LOAN AGREEMENT BETWEEN DELMARVA POWER & LIGHT COMPANY, as Borrower and THE BANK OF NOVA SCOTIA, as Lender Dated as of March 20, 2008
BETWEEN
DELMARVA
POWER & LIGHT COMPANY,
as
Borrower
and
THE BANK
OF NOVA SCOTIA,
as
Lender
Dated as
of March 20, 2008
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TABLE
OF CONTENTS
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Page
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DEFINITIONS
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1
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1.1
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Definitions
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1
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1.2
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Interpretation
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8
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1.3
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Accounting
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8
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ARTICLE
II
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THE
LOAN
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9
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2.1
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Commitment
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9
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2.2
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Required
Payments; Termination
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9
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2.3
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[Intentionally
Omitted]
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9
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2.4
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Type
of Loan
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9
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2.5
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[Intentionally
Omitted]
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9
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2.6
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Minimum
Amount of Each Loan
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9
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2.7
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Prepayments
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9
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2.8
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Method
of Selecting Types and Interest Periods for the Loan
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9
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2.9
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Conversion
and Continuation of the Outstanding Loan
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10
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2.10
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Changes
in Interest Rate, etc.
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10
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2.11
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Rates
Applicable After Default
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10
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2.12
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Method
of Payment
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11
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2.13
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Evidence
of Indebtedness
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11
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2.14
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Telephonic
Notices
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11
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2.15
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Interest
Payment Dates; Interest and Fee Basis
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11
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ARTICLE
III
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YIELD
PROTECTION; TAXES
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12
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3.1
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Yield
Protection
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12
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3.2
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Changes
in Capital Adequacy Regulations
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12
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3.3
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Availability
of Type of Loan
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13
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3.4
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Funding
Indemnification
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13
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3.5
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Taxes
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13
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3.6
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Mitigation
of Circumstances; Lender Statements; Survival of Indemnity
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14
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ARTICLE
IV
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CONDITIONS
PRECEDENT
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15
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4.1
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Conditions
Precedent to Closing and Borrowing
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15
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ARTICLE
V
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REPRESENTATIONS
AND WARRANTIES
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16
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5.1
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Existence
and Standing
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16
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-i-
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TABLE
OF CONTENTS
(continued)
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Page
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5.2
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Authorization
and Validity
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16
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5.3
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No
Conflict; Government Consent
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16
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5.4
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Financial
Statements
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16
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5.5
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No
Material Adverse Change
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16
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5.6
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Taxes
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17
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5.7
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Litigation
and Contingent Obligations
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17
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5.8
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Significant
Subsidiaries
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17
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5.9
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ERISA
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17
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5.10
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Accuracy
of Information
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17
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5.11
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Regulation
U
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17
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5.12
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Material
Agreements
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17
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5.13
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Compliance
With Laws
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17
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5.14
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Plan
Assets; Prohibited Transactions
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17
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5.15
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Environmental
Matters
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17
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5.16
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Investment
Company Act
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18
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5.17
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[Intentionally
Omitted]
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18
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5.18
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Insurance
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18
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5.19
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No
Default
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18
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5.20
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Ownership
of Properties
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18
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5.21
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OFAC
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18
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ARTICLE
VI
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COVENANTS
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18
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6.1
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Financial
Reporting
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18
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6.2
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Use
of Proceeds
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20
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6.3
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Notice
of Default
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20
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6.4
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Conduct
of Business
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20
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6.5
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Taxes
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20
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6.6
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Insurance
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21
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6.7
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Compliance
with Laws
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21
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6.8
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Maintenance
of Properties
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21
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6.9
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Inspection
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21
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6.10
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Merger
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21
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6.11
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Sales
of Assets
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21
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-ii-
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TABLE
OF CONTENTS
(continued)
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Page
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6.12
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Liens
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22
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6.13
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Leverage
Ratio
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23
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ARTICLE
VII
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DEFAULTS
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24
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7.1
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Representation
or Warranty
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24
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7.2
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Nonpayment
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24
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7.3
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Certain
Covenant Breaches
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24
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7.4
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Other
Breaches
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24
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7.5
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Cross
Default
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24
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7.6
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Voluntary
Bankruptcy, etc.
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24
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7.7
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Involuntary
Bankruptcy, etc.
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25
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7.8
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Seizure
of Property, etc.
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25
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7.9
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Judgments
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25
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7.10
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ERISA
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25
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7.11
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Unenforceability
of Loan Documents
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25
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7.12
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Change
in Control
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25
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ARTICLE
VIII
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ACCELERATION,
WAIVERS, AMENDMENTS AND REMEDIES
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26
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8.1
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Acceleration
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26
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8.2
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Amendments
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26
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8.3
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Preservation
of Rights
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26
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ARTICLE
IX
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GENERAL
PROVISIONS
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26
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9.1
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Survival
of Representations
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26
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9.2
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Governmental
Regulation
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27
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9.3
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Headings
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27
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9.4
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Entire
Agreement
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27
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9.5
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Several
Obligations; Benefits of this Agreement
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27
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9.6
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Expenses;
Indemnification
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27
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9.7
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[Intentionally
Omitted]
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27
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9.8
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[Intentionally
Omitted]
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27
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9.9
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Severability
of Provisions
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27
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9.10
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Nonliability
of Lender
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28
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9.11
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Limited
Disclosure
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28
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9.12
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Nonreliance
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28
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-iii-
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TABLE
OF CONTENTS
(continued)
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Page
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9.13
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[Intentionally
Omitted]
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28
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9.14
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USA
Patriot Act Notification
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28
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ARTICLE
X
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[INTENTIONALLY
OMITTED]
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29
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ARTICLE
XI
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SETOFF
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29
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ARTICLE
XII
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BENEFIT
OF AGREEMENT: ASSIGNMENTS: PARTICIPATIONS
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29
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12.1
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Successors
and Assigns
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29
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12.2
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Participations
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30
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12.3
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Assignments
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30
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12.4
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Dissemination
of Information
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31
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12.5
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[Intentionally
Omitted]
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31
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12.6
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Tax
Treatment
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31
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ARTICLE
XIII
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NOTICES
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31
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ARTICLE
XIV
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COUNTERPARTS
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31
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ARTICLE
XV
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CHOICE
OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
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32
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15.1
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CHOICE
OF LAW
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32
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15.2
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CONSENT
TO JURISDICTION
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32
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15.3
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WAIVER
OF JURY TRIAL
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32
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-iv-
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EXHIBITS
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EXHIBIT
A
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PRICING
SCHEDULE
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EXHIBIT
B
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COMPLIANCE
CERTIFICATE
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EXHIBIT
C
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ASSIGNMENT
AGREEMENT
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EXHIBIT
D
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NOTE
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EXHIBIT
E-1
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FORM
OF OPINION OF IN-HOUSE COUNSEL OF BORROWER
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EXHIBIT
E-2
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FORM
OF OPINION OF XXXXXXXXX & XXXXXXX
LLP
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SCHEDULES
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SCHEDULE
1
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LIENS
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-v-
This LOAN
AGREEMENT, dated as of March 20, 2008, is between Delmarva Power & Light
Company (“Borrower”)
and The Bank of Nova Scotia.
The
parties hereto agree as follows:
ARTICLE
I
DEFINITIONS
1.1 Definitions. As
used in this Agreement:
“Affiliate”
of any Person means any other Person directly or indirectly controlling,
controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or
otherwise.
“Agreement”
means this Loan Agreement as amended, restated, supplemented or otherwise
modified from time to time.
“Agreement
Accounting Principles” means generally accepted accounting
principles as in effect from time to time, applied, with respect to Borrower, in
a manner consistent with that used in preparing Borrower’s financial statements
referred to in Section
5.4.
“Alternate
Base Rate” means, for any day, a rate of interest per annum equal to the
higher of (i) the Prime Rate for such day and (ii) the sum of the Federal Funds
Effective Rate for such day plus 0.5%,
provided that with respect to any day during the period commencing on
February 19, 2010 and ending on the Maturity Date, the Alternate Base Rate shall
be equal to the sum of the Federal Funds Effective Rate for such day plus
0.5%.
“Applicable
Margin” means, with respect to Eurodollar Loans to Borrower at any time,
the percentage rate per annum which is applicable at such time with respect to
Eurodollar Loans to Borrower in accordance with the provisions of Exhibit
A.
“Approvals”
is defined in Section
5.3.
“Assignment
Agreement” means an agreement substantially in the form of Exhibit
C.
“Authorized
Officer” means, with respect to Borrower, the President, any Vice
President, the Chief Financial Officer, the Treasurer or any Assistant Treasurer
of Borrower, acting singly.
“Borrower”
is defined in the preamble.
“Business
Day” means (i) with respect to any borrowing, payment or rate selection
of, or any notice with respect to, Eurodollar Loans, a day (other than a
Saturday or Sunday) on which banks generally are open in New York for the
conduct of substantially all of their commercial lending activities, interbank
wire transfers can be made on the Fedwire system and dealings in United States
dollars are carried on in the London interbank market and (ii) for all other
purposes, a day (other than a Saturday or
-1-
Sunday)
on which banks generally are open in New York for the conduct of substantially
all of their commercial lending activities and interbank wire transfers can be
made on the Fedwire system.
“Capitalized
Lease” of a Person means any lease of Property by such Person as lessee
which would be capitalized on a balance sheet of such Person prepared in
accordance with Agreement Accounting Principles.
“Capitalized
Lease Obligations” of a Person means the amount of the obligations of
such Person under Capitalized Leases which would be shown as a liability on a
balance sheet of such Person prepared in accordance with Agreement Accounting
Principles.
“Change
in Control” means an event or series of events by which (a) any Person,
or two or more Persons acting in concert, acquire beneficial ownership (within
the meaning of Rule 13d-3 of the SEC under the Securities Exchange Act of 1934)
of 30% or more (by number of votes) of the outstanding shares of Voting Stock of
PHI; or (b) individuals who on the Closing Date were directors of PHI (the
“Approved
Directors”) shall cease for any reason to constitute a majority of the
board of directors of PHI; provided
that any individual becoming a member of such board of directors subsequent to
such date whose election or nomination for election by PHI’s shareholders was
approved by a majority of the Approved Directors shall be deemed to be an
Approved Director, but excluding, for this purpose, any such individual whose
initial assumption of office 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 two or more Persons acting in concert, other than a
solicitation for the election of one or more directors by or on behalf of the
board of directors.
“Closing
Date” means the date on which all conditions precedent to the making of
the Loan have been satisfied.
“Code”
means the Internal Revenue Code of 1986.
“Commitment”
means the obligation of Lender to make the Loan in an aggregate amount not
exceeding $150,000,000.
“Contingent
Obligation” of a Person means any agreement, undertaking or arrangement
by which such Person assumes, guarantees, endorses, contingently agrees to
purchase or provide funds for the payment of, or otherwise becomes or is
contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including any comfort letter, operating agreement, take or pay
contract, application for a letter of credit or the obligations of any such
Person as general partner of a partnership with respect to the liabilities of
such partnership; provided
that Contingent Obligations shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount
of any Contingent Obligation shall be deemed equal to the stated or determinable
amount of the primary obligation of such other Person or, if such amount is not
stated or is indeterminable, the maximum reasonably anticipated liability of
such Person in respect thereof.
“Controlled
Group” means all members of a controlled group of corporations or other
business entities and all trades or businesses (whether or not incorporated)
under common control which, together with Borrower or any of its Subsidiaries,
are treated as a single employer under Section 414 of the Code.
“Conversion/Continuation
Notice” is defined in Section
2.9.
-2-
“Default”
means an event described in Article
VII.
“DPL”
means Delmarva Power & Light Company.
“Environmental
Laws” means any and all federal, state, local and foreign statutes, laws,
judicial decisions, regulations, ordinances, rules, judgments, orders, decrees,
plans, injunctions, permits, concessions, grants, franchises, licenses,
agreements and other governmental restrictions relating to (i) the protection of
the environment, (ii) the effect of the environment on human health, (iii)
emissions, discharges or releases of pollutants, contaminants, hazardous
substances or wastes into surface water, ground water or land, or (iv) the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, hazardous substances or
wastes or the clean-up or other remediation thereof.
“ERISA”
means the Employee Retirement Income Security Act of 1974.
“Eurodollar
Base Rate” means, with respect to a Eurodollar Loan for the relevant
Interest Period, the applicable British Bankers’ Association Interest Settlement
Rate for deposits in U.S. dollars appearing on Reuters Screen FRBD as of 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period, and having a maturity equal to such Interest Period, provided
that (i) if Reuters Screen FRBD is not available to the Lender for any reason,
the applicable Eurodollar Base Rate for the relevant Interest Period shall
instead be the applicable British Bankers’ Association Interest Settlement Rate
for deposits in U.S. dollars as reported by any other generally recognized
financial information service as of 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period, and having a maturity equal to
such Interest Period, and (ii) if no such British Bankers’ Association Interest
Settlement Rate is available to the Lender, the applicable Eurodollar Base Rate
for the relevant Interest Period shall instead be the rate determined by the
Lender to be the rate at which the Lender or one of its Affiliate banks offers
to place deposits in U.S. dollars with first-class banks in the London interbank
market at approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period, in the approximate amount of the Lender’s
relevant Eurodollar Loan and having a maturity equal to such Interest
Period.
“Eurodollar
Loan” means any portion of the Loan which, except as otherwise provided
in Section
2.11, bears interest at the applicable Eurodollar Rate.
“Eurodollar
Rate” means, with respect to a Eurodollar Loan for the relevant Interest
Period, the sum of (i) the quotient of (a) the Eurodollar Base Rate applicable
to such Interest Period, divided by (b) one minus the Reserve Requirement
(expressed as a decimal) applicable to such Interest Period, plus (ii) the
Applicable Margin.
“Excluded
Taxes” means, in the case of the Lender, taxes imposed on its overall net
income, and franchise taxes imposed on it, by (i) the jurisdiction under the
laws of which the Lender is incorporated or organized or (ii) the jurisdiction
in which the Lender’s principal executive office is
located.
“Federal
Funds Effective Rate” means, for any day, an interest rate per annum
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 for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 11:00 a.m. on such
day on such transactions received by the Lender from three Federal funds brokers
of recognized standing selected by the Lender in its sole
discretion.
-3-
“Floating
Rate Loan” means any portion of the Loan which, except as otherwise
provided in Section
2.11, bears interest at the Alternate Base Rate.
“FRB”
means the Board of Governors of the Federal Reserve System and any successor
thereto.
“Hybrid
Securities” means any trust preferred securities, or deferrable interest
subordinated debt with a maturity of at least 20 years, which provides for the
optional or mandatory deferral of interest or distributions, issued by Borrower,
or any business trusts, limited liability companies, limited partnerships or
similar entities (i) substantially all of the common equity, general partner or
similar interest of which are owned (either directly or indirectly through one
or more wholly owned Subsidiaries) at all times by Borrower or any of its
Subsidiaries, (ii) that have been formed for the purpose of issuing hybrid
securities or deferrable interest subordinated debt, and (iii) substantially all
the assets of which consist of (A) subordinated debt of Borrower or a Subsidiary
of Borrower, and (B) payments made from time to time on the subordinated
debt.
