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EXHIBIT 10.46
THIRD AMENDED AND RESTATED
CREDIT AGREEMENT
among
COGENTRIX ENERGY, INC.,
The Several Lenders
from Time to Time Parties Hereto
and
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED,
as Coordinating Lead Arranger,
THE BANK OF NOVA SCOTIA
and
CITIBANK, N.A.,
as Lead Arrangers
and
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED,
as Agent and Issuing Bank
Dated as of September 14, 2000
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS.........................................................1
1.1 Defined Terms................................................1
1.2 Other Definitional Provisions...............................24
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS....................................25
2.1 Revolving Credit Commitments................................25
2.2 Procedure for Revolving Credit Borrowing....................25
2.3 Fees........................................................26
2.4 Termination or Reduction of Commitments.....................26
2.5 Repayment of Revolving Credit Loans; Evidence of Debt.......27
2.6 Prepayments.................................................27
2.7 Conversion and Continuation Options.........................28
2.8 Minimum Amounts and Maximum Number of Tranches..............29
2.9 Interest Rates and Payment Dates............................29
2.10 Computation of Interest and Fees............................29
2.11 Inability to Determine Interest Rate........................30
2.12 Pro Rata Treatment and Payments.............................30
2.13 Illegality..................................................31
2.14 Requirements of Law.........................................31
2.15 Taxes.......................................................32
2.16 Indemnity...................................................34
2.17 Change of Lending Office....................................34
2.18 Use of Proceeds.............................................34
SECTION 3. LETTERS OF CREDIT..................................................35
3.1 L/C Commitment..............................................35
3.2 Procedure for Issuance of Letters of Credit.................35
3.3 Fees, Commissions and Other Charges.........................36
3.4 L/C Participations..........................................37
3.5 Reimbursement Obligation of the Borrower....................38
3.6 Obligations Absolute........................................38
3.7 Letter of Credit Payments...................................38
3.8 Issuance Request............................................39
3.9 Collateralization...........................................39
3.10 Substitution/Replacement of Issuing Bank....................40
SECTION 4. REPRESENTATIONS AND WARRANTIES.....................................40
4.1 Financial Information.......................................41
4.2 No Change...................................................42
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4.3 Corporate Existence; Compliance with Law....................42
4.4 Corporate Power; Authorization; Enforceable Obligations.....43
4.5 No Legal Bar................................................43
4.6 No Material Litigation......................................43
4.7 No Default..................................................43
4.8 Ownership of Property; Liens................................44
4.9 Taxes.......................................................44
4.10 Federal Regulations.........................................44
4.11 ERISA.......................................................44
4.12 Investment Company Act; Public Utility Holding Company Act;
Other Regulations...........................................44
4.13 Subsidiaries................................................45
4.14 Purpose of the Revolving Credit Loans.......................45
4.15 Environmental Matters.......................................45
4.16 Accuracy of Information; Full Disclosure....................46
4.17 Security Documents..........................................46
4.18 Year 2000 Matters...........................................46
4.19 Intermediate Holding Company Debt and Liens.................47
SECTION 5. CONDITIONS PRECEDENT...............................................47
5.1 Conditions to Effectiveness of Agreement....................47
5.2 Conditions to Each Revolving Credit Loan and Each Letter
of Credit...................................................49
SECTION 6. AFFIRMATIVE COVENANTS..............................................50
6.1 Financial Statements........................................50
6.2 Certificates; Other Information.............................51
6.3 Payment of Obligations......................................52
6.4 Conduct of Business and Maintenance of Existence............52
6.5 Maintenance of Property; Insurance..........................52
6.6 Inspection of Property; Books and Records; Discussions......52
6.7 Notices.....................................................53
6.8 Environmental Laws..........................................53
6.9 Indemnification.............................................54
SECTION 7. NEGATIVE COVENANTS.................................................55
7.1 Financial Condition.........................................55
7.2 Limitation on Debt..........................................55
7.3 Limitation on Subsidiary Debt...............................57
7.4 Limitation on Restricted Payments...........................60
7.5 Limitations on Dividends and Other Payment Restrictions
Affecting Subsidiaries......................................61
7.6 Restrictions on Dispositions................................62
7.7 Limitations on Transactions with Affiliates.................62
7.8 Limitations on Liens........................................62
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7.9 Limitations on Mergers, Consolidations, Sales or Transfers
of Assets by or Involving Borrower..........................63
7.10 Limitations on Certain Mergers, Consolidations and
Investments by Subsidiaries.................................64
7.11 CDH Permitted Investments...................................64
7.12 Limitations on Intermediate Holding Companies...............65
7.13 Limitations on Investments in CMA or CEA....................66
7.14 Limitations on Accumulation of Funds by Subsidiaries........66
SECTION 8. EVENTS OF DEFAULT..................................................66
SECTION 9. THE AGENT..........................................................70
9.1 Appointment.................................................70
9.2 Delegation of Duties........................................70
9.3 Exculpatory Provisions......................................70
9.4 Reliance by Agent...........................................71
9.5 Notice of Default...........................................71
9.6 Non-Reliance on Agent and Other Lenders.....................71
9.7 Indemnification.............................................72
9.8 Agent in Its Individual Capacity............................72
9.9 Successor Agent.............................................72
9.10 Lead Arranger...............................................72
SECTION 10. MISCELLANEOUS.....................................................73
10.1 Amendments and Waivers......................................73
10.2 Notices.....................................................73
10.3 No Waiver; Cumulative Remedies..............................74
10.4 Survival of Representations and Warranties; Survival of
Certain Agreements and Covenants............................74
10.5 Payment of Expenses and Taxes...............................75
10.6 Successors and Assigns; Participations and Assignments......75
10.7 Adjustments; Set-off........................................77
10.8 Counterparts................................................78
10.9 Severability................................................78
10.10 Integration.................................................78
10.11 GOVERNING LAW...............................................78
10.12 Submission To Jurisdiction; Waivers.........................78
10.13 Acknowledgments.............................................79
10.14 WAIVERS OF JURY TRIAL.......................................79
10.15 Confidentiality.............................................79
10.16 Rank........................................................80
10.17 Amendment and Restatement...................................80
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SCHEDULES
Schedule I - Lenders' Commitment Percentages and Addresses for Notices
Schedule II - Applicable Margin
Schedule III - Financial Disclosure
Schedule IV - Material Litigation
Schedule V - Subsidiaries of the Borrower
Schedule VI - Environmental Matters
Schedule VII - Existing Letters of Credit
EXHIBITS
Exhibit A - Form of Note
Exhibit B - [intentionally omitted]
Exhibit C - Form of CDH Guarantee
Exhibit D - Form of Extension Agreement
Exhibit E-1 - Form of Borrowing Request
Exhibit E-2 - Form of Issuance Request
Exhibit F-1 - Form of Opinion of ▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇ PLLC
Exhibit F-2 - Form of Opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
Exhibit G - Form of Assignment and Acceptance
Exhibit H - Form of Account Pledge Agreement
Exhibit I - Form of Securities Account Control Agreement
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THIRD AMENDED AND RESTATED CREDIT AGREEMENT, dated as of
September 14, 2000 among (i) COGENTRIX ENERGY, INC., a North Carolina
corporation (the "Borrower"), (ii) the several banks and other financial
institutions from time to time parties to this Agreement (the "Lenders") and
(iii) AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED ("ANZ"), as the
Coordinating Lead Arranger, and The Bank of Nova Scotia, and CitiBank, N.A., as
the Lead Arrangers and (iv) Australia and New Zealand Banking Group Limited, as
the issuer hereunder of the Letters of Credit (as hereinafter defined) and as
agent for the Lenders hereunder.
