this Credit Agreement or (c) the validity or enforceability of this Credit Agreement or any of the other Credit Documents against the Borrower, or the rights and remedies of the Lenders against the Borrower hereunder or thereunder. " Material Plan " has the meaning set forth in Section 10.1(h) hereof. " Material Subsidiary " shall mean a Subsidiary of the Borrower whose total assets (as determined in accordance with GAAP) represent at least 20% of the total assets of the Borrower, on a consolidated basis. " Maturity Date " means February 28, 2006. " Moody's " means Moody's Investors Service, Inc., or any successor or assignee of the business of such company in the business of rating securities. " Multiemployer Plan " means at any time an employee pension benefit plan within the meaning of Section 4001(a)(3) of ERISA to which any member of the Controlled Group is then making or accruing an obligation to make contributions or has within the preceding five plan years made contributions, including for these purposes any Person which ceased to be a member of the Controlled Group during such five year period but only with respect to the period during which such Person was a member of the Controlled Group. " Net Worth " means, as of any date, the shareholders' equity or net worth of the Borrower and its Consolidated Subsidiaries, on a consolidated basis, as determined in accordance with GAAP (including Mandatorily Convertible Securities and Trust Preferred Securities). " 1935 Act " means the Public Utility Holding Company Act of 1935, as amended. " Non-Recourse Debt " means Indebtedness (a) as to which the Borrower (i) does not provide credit support of any kind (including any undertaking, agreement or instrument that Page 7 would constitute Indebtedness), (ii) is not directly or indirectly liable as a guarantor or otherwise, and (iii) is not the lender; (b) in respect of which default would not permit (whether upon notice, lapse of time or both) any holder of any other Indebtedness of the Borrower to declare a default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity; and (c) as to which the lenders have been notified in writing that they will not have any recourse to the stock or assets of the Borrower. " Other Taxes " has the meaning set forth in Section 4.2(b) hereof. " PBGC " means the Pension Benefit Guaranty Corporation established under ERISA and any successor thereto. " Pension Plans " has the meaning set forth in Section 8.8 hereof. " Person " means any individual, partnership, joint venture, firm, corporation, limited liability company, association, trust or other enterprise (whether or not incorporated), or any government or political subdivision or any agency, department or instrumentality thereof. " Plan " means any single-employer plan as defined in Section 4001 of ERISA, which is maintained, or at any time during the five calendar years preceding the date of this Credit Agreement was maintained, for employees of the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate of the Borrower. " Prime Rate " means the per annum rate of interest established from time to time by JPMorgan Chase at its principal office in New York, New York as its Prime Rate. Any change in the interest rate resulting from a change in the Prime Rate shall become effective as of 12:01 a.m. of the Business Day on which each change in the Prime Rate is announced by the Administrative Agent. The Prime Rate is a reference rate used by the Administrative Agent in determining interest rates on certain loans and is not intended to be the lowest rate of interest charged on any extension of credit to any debtor. " Ratings " means the rating assigned by S&P or Moody's to the Borrower based on the Borrower's senior, unsecured, non-credit enhanced obligations. " Refund " has the meaning set forth in Section 4.2(c) hereof. " Register " has the meaning set forth in Section 12.3(c). " Regulation A, D, T, U or X " means Regulation A, D, T, U or X, respectively, of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof. " Reimbursement Obligation " means the obligation of the Borrower to reimburse the Issuing Lenders pursuant to Section 5.5 for amounts drawn under Letters of Credit. " Reportable Event " means a "reportable event" as defined in Section 4043 of ERISA with respect to which the notice requirements to the PBGC have not been waived. Page 8 " Required Lenders " means Lenders whose aggregate Credit Exposure (as hereinafter defined) constitutes more than 50% of the aggregate 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 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 Commitment Percentage of such Lender multiplied by the L/C Commitment and (b) at any time after the termination of the Commitments, such Lender's Commitment Percentage of the L/C Obligations then outstanding. " S&P " means Standard & Poor's Ratings Services, a division of The McGraw Hill Companies, Inc., or any successor or assignee of the business of such division in the business of rating securities. " Solvent " means, with respect to any Person as of a particular date, that on such date (a) the fair saleable value (on a going concern basis) of such Person's assets exceeds its liabilities, contingent or otherwise, fairly valued, (b) such Person will be able to pay its debts as they become due, (c) such Person does not have unreasonably small capital with which to satisfy all of its current and reasonably anticipated obligations and (d) such Person does not intend to incur nor does it reasonably anticipate that it will incur debts beyond its ability to pay as such debts become due. " Stated Amount " of each Letter of Credit means, at any time, the maximum amount available to be drawn thereunder (in each case determined without regard to whether any conditions to drawing could be met). " 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 50% equity interest at any time. " Synthetic Lease " means each arrangement, however described, under which the obligor accounts for its interest in the property covered thereby under GAAP as lessee of a lease which is not a capital lease under GAAP and accounts for its interest in the property covered thereby for federal income tax purposes as the owner. " Synthetic Lease Obligation " means, as to any Person with respect to any Synthetic Lease at any time of determination, the amount of the liability of such Person in respect of such Synthetic Lease that would (if such lease was required to be classified and accounted for as a capital lease on a balance sheet of such Person in accordance with GAAP) be required to be capitalized on the balance sheet of such Person at such time. " Taxes " has the meaning set forth in Section 4.2(a). Page 9 " Total Funded Debt " means all Funded Debt of the Borrower and its Consolidated Subsidiaries, on a consolidated basis, as determined in accordance with GAAP. " Trust Preferred Securities " means the trust preferred securities issued by any subsidiary capital trusts established by the Borrower outstanding on the date hereof and reflected as such in the financial statements of the Borrower for the fiscal year ended December 31, 2004, and any additional trust preferred securities that are substantially similar thereto, along with the junior subordinated debt obligations of the Borrower, so long as (a) the terms thereof require no repayments or prepayments and no mandatory redemptions or repurchases, in each case prior to at least 91 days after the later of the termination of the Commitments and the repayment in full of the Reimbursement Obligations and all other amounts due under the Credit Agreement, (b) such securities are subordinated and junior in right of payment to all obligations of the Borrower for or in respect of borrowed money and (c) the obligors in respect of such preferred securities and subordinated debt have the right to defer interest and dividend payments, in each case to substantially the same extent as such currently outstanding preferred securities or on similar terms customary for trust preferred securities and not materially less favorable to the interests of the Borrower or the Lenders. " Wholly Owned Subsidiary " means, as to any Person, any other Person all of the Capital Stock of which (other than de minimis directors' qualifying shares or local ownership shares required by law) is owned by such Person directly and/or through other Wholly Owned Subsidiaries. 1.2. Computation of Time Periods; 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 "Sections", "Schedules" and "Exhibits" shall be to Sections, Schedules or Exhibits of or to this Credit Agreement unless otherwise specified. Except as otherwise expressly provided herein, all accounting terms used herein shall be interpreted, and all financial statements and certificates and reports as to financial matters required to be delivered to the Lenders hereunder shall be prepared, in accordance with GAAP applied on a consistent basis. All calculations made for the purposes of determining compliance with this Credit Agreement shall (except as otherwise expressly provided herein) be made by application of GAAP applied on a basis consistent with the most recent annual or quarterly financial statements delivered pursuant to Section 8.1 (or, prior to the delivery of the first financial statements pursuant to Section 8.1, consistent with the financial statements described in Section 6.1(g)); provided , however , if (a) the Borrower shall object to determining such compliance on such basis at the time of delivery of such financial statements due to any change in GAAP or the rules promulgated with respect thereto or (b) the Administrative Agent or the Required Lenders shall so object in writing within 30 days after delivery of such financial statements, then such calculations shall be made on a basis consistent with the most recent financial statements delivered by the Borrower to the Lenders as to which no such objection shall have been made. Page 10 All references to time herein shall be references to Eastern Standard Time or Eastern Daylight time, as the case may be, unless specified otherwise. 