“Indebtedness”
of a Person means, without duplication, such Person’s (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price
of Property or services (other than accounts payable arising in the ordinary
course of such Person’s business payable on terms customary in the trade), (iii)
obligations, whether or not assumed, secured by Liens or payable out of the
proceeds or production from Property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, bonds, debentures,
acceptances or similar instruments, (v) obligations of such Person to
purchase accounts, securities or other Property arising out of or in connection
with the sale of the same or substantially similar accounts, securities or
Property, (vi) Capitalized Lease Obligations, (vii) net liabilities under
interest rate swap, exchange or cap agreements, obligations or other liabilities
with respect to accounts or notes, (viii) obligations under any Synthetic Lease
which, if such Synthetic Lease were accounted for as a Capitalized Lease, would
appear on a balance sheet of such Person, (ix) unpaid reimbursement obligations
in respect of letters of credit issued for the account of such Person and
(x) Contingent Obligations in respect of Indebtedness of the types
described above.
“Initial
Period” means the period commencing on the Closing Date and ending on
March 20, 2009.
“Interest
Period” means, with respect to a Eurodollar Loan, a period of one, two,
three or six months commencing on a Business Day selected by the Borrower
pursuant to this Agreement, provided
that with respect to any period during the period commencing on February 19,
2010 and ending on the Maturity Date, Borrower may select a period of one or two
weeks commencing on a Business Day selected by the Borrower pursuant to this
Agreement. Such Interest Period shall end on the day which
corresponds numerically to such date one, two, three or six months thereafter,
provided
that if there is no such numerically corresponding day in such next, second,
third or sixth succeeding month, such Interest Period shall end on the last
Business Day of such next, second, third or sixth succeeding
month. If an Interest Period would otherwise end on a day which is
not a Business Day, such Interest Period shall end on the next succeeding
Business Day, provided
that if said next succeeding Business Day falls in a new calendar month, such
Interest Period shall end on the immediately preceding Business
Day. No Interest Period shall end after the Maturity Date and any
Interest Period which would, but for this clause, end after the Maturity Date
shall instead end on the Maturity Date subject to the payment of all
break-funding and other losses, costs and expenses incurred as a result
thereof.
“Lender”
means The Bank of Nova Scotia, any financial institution that becomes a
Purchaser pursuant to Section
12.3.1 and their respective successors and assigns.
-4-
“Lien”
means any lien (statutory or other), mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance or preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
(including the interest of a vendor or lessor under any conditional sale,
Capitalized Lease or other title retention agreement, but excluding the interest
of a lessor under any operating lease).
“Loan”
means the loan made by Lender pursuant to Article
II (or any conversion or continuation thereof).
“Loan
Documents” means this Agreement and the Note, each as amended, restated,
supplemented or otherwise modified from time to time.
“Material
Adverse Effect” means a material adverse effect on (i) the business,
Property, financial condition or results of operations of Borrower and its
Subsidiaries taken as a whole, (ii) the ability of Borrower to perform its
obligations under the Loan Documents or (iii) the validity or enforceability of
any of the Loan Documents or the rights or remedies of the Lender against
Borrower thereunder; provided
that in no event shall any Permitted DPL Asset Sale, individually or in the
aggregate, be deemed to cause or result in a Material Adverse
Effect.
“Material
Indebtedness” is defined in Section
7.5.
“Maturity
Date” means March 20, 2010 or such earlier date on which the Obligations
of Borrower become due and payable pursuant to Section
8.1.
“Moody’s”
means Xxxxx’x Investors Service, Inc.
“Multiemployer
Plan” means a Plan maintained pursuant to a collective bargaining
agreement or any other arrangement to which Borrower or any other member of the
Controlled Group is a party to which more than one employer is obligated to make
contributions.
“Net
Worth” means, with respect to Borrower at any time, the sum, without
duplication, at such time of (a) Borrower’s stockholders’ equity plus (b) all
Preferred Stock of Borrower (excluding any Preferred Stock which is mandatorily
redeemable on or prior to the scheduled Maturity Date).
“Nonrecourse
Indebtedness” means, with respect to Borrower, Indebtedness of Borrower
or any Subsidiary of Borrower secured by a Lien on the Property of Borrower or
such Subsidiary, as the case may be, the sole recourse for the payment of which
is such Property and where neither Borrower nor any of its Subsidiaries is
liable for any deficiency after the application of the proceeds of such
Property.
“Non-U.S.
Lender” is defined in Section
3.5(iv).
“Note”
means any promissory note substantially in the form of Exhibit
D issued at the request of a Lender pursuant to Section
2.13.
“Obligations”
means, with respect to Borrower, all unpaid principal of the Loan to Borrower,
all accrued and unpaid interest on such Loan, all accrued and unpaid fees
payable by Borrower and all expenses, reimbursements, indemnities and other
obligations payable by Borrower to the Lender or any other Indemnified Party
arising under any Loan Document.
“OFAC”
means the U.S. Department of the Treasury’s Office of Foreign Assets
Control.
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“Other
Taxes” is defined in Section
3.5(ii).
“Outstanding
Loan” means the aggregate outstanding principal amount of the
Loan.
“Participants”
is defined in Section
12.2.1.
“Payment
Date” means the last Business Day of each fiscal quarter of
Borrower.
“PBGC”
means the Pension Benefit Guaranty Corporation, or any successor
thereto.
“Permitted
DPL Asset Sale” means the sale of the capital stock or assets of any
Subsidiary of Borrower other than a Significant Subsidiary of Borrower, provided
that the fair market value of all such sales shall not exceed $10,000,000 in the
aggregate during the term of this Agreement.
“Permitted
DPL Liens” means the Lien of the Mortgage and Deed of Trust dated
October 1, 1943 between Borrower and JPMorgan Chase Bank (formerly known as
The Chase Manhattan Bank), as trustee.
“Person”
means any natural person, corporation, firm, joint venture, partnership, limited
liability company, association, enterprise, trust or other entity or
organization, or any government or political subdivision or any agency,
department or instrumentality thereof.
“PHI”
means Pepco Holdings, Inc.
“Plan”
means an employee pension benefit plan which is covered by Title IV of ERISA or
subject to the minimum funding standards under Section 412 of the Code as to
which Borrower or any other member of the Controlled Group may have any
liability.
“Preferred
Stock” means, with respect to any Person, equity interests issued by such
Person that are entitled to a preference or priority over any other equity
interests issued by such Person upon any distribution of such Person’s property
and assets, whether by dividend or upon liquidation.
“Prime
Rate” means a rate per annum established by The Bank of Nova Scotia in
New York, New York as its prime rate for dollars loaned in the United States,
from time to time, changing when and as such prime rate changes; it being
understood that such rate is not necessarily the lowest rate charged by The Bank
of Nova Scotia.
“Property”
of a Person means any and all property, whether real, personal, tangible,
intangible, or mixed, of such Person, or other assets owned, leased or operated
by such Person.
“Public
Reports” means Borrower’s annual report on Form 10-K for the year ended
December 31, 2007.
“Purchasers”
is defined in Section
12.3.1.
“Reportable
Event” means a reportable event, as defined in Section 4043 of ERISA,
with respect to a Plan, excluding, however, such events as to which the PBGC has
by regulation waived the requirement of Section 4043(a) of ERISA that it be
notified within 30 days of the occurrence of such event, provided
that a failure to meet the minimum funding standard of Section 412 of the Code
and of Section 302 of ERISA shall be a Reportable Event regardless of the
issuance of any such waiver of the notice requirement in accordance with either
Section 4043(a) of ERISA or Section 412(d) of the Code.
-6-
“Required
Lenders” means Lenders in the aggregate holding more than 50% of the
Outstanding Loan.
“Reserve
Requirement” means, with respect to an Interest Period, the maximum
aggregate reserve requirement (including all basic, supplemental, marginal and
other reserves) which is imposed under Regulation D of the FRB on Eurocurrency
liabilities.
“S&P”
means Standard and Poor’s Ratings Services, a division of The McGraw Hill
Companies, Inc.
“SEC”
means the Securities and Exchange Commission.
“Securitization
Transaction” means any sale, assignment or other transfer by Borrower or
a Subsidiary thereof of accounts receivable or other payment obligations owing
to Borrower or such Subsidiary or any interest in any of the foregoing, together
in each case with any collections and other proceeds thereof, any collection or
deposit accounts related thereto, and any collateral, guaranties or other
property or claims in favor of Borrower or such Subsidiary supporting or
securing payment by the obligor thereon of, or otherwise related to, any such
receivables.
“Significant
Subsidiary” means a “significant subsidiary” (as defined in Regulation
S-X of the SEC as in effect on the date of this Agreement) of
Borrower.
“Single
Employer Plan” means, with respect to Borrower, a Plan maintained by
Borrower or any member of the Controlled Group for employees of Borrower or any
member of the Controlled Group.
“Subsidiary”
of a Person means (i) any corporation more than 50% of the outstanding
securities having ordinary voting power of which shall at the time be owned or
controlled, directly or indirectly, by such Person or by one or more of its
Subsidiaries or by such Person and one or more of its Subsidiaries, or (ii) any
partnership, limited liability company, association, business trust, joint
venture or similar business organization more than 50% of the ownership
interests having ordinary voting power of which shall at the time be so owned or
controlled.
“Substantial
Portion” means, at any time with respect to the Property of any Person,
Property which represents more than 10% of the consolidated assets of such
Person and its Subsidiaries as shown in the consolidated financial statements of
such Person and its Subsidiaries as at the last day of the preceding fiscal year
of such Person.
“Synthetic
Lease” means (a) a so-called synthetic, off-balance sheet or tax
retention lease or (b) any other agreement pursuant to which a Person obtains
the use or possession of property and which creates obligations that do not
appear on the balance sheet of such Person but which, upon the insolvency or
bankruptcy of such Person, would be characterized as indebtedness of such Person
(without regard to accounting treatment).
“Taxes”
means any and all present or future taxes, duties, levies, imposts, deductions,
charges or withholdings, and any and all liabilities with respect to the
foregoing which arise from or relate to any payment made hereunder or under any
Note, but excluding
Excluded Taxes and Other Taxes.
“Total
Capitalization” means, with respect to Borrower at any time, the sum of
the Total Indebtedness of Borrower plus the Net Worth of Borrower, each
calculated at such time.
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“Total
Indebtedness” means, at any time, all Indebtedness of Borrower and its
Subsidiaries at such time determined on a consolidated basis in accordance with
Agreement Accounting Principles, excluding,
to the extent otherwise included in Indebtedness of Borrower or any of its
Subsidiaries, any other Nonrecourse Indebtedness of Borrower and its
Subsidiaries to the extent that the aggregate amount of such Nonrecourse
Indebtedness does not exceed $200,000,000.
“Transferee”
is defined in Section
12.4.
“Type”
means, with respect to any portion of the Loan, its nature as a Floating Rate
Loan or a Eurodollar Loan.
“Unmatured
Default” means an event which but for the lapse of time or the giving of
notice, or both, would constitute a Default.
“Voting
Stock” means, with respect to any Person, voting stock of any class or
kind ordinarily having the power to vote for the election of directors, managers
or other voting members of the governing body of such Person.
1.2 Interpretation.
(a) The
meanings of defined terms are equally applicable to the singular and plural
forms of such terms.
(b) Article,
Section,
Schedule
and Exhibit
references are to this Agreement unless otherwise
specified.
(c) The term
“including” is not limiting and means “including without
limitation.”
(d) In the
computation of periods of time from a specified date to a later specified date,
the word “from” means “from and including”; the words “to” and “until” each mean
“to but excluding”, and the word “through” means “to and
including.”
(e) Unless
otherwise expressly provided herein, (i) references to agreements (including
this Agreement) and other contractual instruments shall be deemed to include all
subsequent amendments and other modifications thereto, but only to the extent
such amendments and other modifications are not prohibited by the terms of this
Agreement, and (ii) references to any statute or regulation are to be construed
as including all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting such statute or
regulation.
(f) Unless
otherwise expressly provided herein, references herein shall be references to
Eastern time (daylight or standard as applicable).
1.3 Accounting. (a) Except
as provided to the contrary herein, all accounting terms used herein shall be
interpreted and all accounting determinations hereunder shall be made in
accordance with Agreement Accounting Principles, except that any calculation or
determination which is to be made on a consolidated basis shall be made for the
Borrower and all of its Subsidiaries, including those Subsidiaries of Borrower,
if any, which are unconsolidated on Borrower’s audited financial
statements.
(b) If at any
time any change in Agreement Accounting Principles would affect the computation
of any financial ratio or requirement set forth herein with respect to Borrower
and either Borrower or the Lender shall so request, the Lender and Borrower
shall negotiate in good faith to amend
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such
ratio or requirement to preserve the original intent thereof in light of such
change in Agreement Accounting Principles (subject to the approval of the
Required Lenders); provided
that, until so amended, (i) such ratio or requirement shall continue to be
computed in accordance with Agreement Accounting Principles as in effect prior
to such change and (ii) Borrower shall provide to the Lender financial
statements and other documents required under this Agreement setting forth a
reconciliation between calculations of such ratio or requirement made before and
after giving effect to such change in Agreement Accounting
Principles.
ARTICLE
II
THE
LOAN
2.1 Commitment. The
Lender agrees, on the terms and conditions set forth in this Agreement, to make
the Loan to Borrower on the Closing Date in an amount not to exceed the amount
of the Commitment. Borrower may from time to time prepay all or a
portion of the Loan pursuant to Section
2.7. Borrower shall not have the right to reborrow any portion
of the Loan after a prepayment. To the extent the amount of the Loan
is less than the Commitment, Lender shall have no obligation to make any further
advances or loans pursuant to this Agreement.
2.2 Required
Payments; Termination. The Outstanding Loan to Borrower and
all other unpaid Obligations of Borrower shall be paid in full by Borrower on
the Maturity Date.
2.3 [Intentionally
Omitted].
2.4 Type
of Loan. The Loan may be a Floating Rate Loan or Eurodollar
Loan, or a combination thereof, as selected by Borrower in accordance with Sections
2.8 and 2.9.
2.5 [Intentionally
Omitted].
2.6 Minimum
Amount of Each Type of Loan. Each Type of Loan selected by
Borrower for the Loan or any portion thereof in accordance with Sections
2.8 and 2.9
shall be in the amount of $10,000,000 or a higher integral multiple of
$1,000,000.
2.7 Prepayments.
(a) Borrower
may from time to time prepay, without penalty or premium, all portions of the
Outstanding Loan which is a Floating Rate Loan in the amount of $10,000,000 or a
higher integral multiple of $1,000,000, upon one Business Day’s prior notice to
the Lender. Borrower may from time to time prepay, all portions of
the Outstanding Loan which is a Eurodollar Loan in the amount of $10,000,000 or
a higher integral multiple of $1,000,000, upon three Business Days’ prior notice
to the Lender.
(b) Any
prepayment of any portion of the Outstanding Loan that is a Eurodollar Loan
shall be without premium or penalty but shall be subject to the payment of any
funding indemnification amounts covered by Section
3.4.
2.8 Method
of Selecting Types and Interest Periods for the Loan. On the
Closing Date, in the case of Floating Rate Loans, and two Business Days’ prior
to the Closing Date, in the case of Eurodollar Loans, Borrower shall designate
the Type of Loan for all or any portion of the Loan and, in the case of any
portion of the Loan designated as a Eurodollar Loan, the Interest Period
applicable thereto. The Borrower shall give the Lender irrevocable
notice (a “Borrowing
Notice”) not later than 11:00 a.m. on the
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Closing
Date, in the case of Floating Rate Loans, and two Business Days prior to the
Closing Date, in the case of Eurodollar Loans, designating whether the Loan or
any portion thereof shall be a Floating Rate Loan or a Eurodollar
Loan, specifying:
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(i)
|
the
Type of Loan selected for all or any portion of the Loan and the aggregate
amount of each Type of Loan, and
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(ii)
|
in
the case of any portion of the Loan which is a Eurodollar Loan, the
Interest Period applicable thereto.