W I T N E S S E T H :
WHEREAS, the Borrower, the Lenders and ANZ, as Agent and
Issuing Bank, are parties to the Second Amended and Restated Credit Agreement,
dated as of March 3, 2000, among the Borrower, the Lenders, the lead arrangers
named therein, and ANZ as Agent and Issuing Bank, as amended by the First
Amendment thereto, dated as of July 19, 2000 (as so amended, the "Existing
Credit Agreement");
WHEREAS, the Borrower has requested that the Existing Credit
Agreement be amended and restated (a) to increase the aggregate of the
Commitments to $250,000,000 and (b) otherwise to amend the Existing Credit
Agreement and restate it as more fully set forth herein;
WHEREAS, the Lenders, the Agent and the Issuing Bank are
willing so to amend and restate the Existing Credit Agreement, but only on the
terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants herein contained and for other good and valuable consideration,
the receipt and adequacy of which is hereby acknowledged, each of the parties
hereto hereby agrees that, from and after the Closing Date, the Existing Credit
Agreement (including all Exhibits and Schedules thereto) shall be, and the same
hereby is, amended and restated in its entirety to read as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"ABR": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the higher of (a) the Prime
Rate in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. For purposes hereof: "Prime Rate"
shall mean the rate of interest per annum established from time to time
by the Agent as its prime rate in effect at its principal office in New
York City (the Prime Rate not being intended to be the lowest rate of
interest charged by the Agent in connection with extensions of credit
to debtors); and "Federal Funds Effective Rate" shall mean, for any
day, the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published on the next succeeding Business Day
by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the Agent from
three federal funds brokers of recognized standing selected by it. Any
change in the ABR due to a change in the Prime Rate or the Federal
Funds Effective Rate shall be effective
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as of the opening of business on the effective day of such change in
the Prime Rate or the Federal Funds Effective Rate, respectively.
"ABR Loans": Revolving Credit Loans the rate of interest
applicable to which is based upon the ABR.
"Acceptable Acquisition Premium": any Acquisition Premium with
respect to any Capital Stock acquired after the Closing Date by the
Borrower (or any of its Subsidiaries) in any Person owning one or more
Power Generation Facilities; provided, that such Acquisition Premium
may not exceed the excess (if any) of the Maximum Value with respect to
such Capital Stock over the book value of the net tangible assets
underlying such Capital Stock, all as determined in accordance with
GAAP; and "Maximum Value" shall mean an amount (as certified to the
Lenders by a Responsible Officer of the Borrower within thirty days of
the acquisition of such Capital Stock by the Borrower or such
Subsidiary) equal to the net present value of all dividends,
distributions and other payments reasonably projected (using
assumptions reasonably acceptable to the Agent) to be received by the
Borrower or such Subsidiary in respect of such Capital Stock after its
acquisition, calculated by discounting to the date of such acquisition
the amount of all such dividends, distributions and other payments
using an assumed discount rate proposed by the Borrower and reasonably
acceptable to the Agent; provided, that for purposes of projecting the
amount of such dividends, distributions and payments in respect of such
Capital Stock, revenue shall be assumed to be received by such Person
from the sale of power from such Power Generation Facilities only to
the extent that such revenue would be received pursuant to a written
power sales agreement and (even if pursuant to a written power sales
agreement) no revenue shall be assumed to be received by such Person
from the sale of electricity into any power exchange or to the extent
the price for such electricity is based on any power exchange price.
"Account Pledge Agreement": as defined in subsection 3.9(a).
"Acquisition Debt": Debt of any Person existing at the time
such Person became a Subsidiary of the Borrower (or such Person is
merged into the Borrower or one of its Subsidiaries) or assumed in
connection with the acquisition of assets from any such Person (other
than assets acquired in the ordinary course of business), including
Debt Incurred in connection with, or in contemplation of, such Person
becoming a Subsidiary of the Borrower (but excluding Debt of such
Person which is extinguished, retired or repaid in connection with such
Person becoming a Subsidiary of the Borrower).
"Acquisition Premium": with respect to any Capital Stock owned
by the Borrower (or any of its Subsidiaries) in any Person (including,
without limitation, any Subsidiary or Affiliate of the Borrower or any
Joint Venture in which the Borrower or any of its Subsidiaries has an
interest), the cost of acquiring such Capital Stock in excess of the
net tangible assets underlying such Capital Stock, as determined in
accordance with GAAP.
"Adjusted Consolidated Net Income": for any period, for any
Person the aggregate Net Income (or loss) of such Person and its
consolidated Subsidiaries for such
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period determined in conformity with GAAP plus the Net Income of any
Subsidiary of such Person for prior periods to the extent such Net
Income is actually paid in cash to such Person during such period plus
the Net Income of such Person (other than a Subsidiary thereof) in
which any third Person has a joint interest for prior periods to the
extent such Net Income is actually paid in cash to such Person during
such period; provided that the following items shall be excluded in
computing Adjusted Consolidated Net Income (without duplication): (i)
the Net Income (or loss) of such Person (other than a Subsidiary
thereof) in which any third Person has a joint interest, except to the
extent of the amount of dividends or other distributions actually paid
in cash to such Person during such period by such Person in which the
joint interest is held, which dividends and distributions shall be
included in such computation; (ii) solely for the purposes of
calculating the amount of Restricted Payments that may be made pursuant
to clause (c)(i) or (c)(ii) of subsection 7.4 (and in such case, except
to the extent includable pursuant to clause (i) above), the Net Income
(if positive) of such Person accrued prior to the date it becomes a
Subsidiary of any other Person or is merged into or consolidated with
such other Person or any of its Subsidiaries or all or substantially
all of the property and assets of such Person are acquired by such
other Person or any of its Subsidiaries; (iii) the Net Income of any
Subsidiary of such Person, except to the extent that (A) such Net
Income (if positive) is actually paid in cash to such Person during
such period and (B) such Net Income (if negative) is actually paid in
cash to such Subsidiary during such period; (iv) any gains or losses
(on an after-tax basis) attributable to Asset Sales; (v) the cumulative
effect of a change in accounting principle; and (vi) any amounts paid
or accrued as dividends on Preferred Stock of such Person or Preferred
Stock of any Subsidiary of such Person.
"Adjusted Parent Operating Cash Flow": for any period, (i)
Parent Operating Cash Flow for such period less (ii) the sum of the
following expenses (determined without duplication), in each case to
the extent paid by the Borrower during such period and regardless of
whether any such amount was accrued during such period:
(a) development expenses for such period of the
Borrower and its Subsidiaries paid directly by the Borrower or
paid indirectly by the transferring of funds or other assets
(whether through a loan, capital contribution or otherwise) to
any Subsidiary of the Borrower (whether by the Borrower or by
any of its Subsidiaries) for the purpose of enabling such
Subsidiary or another Subsidiary to pay any such expense;
(b) income tax expenses of the Borrower and its
Subsidiaries (computed on a consolidated basis) for such
period; and
(c) corporate overhead expenses of the Borrower and
its Subsidiaries for such period.