2.1 L/C Commitment Subject to the terms and conditions set forth herein, the Issuing Lenders agree to issue Letters of Credit in an aggregate amount not to exceed the L/C Commitment, and each Lender, as an L/C Participant, severally agrees to purchase for such L/C Participant's own account and risk an undivided interest equal to such L/C Participant's Commitment Percentage in the L/C Obligations outstanding from time to time; provided that (i) the sum of the aggregate amount of the L/C Obligations then outstanding on any day shall not exceed the L/C Commitment and (ii) with respect to each individual Lender, the Lender's pro rata share of the sum of outstanding L/C Obligations then outstanding on any day shall not exceed such Lender's Commitment Percentage of the L/C Commitment. 2.2 Reductions of L/C Commitment. Upon at least three Business Days' notice, the Borrower shall have the right to permanently terminate or reduce the aggregate unused amount of the L/C Commitment available to it at any time or from time to time; provided that (i) each partial reduction shall be in an aggregate amount at least equal to $10,000,000 and in integral multiples of $1,000,000 above such amount and (ii) no reduction shall be made which would reduce the L/C Commitment to an amount less than the sum of the then outstanding L/C Obligations Any reduction in (or termination of) the L/C Commitment shall be permanent and may not be reinstated. (a) In consideration of the L/C Commitment being made available by the Lenders hereunder, the Borrower agrees to pay to the Administrative Agent, for the pro rata benefit of each Lender, a commitment fee for each day that will accrue on the unutilized L/C Commitment (i.e., the amount of the L/C Commitment less the outstanding aggregate amount of L/C Obligations) on such day according to the per annum percentages set forth under the heading "Applicable Commitment Fee" in the table included in the definition of "Applicable Percentage" (the " Commitment Fee "). (b) The accrued Commitment Fees shall be due and payable in arrears on each L/C Fee Payment Date for the immediately preceding fiscal quarter (or portion thereof), beginning with the first of such dates to occur after the Closing Date. Page 11 3.2 Place and Manner of Payments. All payments of interest, fees, expenses and other amounts to be made by the Borrower under this Credit Agreement shall be received not later than 2:00 p.m. on the date when due in Dollars and in immediately available funds, without setoff, deduction, counterclaim or withholding of any kind, by the Administrative Agent at its offices in New York, New York, except payments to be made directly to an Issuing Lender as provided herein. The Borrower shall, at the time it makes any payment under this Credit Agreement, specify to the Administrative Agent, the fees or other amounts payable by the Borrower hereunder to which such payment is to be applied (and in the event that it fails to specify, or if such application would be inconsistent with the terms hereof, the Administrative Agent, shall distribute such payment to the Lenders in such manner as it reasonably determines in its sole discretion). Except to the extent otherwise provided herein, each payment to Lenders in respect of their participations in L/C Obligations shall be allocated pro rata among the Lenders in accordance with the respective Commitment Percentages. 3.4 Computations of Interest and Fees. (a) 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. (b) 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 paragraph 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 obligation), shall the interest taken, reserved, contracted for, charged, or received under this Credit Agreement or otherwise, exceed the maximum non-usurious 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 non-usurious amount, any such construction shall be subject to the provisions of this paragraph and such documents shall be automatically reduced to the maximum non-usurious 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 under applicable law and which would, apart from this provision, be in excess of the maximum lawful 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 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 Reimbursement Obligations. The right to demand payment of the Reimbursement Obligations or any other indebtedness