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On the
Closing Date, the Lender shall make available the Loan in funds immediately
available in New York to Borrower at its address specified pursuant to Article
XIII.
2.9 Conversion
and Continuation of the Outstanding Loan. The Loan (or any
portion thereof), if bearing interest at the Alternate Base Rate, shall continue
as a Floating Rate Loan unless and until such Loan or portion thereof is
converted into a Eurodollar Loan pursuant to this Section
2.9 or is repaid in accordance with Section
2.7. The Loan (or any portion thereof), if bearing interest at
the Eurodollar Rate, shall continue as a Eurodollar Loan until the end of the
then applicable Interest Period therefor, at which time such Loan or portion
thereof shall be automatically converted into a Floating Rate Loan unless (x)
such portion of the Loan while it is a Eurodollar Loan is or was repaid in
accordance with Section
2.7 or (y) the Borrower shall have given the Lender a
Conversion/Continuation Notice requesting that, at the end of such Interest
Period, such Loan or portion thereof continue as a Eurodollar Loan for a
subsequent Interest Period. Subject to the terms of Section
2.6 Borrower may elect from time to time to convert all or any part of
the Loan from a Floating Rate Loan into a Eurodollar Loan. Borrower
shall give the Lender irrevocable notice (a “Conversion/Continuation
Notice”) of each conversion of the Loan or any portion thereof from a
Floating Rate Loan into a Eurodollar Loan or continuation of the Loan or any
portion thereof as a Eurodollar Loan not later than 11:00 a.m. at least three
Business Days prior to the date of the requested conversion or continuation,
specifying:
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(i)
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the
requested date, which shall be a Business Day, of such conversion or
continuation,
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(ii)
|
the
aggregate amount and Type of the Loan which is to be converted or
continued, and
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(iii)
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the
amount of the Loan which is to be converted into or continued as a
Eurodollar Loan and the duration of the Interest Period applicable
thereto.
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2.10 Changes
in Interest Rate, etc. The Loan (or any portion thereof), if
bearing interest at the Alternate Base Rate shall bear interest on the
outstanding principal amount thereof, for each day from the date such Loan is
made or is converted from a Eurodollar Loan into a Floating Rate Loan pursuant
to Section
2.9 to the date it is paid or is converted into a Eurodollar Loan
pursuant to Section
2.9, at a rate per annum equal to the Alternate Base Rate for such
day. Changes in the rate of interest on that portion of the Loan
maintained as a Floating Rate Loan will take effect simultaneously with each
change in the Alternate Base Rate. The Loan (or any portion thereof),
if bearing interest at the Eurodollar Rate, shall bear interest on the
outstanding principal amount thereof from the first day of each Interest Period
applicable thereto to the last day of such Interest Period at the Eurodollar
Rate applicable to such portion of the Loan based upon the Borrower’s selections
under Sections
2.8 and 2.9
and otherwise in accordance with the terms hereof.
2.11 Rates
Applicable After Default. Notwithstanding anything to the
contrary contained in Section
2.8 or 2.9,
during the continuance of a Default or Unmatured Default the Required Lenders
may, at their option, by notice to Borrower (which notice may be revoked at the
option of the Required Lenders
-10-
notwithstanding
any provision of Section
8.2 requiring unanimous consent of all Lenders to changes in the interest
rates), declare that no portion of the Loan to Borrower may be converted into or
continued as a Eurodollar Loan. During the continuance of a Default,
the Required Lenders may, at their option, by notice to Borrower (which notice
may be revoked at the option of the Required Lenders notwithstanding any
provision of Section
8.2 requiring unanimous consent of all Lenders to changes in interest
rates), declare that (i) the Loan (or any portion thereof), if bearing interest
at the Eurodollar Rate, shall bear interest for the remainder of the applicable
Interest Period at the rate otherwise applicable to such Interest Period plus 2%
per annum and (ii) the Loan (or any portion thereof), if bearing interest at the
Alternate Base Rate, shall bear interest at a rate per annum equal to the
Alternate Base Rate in effect from time to time plus 2% per annum, provided
that during the continuance of a Default under Section
7.6 or 7.7
with respect to Borrower, the interest rates set forth in clauses
(i) and (ii)
above shall be applicable to the Outstanding Loan to Borrower without any
election or action on the part of the Lender.
2.12 Method
of Payment. All payments of the Obligations hereunder shall be
made, without setoff, deduction, or counterclaim, in immediately available funds
to the Lender at the Lender’s address specified pursuant to Article
XIII, or at any other office of the Lender specified in writing by the
Lender to Borrower by 1:00 p.m. on the date when due.
2.13 Evidence
of Indebtedness. (a) The
Lender shall maintain in accordance with its usual practice an account or
accounts evidencing the indebtedness of Borrower to the Lender resulting from
the Loan made by the Lender to Borrower from time to time, including the amounts
of principal and interest payable and paid to the Lender from time to time
hereunder.
(b) The
entries maintained in the accounts maintained pursuant to clause
(a) above shall be prima facie evidence of the existence and amounts of
the Obligations therein recorded; provided
that the failure of the Lender to maintain such accounts or any error therein
shall not in any manner affect the obligation of the Borrower to repay the
Obligations of Borrower in accordance with their
terms.
(c) If
requested by the Lender, the Loan to Borrower shall be evidenced by a Note in
the form annexed hereto as Exhibit
D. Thereafter, the Loan evidenced by such Note and interest
thereon shall at all times (including after any assignment pursuant to Section
12.3) be represented by one or more Notes payable to the order of the
payee named therein or any assignee pursuant to Section
12.3.
2.14 Telephonic
Notices. Borrower hereby authorizes the Lender to convert or
continue the Loan (or any portion thereof) and to transfer funds based on
telephonic notices made by any Person the Lender in good faith believes to be
acting on behalf of Borrower, it being understood that the foregoing
authorization is specifically intended to allow Borrowing Notices and
Conversion/Continuation Notices to be given telephonically. Borrower
agrees that upon the request of the Lender, Borrower will deliver promptly to
the Lender a written confirmation signed by an Authorized Officer of Borrower,
of each telephonic notice given by Borrower pursuant to the preceding
sentence. If the written confirmation differs in any material respect
from the action taken by the Lender, the records of the Lender shall govern
absent manifest error. Borrower consents to the Lender recording any
such telephone conversations with Borrower.
2.15 Interest
Payment Dates; Interest and Fee Basis. Interest accrued on the
Loan (or any portion thereof) that is a Floating Rate Loan shall be payable on
each Payment Date, on any date on which such Loan (or any portion thereof) is
prepaid, whether due to acceleration or otherwise, and at
maturity. If any portion of the Loan is converted from a Floating
Rate Loan into a Eurodollar Loan on a day other than a Payment Date, all accrued
interest thereon shall be payable on the date of conversion. Interest
accrued on the Loan (or any portion thereof) that is a Eurodollar Loan shall be
payable on the last day of its applicable Interest Period (and, in the case of a
six-month Interest Period, on the day which is
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three
months after the first day of such Interest Period), on any date on which such
Eurodollar Loan is prepaid, whether by acceleration or otherwise, and at
maturity. Interest on the Loan (or any portion thereof) that is a
Floating Rate Loan and is bearing interest at the Prime Rate shall be calculated
for actual days elapsed on the basis of a 365-day year or, when appropriate,
366-day year. All other interest and all fees shall be calculated for
actual days elapsed on the basis of a 360-day year. Interest shall be
payable for the day the Loan is made but not for the day of any payment on the
amount paid if payment is received prior to 1:00 p.m. at the place of
payment. If any payment of principal of or interest on the Loan shall
become due on a day which is not a Business Day, such payment shall be made on
the next succeeding Business Day and, in the case of a principal payment, such
extension of time shall be included in computing interest in connection with
such payment.
ARTICLE
III
YIELD
PROTECTION; TAXES
3.1 Yield
Protection. If, on or after the date of this Agreement, the
adoption of any law or any governmental or quasi-governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law), or any
change in the interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by Lender with any
request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency:
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(i)
|
subjects
the Lender to any Taxes or changes the basis of taxation of payments
(other than with respect to Excluded Taxes) to the Lender in respect of
any Eurodollar Loan, or
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(ii)
|
imposes
or increases or deems applicable any reserve, assessment, insurance
charge, special deposit or similar requirement against assets of, deposits
with or for the account of, or credit extended by, the Lender (other than
reserves and assessments taken into account in determining the interest
rate applicable to any Eurodollar Loan),
or
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(iii)
|
imposes
any other condition the result of which is to increase the cost to the
Lender of making, funding or maintaining any Eurodollar Loan or reduces
any amount receivable by the Lender in connection with any Eurodollar
Loan, or requires the Lender to make any payment calculated by reference
to the amount of any Eurodollar Loan held or interest received by it, in
each case by an amount deemed material by the Lender, and the result of
any of the foregoing is to increase the cost to the Lender of making or
maintaining any Eurodollar Loan or to reduce the return received by the
Lender in connection with any Eurodollar Loan, then, within 15 days of
demand by the Lender, Borrower shall pay Lender such additional amount or
amounts as will compensate Lender for such increased cost or reduction in
amount received.
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3.2 Changes
in Capital Adequacy Regulations. If Lender determines the
amount of capital required or expected to be maintained by Lender or any
corporation controlling Lender is increased as a result of a Change, then,
within 15 days of demand by Lender, the Borrower shall pay Lender the amount
necessary to compensate for any shortfall in the rate of return on the portion
of such increased capital which Lender determines is attributable to this
Agreement or the Loan outstanding hereunder (or participations
therein). “Change”
means (i) any change after the date of this Agreement in the Risk Based Capital
Guidelines (as defined below) or (ii) any adoption of or change in any other
law, governmental or quasi-governmental rule, regulation, policy, guideline,
interpretation, or directive (whether or not having the force of law) after the
date of this Agreement which affects the amount of capital required or expected
to be maintained by Lender or any corporation controlling
Lender. “Risk
Based Capital Guidelines”
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means (i)
the risk based capital guidelines in effect in the United States on the date of
this Agreement, including transition rules, and (ii) the corresponding capital
regulations promulgated by regulatory authorities outside the United States
implementing the July 1988 report of the Basel Committee on Banking Regulation
and Supervisory Practices Entitled “International Convergence of Capital
Measurements and Capital Standards,” including transition rules, and any
amendments to such regulations adopted prior to the date of this
Agreement.
3.3 Availability
of Type of Loan. If Lender determines that maintenance of any
portion of the Loan as a Eurodollar Loan would violate any applicable law, rule,
regulation, or directive, whether or not having the force of law, or if the
Lender determines that (i) deposits of a type and maturity appropriate to match
fund any portion of the Loan maintained as a Eurodollar Loan are not available
or (ii) the interest rate applicable to any portion of the Loan which is a
Eurodollar Loan does not accurately reflect the cost of making or maintaining a
Eurodollar Loan, then the Lender may suspend the availability of a Eurodollar
Loan and require any affected portion of the Loan to be repaid or converted to a
Floating Rate Loan, subject to the payment of any funding indemnification
amounts required by Section
3.4.
3.4 Funding
Indemnification. If any payment of a Eurodollar Loan occurs on
a day which is not the last day of an Interest Period therefor, whether because
of acceleration, prepayment or otherwise, or any portion of the Loan is not made
or converted to a Eurodollar Loan on the date specified by Borrower for any
reason other than default by the Lender, the Borrower will indemnify Lender for
any loss or cost incurred by it resulting therefrom, including any loss or cost
in liquidating or employing deposits acquired to fund or maintain any portion of
the Loan as a Eurodollar Loan.
3.5 Taxes.
(i) All
payments by the Borrower to or for the account of Lender hereunder or under any
Note shall be made free and clear of and without deduction for any and all
Taxes. If Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder to Lender (a) 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
3.5), Lender receives an amount equal to the sum it would have received
had no such deductions been made, (b) Borrower shall make such deductions,
(c) Borrower shall pay the full amount deducted to the relevant authority
in accordance with applicable law and (d) Borrower shall furnish to the Lender
the original copy of a receipt evidencing payment thereof within 30 days after
such payment is made.
(ii) In
addition, Borrower hereby agrees to pay any present or future stamp or
documentary taxes and any other excise or property taxes, charges or similar
levies which arise from any payment made by it hereunder or under any Note or
from its execution or delivery of, or otherwise attributable to Borrower in
connection with, this Agreement or any Note (“Other
Taxes”).
(iii) Borrower
hereby agrees to indemnify Lender for the full amount of Taxes or Other Taxes
(including any Taxes or Other Taxes imposed on amounts payable under this Section
3.5) paid by Lender and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto. Payments due
under this indemnification shall be made within 30 days of the date Lender makes
demand therefor pursuant to Section
3.6.
(iv) If, at
any time, Lender is not incorporated under the laws of the United States of
America or a state thereof (a “Non-U.S.
Lender”), such Non-U.S. Lender agrees that it will, not less than ten
Business Days after the date that it becomes a Purchaser pursuant to Section
12.3.1, (i) deliver to Borrower two duly completed copies of United
States Internal Revenue Service Form W-8BEN or W-8ECI certifying in either case
that the Non-U.S. Lender is entitled to receive payments under
this
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Agreement
without deduction or withholding of any United States federal income taxes, and
(ii) deliver to Borrower a United States Internal Revenue Form W-8BEN or W-9, as
the case may be, and certify that it is entitled to an exemption from United
States backup withholding tax. Each Non-U.S. Lender further
undertakes to deliver to Borrower (x) renewals or additional copies of such form
(or any successor form) on or before the date that such form expires or becomes
obsolete, and (y) after the occurrence of any event requiring a change in the
most recent forms so delivered by it, such additional forms or amendments
thereto as may be reasonably requested by Borrower. All forms or
amendments described in the preceding sentence shall certify that the Non-U.S.
Lender is entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, unless
an event (including any change in treaty, law or regulation) has occurred
prior to the date on which any such delivery would otherwise be required which
renders all such forms inapplicable or which would prevent the Non-U.S. Lender
from duly completing and delivering any such form or amendment with respect to
it and the Non-U.S. Lender advises Borrower that it is not capable of receiving
payments without any deduction or withholding of United States federal income
tax.
(v) For any
period during which a Non-U.S. Lender has failed to provide Borrower with an
appropriate form pursuant to clause
(iv) above (unless such failure is due to a change in treaty, law or
regulation, or any change in the interpretation or administration thereof by any
governmental authority, occurring subsequent to the date on which a form
originally was required to be provided), Borrower shall not be required to
increase any amount payable to such Non-U.S. Lender pursuant to Section
3.5(i)(a) or to otherwise indemnify such Non-U.S. Lender under this Section
3.5 with respect to Taxes imposed by the United States; provided
that, should a Non-U.S. Lender which is otherwise exempt from or subject to a
reduced rate of withholding tax become subject to Taxes because of its failure
to deliver a form required under clause
(iv) above, Borrower shall take such steps as such Non-U.S.
Lender shall reasonably request to assist such Non-U.S. Lender to recover such
Taxes.
(vi) If Lender
is entitled to an exemption from or reduction of withholding tax with respect to
payments under this Agreement or any Note pursuant to the law of any relevant
jurisdiction or any treaty, such Lender shall deliver to the Borrower, at the
time or times prescribed by applicable law, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate.