"Adjusted Tangible Net Worth": with respect to the Borrower,
as of the date of determination, the Tangible Net Worth of the Borrower
at such date plus the sum of all Acquisition Premiums included in the
Net Worth of the Borrower as reflected in the Pro
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Forma Balance Sheet plus the sum of all Acceptable Acquisition Premiums
(if any) at such date.
"Administration Fee": as defined in subsection 2.3(c).
"Affiliate": as to any Person, any other Person directly or
indirectly controlling or controlled by or under direct or indirect
common control with such Person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms
"controlling," "controlled by" and "under common control with") when
used with respect to any Person means the possession, directly or
indirectly, of the power either (a) to vote 10% or more of the
securities having ordinary voting power for the election of directors
of such Person or (b) to direct or cause the direction of the
management and policies of such Person, whether through the ownership
of voting securities, by contract or otherwise.
"Agent": ANZ in its capacity as the agent for the Lenders
under this Agreement and the other Loan Documents and its successors in
such capacity.
"Aggregate Outstanding Extensions of Credit": as to any Lender
at any time, an amount equal to the sum of (a) the aggregate principal
amount of all Revolving Credit Loans made by such Lender then
outstanding and (b) such Lender's Commitment Percentage of the L/C
Obligations then outstanding.
"Agreement": this Third Amended and Restated Credit Agreement,
as amended, supplemented or otherwise modified from time to time.
"Applicable Margin": for the Commitment Fee, for each Type of
Revolving Credit Loan and for each Type of Letter of Credit, the rate
per annum as set forth under the relevant column heading on Schedule
II.
"Asset Acquisition": (i) an investment by the Borrower or any
of its Subsidiaries in any other Person pursuant to which such Person
shall become a Subsidiary of the Borrower or any of its Subsidiaries or
shall be merged into or consolidated with the Borrower or any of its
Subsidiaries or (ii) an acquisition by the Borrower or any of its
Subsidiaries of the Property of any Person other than the Borrower or
any of its Subsidiaries that constitutes substantially all of an
operating unit or business of such Person.
"Asset Disposition": with respect to any Person, any sale,
transfer, conveyance, lease or other disposition (including by way of
merger, consolidation or sale-leaseback) by such Person or any of its
Subsidiaries to any Person (other than to such Person or a Subsidiary
of such Person and other than in the ordinary course of business) of
(i) any Property of such Person or any of its Subsidiaries or (ii) any
shares of Capital Stock of such Person's Subsidiaries. For purposes of
this definition, any disposition in connection with directors'
qualifying shares or investments by foreign nationals mandated by
applicable law shall not constitute an Asset Disposition. In addition,
the term "Asset Disposition" shall not include (i) any sale, transfer,
conveyance, lease or other disposition of the Capital Stock or assets
of Subsidiaries pursuant to the terms of any power sales
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agreements or steam sales agreements to which such Subsidiaries are
parties as of the date of this Agreement or pursuant to the terms of
any power sales agreements or steam sales agreements to which such
Subsidiaries become a party after such date if the Board of Directors
determines in good faith (evidenced by a Board resolution) that such
provisions are necessary in order to effect such agreements and are
reasonable, (ii) any sale, transfer, conveyance, lease or other
disposition of assets governed by subsection 7.9, (iii) the sale,
transfer, conveyance, lease or other disposition of the Capital Stock
or assets of the following: (A) Cogentrix of Pennsylvania, Inc. and (B)
ReUse Technology, Inc. and (iv) any transaction or series of related
transactions consisting of the sale, transfer, conveyance, lease or
other disposition of Capital Stock or assets with a Fair Market Value
aggregating less than $5 million. The term "Asset Disposition" also
shall not include (i) the grant of a Lien by any Person in any assets
or shares of Capital Stock securing a borrowing by, or contractual
performance obligation of, such Person or any Subsidiary of such Person
or any Joint Venture in which such Person has an interest, which Lien
is not prohibited under subsection 7.8 or 7.12 or under Section 10(a)
of the CDH Guarantee or the exercise of remedies thereunder or (ii) a
sale-leaseback transaction involving substantially all of the assets of
a Power Generation Facility where a Subsidiary of the Borrower sells
the Power Generation Facility to a Person in exchange for the
assumption by that Person of the Debt financing the Power Generation
Facility and the Subsidiary leases the Power Generation Facility from
such Person.
"Asset Sale": the sale or other disposition by the Borrower or
any of its Subsidiaries (other than to the Borrower or another
Subsidiary of the Borrower) of (i) all or substantially all of the
Capital Stock of any Subsidiary of the Borrower or (ii) all or
substantially all of the Property of the Borrower or any of its
Subsidiaries.
"Assignee": as defined in subsection 10.6(c).
"Assignment and Acceptance": an Assignment and Acceptance
substantially in the form of Exhibit G.
"Attributable Value": as to a Capitalized Lease Obligation
under which any Person is at the time liable and at any date as of
which the amount thereof is to be determined, the capitalized amount
thereof that would appear on the face of a balance sheet of such Person
in accordance with GAAP.
"Available Commitment": as to any Lender, at any time, an
amount equal to the excess, if any, of (a) such Lender's Commitment
over (b) such Lender's Aggregate Outstanding Extensions of Credit.
"Average Life": at any date of determination with respect to
any Debt security or Preferred Stock the quotient obtained by dividing
(i) the sum of the product of (A) the number of years from such date of
determination to the dates of each successive scheduled principal or
involuntary liquidation value payment of such Debt security or
Preferred Stock, respectively, multiplied by (B) the amount of such
principal or involuntary liquidation value payment by (ii) the sum of
all such principal or involuntary liquidation value payments.
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"Board of Directors": either the Board of Directors of the
Borrower or any committee of such Board duly authorized to act on
behalf of such Board.
"Borrower Indenture Securities": the collective reference to
the 2004 Senior Notes and the 2008 Senior Notes.
"Borrower Indentures": the collective reference to the 2004
Senior Note Indenture and the 2008 Senior Note Indenture.
"Borrowing Date": any Business Day specified in a Borrowing
Request pursuant to subsection 2.2 as a date on which the Borrower
requests the Lenders to make Revolving Credit Loans hereunder.
"Borrowing Request": a request and certificate of the Borrower
substantially in the form of Exhibit E-1 (with such changes thereto as
agreed upon from time to time by the Agent and the Borrower).
"Business": as defined in subsection 4.15(b).
"Business Day": a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or
required by law to close.
"Capital Stock": with respect to any Person, any and all
shares, interests, participations or other equivalents (however
designated, whether voting or non-voting) of, or interests in (however
designated), the equity of such Person which is outstanding or issued
on or after the date of this Agreement, including, without limitation,
all Common Stock and Preferred Stock and partnership and joint venture
interests of such Person.
"Capitalized Lease": as applied to any Person, any lease of
any Property of which the discounted present value of the rental
obligations of such Person as lessee, in conformity with GAAP, is
required to be capitalized on the balance sheet of such Person;
"Capitalized Lease Obligation" means the rental obligations, as
aforesaid, under such lease.