evidenced by any of the Credit Documents does not include the right to receive 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 with respect Page 12 to the Reimbursement Obligations shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread throughout the period of time during which the Reimbursement Obligations remain outstanding so that the amount of interest on account of such indebtedness does not exceed the maximum non-usurious amount permitted by applicable law. Each Lender agrees that, in the event that any Lender shall obtain payment in respect of a Reimbursement Obligation owing to such Lender under this Credit Agreement through the exercise of a right of set-off, banker's lien, counterclaim or otherwise (including, but not limited to, pursuant to the Bankruptcy Code) in excess of its pro rata share as provided for in this Credit Agreement, such Lender shall promptly purchase from the other Lenders a participation in such Reimbursement Obligation, in such amounts and with such other adjustments from time to time, as shall be equitable in order that all Lenders share such payment in accordance with their respective ratable shares as provided for in this Credit Agreement. Each Lender further agrees that if a payment to a Lender (which is obtained by such Lender through the exercise of a right of set-off, banker's lien, counterclaim or otherwise) shall be rescinded or must otherwise be restored, each Lender which shall have shared the benefit of such payment shall, by repurchase of a participation theretofore sold, return its share of that benefit to each Lender whose payment shall have been rescinded or otherwise restored. The Borrower agrees that any Lender so purchasing such a participation in Reimbursement Obligations may, to the fullest extent permitted by law, exercise all rights of payment, including set-off, banker's lien or counterclaim, with respect to such participation as fully as if such Lender were a holder of such Reimbursement Obligation in the amount of such participation. Except as otherwise expressly provided in this Credit Agreement, if any Lender shall fail to remit to the Administrative Agent or any other Lender an amount payable by such Lender to the Administrative Agent or such other Lender pursuant to this Credit Agreement on the date when such amount is due, such payments shall accrue interest thereon, for each day from the date such amount is due until the day such amount is paid to the Administrative Agent or such other Lender, at a rate per annum equal to the Federal Funds Rate. (a) The Administrative Agent shall maintain the Register pursuant to Section 12.3(c), and a subaccount for each Lender, in which Register and subaccounts (taken together) shall be recorded (i) the amount and expiry date of each Letter of Credit, (ii) the amount of any Reimbursement Obligation outstanding and (iii) the amount of any sum received by the Administrative Agent hereunder from or for the account of the Borrower and each Lender's share thereof. The Administrative Agent will make reasonable efforts to maintain the accuracy of the subaccounts referred to in the preceding sentence and to promptly update such subaccounts from time to time, as necessary. (b) The entries made in the accounts, Register and subaccounts maintained pursuant to subsection (a) of this Section 3.6 (and, if consistent with the entries of the Administrative Agent, subsection (a)) shall be prima facie evidence of the existence and amounts of the obligations of the Borrower therein recorded; provided , however , that the failure of any Lender or the Administrative Agent to maintain any such account, the Register or such Page 13 subaccounts, as applicable, or any error therein, shall not in any manner affect the obligation of the Borrower to repay the Reimbursement Obligations inaccordance with the terms hereof. SECTION 4. ADDITIONAL PROVISIONS REGARDING PAYMENTS If, after the date hereof, any Lender has determined that the adoption or effectiveness of any applicable law, rule or regulation regarding capital adequacy, or any change therein, or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by such Lender (or its parent corporation) with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on such Lender's (or parent corporation's) capital or assets as a consequence of its commitments or obligations hereunder to the Borrower to a level below that which such Lender (or its parent corporation) could have achieved but for such adoption, effectiveness, change or compliance (taking into consideration such Lender's (or parent corporation's) policies with respect to capital adequacy), then, upon notice from such Lender, the Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender (or its parent corporation) for such reduction. Each determination by any such Lender of amounts owing under