3.6 Mitigation
of Circumstances; Lender Statements; Survival of
Indemnity. Lender shall promptly notify the Borrower of any
event of which it has knowledge which will result in, and will use reasonable
commercial efforts available to it (and not, in Lender’s good faith judgment,
otherwise disadvantageous to Lender) to mitigate or avoid, (i) any obligation of
Borrower to pay any amount pursuant to Section
3.1, 3.2
or 3.5
and (ii) the unavailability of Eurodollar Loans under Section
3.3 (and, if Lender has given notice of any such event described above
and thereafter such event ceases to exist, Lender shall promptly so notify the
Borrower). If Lender claims compensation under Section
3.1, 3.2,
3.4,
or 3.5,
Lender shall deliver a written statement to the Borrower as to the amount due
under the applicable Section, which statement shall set forth in reasonable
detail the calculations upon which Lender determined such amount and shall be
final, conclusive and binding on Borrower in the absence of manifest
error. Determination of amounts payable under any such Section in
connection with a Eurodollar Loan shall be calculated as though Lender funded
its Eurodollar Loan through the purchase of a deposit of the type and maturity
corresponding to the deposit used as a reference in determining the Eurodollar
Rate applicable to such Loan, whether in fact that is the case or
not. Unless otherwise provided herein, the amount specified in the
written statement of Lender shall be payable on demand after receipt by the
Borrower of such written statement. Notwithstanding any other
provision of this Article
III, if Lender fails to notify Borrower of any event or circumstance
which will entitle Lender to compensation from Borrower pursuant to Section
3.1, 3.2
or 3.5
within 60 days after Lender obtains knowledge of such event or
circumstance, then Borrower will not be responsible for any
such
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compensation
arising prior to the 60th day before Borrower receives notice from Lender of
such event or circumstance. The obligations of the Borrower under
Sections
3.1, 3.2,
3.4
and 3.5
shall survive payment of the Obligations and termination of this
Agreement.
ARTICLE
IV
CONDITIONS
PRECEDENT
4.1 Conditions
Precedent to Closing and Borrowing. The obligation of the
Lender to make the Loan hereunder is subject to the conditions precedent that
(a) the Lender has received all fees and (to the extent billed) expenses which
are payable on or before the Closing Date to Lender or in connection herewith
have been (or concurrently with the making of the Loan will be) paid in full;
(b) the Lender has received each of the following
documents:
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(i)
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Copies
of the articles or certificate of incorporation of Borrower, together with
all amendments thereto, certified by the Secretary or an Assistant
Secretary of Borrower, and certificates of good standing, certified by the
appropriate governmental officer in the jurisdiction of incorporation of
Borrower.
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(ii)
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Copies,
certified by the Secretary or Assistant Secretary of Borrower, of
Borrower’s bylaws and of resolutions of its Board of Directors authorizing
the execution, delivery and performance of the Loan
Documents.
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(iii)
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An
incumbency certificate from Borrower, executed by the Secretary or
Assistant Secretary of Borrower, which shall identify by name and title
and bear the signatures of the officers of Borrower authorized to sign the
Loan Documents, upon which certificate the Lender shall be entitled to
rely until informed of any change in writing by
Borrower.
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(iv)
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A
certificate, signed by an Authorized Officer of Borrower, stating that on
the Closing Date no Default or Unmatured Default has occurred and is
continuing with respect to
Borrower.
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(v)
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A
written opinion of internal counsel to Borrower, substantially in the form
of Exhibit
E-1.
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(vi)
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A
written opinion of Xxxxxxxxx & Xxxxxxx LLP, special New York counsel
to the Borrower, substantially in the form of Exhibit
E-2.
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(vii)
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Any
Notes requested by Lender pursuant to Section
2.13 payable to the order of
Lender.
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(viii)
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Copies
of all governmental approvals, if any, necessary for Borrower to enter
into the Loan Documents to which it is a party and to obtain the Loan
hereunder.
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(ix)
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Such
other documents and other items as Lender or its counsel may reasonably
request;
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and (c)
after giving effect to the Loan, the Borrower will not exceed its borrowing
authority as allowed by the Approvals.
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ARTICLE
V
REPRESENTATIONS
AND WARRANTIES
Borrower
represents and warrants to the Lender that:
5.1 Existence
and Standing. Borrower is a corporation, and each of its
Subsidiaries is a corporation, partnership or limited liability company, duly
and properly incorporated or organized, as the case may be, validly existing and
(to the extent such concept applies to such entity) in good standing under the
laws of its jurisdiction (or, if applicable, jurisdictions) of incorporation or
organization and has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted, except where failure to do so
could not reasonably be expected to have a Material Adverse
Effect.
5.2 Authorization
and Validity. Borrower has the power and authority and legal
right to execute and deliver the Loan Documents to which it is a party and to
perform its obligations thereunder. The execution and delivery by
Borrower of the Loan Documents to which it is a party and the performance of its
obligations thereunder have been duly authorized by proper corporate
proceedings, and the Loan Documents constitute legal, valid and binding
obligations of Borrower enforceable against Borrower in accordance with their
terms, except as enforceability may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors’ rights
generally.
5.3 No
Conflict; Government Consent. Neither the execution and
delivery by Borrower of the Loan Documents to which it is a party, nor the
consummation of the transactions therein contemplated, nor compliance with the
provisions thereof, will violate (i) any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on Borrower or any of its
Subsidiaries or (ii) Borrower’s or any of its Subsidiary’s articles or
certificate of incorporation, partnership agreement, certificate of partnership,
articles or certificate of organization, bylaws, or operating or other
management agreement, as the case may be, or (iii) the provisions of any
indenture, instrument or agreement to which Borrower or any of its Significant
Subsidiaries is a party or is subject, or by which it, or its Property, is
bound, or conflict with or constitute a default thereunder, or result in, or
require, the creation or imposition of any Lien in, of or on any Property of
Borrower or any of its Significant Subsidiaries pursuant to the terms of any
such indenture, instrument or agreement. No order, consent,
adjudication, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, or other action in respect of
any governmental or public body or authority (including the Federal Energy
Regulatory Commission), or any subdivision thereof (any of the foregoing, an
“Approval”),
is required to be obtained by Borrower or any of its Subsidiaries in connection
with the execution and delivery by Borrower of the Loan Documents, the payment
and performance by Borrower of its Obligations or the legality, validity,
binding effect or enforceability against Borrower of any Loan Document or the
borrowings by Borrower under this Agreement, except for Approvals which have
been issued or obtained by Borrower and which are in full force and
effect.
5.4 Financial
Statements. The financial statements included in Borrower’s
Public Reports were prepared in accordance with Agreement Accounting Principles
and fairly present the consolidated financial condition and operations of
Borrower and its Subsidiaries at the dates thereof and the consolidated results
of their operations for the periods then ended.
5.5 No
Material Adverse Change. Since December 31, 2007, there has
been no change from that reflected in the Public Reports in the business,
Property, financial condition or results of operations of Borrower and its
Subsidiaries taken as a whole which could reasonably be expected to have a
Material Adverse Effect.
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5.6 Taxes. Borrower
and its Subsidiaries have filed all United States federal tax returns and all
other material tax returns which are required to be filed and have paid all
taxes due pursuant to said returns or pursuant to any assessment received by
Borrower or any of its Subsidiaries, except (a) such taxes, if any, as are being
contested in good faith and as to which adequate reserves have been provided in
accordance with Agreement Accounting Principles and (b) taxes and governmental
charges (in addition to those referred to in clause
(a)) in an aggregate amount not exceeding $1,000,000. The
charges, accruals and reserves on the books of Borrower and its Subsidiaries in
respect of any taxes or other governmental charges are
adequate.
5.7 Litigation
and Contingent Obligations. Except as disclosed in the Public
Reports, there is no litigation, arbitration, governmental investigation,
proceeding or inquiry pending or, to the knowledge of Borrower, threatened
against or affecting Borrower or any of its Subsidiaries which could reasonably
be expected to have a Material Adverse Effect or which seeks to prevent, enjoin
or delay the making of the Loan. Other than any liability incident to
any litigation, arbitration or proceeding which could not reasonably be expected
to have a Material Adverse Effect, Borrower has no material contingent
obligations not provided for or disclosed in the Public
Reports.
5.8 Significant
Subsidiaries. As of the date hereof, Borrower has no
Significant Subsidiaries.
5.9 ERISA. Each
Plan complies in all material respects with all applicable requirements of law
and regulations, no Reportable Event has occurred with respect to any Plan,
neither Borrower nor any other member of the Controlled Group has withdrawn from
any Plan or initiated steps to do so, and no steps have been taken to reorganize
or terminate any Plan.
5.10 Accuracy
of Information. No written information, exhibit or report
furnished by Borrower or any of its Subsidiaries to the Lender in connection
with the negotiation of, or compliance with, the Loan Documents contained any
material misstatement of fact or omitted to state a material fact or any fact
necessary to make the statements contained therein not
misleading.
5.11 Regulation
U. Neither Borrower nor any of its Subsidiaries is engaged
principally or as one of its primary activities in the business of extending
credit for the purpose of purchasing or carrying any “margin stock” (as defined
in Regulation U of the FRB).
5.12 Material
Agreements. Neither Borrower nor any Subsidiary thereof is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any agreement to which it is a party, which
default could reasonably be expected to have a Material Adverse
Effect.
5.13 Compliance
With Laws. Borrower and its Subsidiaries have complied with
all applicable statutes, rules, regulations, orders and restrictions of any
domestic or foreign government or any instrumentality or agency thereof having
jurisdiction over the conduct of their respective businesses or the ownership of
their respective Property except for any failure to comply with any of the
foregoing which could not reasonably be expected to have a Material Adverse
Effect.
5.14 Plan
Assets; Prohibited Transactions. Borrower is not an entity
deemed to hold “plan assets” within the meaning of 29 C.F.R. § 2510.3-101 of an
employee benefit plan (as defined in Section 3(3) of ERISA) which is subject to
Title I of ERISA or any plan (within the meaning of Section 4975 of the
Code).
5.15 Environmental
Matters. In the ordinary course of its business, the officers
of Borrower consider the effect of Environmental Laws on the business of
Borrower and its Subsidiaries, in the course
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of which
they identify and evaluate potential risks and liabilities accruing to Borrower
and its Subsidiaries due to Environmental Laws. On the basis of this
consideration, Borrower has concluded that Environmental Laws are not reasonably
expected to have a Material Adverse Effect. Except as disclosed in
the Public Reports, Borrower nor any Subsidiary thereof has received any notice
to the effect that its operations are not in material compliance with any of the
requirements of applicable Environmental Laws or are the subject of any federal
or state investigation evaluating whether any remedial action is needed to
respond to a release of any toxic or hazardous waste or substance into the
environment, which noncompliance or remedial action could reasonably be expected
to have a Material Adverse Effect.
5.16 Investment
Company Act. Neither Borrower nor any Subsidiary thereof is an
“investment company” or a company “controlled” by an “investment company”,
within the meaning of the Investment Company Act of
1940.
5.17. Intentionally
Omitted.
5.18. Insurance. Borrower
and its Significant Subsidiaries maintain insurance with financially sound and
reputable insurance companies on all their Property of a character usually
insured by entities in the same or similar businesses similarly situated against
loss or damage of the kinds and in the amounts, customarily insured against by
such entities, and maintain such other insurance as is usually carried by such
entities.
5.19. No
Default. No Default or Unmatured Default exists.
5.20. Ownership
of Properties. As of the Closing Date, Borrower and its
Subsidiaries have valid title, free of all Liens other than those permitted by
Section
6.12, to all the Property reflected as owned by Borrower and its
Subsidiaries in the December 31, 2007 financial statements of Borrower referred
to in Section
5.4, other than Property used, sold, transferred or otherwise disposed of
since such date (a) in the ordinary course of business or (b) which are not
material to the business of Borrower and its Subsidiaries taken as a
whole.
5.21. OFAC. None
of Borrower, any Subsidiary of Borrower or any Affiliate of Borrower: (i) is a
person named on the list of Specially Designated Nationals or Blocked Persons
maintained by the U.S. Department of the Treasury’s Office of Foreign Assets
Control available at
xxxx://xxx.xxxxx.xxx/xxxxxxx/xxxxxxxxxxx/xxxx/xxx/xxxxx.xxxx, or as otherwise
published from time to time; or (ii) is (A) an agency of the government of a
country, (B) an organization controlled by a country, or (C) a person resident
in a country that is subject to a sanctions program identified on the list
maintained by OFAC and available at
xxxx://xxx.xxxxx.xxx/xxxxxxx/xxxxxxxxxxx/xxxx/xxxxxxxxx/xxxxx.xxxx, or as
otherwise published from time to time, as such program may be applicable to such
agency, organization or person; or (iii) derives more than 10% of its assets or
operating income from investments in or transactions with any such country,
agency, organization or person; and (iv) none of the proceeds from the Loan will
be used to finance any operations, investments or activities in, or make any
payments to, any such country, agency, organization, or person.
ARTICLE
VI
COVENANTS
During
the term of this Agreement, unless the Lender shall otherwise consent in
writing:
6.1 Financial
Reporting. Borrower will maintain, for itself and each of its
Subsidiaries, a system of accounting established and administered in accordance
with Agreement Accounting Principles, and furnish to the Lender (in such number
of copies as the Lender may reasonably request):
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(i)
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Within
100 days after the close of each of its fiscal years, an audit report,
which shall be without a “going concern” or similar qualification or
exception and without any qualification as to the scope of the audit,
issued by independent certified public accountants of recognized national
standing and reasonably acceptable to the Lender, prepared in accordance
with Agreement Accounting Principles on a consolidated and consolidating
basis (consolidating statements need not be certified by such accountants)
for itself and its Subsidiaries, including balance sheets as of the end of
such period, related profit and loss and reconciliation of surplus
statements, and a statement of cash flows, accompanied by (a) any
management letter prepared by said accountants, and (b) a certificate of
said accountants that, in the course of their examination necessary for
their certification of the foregoing, they have obtained no knowledge of
any Default or Unmatured Default with respect to Borrower, or if, in the
opinion of such accountants, any such Default or Unmatured Default shall
exist, stating the nature and status thereof; provided
that if Borrower is then a “registrant” within the meaning of Rule 1-01 of
Regulation S-X of the SEC and required to file a report on Form 10-K with
the SEC, a copy of Borrower’s annual report on Form 10-K (excluding the
exhibits thereto, unless such exhibits are requested under clause
(vi) of this Section) or any successor form and a manually executed
copy of the accompanying report of Borrower’s independent public
accountant, as filed with the SEC, shall satisfy the requirements of this
clause
(i);
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(ii)
|
Within
60 days after the close of the first three quarterly periods of each of
its fiscal years, for itself and its Subsidiaries, either (i) consolidated
and consolidating unaudited balance sheets as at the close of each such
period and consolidated and consolidating profit and loss and
reconciliation of surplus statements and a statement of cash flows for the
period from the beginning of such fiscal year to the end of such quarter,
all certified by its chief financial officer or (ii) if Borrower is then a
“registrant” within the meaning of Rule 1-01 of Regulation S-X of the SEC
and required to file a report on Form 10-Q with the SEC, a copy of
Borrower’s report on Form 10-Q for such quarterly period, excluding the
exhibits thereto, unless such exhibits are requested under clause
(vi) of this Section.