"CDH": Cogentrix Delaware Holdings, Inc., a Delaware
corporation and a Wholly-Owned Subsidiary of the Borrower.
"CDH Guarantee": the Second Amended and Restated Guarantee to
be executed and delivered by CDH, substantially in the form of Exhibit
C, as amended, supplemented or otherwise modified from time to time.
"CDH Permitted Investments": as defined in the CDH Guarantee.
"CEA": Cogentrix Eastern America, Inc., a Delaware corporation
and a Wholly-Owned Subsidiary of the Borrower.
"CEA Credit Agreement": the Credit Agreement, dated as of
September 8, 1999, among CEA, the several lenders from time to time
parties thereto, and Dresdner Bank
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AG, New York Branch, as administrative agent thereunder, as amended,
supplemented or otherwise modified from time to time.
"Closing Date": the date on which the conditions precedent set
forth in subsection 5.1 shall be satisfied.
"CMA": Cogentrix Mid-America, Inc., a Delaware corporation and
a Wholly-Owned Subsidiary of the Borrower.
"CMA Credit Agreement": the Credit Agreement, dated as of
December 11, 1998, among CMA, the several lenders from time to time
parties thereto, and Dresdner Bank AG, New York Branch, as issuing bank
and administrative agent thereunder, as amended, supplemented or
otherwise modified from time to time.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": the collective reference to the "Collateral" and
the "Collateral Account" as defined in the Account Pledge Agreement.
"Collateral Account": as defined in subsection 3.9(a).
"Commitment": as to any Lender, the obligation of such Lender
to make Revolving Credit Loans to and/or issue or participate in
Letters of Credit issued hereunder in an aggregate principal and/or
face amount at any one time outstanding not to exceed the amount set
forth next to such Lender's name under the caption "Commitment" on
Schedule I or set forth in the Assignment and Acceptance executed by
such Lender by which such Lender became a Lender hereunder, in either
such case as such amount may be reduced from time to time pursuant to
subsection 2.4 and as such amount may be adjusted from time to time in
accordance with subsection 10.6 pursuant to any Assignment and
Acceptance executed by such Lender or otherwise in accordance with this
Agreement.
"Commitment Fee": as defined in subsection 2.3(a).
"Commitment Percentage": as to any Lender at any time, the
percentage set forth next to such Lender's name under the caption
"Commitment Percentage" on Schedule I or set forth in the Assignment
and Acceptance executed by such Lender by which such Lender became a
Lender hereunder, in either such case as such percentage may be
adjusted from time to time in accordance with subsection 10.6 pursuant
to any Assignment and Acceptance executed by such Lender or otherwise
in accordance with this Agreement.
"Commitment Period": the period from and including the Closing
Date to but not including the Final Maturity Date or such earlier date
on which the Commitments shall terminate as provided herein.
"Common Stock": with respect to any Person, Capital Stock of
such Person that does not rank prior, as to the payment of dividends or
as to the distribution of assets upon
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any voluntary or involuntary liquidation, dissolution or winding up of
such Person, to shares of Capital Stock of any other class of such
Person.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Borrower within
the meaning of Section 4001 of ERISA or is part of a group which
includes the Borrower and which is treated as a single employer under
Section 414 of the Code.
"Consolidated EBITDA": of any Person for any period, the
Adjusted Consolidated Net Income of such Person, plus (i) income taxes,
excluding income taxes (either positive or negative) attributable to
extraordinary and non-recurring gains or losses or Asset Sales, all
determined on a consolidated basis for such Person and its consolidated
Subsidiaries in accordance with GAAP, (ii) Consolidated Fixed Charges,
(iii) depreciation and amortization expense, all determined on a
consolidated basis for such Person and its consolidated Subsidiaries in
accordance with GAAP, (iv) all other non-cash items reducing Adjusted
Consolidated Net Income for such period, all determined on a
consolidated basis for such Person and its consolidated Subsidiaries in
accordance with GAAP and (v) the aggregate amount actually received in
cash by such Person during such period relating to non-cash items
increasing Adjusted Consolidated Net Income for prior periods, and less
(i) all non-cash items increasing Adjusted Consolidated Net Income
during such period and (ii) the aggregate amount actually paid in cash
by such Person during such period relating to non-cash items reducing
Adjusted Consolidated Net Income for prior periods; provided that
depreciation and amortization expense of any Subsidiary of such Person
and any other non-cash item of any Subsidiary of such Person that
reduces Adjusted Consolidated Net Income shall be excluded (without
duplication) in computing Consolidated EBITDA, except to the extent
that the positive cash flow associated with such depreciation and
amortization expense and other non-cash items is actually distributed
in cash to such Person during such period.
"Consolidated Fixed Charges": of any Person, for any period,
the aggregate of (i) Consolidated Interest Expense, (ii) the interest
component of Capitalized Leases, determined on a consolidated basis for
such Person and its consolidated Subsidiaries in accordance with GAAP
excluding any interest component of Capitalized Leases in respect of
that portion of a Capitalized Lease Obligation of a Subsidiary that is
Non-Recourse to such Person and (iii) cash and non-cash dividends due
(whether or not declared) on the Preferred Stock of any Subsidiary of
such Person and any Redeemable Stock of such Person.
"Consolidated Interest Expense": of any Person, for any
period, the aggregate interest expense in respect of Debt (including
amortization or original issue discount and non-cash interest payments
or accruals) of such Person and its consolidated Subsidiaries,
determined on a consolidated basis in accordance with GAAP, including
all commissions, discounts, other fees and charges owed with respect to
letters of credit and bankers' acceptance financing and net costs
associated with Interest Rate Protection Agreements and any amounts
paid during such period in respect of such interest expense,
commissions, discounts, other fees and charges that have been
capitalized; provided that Consolidated Interest Expense of the
Borrower shall not include any interest expense
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(including all commissions, discounts, other fees and charges owed with
respect to letters of credit and bankers' acceptance financing and net
costs associated with Interest Rate Protection Agreements) in respect
of that portion of Debt of a Subsidiary of the Borrower that is
Non-Recourse to the Borrower; and provided further that Consolidated
Interest Expense of the Borrower in respect of a Guarantee by the
Borrower of Debt of a Subsidiary shall be equal to the commissions,
discounts, other fees and charges that would be due with respect to a
hypothetical letter of credit issued under a bank credit agreement that
can be drawn by the beneficiary thereof in the amount of the Debt so
guaranteed if (i) the Borrower is not actually making directly or
indirectly interest payments on such Debt and (ii) GAAP does not
require the Borrower on an unconsolidated basis to record such Debt as
a liability of the Borrower.
"Consolidated Total Assets": with respect to any Person at any
time, the total assets of such Person and its consolidated Subsidiaries
at such time determined in conformity with GAAP.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or any
of its property is bound.
"Currency Protection Agreement": with respect to any Person
any foreign exchange contract, currency swap agreement or other similar
agreement or arrangement designed to protect such Person or any of its
Subsidiaries against fluctuations in currency values to or under which
such Person or any of its Subsidiaries is a party or a beneficiary on
the date of this Agreement or becomes a party or a beneficiary
thereafter.