this Section 4.1 shall, absent manifest error, be conclusive and binding on the parties hereto. (a) Tax Liabilities Imposed on a Lender . Any and all payments by the Borrower hereunder or under any of the Credit Documents shall be made, in accordance with the terms hereof and thereof, free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding taxes measured by net income and franchise taxes imposed on any Lender by the jurisdiction under the laws of which such Lender is organized or transacting business or any political subdivision thereof (all such non-excluded taxes, being hereinafter referred to as " Taxes "). If the Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder to any Lender, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 4.2) such Lender 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 Governmental Authority in accordance with applicable law, and (iv) the Borrower shall deliver to such Lender evidence of such payment to therelevant Governmental Authority. (b) Other Taxes . In addition, the Borrower agrees to pay, upon notice from a Lender and prior to the date when penalties attach thereto, all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies of the United States or any state or political subdivision thereof or any applicable foreign jurisdiction that arise from any payment made hereunder by the Borrower or from the execution, delivery Page 14 or registration of, or otherwise from the Borrower's participation with respect to, this Credit Agreement (collectively, the " Other Taxes "). (c) Refunds . If a Lender or the Administrative Agent (as the case may be) shall become aware that it is entitled to claim a refund (or a refund in the form of a credit) (each, a " Refund ") from a Governmental Authority (as a result of any error in the amount of Taxes or Other Taxes paid to such Governmental Authority or otherwise) of Taxes or Other Taxes which the Borrower has paid, or with respect to which the Borrower has paid additional amounts, pursuant to this Section 4.2, it shall promptly notify the Borrower of the availability of such Refund and shall, within 30 days after receipt of written notice by the Borrower, make a claim to such Governmental Authority for such Refund at the Borrower's expense if, in the judgment of such Lender or the Administrative Agent (as the case may be), the making of such claim will not be otherwise disadvantageous to it; provided that nothing in this subsection (c) shall be construed to require any Lender or the Administrative Agent to institute any administrative proceeding (other than the filing of a claim for any such Refund) or judicial proceeding to obtain such Refund. If a Lender or the Administrative Agent (as the case may be) receives a Refund from a Governmental Authority (as a result of any error in the amount of Taxes or Other Taxes paid to such Governmental Authority or otherwise) of any Taxes or Other Taxes which have been paid by the Borrower, or with respect to which the Borrower has paid additional amounts pursuant to this Section 4.2, it shall promptly pay to the Borrower the amount so received (but only to the extent of payments made, or additional amounts paid, by the Borrower under this Section 4.2 with respect to Taxes or Other Taxes giving rise to such Refund), net of all reasonable out-of-pocket expenses (including the net amount of taxes, if any, imposed on such Lender or the Administrative Agent with respect to such Refund) of such Lender or Administrative Agent, and without interest (other than interest paid by the relevant Governmental Authority with respect to such Refund); provided , however , that the Borrower, upon the request of Lender or the Administrative Agent, agrees to repay the amount paid over to the Borrower (plus penalties, interest or other charges) to such Lender or the Administrative Agent in the event such Lender or the Administrative Agent is required to repay such Refund to such Governmental Authority. Nothing contained in this Section 4.2(c) shall require any Lender or the Administrative Agent to make available any of its tax returns (or any other information that it deems to be confidential or proprietary). (d) Foreign Lender . Each Lender that is not a "United States person" (as such term is defined in Section 7701(a)(30) of the Code) shall submit to the Borrower and the Administrative Agent on or before the Closing Date (or, in the case of a Person that becomes a Lender after the Closing Date by assignment, promptly upon such assignment), two duly completed and signed copies of (A) either (1) Form W-8BEN, or any applicable successor form, of the United States Internal Revenue Service entitling such Lender to a complete exemption from withholding on all amounts to be received by such Lender pursuant to this Credit Agreement or (2) Form W-8ECI, or any applicable successor