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(iii)
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Together
with the financial statements (or reports) required under Sections
6.1(i) and (ii),
a compliance certificate in substantially the form of Exhibit
B signed by an Authorized Officer of Borrower showing the
calculations necessary to determine Borrower’s compliance with Section
6.13 of this Agreement and stating that, to the knowledge of such
officer, no Default or Unmatured Default with respect to Borrower exists,
or if any such Default or Unmatured Default exists, stating the nature and
status thereof.
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(iv)
|
As
soon as possible and in any event within 30 days after receipt by
Borrower, a copy of (a) any notice or claim to the effect that Borrower or
any of its Subsidiaries is or may be liable to any Person as a result of
the release by Borrower, any of its Subsidiaries, or any other Person of
any toxic or hazardous waste or substance into the environment, and (b)
any notice alleging any violation of any federal, state or local
environmental, health or safety law or regulation by Borrower or any of
its Subsidiaries, which, in either case, could be reasonably expected to
have a Material Adverse Effect.
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(v)
|
Promptly
upon Borrower’s furnishing thereof to its shareholders generally, copies
of all financial statements, reports and proxy statements so
furnished.
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(vi)
|
Promptly
upon the filing thereof, copies of all registration statements and annual,
quarterly, monthly or other regular reports which Borrower or any of its
Subsidiaries files with the SEC.
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(vii)
|
As
soon as Borrower obtains knowledge of an actual Change in Control or
publicly disclosed prospective Change in Control, written notice of same,
including the anticipated or actual date of and all other publicly
disclosed material terms and conditions surrounding such proposed or
actual Change in Control.
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(viii)
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Such
other information (including nonfinancial information) as Lender may from
time to time reasonably request.
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Documents
required to be delivered pursuant to clause
(i), (ii),
(v)
or (vi)
above 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 a website on the internet at a website address
previously specified to the Lender; or (ii) on which such documents are posted
on the Borrower’s behalf on IntraLinks or another relevant website, if any, to
which Lender has access; provided
that (1) upon request of the Lender, the Borrower shall deliver paper copies of
such documents to the Lender (until a written request to cease delivering paper
copies is given by the Lender) and (2) the Borrower shall notify (which may be
by facsimile or electronic mail) the Lender of the posting of any
documents.
6.2 Use
of Proceeds. Borrower will use the proceeds of the Loan for
general corporate purposes. Borrower will not, nor will it permit any
Subsidiary to, use any of the proceeds of the Loan to purchase or carry any
“margin stock” (as defined in Regulation U of the
FRB).
6.3 Notice
of Default. Borrower will give prompt notice in writing to the
Lender of the occurrence of any Default or Unmatured Default with respect to
Borrower (it being understood and agreed that Borrower shall not be required to
make separate disclosure under this Section
6.3 of occurrences or developments which have previously been disclosed
to the Lender in any financial statement or other information delivered to the
Lender pursuant to Section
6.1).
6.4 Conduct
of Business. Borrower will, and will cause each of its
Significant Subsidiaries (or, in the case of clause
(ii) below, each of its Subsidiaries) to, (i) carry on and conduct its
business in substantially the same manner and in substantially the same fields
of enterprise as it is presently conducted and (ii) do all things necessary to
remain duly incorporated or organized, validly existing and (to the extent such
concept applies to such entity) in good standing as a domestic corporation,
partnership or limited liability company in its jurisdiction of incorporation or
organization, as the case may be, and maintain all requisite authority to
conduct its business in each jurisdiction in which its business is conducted,
except to the extent, in the case of all matters covered by this clause
(ii) other than the existence of Borrower, that failure to do so would
not reasonably be expected to have a Material Adverse
Effect.
6.5 Taxes. Borrower
will, and will cause each of its Subsidiaries to, timely file complete and
correct United States federal and applicable foreign, state and local tax
returns required by law and pay when due all taxes, assessments and governmental
charges and levies upon it or its income, profits or Property, except (a) those
that are being contested in good faith by appropriate proceedings and with
respect to which adequate reserves have been set aside in accordance with
Agreement Accounting Principles and (b) taxes, governmental charges and levies
(in addition to those referred to in clause
(a)) in an aggregate amount not exceeding
$1,000,000.
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6.6 Insurance. Borrower
will, and will cause each of its Significant Subsidiaries to, maintain with
financially sound and reputable insurance companies insurance on all of its
Property in such amounts and covering such risks as is consistent with sound
business practice, and Borrower will furnish to Lender such information as
Lender may reasonably request as to the insurance carried by Borrower and its
Significant Subsidiaries.
6.7 Compliance
with Laws. Borrower will, and will cause each of its
Subsidiaries to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject, including
all Environmental Laws, where failure to do so could reasonably be expected to
have a Material Adverse Effect.
6.8 Maintenance
of Properties. Borrower will, and will cause each of its
Subsidiaries to, do all things necessary to (a) maintain, preserve, protect
and keep its Property in good repair, working order and condition, and make all
necessary and proper repairs, renewals and replacements so that its business
carried on in connection therewith may be properly conducted at all times, where
failure to do so could reasonably be expected to have a Material Adverse Effect;
and (b) keep proper books and records in which full and correct entries
shall be made of all material financial transactions of Borrower and its
Subsidiaries.
6.9 Inspection. Borrower
will, and will cause each of its Significant Subsidiaries to, permit the Lender
upon reasonable notice and at such reasonable times and intervals as the Lender
may designate by its respective representatives and agents, to inspect any of
the Property, books and financial records of Borrower and each such Significant
Subsidiary, to examine and make copies of the books of accounts and other
financial records of Borrower and each such Significant Subsidiary, and to
discuss the affairs, finances and accounts of Borrower and each such Significant
Subsidiary with, and to be advised as to the same by, their respective
officers.
6.10 Merger. Borrower
will not, nor will it permit any of its Significant Subsidiaries to, merge or
consolidate with or into any other Person, except that, so long as both
immediately prior to and after giving effect to such merger or consolidation, no
Default or Unmatured Default with respect to Borrower shall have
occurred and be continuing, (i) any Significant Subsidiary of Borrower may merge
with Borrower or a wholly-owned Subsidiary of Borrower and (ii) Borrower may
merge or consolidate with any other Person so long as Borrower is the surviving
entity.
6.11 Sales
of Assets. Borrower will not, nor will it permit any of its
Subsidiaries to, lease, sell or otherwise dispose of any of its assets (other
than in the ordinary course of business), or sell or assign with or without
recourse any accounts receivable, except:
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(i)
|
Any
Subsidiary of Borrower may sell, transfer or assign any of its assets to
Borrower or another Subsidiary of
Borrower.
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(ii)
|
The
sale, assignment or other transfer of accounts receivable or other rights
to payment pursuant to any Securitization
Transaction.
|
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(iii)
|
Any
Permitted DPL Asset Sale so long as, at the time thereof and immediately
after giving effect thereto, no Default or Unmatured Default
exists.
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(iv)
|
Borrower
and its Subsidiaries may sell or otherwise dispose of assets so long as
the aggregate book value of all assets sold or otherwise disposed of in
any fiscal year of Borrower (other than assets sold or otherwise disposed
of in the ordinary course of
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business
or pursuant to clauses
(i) through (iii)
above) does not exceed a Substantial Portion of the Property of
Borrower.
6.12 Liens. Borrower
will not, nor will it permit any of its Significant Subsidiaries to, create,
incur, or suffer to exist any Lien in, of or on the Property of Borrower or any
such Significant Subsidiary, except:
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(i)
|
Liens
for taxes, assessments or governmental charges or levies on its
Property if the same shall not at the time be delinquent or
thereafter can be paid without penalty, or are being contested in good
faith and by appropriate proceedings and for which adequate reserves in
accordance with Agreement Accounting Principles shall have been set aside
on its books.
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(ii)
|
Liens
imposed by law, such as carriers’, warehousemen’s and mechanics’ liens and
other similar liens arising in the ordinary course of business which
secure payment of obligations not more than 90 days past due or which are
being contested in good faith by appropriate proceedings and for which
adequate reserves shall have been set aside on its
books.
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(iii)
|
Liens
arising out of pledges or deposits under worker’s compensation laws,
unemployment insurance, old age pensions, or other social security or
retirement benefits, or similar
legislation.
|
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(iv)
|
Utility
easements, building restrictions, zoning laws or ordinances and such other
encumbrances or charges against real property as are of a nature generally
existing with respect to properties of a similar character and which do
not in any material way affect the marketability of the same or interfere
with the use thereof in the business of Borrower and its Significant
Subsidiaries.
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(v)
|
Liens
existing on the date hereof and described in Schedule
1 (including liens on after-acquired property arising under
agreements described in Schedule
1 as such agreements are in effect on the date
hereof).
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(vi)
|
Judgment
Liens which secure payment of legal obligations that would not constitute
a Default with respect to Borrower under Article
VII.
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(vii)
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Liens
on Property acquired by Borrower or a Significant Subsidiary thereof after
the date hereof, existing on such Property at the time of acquisition
thereof (and not created in anticipation thereof), provided
that in any such case no such Lien shall extend to or cover any other
Property of Borrower or such Significant Subsidiary, as the case may
be.
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(viii)
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Deposits
and/or similar arrangements to secure the performance of bids, fuel
procurement contracts or other trade contracts (other than for borrowed
money), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business by Borrower or any of its Significant
Subsidiaries.
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(ix)
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Liens
on assets of Borrower and its Significant Subsidiaries arising out of
obligations or duties to any municipality or public authority with respect
to any franchise, grant, license, permit or
certificate.
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(x)
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Rights
reserved to or vested in any municipality or public authority to control
or regulate any property or asset of Borrower or any of its Significant
Subsidiaries or to use such property or asset in a manner which does not
materially impair the use of such property or asset for the purposes for
which it is held by Borrower or such Significant
Subsidiary.
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(xi)
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Irregularities
in or deficiencies of title to any Property which do not materially affect
the use of such property by Borrower or any of its Significant
Subsidiaries in the normal course of its
business.
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(xii)
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Liens
securing Indebtedness of Borrower and its Subsidiaries incurred to finance
the acquisition of fixed or capital assets, provided
that (i) such Liens shall be created substantially simultaneously with the
acquisition of such fixed or capital assets, (ii) such Liens do not at any
time encumber any property other than the property financed by such
Indebtedness, (iii) the principal amount of Indebtedness secured thereby
is not increased and (iv) the principal amount of Indebtedness secured by
any such Lien shall at no time exceed 100% of the original purchase price
of such property at the time it was
acquired.
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(xiii)
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Any
Lien on any property or asset of any corporation or other entity existing
at the time such corporation or entity is acquired, merged or consolidated
or amalgamated with or into Borrower or any Significant Subsidiary thereof
and not created in contemplation of such
event.
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(xiv)
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Liens
arising out of the refinancing, extension, renewal or refunding of any
Indebtedness secured by any Lien permitted by Section
6.12(vii), (xii)
or (xiii),
provided
that such Indebtedness is not increased and is not secured by any
additional assets.
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(xv)
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Rights
of lessees arising under leases entered into by Borrower or any of its
Significant Subsidiaries as lessor, in the ordinary course of
business.
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(xvi)
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Permitted
DPL Liens.
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(xvii)
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Purchase
money mortgages or other purchase money liens or conditional sale,
lease-purchase or other title retention agreements upon or in respect of
property acquired or leased for use in the ordinary course of its business
by Borrower or any of its Significant
Subsidiaries.
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(xviii)
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Liens,
in addition to those permitted by clauses
(i) through (xvii),
granted by Borrower and its Subsidiaries to secure Nonrecourse
Indebtedness incurred after the date hereof, provided
that the aggregate amount of all Indebtedness secured by such Liens shall
not at any time exceed
$200,000,000.
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(xix)
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Other
Liens, in addition to those permitted by clauses
(i) through (xviii),
securing Indebtedness or arising in connection with Securitization
Transactions, provided
that the sum (without duplication) of all such Indebtedness, plus
the aggregate investment or claim held at any time by all purchasers,
assignees or other transferees of (or of interests in) receivables and
other rights to payment in all Securitization Transactions shall not at
any time exceed $300,000,000 for Borrower and its Significant
Subsidiaries.
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6.13 Leverage
Ratio. Borrower will not permit the ratio, determined as of
the end of each of its fiscal quarters, of (i) the Total Indebtedness of
Borrower to (ii) the Total Capitalization of Borrower to be greater than 0.65 to
1.0. For purposes of this Section, the aggregate outstanding
Indebtedness
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evidenced
by Hybrid Securities up to an aggregate amount of 15% of Total Capitalization as
of the date of determination, shall be excluded from Total Indebtedness, but the
entire aggregate outstanding Indebtedness evidenced by such Hybrid Securities
shall be included in the calculation of Total Capitalization.
ARTICLE
VII
DEFAULTS
The
occurrence of any one or more of the following events shall constitute a Default
with respect to the Borrower:
7.1 Representation
or Warranty. Any representation or warranty made by or on
behalf of Borrower to the Lender under or in connection with this Agreement or
any certificate or information delivered in connection with this Agreement or
any other Loan Document shall be materially false on the date as of which
made.
7.2 Nonpayment. Nonpayment
of the principal of the Loan to Borrower when due; or nonpayment by Borrower of
any interest on the Loan to Borrower or other obligation payable by Borrower
under any of the Loan Documents to which it is a party, within five days after
the same becomes due.
7.3 Certain
Covenant Breaches. The breach by Borrower of any of the terms
or provisions of Section
6.2, 6.4
(as to the existence of Borrower), 6.10,
6.11,
6.12
or 6.13.
7.4 Other
Breaches. The breach by Borrower (other than a breach which
constitutes a Default with respect to Borrower under another Section of this
Article
VII) of any of the terms or provisions of this Agreement which is not
remedied within 15 days (or, in the case of Section
6.9, five Business Days) after the chief executive officer, the chief
financial officer, the President, the Treasurer or any Assistant Treasurer of
Borrower obtains actual knowledge of such breach.
7.5 Cross
Default. Failure of Borrower or any of its Significant
Subsidiaries to pay when due any Indebtedness aggregating in excess of
$50,000,000 (“Material
Indebtedness”); or the default by Borrower or any of its Significant
Subsidiaries in the performance (beyond the applicable grace period with respect
thereto, if any) of any term, provision or condition contained in any agreement
under which any such Material Indebtedness was created or is governed, or any
other event shall occur or condition exist, the effect of which default or event
is to cause, or to permit the holder or holders of such Material Indebtedness to
cause, such Material Indebtedness to become due prior to its stated maturity; or
any Material Indebtedness of Borrower or any of its Significant Subsidiaries
shall be declared to be due and payable or required to be prepaid or repurchased
(other than by a regularly scheduled payment) prior to the stated maturity
thereof; or Borrower or any of its Significant Subsidiaries shall not pay, or
shall admit in writing its inability to pay, its debts generally as they become
due.
7.6 Voluntary
Bankruptcy, etc. Borrower or any of its Significant
Subsidiaries shall (i) have an order for relief entered with respect to it under
the federal bankruptcy laws as now or hereafter in effect, (ii) make an
assignment for the benefit of creditors, (iii) apply for, seek, consent to, or
acquiesce in, the appointment of a receiver, custodian, trustee, examiner,
liquidator or similar official for it or a Substantial Portion of its Property,
(iv) institute any proceeding seeking an order for relief under the federal
bankruptcy laws as now or hereafter in effect or seeking to adjudicate it a
bankrupt or insolvent, or seeking dissolution, winding up, liquidation,
reorganization, arrangement, adjustment or composition of it or its debts under
any law relating to bankruptcy, insolvency or reorganization or relief of
debtors or fail
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to file
an answer or other pleading denying the material allegations of any such
proceeding filed against it, (v) take any corporate, partnership
or limited liability company action to authorize or effect any of the foregoing
actions set forth in this Section
7.6 or (vi) fail to contest in good faith any appointment or proceeding
described in Section
7.7.