"Debt": with respect to any Person at any date of
determination (without duplication), (i) all indebtedness of such
Person for borrowed money, (ii) all obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person in respect of letters of credit or
bankers' acceptance or other similar instruments (or reimbursement
obligations with respect thereto), (iv) all obligations of such Person
to pay the deferred purchase price of property or services, except
Trade Payables, (v) the Attributable Value of all obligations of such
Person as lessee under Capitalized Leases, (vi) all Debt of others
secured by a Lien on any asset of such Person, whether or not such Debt
is assumed by such Person; provided that, for purposes of determining
the amount of any Debt of the type described in this clause, if
recourse with respect to such Debt is limited to such asset, the amount
of such Debt shall be limited to the lesser of the Fair Market Value of
such asset or the amount of such Debt, (vii) all Debt of others
Guaranteed by such Person to the extent such Debt is Guaranteed by such
Person, (viii) all Redeemable Stock valued at the greater of its
voluntary or involuntary liquidation preference plus accrued and unpaid
dividends and (ix) to the extent not otherwise included in this
definition, all obligations of such Person under Currency Protection
Agreement and Interest Rate Protection Agreements.
"Default": any of the events specified in Section 8, whether
or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
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"Dollars" and "$": dollars in lawful currency of the United
States of America.
"Environmental Laws": any and all foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority
or other Requirements of Law (including common law) regulating,
relating to or imposing liability or standards of conduct concerning
protection of human health or the environment, as now or may at any
time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to
a Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on
such day (including, without limitation, basic, supplemental, marginal
and emergency reserves under any regulations of the Board of Governors
of the Federal Reserve System or other Governmental Authority having
jurisdiction with respect thereto) dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of such Board) maintained by
a member bank of such System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum
equal to the rate at which the Agent is offered Dollar deposits at or
about 10:00 A.M., New York City time, two Eurodollar Business Days
prior to the beginning of such Interest Period in the London interbank
eurodollar market for delivery on the first day of such Interest Period
for the number of days comprised therein and in an amount comparable to
the amount of its Eurodollar Loan to be outstanding during such
Interest Period.
"Eurodollar Business Day": any Business Day on which dealings
in foreign currency and exchange between banks may be carried on in
London, England.
"Eurodollar Loans": Revolving Credit Loans the rate of
interest applicable to which is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum
determined for such day in accordance with the following formula
(rounded upward to the nearest 1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Event of Default": any of the events specified in Section 8,
provided that any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
"Excess Cash Flow": of any Person for any period, Consolidated
EBITDA less Consolidated Fixed Charges less any income taxes actually
paid during such period.
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"Existing Credit Agreement": as defined in the recitals
hereto.
"Existing Letters of Credit": the collective reference to the
letters of credit listed in Schedule VII.
"Extension Date": as defined in subsection 2.1(c).
"Extension of Credit": any making of any Revolving Credit Loan
by a Lender and any issuance or extension by the Issuing Bank of any
Letter of Credit.
"Fair Market Value": with respect to any Capital Stock, asset
or other Property, the price obtainable for such Capital Stock, asset
or other Property in an arm's-length sale between an informed and
willing purchaser under no compulsion to purchase and an informed and
willing seller under no compulsion to sell.
"Fee Letter ": the reference to any and all agreements between
the Borrower and ANZ relating to the fees payable hereunder to ANZ as
Agent and as Issuing Bank.
"Final Maturity Date": October 29, 2003 or such later date to
which the Final Maturity Date shall have been extended pursuant to
subsection 2.1(c); provided, that, if such later date is not a
Eurodollar Business Day, the Final Maturity Date shall be the next
succeeding Eurodollar Business Day.
"Financial Letter of Credit": as defined in clause (i)(1) of
subsection 3.1(b).
"Fixed Charge Ratio": the ratio, on a pro forma basis, of (i)
the aggregate amount of Consolidated EBITDA of any Person for the
Reference Period immediately prior to the date of the transaction
giving rise to the need to calculate the Fixed Charge Ratio (the
"Transaction Date") to (ii) the aggregate Consolidated Fixed Charges of
such Person during such Reference Period; provided that for purposes of
such computation in calculating Consolidated EBITDA and Consolidated
Fixed Charges, (1) the Incurrence of the Debt giving rise to the need
to calculate the Fixed Charge Ratio and the application of the proceeds
therefrom shall be assumed to have occurred on the first day of the
Reference Period, (2) Asset Sales and Asset Acquisitions which occur
during the Reference Period or subsequent to the Reference Period and
prior to the Transaction Date (but including any Asset Acquisition to
be made with the Debt Incurred pursuant to (1) above) shall be assumed
to have occurred on the first day of the Reference Period, (3) the
Incurrence of any Debt during the Reference Period or subsequent to the
Reference Period and prior to the Transaction Date and the application
of the proceeds therefrom shall be assumed to have occurred on the
first day of such Reference Period, (4) Consolidated Interest Expense
attributable to any Debt (whether existing or being Incurred) computed
on a pro forma basis and bearing a floating interest rate shall be
computed as if the rate in effect on the date of computation had been
the applicable rate for the entire period unless such Person or any of
its Subsidiaries is a party to an Interest Rate Protection Agreement
(which shall remain in effect for the twelve month period after the
Transaction Date) which has the effect of fixing the interest rate on
the date of computation, in which case such rate (whether higher or
lower) shall be used and (5) there shall be excluded from Consolidated
Fixed Charges any Consolidated Fixed
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Charges related to any amount of Debt which was outstanding during and
subsequent to the Reference Period but is not outstanding on the
Transaction Date, except for Consolidated Fixed Charges actually
incurred with respect to Debt borrowed (as adjusted pursuant to clause
(4)) under a revolving credit or similar arrangement to the extent the
commitment thereunder remains in effect on the Transaction Date. For
the purpose of making this computation, Asset Sales and Asset
Acquisitions which have been made by any Person which has become a
Subsidiary of the Borrower or been merged with or into the Borrower or
any Subsidiary of the Borrower during the Reference Period, or
subsequent to the Reference Period and prior to the Transaction Date
shall be calculated on a pro forma basis (including all of the
calculations referred to in clauses (1) through (5) above assuming such
Asset Sales or Asset Acquisitions occurred on the first day of the
Reference Period).
"Fronting Fee": as defined in subsection 3.3(a).
"GAAP": generally accepted accounting principles in the United
States of America in effect from time to time, including, without
limitation, those set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other
entity as approved by a significant segment of the accounting
profession.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guarantee" or "Guarantee Obligation": any obligation,
contingent or otherwise, of any Person directly or indirectly
guaranteeing any Debt or other obligation of any other Person and,
without limiting the generality of the foregoing, any obligation,
direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment
of) such Debt or other obligation of such other Person (whether arising
by virtue of partnership arrangements, or by agreement to keep-well, to
purchase assets, goods, securities or services, or to take-or-pay, or
to maintain financial statement conditions or otherwise) or (ii)
entered into for purposes of assuring in any other manner the obligee
of such Debt or other obligation of the payment thereof or to protect
such obligee against loss in respect thereof (in whole or in part);
provided that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term
"Guarantee" used as a verb has a corresponding meaning.
"Incur": with respect to any Debt, to incur, create, issue,
assume, Guarantee or otherwise become liable for or with respect to, or
become responsible for, the payment of, contingently or otherwise, such
Debt; provided that neither the accrual of interest (whether such
interest is payable in cash or kind) nor the accretion of original
issue discount shall be considered an Incurrence of Debt.