form, of the United States Internal Revenue Service relating to all amounts to be received by such Lender pursuant to this Credit Agreement and, if applicable, (B) an Internal Revenue Service Form W-8BEN or W-9 entitling such Lender to receive a complete exemption from United States backup withholding tax. Each such Lender shall, from time to time after submitting either such form, submit to the Borrower Page 15 and the Administrative Agent such additional duly completed and signed copies of such forms (or such successor forms or other documents as shall be adopted from time to time by the relevant United States taxing authorities) as may be (1) reasonably requested in writing by the Borrower or the Administrative Agent and (2) appropriate under then current United States laws or regulations. Upon the reasonable request of the Borrower or the Administrative Agent, each Lender that has not provided the forms or other documents, as provided above, on the basis of being a United States person shall submit to the Borrower and the Administrative Agent a certificate to the effect that it is such a "United States person." 4.3 Mitigation; Mandatory Assignment. The Administrative Agent and each Lender shall use reasonable efforts to avoid or mitigate any increased cost or suspension of the availability of an interest rate under Sections 4.1 through 4.2 above to the greatest extent practicable unless, in the opinion of the Administrative Agent or such Lender, such efforts would be likely to have an adverse effect upon it. In the event a Lender makes a request to the Borrower for additional payments in accordance with Section 4.1 or 4.2 then, provided that no Default or Event of Default has occurred and is continuing at such time, the Borrower may, at its own expense (such expense to include any transfer fee payable to the Administrative Agent under Section 12.3(b) and any expense pursuant to Section 4 hereof) and in its sole discretion, require such Lender to transfer and assign in whole (but not in part), without recourse (in accordance with and subject to the terms and conditions of Section 12.3(b)), all of its interests, rights and obligations under this Credit Agreement to an Eligible Assignee which shall assume such assigned obligations (which Eligible Assignee may be another Lender, if a Lender accepts such assignment); provided that (a) such assignment shall not conflict with any law, rule or regulation or order of any court or other Governmental Authority and (b) the Borrower or such Eligible Assignee shall have paid to the assigning Lender in immediately available funds the principal of and interest accrued to the date of such payment on the portion of the Reimbursement Obligations hereunder held by such assigning Lender and all other amounts owed to such assigning Lender hereunder, including amounts owed pursuant to Sections 4.1 through 4.2 hereof. (a) Subject to the terms and conditions hereof, each Issuing Lender, in reliance on the agreements of the other Lenders set forth in Section 5.4, agrees to issue letters of credit (each a " Letter of Credit ") for the account of the Borrower on any Business Day from the Closing Date until the date that is ten Business Days prior to the Maturity Date in such form as may be approved from time to time by such Issuing Lender; provided that no Issuing Lender shall have any obligation to issue any Letter of Credit if, after giving effect to such issuance, the L/C Obligations would exceed the L/C Commitment. Each Letter of Credit shall (x) be denominated in Dollars, (y) have a face amount of at least $1,000,000 (unless otherwise agreed by the applicable Issuing Lender) and (z) expire no later than the earlier of (x) the first anniversary of its date of issuance and (y) the date that is five Business Days prior to the Maturity Date; provided , that, if one or more Letters of Credit shall at any time have an expiry date that is later than five Business Days prior to the Maturity Date, the Borrower shall, not later Page 16 than (i) five Business Days preceding the Maturity Date, deposit in a cash collateral account established with the Administrative Agent, on terms and conditions satisfactory to the Administrative Agent, an amount equal to the L/C Obligations with respect to such Letters of Credit, if the Borrower's senior unsecured long-term, non-credit enhanced debt rating in effect is at least BBB- as published by S&P and is at least Baa3 as published by Moody's or (ii) fifteen days preceding the Maturity Date, deposit in a cash collateral account established with the Administrative Agent an amount equal to the L/C Obligations with respect to such Letters of Credit if the Borrower's senior unsecured long-term, non-credit enhanced debt rating in effect is lower than BBB- as published by S&P or is lower than Baa3 as published by