7.7 Involuntary
Bankruptcy, etc. Without the application, approval or consent
of Borrower or any of its Significant Subsidiaries, a receiver, trustee,
examiner, liquidator or similar official shall be appointed for Borrower or any
of its Significant Subsidiaries or a Substantial Portion of its Property, or a
proceeding described in Section
7.6(iv) shall be instituted against Borrower or any of its Significant
Subsidiaries and such appointment continues undischarged or such proceeding
continues undismissed or unstayed for a period of 30 consecutive
days.
7.8 Seizure
of Property, etc. Any court, government or governmental agency
shall condemn, seize or otherwise appropriate, or take custody or control of,
all or any portion of the Property of Borrower and its Significant Subsidiaries
which, when taken together with all other Property of Borrower and its
Significant Subsidiaries so condemned, seized, appropriated, or taken custody or
control of, constitutes a Substantial Portion of its
Property.
7.9 Judgments. Borrower
or any of its Significant Subsidiaries shall fail within 60 days to pay, bond or
otherwise discharge one or more (i) judgments or orders for the payment of money
in excess of $50,000,000 (or the equivalent thereof in currencies other than
U.S. Dollars) in the aggregate or (ii) nonmonetary judgments or orders which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect, and, in any such case, there is a period of five
consecutive days during which a stay of enforcement of such judgment(s) or
order(s) is not in effect (by reason of pending appeal or
otherwise).
7.10 ERISA. (i)
Any Person shall engage in any “prohibited transaction” (as defined in Section
406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any
“accumulated funding deficiency” (as defined in Section 302 of ERISA), whether
or not waived, shall exist with respect to any Plan or any Lien in favor of the
PBGC or a Plan shall arise on the assets of Borrower or any other member of the
Controlled Group, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Single Employer Plan, which
Reportable Event or commencement of proceedings or appointment of a trustee is,
in the reasonable opinion of the Lender, likely to result in the termination of
such Plan for purposes of Title IV of ERISA, (iv) any other member of the Plan
shall terminate for purposes of Title IV of ERISA, (v) Borrower or any
other member of the Controlled Group shall, or in the reasonable opinion of the
Lender is likely to, incur any liability in connection with a withdrawal from,
or the insolvency or reorganization of, a Multiemployer Plan or (vi) any other
event or condition shall occur or exist with respect to a Plan; and
in each case referred to in clauses
(i) through (vi)
above, such event or condition, together with all other such events or
conditions, if any, could reasonably be expected to have a Material Adverse
Effect.
7.11 Unenforceability
of Loan Documents, etc. Any Loan Document shall cease to be in
full force and effect (other than, in the case of a Note, as contemplated
hereby), any action shall be taken by or on behalf of Borrower to discontinue or
to assert the invalidity or unenforceability of any of its obligations under any
Loan Document, or Borrower or any Person acting on behalf of Borrower shall deny
that Borrower has any further liability under any Loan Document or shall give
notice to such effect.
7.12 Change
in Control. Any Change in Control shall occur or PHI shall
fail to own directly or indirectly 100% of the Voting Stock of
Borrower.
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ARTICLE
VIII
ACCELERATION,
WAIVERS, AMENDMENTS AND REMEDIES
8.1 Acceleration. If
any Default described in Section
7.6 or 7.7
occurs with respect to Borrower, the Obligations of Borrower shall immediately
become due and payable without any election or action on the part of the
Lender. If any other Default occurs with respect to Borrower, the
Required Lenders may declare the Obligations of Borrower to be due and payable,
whereupon the Obligations of Borrower shall become immediately due and payable,
without presentment, demand, protest or notice of any kind, all of which
Borrower hereby expressly waives.
If,
within 30 days after acceleration of the maturity of the Obligations of Borrower
as a result of any Default (other than any Default as described in Section
7.6 or 7.7)
with respect to Borrower and before any judgment or decree for the payment of
the Obligations due shall have been obtained or entered, the Required Lenders
(in their sole discretion) may, by notice to Borrower, rescind and annul such
acceleration.
8.2 Amendments. Subject
to the provisions of this Article
VIII, the Required Lenders and the Borrower may enter into agreements
supplemental hereto for the purpose of adding or modifying any provisions to
this Agreement changing in any manner the rights of the Lender or Borrower
hereunder or waiving any Default or Unmatured Default hereunder; provided
that no such supplemental agreement shall, without the consent of each
Lender:
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(i)
|
Extend
the final maturity of the Loan or forgive all or any portion of the
principal amount thereof, or reduce the rate or extend the time of payment
of interest thereon.
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(ii)
|
Reduce
the percentage specified in the definition of Required
Lenders.
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|
(iii)
|
Permit
Borrower to assign its rights under this
Agreement.
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(iv)
|
Amend
this Section
8.2.
|
8.3 Preservation
of Rights. No delay or omission of the Lender to exercise any
right under the Loan Documents shall impair such right or be construed to be a
waiver of any Default or Unmatured Default or an acquiescence therein, and the
making of the Loan notwithstanding the existence of a Default or Unmatured
Default or the inability of the Borrower to satisfy the conditions precedent to
the Loan shall not constitute any waiver or acquiescence. Any single
or partial exercise of any such right shall not preclude other or further
exercise thereof or the exercise of any other right, and no waiver, amendment or
other variation of the terms, conditions or provisions of any Loan Document
whatsoever shall be valid unless in writing signed by the parties required
pursuant to Section
8.2 and then only to the extent in such writing specifically set
forth. All remedies contained in the Loan Documents or by law
afforded shall be cumulative and all shall be available to the Lender until the
Obligations have been paid in full.
ARTICLE
IX
GENERAL
PROVISIONS
9.1 Survival
of Representations. All representations and warranties of the
Borrower contained in this Agreement shall survive the making of the Loan herein
contemplated.
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9.2 Governmental
Regulation. Anything contained in this Agreement to the
contrary notwithstanding, the Lender shall not be obligated to extend credit to
Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
9.3 Headings. Section
headings in the Loan Documents are for convenience of reference only, and shall
not govern the interpretation of any of the provisions of the Loan
Documents.
9.4 Entire
Agreement. The Loan Documents embody the entire agreement and
understanding between the Borrower and the Lender and supersede all prior
agreements and understandings between the Borrower and the Lender relating to
the subject matter thereof.
9.5 Benefits
of this Agreement. This Agreement shall not be construed so as
to confer any right or benefit upon any Person other than the parties to this
Agreement and their respective successors and
assigns.
9.6 Expenses;
Indemnification.
(i) Borrower
shall not be responsible to reimburse the Lender for any costs, internal charges
and out of pocket expenses (including expenses of and fees for attorneys for the
Lender who also are employees of the Lender) paid or incurred by the Lender in
connection with the preparation, negotiation, execution, delivery, and review of
the Loan Documents; provided,
however,
that Borrower shall reimburse the Lender for the reasonable expenses of a single
outside counsel for the Lender in connection with the preparation, negotiation,
execution, delivery and review of the Loan Documents executed on the Closing
Date in an amount not to exceed $10,000. Borrower agrees to reimburse
the Lender for (A) all reasonable costs, internal charges and out of pocket
expenses (including reasonable expenses of and fees for attorneys for the
Lender, which attorneys may be employees of the Lender) paid or incurred by the
Lender in connection with any amendment or modification of the Loan Documents,
and the collection and enforcement of the Obligations of Borrower under the Loan
Documents (including in any “work-out” or restructuring of the Obligations of
Borrower resulting from the occurrence of a Default with respect to Borrower)
and (B) any civil penalty or fine assessed by OFAC against, and all reasonable
costs and expenses (including reasonable counsel fees and disbursements)
incurred in connection with defense thereof, by the Lender as a result of
conduct by Borrower that violates a sanction enforced by
OFAC.
(ii) Borrower
agrees to indemnify the Lender, its affiliates, and each of the directors,
officers and employees of the foregoing Persons (collectively, the “Indemnified
Parties”) against all losses, claims, damages, penalties, judgments,
liabilities and reasonable expenses (including all reasonable expenses of
litigation or preparation therefor whether or not any Indemnified Party is a
party thereto) which any of them may pay or incur arising out of or relating to
this Agreement, the other Loan Documents, the transactions contemplated hereby
or the direct or indirect application or proposed application of the proceeds of
the Loan hereunder except to the extent that they are determined in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of the Indemnified Party seeking
indemnification. The obligations of the Borrower under this Section
9.6 shall survive the termination of this
Agreement.
9.7 [Intentionally
Omitted].
9.8 [Intentionally
Omitted].
9.9 Severability
of Provisions. Any provision in any Loan Document that is held
to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to
that jurisdiction, be inoperative, unenforceable, or invalid without affecting
the remaining provisions in that jurisdiction or the
operation,
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enforceability,
or validity of that provision in any other jurisdiction, and to this end the
provisions of all Loan Documents are declared to be severable.
9.10 Nonliability
of Lender. The relationship between the Borrower on the one
hand and the Lender on the other hand shall be solely that of borrower and
lender. The Lender shall not have any fiduciary responsibility to
Borrower. The Lender undertakes no responsibility to Borrower to
review or inform Borrower of any matter in connection with any phase of
Borrower’s business or operations. Borrower agrees that the Lender
shall not have liability to Borrower (whether sounding in tort, contract or
otherwise) for losses suffered by Borrower in connection with, arising out of,
or in any way related to, the transactions contemplated and the relationship
established by the Loan Documents, or any act, omission or event occurring in
connection therewith, unless it is determined in a final non-appealable judgment
by a court of competent jurisdiction that such losses resulted from the Lender’s
gross negligence or willful misconduct. The Lender shall not have any
liability with respect to, and Borrower hereby waives, releases and agrees not
to xxx for, any special, indirect or consequential damages suffered by Borrower
in connection with, arising out of, or in any way related to the Loan Documents
or the transactions contemplated thereby.
9.11 Limited
Disclosure.
(i) Lender
shall not disclose to any Person any Specified Information (as defined below)
except to its, and its Affiliates’, officers, employees, agents, accountants,
legal counsel, advisors and other representatives who have a need to know such
Specified Information in connection with this Agreement or the transactions
contemplated hereby. “Specified
Information” means information that Borrower has furnished or in the
future furnishes to the Lender in confidence, but does not include any such
information that (a) is published in a source or otherwise becomes
generally available to the public (other than through the actions of the Lender
or any of its Affiliates, officers, employees, agents, accountants, legal
counsel, advisors and other representatives in violation of this Agreement) or
that is or becomes available to the Lender from a source other than Borrower,
(b) without duplication with clause
(a) above, is otherwise a matter of general public knowledge, (c) is
required to be disclosed by law, regulation, or judicial order (including
pursuant to the Code), (d) is requested by any regulatory body with jurisdiction
over the Lender, (e) is disclosed to legal counsel, accountants and other
professional advisors to the Lender, in connection with the exercise of any
right or remedy hereunder or under any Note or any suit or other litigation or
proceeding relating to this Agreement or any Note or to a rating agency if
required by such agency in connection with a rating relating to the Loan, (f) is
disclosed to assignees, participants or potential
assignees or participants who agree to be bound by the provisions of this Section
9.11 or (g) is disclosed to any actual or prospective counterparty (or
its advisors) to any swap or derivative transaction relating to Borrower and its
obligations who agrees to be bound by the provisions of this Section
9.11.
(ii) The
provisions of this Section
9.11 supersede any confidentiality obligations of Lender relating to this
Agreement or the transactions contemplated hereby under any agreement between
Borrower and the Lender.
9.12 Nonreliance. Lender
hereby represents that it is not relying on or looking to any margin stock (as
defined in Regulation U of the FRB) for the repayment of the Loan provided for
herein.
9.13 [Intentionally
Omitted].
9.14 USA
PATRIOT ACT NOTIFICATION. The following notification is provided to the
Borrower pursuant to the USA Patriot Act of 2001, 31 U.S.C. Section
5318:
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IMPORTANT INFORMATION
ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the government fight the
funding of terrorism and money laundering activities, Federal law requires all
financial institutions to obtain, verify and record information that identifies
each person or entity that opens an account, including any deposit account,
treasury management account, loan, other extension of credit or other financial
services product. What this means for the Borrower: When
the Borrower opens an account, if the Borrower is an individual,
the Lender will ask for the Borrower’s name, residential address, tax
identification number, date of birth and other information that will allow
the Lender to identify the Borrower, and, if the Borrower is not an
individual, the Lender will ask for the Borrower’s name, tax
identification number, business address and other information that will allow
the Lender to identify the Borrower. The Lender
may also ask, if the Borrower is an individual, to see the Borrower’s driver’s
license or other identifying documents, and, if the Borrower is not an
individual, to see the Borrower’s legal organizational documents or other
identifying documents.
ARTICLE
X
[INTENTIONALLY
OMITTED]
ARTICLE
XI
SETOFF
In
addition to, and without limitation of, any rights of the Lender under
applicable law, if Borrower becomes insolvent, however evidenced, or any Default
occurs with respect to Borrower, any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by Lender or any
Affiliate of Lender to or for the credit or account of Borrower may
be offset and applied toward the payment of the Obligations of Borrower owing to
Lender, whether or not the Obligations, or any part thereof, shall then be
due.
ARTICLE
XII
BENEFIT
OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1 Successors
and Assigns. The terms and provisions of the Loan Documents
shall be binding upon and inure to the benefit of the Borrower and the Lender
and their respective successors and assigns, except that (i) Borrower shall not
have the right to assign its rights or obligations under the Loan Documents and
(ii) any assignment by Lender must be made in compliance with Section
12.3. The parties to this Agreement acknowledge that clause
(ii) of the preceding sentence relates only to absolute assignments and
does not prohibit assignments creating security interests, including any pledge
or assignment by Lender of all or any portion of its rights under this Agreement
and any Note to a Federal Reserve Bank; provided
that no such pledge or assignment creating a security interest shall release the
transferor Lender from its obligations hereunder unless and until the parties
thereto have complied with the provisions of Section
12.3. Any assignee of the rights to the Loan or any Note
agrees by acceptance of such assignment to be bound by all the terms and
provisions of the Loan Documents. Any request, authority or consent
of any Person, who at the time of making such request or giving such authority
or consent is the owner of the rights to the Loan (whether or not a Note has
been issued in evidence thereof), shall be conclusive and binding on any
subsequent holder or assignee of the rights to the
Loan.
-29-
12.2 Participations.
12.2.1 Permitted
Participants; Effect. Upon giving notice to but without
obtaining the consent of Borrower, Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time sell to one or more
banks or other entities (“Participants”)
participating interests in any Obligations owing to Lender, any Note held by
Lender, or any other interest of Lender under the Loan Documents. In
the event of any such sale by a Lender of participating interests to a
Participant, Lender’s obligations under the Loan Documents shall remain
unchanged, Lender shall remain solely responsible to the Borrower for the
performance of such obligations, Lender shall remain the owner of the
Obligations owing to Lender and the holder of any Note issued to it for all
purposes under the Loan Documents, all amounts payable by Borrower under this
Agreement shall be determined as if Lender had not sold such participating
interests, and the Borrower shall continue to deal solely and directly with
Lender in connection with Lender’s rights and obligations under the Loan
Documents.