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"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Interest Payment Date": (a) as to any ABR Loan, the last day
of each March, June, September and December, (b) as to any Eurodollar
Loan having an Interest Period of three months or less, the last day of
such Interest Period, and (c) as to any Eurodollar Loan having an
Interest Period longer than three months or 90 days, respectively, each
day which is three months or 90 days, respectively, or a whole multiple
thereof, after the first day of such Interest Period and the last day
of such Interest Period.
"Interest Period": with respect to any Eurodollar Loan:
(i) initially, the period commencing on the
Borrowing Date or conversion date, as the case may be, with
respect to such Eurodollar Loan and ending one, two, three,
six, nine or twelve months thereafter, as selected by the
Borrower in its Borrowing Request or notice of conversion, as
the case may be, given with respect thereto; and
(ii) thereafter, each period commencing on
the last day of the next preceding Interest Period applicable
to such Eurodollar Loan and ending one, two, three, six, nine
or twelve months thereafter, as selected by the Borrower by
irrevocable notice to the Agent not less than three Eurodollar
Business Days prior to the last day of the then current
Interest Period with respect thereto;
provided that, all of the foregoing provisions relating to Interest
Periods are subject to the following:
(1) if any Interest Period pertaining to a Eurodollar
Loan would otherwise end on a day that is not a Eurodollar
Business Day, such Interest Period shall be extended to the
next succeeding Eurodollar Business Day unless the result of
such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period
shall end on the immediately preceding Eurodollar Business
Day;
(2) any Interest Period that would otherwise extend
beyond the Final Maturity Date shall end on the Final Maturity
Date;
(3) any Interest Period pertaining to a Eurodollar
Loan that begins on the last Eurodollar Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Eurodollar Business Day
of a calendar month; and
(4) the Borrower shall select Interest Periods so as
not to require a payment or prepayment of any Eurodollar Loan
during an Interest Period for such Revolving Credit Loan.
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"Interest Rate Protection Agreement": with respect to any
Person, any interest rate protection agreement, interest rate future
agreement, interest rate option agreement, interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement,
interest rate hedge agreement or other similar agreement or arrangement
designed to protect such Person or any of its Subsidiaries against
fluctuations in interest rates to or under which such Person or any of
its Subsidiaries is a party or a beneficiary on the date of this
Agreement or becomes a party or a beneficiary thereafter.
"Intermediate Holding Company": any Subsidiary of the Borrower
that serves as a holding company (directly or indirectly) for any of
the Borrower's interests in any one or more Power Generation Facilities
or other businesses.
"Investment": in a Person, any investment in, loan or advance
to, Guarantee on behalf of, directly or indirectly, or other transfer
of assets to, such Person.
"Investment Grade": with respect to the Borrower Indenture
Securities, a rating of "Baa3" or better by ▇▇▇▇▇'▇ Investors Service,
Inc. and a rating of "BBB-" or better by Standard and Poor's Rating
Group.
"Issuance Request": a request and certificate of the Borrower
substantially in the form of Exhibit E-2 (with such changes thereto as
agreed upon from time to time by the Agent and the Borrower), together
with a properly completed application for a Letter of Credit in such
form as the Issuing Bank may specify from time to time.
"Issuing Bank": ANZ, in its capacity as issuer of any Letter
of Credit, and any L/C Participant issuing any Letter of Credit
pursuant to subsection 3.10(a) or succeeding ANZ as Issuing Bank
pursuant to subsection 3.10(b), in its capacity as the issuer of each
Letter of Credit issued by it.
"Joint Venture": a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form;
provided that, as to any such arrangement in corporate form, such
corporation shall not, as to any Person to which such corporation is a
Subsidiary, be considered to be a Joint Venture to which such Person is
a party.
"L/C Fee Payment Date": the last day of each March, June,
September and December.
"L/C Obligations": at any time, an amount equal to the sum of
(a) the aggregate then undrawn and unexpired amount of the then
outstanding Letters of Credit and (b) the aggregate amount of drawings
under Letters of Credit which have not then been reimbursed pursuant to
subsection 3.5(a).
"L/C Participants": the collective reference to all the
Lenders.
"Lead Arranger": ANZ in its capacity as the lead arranger of
the Commitments.
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"Letter of Credit Availability": at any time, an amount equal
to the excess of (i) the aggregate Commitments of all the Lenders at
such time over (ii) the then Aggregate Outstanding Extensions of
Credits of all the Lenders.
"Letter of Credit Fee": as defined in subsection 3.3(b).
"Letters of Credit": as defined in subsection 3.1(a).
"Leverage Ratio": as of any date, the ratio of (i) the sum of
(a) the aggregate amount of all Debt of the Borrower at such date plus
(b) the aggregate amount of all cash collateral securing the
obligations of any Intermediate Holding Company with respect to any
letter of credit permitted pursuant to Section 7.12(A)(v) to (ii) the
sum of (a) the Adjusted Parent Operating Cash Flow for the six-month
period ending on such date plus (b) the projected Adjusted Parent
Operating Cash Flow for the immediately succeeding six-month period.
The projected Adjusted Parent Operating Cash Flow referred to in
subclause (b) of the preceding sentence shall be determined by using
the same amount for Adjusted Parent Operating Cash Flow for the
immediately preceding six months and then adjusting such amount for the
effect thereon (if any) of any planned or anticipated changes in the
Adjusted Parent Operating Cash Flow during such succeeding six months
(as determined in good faith by the Borrower and by using assumptions
reasonably acceptable to the Majority Lenders); provided that in no
event shall the projected Adjusted Parent Operating Cash Flow include
cash flows to be received by the Borrower in respect of any Power
Generating Facility or other asset which was not owned by a Subsidiary
of the Borrower or by an unconsolidated Affiliate of the Borrower at
any time during such preceding six-month period.
"Lien": with respect to any Property, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect
of such Property. For purposes of this Agreement, the Borrower shall be
deemed to own subject to a Lien any Property which it has acquired or
holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention
agreement relating to such Property.
"Loan Documents": this Agreement, the Notes, all Borrowing
Requests, all Issuance Requests, the CDH Guarantee and the Security
Documents.
"Loan Parties": the Borrower and CDH.
"Majority Lenders": at any time, Lenders the Commitment
Percentages of which aggregate more than 50%.
"Material Adverse Effect": a material adverse effect on (a)
the business, operations, property, condition (financial or otherwise)
or prospects of the Borrower and its Subsidiaries taken as a whole, (b)
the validity or enforceability of this or any of the other Loan
Documents or the rights or remedies of the Agent, the Issuing Bank or
the Lenders hereunder or thereunder or (c) any Loan Party's ability to
perform any Obligation.