Moody's; provided , further , that the obligations under this Section 5 in respect of such Letters of Credit of (i) the Borrower shall survive the Maturity Date and shall remain in effect until no such Letters of Credit remain outstanding and (ii) each Lender shall be reinstated, to the extent any such cash collateral, the application thereof or reimbursement in respect thereof is required to be returned to the Borrower by the applicable Issuing Bank after the Maturity Date. Amounts held in such cash collateral account shall be held and applied by the Administrative Agent in the manner and for the purposes set forth in Section 10.2(c). (b) No Issuing Lender shall at any time be obligated to issue any Letter of Credit if such issuance would conflict with, or cause such Issuing Lender or any L/C Participant to exceed any limits imposed by, any applicable requirement of law. 5.2 Procedure for Issuance of Letter of Credit. The Borrower may from time to time request that an Issuing Lender issue a Letter of Credit by delivering an Application therefor to such Issuing Lender, with a copy to the Administrative Agent, at their respective addresses for notices specified herein, completed to the satisfaction of such Issuing Lender, and such other certificates, documents and other papers and information as such Issuing Lender may request. Upon receipt of any Application, the applicable Issuing Lender will process such Application and the certificates, documents and other papers and information delivered to it in connection therewith in accordance with its customary procedures and shall promptly issue the Letter of Credit requested thereby (but in no event shall any Issuing Lender be required to issue any Letter of Credit earlier than three Business Days after its receipt of the Application therefor and all such other certificates, documents and other papers and information relating thereto) by issuing the original of such Letter of Credit to the beneficiary thereof or as otherwise may be agreed to by the applicable Issuing Lender and the Borrower. The applicable Issuing Lender shall furnish a copy of such Letter of Credit to the Borrower promptly following the issuance thereof. The applicable Issuing Lender shall promptly furnish to the Administrative Agent notice of the issuance of such Letter of Credit (including the amount thereof), together with a copy of such Letter of Credit, whereupon the Administrative Agent shall in turn promptly furnish such notice to the Lenders and a copy of such Letter of Credit to any Lender requesting the same. (a) The Borrower will pay a fee (" Letter of Credit Fees ") on all outstanding Letters of Credit at the per annum percentages set forth under the heading Applicable Percentage for Letters of Credit" in the table included in the definition of "Applicable Page 17 Percentage", multiplied by the Stated Amount of each Letter of Credit, shared ratably among the Lenders and payable quarterly in arrears on each L/C Fee Payment Date after the issuance date. In addition, the Borrower shall pay to each Issuing Lender for its own account a fronting fee on the undrawn and unexpired amount of each Letter of Credit issued by it as agreed between the Borrower and such Issuing Lender. (b) In addition to the foregoing fees, the Borrower shall pay or reimburse each Issuing Lender for such normal and customary costs and expenses as are incurred or charged by such Issuing Lender in issuing, negotiating, effecting payment under, amending or otherwise administering any Letter of Credit issued by it. (a) Each Issuing Lender irrevocably agrees to grant and hereby grants to each L/C Participant, and, to induce the Issuing Lenders to issue their respective Letters of Credit, each L/C Participant irrevocably agrees to accept and purchase and hereby accepts and purchases from each Issuing Lender, on the terms and conditions set forth below, for such L/C Participant's own account and risk an undivided interest equal to such L/C Participant's Commitment Percentage in such Issuing Lender's obligations and rights under and in respect of each Letter of Credit issued by it and the amount of each draft paid by such Issuing Lender thereunder. Each L/C Participant unconditionally and irrevocably agrees that, if a draft is paid under any Letter of Credit for which an Issuing Lender is not indefeasibly reimbursed in cash in full by the Borrower in accordance with the terms of this Credit Agreement (notwithstanding delivery of cash collateral pursuant to Sections 5.1(a) and 10.2(c)), such L/C Participant shall pay to the Administrative Agent for the account of the applicable Issuing Lender, upon demand, an amount equal to such L/C Participant's Commitment Percentage of the amount of such draft, or any part thereof, that is not so reimbursed.
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