12.2.2 Voting
Rights. Lender shall retain the sole right to approve, without
the consent of any Participant, any amendment, modification or waiver of any
provision of the Loan Documents other than any amendment, modification or waiver
which extends the final maturity of the Loan in which such Participant has an
interest or forgives all or any portion of the principal amount thereof, or
reduces the rate or extends the time of payment of interest
thereon.
12.2.3 Benefit
of Setoff. The Borrower agree that each Participant shall be
deemed to have the right of setoff provided in Article
XI in respect of its participating interest in amounts owing under the
Loan Documents to the same extent as if the amount of its participating interest
were owing directly to it as the Lender under the Loan Documents, provided
that Lender shall retain the right of setoff provided in Article
XI with respect to the amount of participating interests sold to each
Participant. The Lender agrees to share with each Participant, and
each Participant, by exercising the right of setoff provided in Article
XI, agrees to share with Lender, any amount received pursuant to the
exercise of its right of setoff.
12.3 Assignments.
12.3.1 Permitted
Assignments. Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time assign to one or
more banks or other entities (“Purchasers”)
all or any part of its rights and obligations under the Loan
Documents. Such assignment shall be substantially in the form of
Exhibit
C or in such other form as may be agreed to by the parties
thereto. Borrower’s consent shall not be required (A) for an
assignment (i) to a Purchaser which is an Affiliate of the Lender, and
(ii) to a Purchaser which is not an Affiliate of Lender provided such
an assignment is in an amount not less than the lesser of (x)
$5,000,000 or (y) the amount of the Outstanding Loan or (B) if a Default exists
with respect to the Borrower. To the extent Borrower’s consent is
otherwise required to an assignment hereunder, Borrower agrees not to
unreasonably withhold, delay or condition such consent. Each party
hereto hereby agrees that upon the effectiveness of any such assignment to a
Purchaser pursuant to Section
12.3, such Purchaser shall be deemed to be a “Lender” under this
Agreement and the other Loan Documents as if such Purchaser were a Lender on the
Closing Date hereof.
12.3.2 Effect;
Effective Date. Upon delivery of an Assignment Agreement to
Borrower, the Assignment Agreement shall become effective on the effective date
specified in such Assignment Agreement. On and after the effective
date of such Assignment Agreement, such Purchaser shall for all purposes be a
lender party to this Agreement and any other Loan Document executed by or on
behalf of the Lender and shall have all the rights and obligations of the Lender
under the Loan Documents with respect to the percentage of the Obligations
assigned to such Purchaser, to the same extent as if it were an original party
hereto, and no further consent or action by the Borrower shall be required to
release the Lender with respect to the percentage of the Obligations assigned to
such Purchaser. Any Person that is
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at any
time a Lender and that thereafter ceases to be a Lender pursuant to the terms of
this Section
12.3.2 shall continue to be entitled to the benefit of those provisions
of this Agreement that, pursuant to the terms hereof, survive the
termination hereof. Upon the consummation of any assignment to a
Purchaser pursuant to this Section
12.3.2, the Lender and the Borrower shall, if the Purchaser desires that
its Loans be evidenced by Notes, make appropriate arrangements so that new Notes
or, as appropriate, replacement Notes are issued to the Lender and new Notes or,
as appropriate, replacement Notes, are issued to such Purchaser.
12.4 Dissemination
of Information. The Borrower authorizes Lender to disclose to
any Participant or Purchaser or any other Person acquiring an interest in the
Loan Documents by operation of law (each a “Transferee”)
and any prospective Transferee any and all information in Lender’s possession
concerning the creditworthiness of the Borrower and their respective
Subsidiaries, including any information contained in any Public Reports; provided
that each Transferee and prospective Transferee agrees to be bound by Section
9.11 of this Agreement.
12.5 [Intentionally
Omitted].
12.6 Tax
Treatment. If any interest in any Loan Document is transferred
to any Transferee which is organized under the laws of any jurisdiction other
than the United States or any State thereof, the transferor Lender shall cause
such Transferee, concurrently with the effectiveness of such transfer, to comply
with the provisions of Section
3.5(iv).
ARTICLE
XIII
NOTICES
Except
as otherwise permitted by Section
2.14, all notices, requests and other communications to any party
hereunder shall be in writing (including facsimile transmission or electronic
mail or posting on a website) and shall, subject to the last paragraph of Section
6.1, be given to such party at its address, facsimile number or
electronic mail address set forth on the signature pages hereof or such other
address, facsimile number or electronic mail address as it may hereafter specify
for such purpose by notice to the other parties hereto. Subject to
the last paragraph of Section
6.1, each such notice, request or other communication shall be effective
(i) if given by facsimile transmission, when transmitted to the facsimile number
specified pursuant to this Section and confirmation of receipt is received, (ii)
if given by mail, three Business Days after such communication is deposited in
the mails with first class postage prepaid, addressed as aforesaid, or (iii) if
given by any other means, when delivered (or, in the case of electronic mail,
received) at the address specified pursuant to this Section; provided
that notices to the Lender under Article
II shall not be effective until received.
ARTICLE
XIV
COUNTERPARTS
This Agreement may be
executed in any number of counterparts, all of which taken together shall
constitute one agreement, and any of the parties hereto may execute this
Agreement by signing any such counterpart. This Agreement shall be
effective when it has been executed by the Borrower and the
Lender. Delivery of any executed signature page hereof or of any
amendment, waiver or consent to this Agreement by facsimile or electronic
transmission shall be as effective as delivery of a manually executed
counterpart thereof.
-31-
ARTICLE
XV
CHOICE
OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
15.1 CHOICE
OF LAW. THE LOAN DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS (INCLUDING SECTION 5.1401.7 OF THE GENERAL OBLIGATIONS
LAW, BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF) OF
THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS.
15.2 CONSENT
TO JURISDICTION. BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT
SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENT, AND BORROWER HEREBY IRREVOCABLY AGREES THAT ALL
CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN
ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE
AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT
OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL
LIMIT THE RIGHT OF THE LENDER TO BRING PROCEEDINGS AGAINST BORROWER
IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY
BORROWER AGAINST THE LENDER OR ANY AFFILIATE OF THE LENDER INVOLVING, DIRECTLY
OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN NEW YORK, NEW
YORK.
15.3 WAIVER
OF JURY TRIAL. THE BORROWER AND THE LENDER HEREBY WAIVE TRIAL
BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED
THEREUNDER.
[Signatures
Follow]
-32-
IN
WITNESS WHEREOF, the Borrower and the Lender have executed this Agreement
as of the date first above written.
|
DELMARVA
POWER & LIGHT COMPANY
|
||
|
By:
|
/s/
X. X.
XXXXXXXX
|
|
|
Xxxxxxx
X. Xxxxxxxx
Vice
President and Treasurer 000 Xxxxx Xxxxxx XX Xxxxx
Xxxxx
Xxxxxxxxxx,
X.X. 00000
Attention:
Xxxxxxx X. Xxxxxxxx
Tel.:
000-000-0000
Fax:
000-000-0000
E-Mail: xxxxxxxxxx@xxxxx.xxx
|
||
|
THE
BANK OF NOVA SCOTIA
|
||
|
By:
|
/s/
XXXXX
XXXXXX
|
|
|
Name: Xxxxx
Xxxxxx
Title: Managing
Director
000 Xxxx Xxxxxx Xxxx 0xx
Xxxxx
Xxxxxxx,
XX
Xxxxxx
X0X0X0
WBO
- Corporate Loan Operations
Attention:
Xxxxx Xxxx and Xxxxx Xxxxx
Gen.
Tel.: 000-000-0000
Gen.
Fax: 000-000-0000
E-Mail:
Xxxxx_Xxxx@xxxxxxxxxxxxx.xxx
Xxxxx_Xxxxx@xxxxxxxxxxxxx.xxx
|
||
|
0
Xxxxxxx Xxxxx, Xxxxx 00
000
Xxxxxxxx
Xxx
Xxxx, XX 00000
Power
- Execution
Attention:
Xxxxx Xxxxxx
Tel.:
000-000-0000
Fax:
000-000-0000
E-Mail:
Xxxxx_Xxxxxx@xxxxxxxxxxxxx.xxx
Attention:
Xxxxxx Xxxxxx
Tel.:
000-000-0000
Fax:
000-000-0000
E-Mail: Xxxxxx_Xxxxxx@xxxxxxxxxxxxx.xxx
|
||
EXHIBIT
A
PRICING
SCHEDULE
|
Level
|
S&P
Rating/Xxxxx’x Rating/Fitch Rating
|
Applicable
Margin
During
Initial Period
|
Applicable
Margin
After
Initial Period
|
|
I
|
BBB/Baa2/BBB
or better
|
0.600%
|
0.750%
|
|
II
|
BBB-/Baa3/BBB-
|
0.675%
|
0.825%
|
|
III
|
Borrower
does not qualify for Level I status or Level II status
|
0.775%
|
0.925%
|
For the
purposes of this Exhibit A, the following terms have the following meanings,
subject to the other provisions of this Exhibit A:
“Fitch
Rating” means, at any time, the ratings issued by Fitch Ratings and then
in effect with respect to the Borrower’s unsecured long-term debt securities
without third-party credit enhancement.
“Xxxxx’x
Rating” means, at any time, the rating issued by Xxxxx’x and then in
effect with respect to the Borrower’s senior unsecured long term debt securities
without third party credit enhancement.
“S&P
Rating” means, at any time, the rating issued by S&P and then in
effect with respect to the Borrower’s senior unsecured long term debt securities
without third party credit enhancement.
For
purposes of this Exhibit A, the Xxxxx’x Rating, the S&P Rating and the Fitch
Rating in effect for the Borrower on any date are that in effect at the close of
business on such date. If the Borrower is split-rated and all three
(3) ratings fall in different Levels, the Applicable Margin shall be based upon
the Level indicated by the middle rating. If the Borrower is
split-rated and two (2) of the ratings fall in the same Level, (the “Majority
Level”) and the third rating is in a different Level, the Applicable
Margin shall be based upon the Majority Level.
EXHIBIT
B
COMPLIANCE
CERTIFICATE
|
To:
|
The
Bank of Nova Scotia
|
This
Compliance Certificate is furnished pursuant to the Loan Agreement dated as of
March [__], 2008 (as amended, restated or otherwise modified from time to time,
the “Loan
Agreement”) between Delmarva Power & Light Company, as Borrower, and
The Bank of Nova Scotia, as Lender. Unless otherwise defined herein,
capitalized terms used in this Compliance Certificate have the respective
meanings ascribed thereto in the Loan Agreement.
THE
UNDERSIGNED HEREBY CERTIFIES THAT:
1. I
am the duly elected _________of Borrower.
2. I
have reviewed the terms of the Loan Agreement and I have made, or have caused to
be made under my supervision, a detailed review of the transactions and
conditions of Borrower and its Subsidiaries during the accounting period covered
by the attached financial statements.
3. The
examinations described in paragraph
2 did not disclose, and I have no knowledge of, the existence of any
condition or event which constitutes a Default or Unmatured Default during or at
the end of the accounting period covered by the attached financial statements or
as of the date of this Compliance Certificate, except as set forth
below:
[Describe
any exceptions by listing, in detail, the nature of the condition or event, the
period during which it has existed and the action taken or proposed to be taken
with respect to each such condition or event.]
4. Schedule
1 attached hereto sets forth true and accurate computations of certain
covenant ratios in the Loan Agreement.
The
foregoing certifications, together with the computations set forth in Schedule
1 hereto and the financial statements delivered with this Compliance
Certificate in support hereof, are made and delivered this ________,
200_.
SCHEDULE
1 TO COMPLIANCE CERTIFICATE
Compliance
as of ____, 200_ with
provisions
of Section 6.13 of
the Loan
Agreement
[INSERT
FORMULA FOR CALCULATION]
EXHIBIT
C
ASSIGNMENT
AGREEMENT
This
Assignment Agreement (this “Assignment
Agreement”) between _____________ _____________ (the “Assignor”)
and __________________________ (the “Assignee”)
is dated as of ____________, 20__. The parties hereto agree as
follows:
1. PRELIMINARY
STATEMENT. The Assignor is a party to a certain Loan Agreement
(as amended, restated or otherwise modified from time to time, the “Loan
Agreement”) described in Item 1 of Schedule
1 attached hereto (“Schedule
1”). Unless otherwise defined herein, capitalized terms used
herein shall have the respective meanings ascribed thereto in the Loan
Agreement.
2. ASSIGNMENT
AND ASSUMPTION. The Assignor hereby sells and assigns to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor, an
interest in and to the Assignor’s rights and obligations under the Loan
Agreement and the other Loan Documents in the amount specified in Item 2 of
Schedule
1 of all outstanding rights and obligations under the Loan Agreement and
the other Loan Documents. The amount of the rights and obligations of
the Assignee and the Assignor, after giving effect to this Assignment Agreement,
is set forth in Item 3 of Schedule
1.
3. EFFECTIVE
DATE. The effective date of this Assignment Agreement (the
“Effective
Date”) shall be the later of the date specified in Item 4 of Schedule
1 or two Business Days (or such shorter period agreed to by the Borrower)
after this Assignment Agreement, together with any consents required under the
Loan Agreement, are delivered to the Borrower. In no event will the
Effective Date occur if the payments required to be made by the Assignee to the
Assignor on the Effective Date are not made on the proposed Effective
Date.
4. PAYMENT
OBLIGATIONS. In consideration for the sale and assignment
hereunder, the Assignee shall pay the Assignor, on the Effective Date, the
amount agreed to by the Assignor and the Assignee. The Assignee shall
be entitled to receive all payments of principal and interest which become due
and payable on and after the Effective Date with respect to the interest
assigned hereby. The Assignee will promptly remit to the Assignor any
interest received from the Borrower which relate to the portion of the Loan
assigned to the Assignee hereunder for periods prior to the Effective
Date. In the event that either party hereto receives any payment to
which the other party hereto is entitled under this Assignment Agreement, then
the party receiving such amount shall promptly remit such amount to the other
party hereto.
5. RECORDATION
FEE. The Assignee agrees to pay the recordation fee, if any
required to be paid to the Assignor in connection with this Assignment
Agreement.
6. REPRESENTATIONS
OF THE ASSIGNOR: LIMITATIONS ON THE ASSIGNOR’S LIABILITY. The
Assignor represents and warrants that (i) it is the legal and beneficial owner
of the interest being assigned by it hereunder, (ii) such interest is free and
clear of any adverse claim created by the Assignor and (iii) the execution and
delivery of this Assignment Agreement by the Assignor is duly
authorized. The parties hereto agree that the assignment and
assumption hereunder are made without recourse to the Assignor and that the
Assignor makes no other representation or warranty of any kind to the
Assignee. Neither the Assignor nor any of its officers, directors,
employees, agents or attorneys shall be responsible for (i) the due execution,
legality, validity, enforceability, genuineness, sufficiency or
collectability
of any Loan Document, (ii) any representation, warranty or statement made in or
in connection with any Loan Document, (iii) the financial condition or
creditworthiness of any Borrower, (iv) the performance of or compliance
with any term or provision of any Loan Document, (v) inspecting any of the
property, books or records of Borrower or (vi) any mistake, error of judgment,
or action taken or omitted to be taken in connection with the Loan
Documents.