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"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic substances, materials or wastes,
defined or regulated as such in or under any Environmental Law,
including, without limitation, asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": from an Asset Disposition or Recovery
Event, cash payments received (including, without limitation, any cash
payment received by way of (a) a payment of principal pursuant to a
note or installment receivable or otherwise, but only as and when
received (including any cash received upon sale or disposition of such
note or receivable) or (b) any dividend or other distribution on any
shares of any Person's Capital Stock representing directly or
indirectly all or part of the consideration in respect of any Asset
Disposition or Recovery Event, but only as and when received, but
excluding any other consideration received in the form of assumption by
the acquiring Person of Debt or other obligations relating to the
Property disposed of in such Asset Disposition or Recovery Event or
received in any other noncash form) therefrom, in each case, net of all
legal, title and recording tax expenses, commissions and other fees and
expenses incurred or payable and all federal, state, provincial,
foreign and local taxes required to be accrued as a liability under
GAAP (i) as a consequence of such Asset Disposition or Recovery Event,
(ii) as a result of the repayment of any Debt in any jurisdiction other
than the jurisdiction where the Property disposed of was located or
(iii) as a result of any repatriation to the United States of America
of any proceeds of such Asset Disposition or Recovery Event, and in
each case net of a reasonable reserve for the after tax cost of any
indemnification payments (fixed and contingent) attributable to
seller's indemnities to the purchaser undertaken by the Borrower or any
of its Subsidiaries in connection with such Asset Disposition or
Recovery Event (but excluding any payments, which by the terms of the
indemnities will not, under any circumstances, be made prior to the
then Final Maturity Date), and net of all payments made on any Debt
which is secured by such Property, in accordance with the terms of any
Lien upon or with respect to such Property or which must by its terms
or by applicable law be repaid out of the proceeds from such Asset
Disposition, and net of all distributions and other payments made to
holders of minority interests in Subsidiaries or Joint Ventures as a
result of such Asset Disposition.
"Net Income": of any Person for any period, the net income
(loss) of such Person for such period, determined in accordance with
GAAP, except that for any purpose hereunder (other than for computing
Net Income of the Borrower and its consolidated Subsidiaries for
purposes of subsection 7.1(c)(iii)) extraordinary and non-recurring
gains and losses as determined in accordance with GAAP shall be
excluded.
"Net Worth": of any Person, as of any date the aggregate of
capital, surplus and retained earnings (including any cumulative
translation adjustment) of such Person and its consolidated
Subsidiaries as would be shown on a consolidated balance sheet of such
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Person and its consolidated Subsidiaries prepared as of such date in
accordance with GAAP.
"Non-Excluded Taxes": as defined in subsection 2.15.
"Non-Recourse": to a Person as applied to any Debt (or portion
thereof), that such Person is not, directly or indirectly, liable to
make any payments with respect to such Debt (or portion thereof), that
no Guarantee of such Debt (or portion thereof) has been made by such
Person other than a Guarantee limited in recourse to the Capital Stock
of the Person incurring such Debt (or any shareholder, partner, member
or participant of such Person) and that such Debt (or portion thereof)
is not secured by a Lien on any asset of such Person other than the
Capital Stock of the Person incurring such Debt or any shareholder,
partner, member or participant of such Person or of the Person whose
obligations were Guaranteed, provided that for purposes of this
definition the status of a Subsidiary as a general partner of a
partnership or Joint Venture shall not, without more, cause such Person
to be, directly or indirectly, liable to make payments with respect to
such Debt or constitute a Guarantee of such Debt for purposes of
determining whether Debt is Non-Recourse, and provided further that
none of the following shall cause any Debt to fail to be Non-Recourse:
the incurrence of Debt, Guarantees or Liens jointly by (i) Cogentrix
Eastern Carolina Corporation and Cogentrix of North Carolina, Inc. (or
successor to the merger or other combination of such entities) with
respect to the Power Generation Facilities located at Elizabethtown,
Kenansville, Lumberton, Southport and Roxboro, North Carolina; (ii)
Cogentrix Virginia Leasing Corporation and ▇▇▇▇▇ River Cogeneration
Company (or successor to the merger or other combination of such
entities) with respect to the Power Generation Facilities located at
Portsmouth and Hopewell, Virginia; and (iii) Subsidiaries of the
Borrower or Joint Ventures in which the Borrower or one of its
Subsidiaries is a partner, shareholder, member or other participant,
which become such after the date of this Agreement, incurred thereafter
with respect to the development or acquisition by such Subsidiaries or
Joint Ventures of multiple Power Generation Facilities, so long as no
such Subsidiary or Joint Venture has any direct or indirect interest in
any Power Generation Facility other than the Power Generation
Facilities to be developed or acquired or in any other business.
"Notes": as defined in Section 2.5(e).
"Obligations": all of the Debt, obligations and liabilities of
the Loan Parties to the Agent, the Lead Arrangers, the Issuing Bank,
the Lenders, or to any of them now or in the future existing under or
in connection with this Agreement, the Notes, the CDH Guarantee or any
other Loan Document (as any of the foregoing may from time to time be
amended, modified, substituted, extended, or renewed), direct or
indirect, absolute or contingent, due or to become due, now or
hereafter existing.
"Other Borrower Indebtedness": any Debt of the Borrower of the
types described in clause (i) and (ii) of the definition of Debt which
has a term of not less than 5 years (other than the Obligations but
including the Borrower Indenture Securities) and which the Borrower is
not prohibited from incurring hereunder or under the Borrower
Indentures.
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"Parent Cash Flow Coverage Ratio": for any period, the ratio
of (i) Adjusted Parent Operating Cash Flow for such period to (ii)
Parent Corporate Charges for such period.
"Parent Corporate Charges": for any period, the sum of the
following amounts (determined without duplication), in each case to the
extent paid by the Borrower during such period and regardless of
whether any such amount was accrued during such period:
(a) interest expenses of the Borrower for such
period, including without limitation all commissions,
discounts, other fees and charges owed with respect to letters
of credit and bankers' acceptance financing and net costs
associated with Interest Rate Protection Agreements; and
(b) rental payments and other expenses of the
Borrower for such period under any Capitalized Lease.
"Parent Operating Cash Flow": for any period, the sum of the
following amounts (determined without duplication), but only to the
extent received in cash by the Borrower during such period and
regardless of whether any such amount was accrued during such period:
(a) dividends and distributions paid to the Borrower
by its Subsidiaries during such period;
(b) development, consulting, management or other fees
paid to the Borrower during such period;
(c) tax-sharing payments made to the Borrower during
such period;
(d) interest, dividends and other distributions paid
during such period with respect to cash and cash investments
of the Borrower (other than with respect to amounts on deposit
in the Collateral Account except to the extent of any interest
earnings on cash deposited in the Collateral Account actually
paid to the Borrower pursuant to Section 3.9(c)); and
(e) other cash payments made to the Borrower by its
Subsidiaries other than (i) returns of invested capital upon
liquidation or sale, (ii) payments of the principal of Debt of
any such Subsidiary to the Borrower and (iii) payments in an
amount equal to the aggregate amount released from debt
service reserve accounts upon the issuance of Letters of
Credit for the benefit of the beneficiaries of such accounts.
"Participant": as defined in subsection 10.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Performance Letter of Credit": as defined in clause (i)(2) of
subsection 3.1(b).
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"Permitted Holders": (a) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., ▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇ (collectively, the
"Current Holders"), (b) members of the immediate families of the
Current Holders, (c) trusts for the benefit of Current Holders and
members of the immediate families of the Current Holders, and (d) a
non-profit corporation or foundation controlled by any of the Persons
described in (a), (b) or (c) of this definition. Members of a Person's
"immediate family" shall mean such Person's parents, brothers, sisters,
spouse and lineal descendants.