7. REPRESENTATIONS
AND UNDERTAKINGS OF THE ASSIGNEE. The Assignee (i) confirms
that it has received a copy of the Loan Agreement, together with copies of all
financial statements requested by the Assignee and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment Agreement, (ii) agrees that it will,
independently and without reliance upon the Assignor and based on such documents
and information that it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under the Loan Documents,
(iii) confirms that the execution and delivery of this Assignment Agreement
by the Assignee is duly authorized, (iv) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender, (v) confirms that
its payment instructions and notice instructions are as set forth in the
attachment to Schedule
1, (vi) confirms that none of the funds, monies, assets or other
consideration being used to make the purchase and assumption hereunder are “plan
assets” as defined under ERISA and that its rights, benefits and interests in
and under the Loan Documents will not be “plan assets” under ERISA, (vii) agrees
to indemnify and hold the Assignor harmless against all losses, costs and
expenses (including reasonable attorneys fees) and liabilities incurred by the
Assignor in connection with or arising in any manner from the Assignee’s
nonperformance of the obligations assumed under this Assignment Agreement, and
(viii) if applicable, attaches the forms prescribed by the Internal Revenue
Service of the United States certifying that the Assignee is entitled to receive
payments under the Loan Documents without deduction or withholding of any United
States federal income taxes.
8. GOVERNING
LAW. THIS ASSIGNMENT AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING SECTION 5.1401.7 OF THE GENERAL
OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS
THEREOF) OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE
TO NATIONAL BANKS.
9. NOTICES. Notices
shall be given under this Assignment Agreement in the manner set forth in the
Loan Agreement. For purposes hereof, the addresses of the parties
hereto (until notice of a change is delivered) shall be the respective addresses
set forth in the attachment to Schedule
1.
10. COUNTERPARTS:
DELIVERY BY FACSIMILE. This Assignment Agreement may be
executed in counterparts. Transmission by facsimile of an executed
counterpart of this Assignment Agreement shall be deemed to constitute due and
sufficient delivery of such counterpart and such facsimile shall be deemed to be
an original counterpart of this Assignment Agreement.
IN
WITNESS WHEREOF, the duly authorized officers of the parties hereto have
executed this Assignment Agreement by signing Schedule
1 hereto as of the date first above written.
SCHEDULE
1
to
Assignment Agreement
| 1. |
Description
and Date of Loan Agreement:
|
|
|
Loan
Agreement, dated as of March [__], 2008, between Delmarva Power &
Light Company, as Borrower, and The Bank of Nova Scotia, as
Lender.
|
||
| 2. | Amount of the Loan purchased under Assignment Agreement |
$______________
|
| 3. |
Assignor’s
Loan Amount after giving
effect to Assignment Agreement |
$______________
|
| 4. |
Proposed
Effective Date:
|
______________ |
|
Accepted and
Agreed:
|
|
|
[NAME OF
ASSIGNOR]
|
[NAME OF
ASSIGNEE]
|
| By: __________________________________________ | By: ___________________________________________ |
| Title: ________________________________________ | Title: _________________________________________ |
| ACCEPTED AND CONSENTED TO BY1: |
| DELMARVA POWER & LIGHT COMPANY | |
| By: _______________________________________ | |
| Print Name: _________________________________ | |
| Title: ______________________________________ |
Attachment
to SCHEDULE 1 to ASSIGNMENT AGREEMENT
INFORMATION
SHEET
Attach
Assignor’s Information Sheet, which must
include
notice addresses for the Assignor and the Assignee
(Sample
form shown below)
ASSIGNOR
INFORMATION
Loan
Contact:
Name:
__________________________________ Telephone
No.: ________________________________
Fax
No.:
________________________________
Payment
Information:
Name
& ABA # of Destination
Bank: ___________________________________________________
Account
Name & Number for Wire
Transfer: _____________________________________________
Other
Instructions: ________________________________________________________________
Address for
Notices for Assignor:
Name: _________________________________ Telephone
No.: __________________________________
Fax
No.: _______________________________
ASSIGNEE
INFORMATION
Loan
Contact:
Name:
________________________________ Telephone
No.: ____________________________________
Fax
No.: ______________________________
Operations
Contacts:
Booking
Installation:
Name:
Telephone
No.:
Fax
No.:
Payment
Information:
Name
& ABA # of Destination
Bank: __________________________________________________
Account
Name & Number for Wire
Transfer: ____________________________________________
Other
Instructions: ______________________________________________________________
|
Address
for Notices for Assignee:
|
|
EXHIBIT
D
NOTE
$___________________
[Date]
Delmarva
Power & Light Company (the “Borrower”)
promises to pay to ___________________ (the “Lender”)
the sum of ______________________ and 00/100 DOLLARS ($________________) (the
“Loan”) made by the Lender to the Borrower pursuant to the Loan Agreement (as
defined below), at the office of Lender at _______________________________,
together with interest on the unpaid principal amount hereof at the rates and on
the dates set forth in the Loan Agreement. The Borrower shall pay the
principal of and accrued and unpaid interest on the Loan in full on the Maturity
Date.
This Note
is issued pursuant to, and is entitled to the benefits of, the Loan Agreement
dated as of March [__], 2008 (as amended or otherwise modified from time to
time, the “Loan
Agreement”), between the Borrower and the Lender, to which Loan Agreement
reference is hereby made for a statement of the terms and conditions governing
this Note, including the terms and conditions under which this Note may be
prepaid or its maturity date accelerated. Capitalized terms used
herein and not otherwise defined herein are used with the meanings attributed to
them in the Loan Agreement.
All
payments hereunder shall be made in lawful money of the United States of America
and in immediately available funds.
THIS NOTE
SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING SECTION
5.1401.7 OF THE GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO THE
CONFLICT OF LAWS PROVISIONS THEREOF) OF THE STATE OF NEW YORK, BUT GIVING EFFECT
TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
DELMARVA
POWER & LIGHT COMPANY
By: _________________________________
Print
Name: __________________________
Title: _______________________________
Exhibit
X-0
Xxxxx 00, 0000
Xxx Xxxx
xx Xxxx Xxxxxx
000 Xxxx
Xxxxxx Xxxx
0xx
Xxxxx
Xxxxxxx,
XX
Xxxxxx
X0X0X0
Ladies
and Gentlemen:
I am
General Counsel of Delmarva Power & Light Company, a Delaware and Virginia
corporation (“DPL”), and have represented DPL in connection with the
negotiation, execution and delivery of the Loan Agreement, dated as of March
[__], 2008, between The Bank of Nova Scotia (the “Lender”) and DPL (the “Loan
Agreement”). This opinion is being delivered to you in accordance
with Section 4.1(b)(v) of the Loan Agreement. Capitalized terms not
defined herein have the respective meanings set forth in the Loan
Agreement.
In
connection with rendering the opinions set forth herein, I, or my
representatives, have reviewed an executed copy of the Loan Agreement and the
Note issued by DPL on the date hereof (the “Note”). I or my
representatives also have examined or caused to be examined originals, or copies
that have been certified or otherwise identified to my or their satisfaction as
being true copies, of such other instruments, certificates and other documents
or records as I or they have deemed necessary or appropriate to enable me to
render the opinions set forth below. In such review and examination,
I or my representatives have assumed the genuineness of all signatures, the
authenticity of all documents submitted to me or them as originals, and the
conformity to original documents of all documents submitted to me or them as
copies.
Based upon the foregoing, and subject to the reservations and exceptions
set forth herein, I am of the opinion that:
1. DPL
is a corporation duly incorporated, validly existing and in good standing under
the laws of the State of Delaware and under the laws of the Commonwealth of
Virginia, and has the corporate power and authority to own and operate its
property and assets, to carry on its business as currently conducted, to execute
and deliver the Loan Agreement and the Note, and to consummate the transactions
contemplated thereby.
2. The
execution and delivery of the Loan Agreement and the Note and the performance by
DPL of its obligations thereunder have been duly authorized by all necessary
corporate action on the part of DPL, and DPL has duly executed and delivered the
Loan Agreement and the Note.
3. Neither
the execution or delivery of the Loan Agreement and the Note by DPL, nor the
performance by DPL of its obligations thereunder, does or will (i) violate any
of the provisions of the certificate and articles of incorporation or bylaws of
DPL, (ii) violate any laws, rules or regulations of the State of Delaware or the
Public Utility Holding Company Act of 2005 and the rules and regulations of the
Federal Energy Regulatory Commission thereunder, (iii) conflict with, violate or
constitute a breach of
The Bank
of Nova Scotia
March 20,
2008
Page
2
(A) the
provisions of any indenture or other material contract, agreement or other
instrument to which DPL is a party or by which it or its Property is bound, or
(B) any judgment, injunction, material permit, order or decree of any
government, governmental instrumentality, arbitrator or court applicable to DPL,
or (iv) result in or require the creation or imposition of any Lien on the
Property of DPL under any indenture or other material contract, agreement or
other instrument to which DPL is a party or by which it or its Property is
bound.
4. No
consent, approval, authorization or other action by or filing with any
governmental agency or instrumentality is required on the part of DPL for the
execution and delivery of the Loan Agreement or the Note or the consummation of
the transactions contemplated thereby, except those already obtained or
made.
5. Except
as disclosed in the Public Reports, there is no litigation, arbitration,
governmental investigation, proceeding or inquiry pending or, to the best of my
knowledge, threatened against DPL or any of its Subsidiaries which, if adversely
determined, could reasonably be expected to have a Material Adverse
Effect.
My opinion in paragraph 3(ii) above is limited to laws and regulations
explicitly referenced herein and those normally applicable to transactions of
the type contemplated by the Loan Agreement and does not extend to other laws or
regulations relating to, or to licenses, permits, approvals and filings
necessary for, the conduct of DPL’s business, including any environmental laws
or regulations.
* * *
I
am a member of the Bar of the District of Columbia, and I express no opinion
herein as to any law other than the laws of the State of Delaware, the Virginia
Stock Corporation Act, and, to the extent expressly referred to herein, the
federal law of the United States. In rendering the opinions herein as
to matters governed by the laws of the State of Delaware, I am relying on
attorneys working under my supervision who are members of the Bar of the State
of Delaware. The opinions contained herein are rendered solely to the
Lender in connection with the transactions contemplated by the Loan Agreement
and may not be relied on by the Lender for any other purpose or by any other
Person for any purpose. The opinions expressed in this letter are
limited to the matters set forth herein, and no opinion should be inferred
beyond those opinions expressly stated. I assume no obligation to
advise you of any facts that come to my attention, or any changes in law,
subsequent to the date hereof.
|
Very
truly yours,
|
|
| Xxxx X. Xxxx |
Exhibit
X-0
Xxxxx 00, 0000
Xxx Xxxx
xx Xxxx Xxxxxx
000 Xxxx
Xxxxxx Xxxx
0xx
Xxxxx
Xxxxxxx,
XX
Xxxxxx
X0X0X0
Ladies
and Gentlemen:
We have
acted as special New York counsel to Delmarva Power & Light Company, a
Delaware and Virginia corporation (the “Borrower”), in connection with the entry
by the Borrower into the Loan Agreement, dated as of the date hereof, between
The Bank of Nova Scotia (the “Lender”) and the Borrower (the “Loan
Agreement”). This letter is being delivered to you in accordance with
Section 4.1(b)(vi) of the Loan Agreement. Unless otherwise defined
herein, capitalized terms used herein have the respective meanings provided in
the Loan Agreement.
We have
reviewed the Loan Agreement, the Note issued by the Borrower on the date hereof
(the “Note”), and such corporate records, certificates and other documents, and
such questions of law, as we have deemed necessary or appropriate for the
purposes of rendering this opinion.
We have
assumed that all signatures are genuine, that all documents submitted to us as
originals are authentic and that all copies of documents submitted to us conform
to the originals. We have assumed that the Borrower is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdictions of its incorporation and has all requisite power, authority and
legal right to execute, deliver and perform its obligations under the Loan
Agreement and the Note. We also have assumed that the Borrower has
duly authorized, executed and delivered the Loan Agreement and the
Note. We have assumed further that the Lender has duly authorized,
executed and delivered the Loan Agreement and that the Loan Agreement is the
valid and binding obligation of the Lender, enforceable against the Lender in
accordance with its terms.
We have
made no investigation for the purpose of verifying the assumptions set forth
herein.
Based
upon the foregoing, and subject to the qualifications set forth below, we are of
the opinion that, insofar as the laws of the State of New York are
concerned:
1. The
Loan Agreement constitutes the valid and binding obligation of the Borrower,
enforceable against the Borrower in accordance with its terms, subject to
bankruptcy, insolvency,
The Bank
of Nova Scotia
March 20,
2008
Page
2
fraudulent
transfer, reorganization, moratorium and other laws of general applicability
relating to or affecting creditors’ rights and to general equity
principles.
2. The
Note constitutes the valid and binding obligation of the Borrower, enforceable
against the Borrower in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and other laws of
general applicability relating to or affecting creditors’ rights and to general
equity principles.
3. Neither
the execution or delivery of the Loan Agreement or the Note by the Borrower, nor
the performance by the Borrower of its obligations thereunder in accordance with
the terms thereof, does or will conflict with, violate or constitute a breach
of, any laws, or any rules or regulations known to us, of the State of New
York.
The
foregoing opinion is subject to the following limitations and
qualifications:
(a) We
express no opinion as to:
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(i) waivers
of defenses, subrogation and related rights, rights to trial by jury,
rights to object to venue, or other rights or benefits bestowed by
operation of law;
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(ii) releases or waivers
of unmatured claims or rights;
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(iii) indemnification,
contribution, or exculpation, to the extent they purport to indemnify any
party against, or release or limit any party’s liability for, its own
breach or failure to comply with statutory obligations, or to the extent
such provisions are contrary to public policy;
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(iv) provisions
for liquidated damages and penalties or penalty
interest;
|
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(v)
provisions
purporting to require a prevailing party in a dispute to pay attorneys’
fees and expenses, or other costs, to a non-prevailing
party;
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(vi)
provisions
requiring amendments and waivers to be in
writing;
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(vii) provisions
making notices effective even if not actually
received;
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(viii) provisions
purporting to make a party’s determination
conclusive;
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(ix)
provisions
purporting to govern post-judgment interest; or
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| (x) exclusive jurisdiction or venue provisions. |
(b) We
express no opinion as to any right of setoff, bankers lien or counterclaim or
right to the application of property in the possession or control of the
Lender.
The Bank
of Nova Scotia
March 20,
2008
Page
3
(c) We
express no opinion as to any legal requirements or restrictions applicable to
the Lender.
(d) Our
opinion in paragraph 3 above is limited to laws and regulations normally
applicable to transactions of the type contemplated by the Loan Agreement and
does not extend to laws or regulations relating to, or to licenses, permits,
approvals and filings necessary for, the conduct of the Borrower’s business,
including any environmental laws or regulations.
We are
members of the bar of the District of Columbia and the State of New
York. We do not express any opinion herein on any laws other than the
law of the State of New York.
This
opinion is given solely for your benefit and may not be disclosed to any other
person (except to bank examiners and other governmental officials having
regulatory authority over the Lender or as otherwise required by applicable law,
regulation or legal process) without our written consent. This
opinion may not be relied upon by any other person without our written
consent.
Very truly yours,
SCHEDULE
1
LIENS
|
Incurred
By
|
Owed To
|
Property
Encumbered
|
Maturity
|
Amount of
Indebtedness
|
|
Delmarva
Power & Light Company
|
CitiCapital
(BLC)
|
Vehicles,
Office
Equip.,
Computers
|
Master
Agreement
|
$15,670,487.36*
|
|
*The
amount of this lien fluctuates with the amount of accounts receivable
created by this program. The amount listed is as of December
31, 2007.
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