"Permitted Investment": any Investment of the type specified
in clause (iv) of the definition of Restricted Payment which is made
directly or indirectly by the Borrower and its Subsidiaries; provided
that the Person in which the Investment is made is (a) a Subsidiary
which, directly or indirectly, is or will be engaged in the
development, construction, marketing, management, acquisition,
ownership or operation of a Power Generation Facility or (b) a Joint
Venture; provided further, that, in the case of an Investment in a
Joint Venture, (i) at the time such Investment is made, the Borrower
could Incur at least $1 of Debt under subsection 7.2; (ii) at the time
such Investment is made, no Event of Default or event that, after the
giving of notice or lapse of time or both would become an Event of
Default, shall have occurred and be continuing; and (iii) such
Investment is in a Joint Venture which, directly or indirectly, is or
will be engaged in the development, construction, marketing,
management, acquisition, ownership or operation of a Power Generation
Facility.
"Permitted Payments": with respect to the Borrower or any of
its Subsidiaries (i) any dividend on shares of Capital Stock payable
(or to the extent paid) solely in shares of Capital Stock (other than
Redeemable Stock) or in options, warrants or other rights to purchase
Capital Stock (other than Redeemable Stock); (ii) any dividend or other
distribution payable to the Borrower by any of its Subsidiaries or by a
Subsidiary to a Wholly-Owned Subsidiary; (iii) the repurchase or other
acquisition or retirement for value of any shares of the Borrower's
Capital Stock, or any option, warrant or other right to purchase shares
of the Borrower's Capital Stock with additional shares of, or out of
the proceeds of a substantially contemporaneous issuance of, Capital
Stock other than Redeemable Stock (unless the redemption provisions of
such Redeemable Stock prohibit the redemption thereof prior to the date
on which the Capital Stock to be acquired or retired was by its terms
required to be redeemed); (iv) any defeasance, redemption, repurchase
or other acquisition for value of any Debt which by its terms ranks
subordinate in right of payment to the Obligations with the proceeds
from the issuance of (x) Debt which is also subordinate to the
Obligations at least to the extent and in the manner as the Debt to be
defeased, redeemed, repurchased or otherwise acquired is subordinate in
right of payment to the Obligations; provided that such subordinated
Debt provides for no payments of principal by way of sinking fund,
mandatory redemption or otherwise (including defeasance) by the
Borrower (including, without limitation, at the option of the holder
thereof other than an option given to a holder pursuant to an asset
disposition or change of control covenant which is no more favorable to
the holders of such Debt than the provisions contained in subsections
2.6(b), 7.6, 7.9, 7.10 and 8(j) are to the Lenders and such Debt
provides that the Borrower will not repurchase such Debt pursuant to
such provisions prior to the date that all Obligations have been paid
and performed in full) prior to, or in an amount greater than, any
Stated Maturity of the Debt
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being replaced and the proceeds of such subordinated Debt are utilized
for such purpose within 45 days of issuance or (y) Capital Stock (other
than Redeemable Stock); (v) in respect of any actual payment on account
of an Investment (other than a Permitted Investment) which is not fixed
in amount at the time when made, the amount determined by the Board of
Directors to be a Restricted Payment on the date such Investment was
originally deemed to have been made (the "Original Restricted Payment
Charge") plus an amount equal to the interest on a hypothetical
investment in a principal amount equal to the Original Restricted
Payment Charge assuming interest at a rate of 7% per annum compounded
annually for a period beginning on the date the Investment was
originally deemed to have been made and ending with respect to any
portion of the Original Restricted Payment Charge actually paid on the
date of actual payment less any actual payments previously made on
account of such Investment; provided that the Permitted Payment under
this clause (v) shall in no event exceed the payment actually made;
(vi) any amount required to be paid with respect to an obligation
outstanding on the date of this Agreement; or (vii) a Permitted
Investment.
"Person": an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan which
is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Power Generation Facility": an electric power or thermal
energy generation or cogeneration facility or related facilities
(including residual waste management and, to the extent such facilities
are in existence on the date of this Agreement or are required by
contract or applicable law, rule or regulation, facilities that use
thermal energy from a cogeneration facility), and its or their related
electric power transmission, fuel supply and fuel transportation
facilities, together with its or their related power supply, thermal
energy and fuel contracts and other facilities, services or goods that
are ancillary, incidental, necessary or reasonably related to the
marketing, development, construction, management or operation of the
foregoing, as well as other contractual arrangements with customers,
suppliers and contractors.
"Preferred Stock": with respect to any Person, any and all
shares, interests, participations or other equivalents (however
designated, whether voting or non-voting) of preferred or preference
stock of such Person which is outstanding or issued on or after the
date of this Agreement.
"Pro Forma Balance Sheet": as defined in subsection 4.1(e).
"Project Properties": as defined in subsection 4.15.
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"Property": as to any Person, all types of real, personal,
tangible, intangible or mixed property owned by such Person whether or
not included in the most recent consolidated balance sheet of such
Person under GAAP.
"Recovery Event": any settlement of or payment in respect of
any property or casualty insurance claim or any condemnation proceeding
relating to any Property of the Borrower or any of its Subsidiaries.
"Redeemable Stock": any class or series of Capital Stock of
any Person that by its terms or otherwise is (i) required to be
redeemed prior to the later of the Final Maturity Date, the Stated
Maturity of the 2004 Senior Notes or the Stated Maturity of the 2008
Senior Notes, (ii) redeemable at the option of the holder of such class
or series of Capital Stock at any time prior to the later of the Final
Maturity Date or the Stated Maturity of the 2004 Senior Notes or the
Stated Maturity of the 2008 Senior Notes or (iii) convertible into or
exchangeable for Capital Stock referred to in clause (i) or (ii) above
or Debt having a scheduled maturity prior to the later of the Final
Maturity Date, the Stated Maturity of the 2004 Senior Notes or the
Stated Maturity of the 2008 Senior Notes; provided that any Capital
Stock that would not constitute Redeemable Stock but for provisions
thereof giving holders thereof the right to require the Borrower to
repurchase or redeem such Capital Stock upon the occurrence of an
"asset sale" or a "change of control" occurring prior to the later of
the Final Maturity Date or the Stated Maturity of the 2004 Senior Notes
or the Stated Maturity of the 2008 Senior Notes shall not constitute
Redeemable Stock if the asset disposition or change of control
provision applicable to such Capital Stock is no more favorable to the
holders of such Capital Stock than the provisions contained in
subsections 2.6(b), 7.6, 7.9, 7.10 and 8(j) are to the Lenders and such
Capital Stock specifically provides that the Borrower will not
repurchase or redeem any such Capital Stock pursuant to such provisions
prior to the date that all Obligations have been paid and performed in
full.
"Reference Period": the four complete fiscal quarters for
which financial information is available preceding the date of a
transaction giving rise to the need to make a financial calculation;
provided, that for purposes of this definition financial information
shall not be considered unavailable for any fiscal quarter on any day
that is 30 or more days after the last day of such fiscal quarter.
"Refinance": to issue Debt in order to substantially
concurrently repay, redeem, defease, refund, refinance, discharge or
otherwise retire for value, in whole or in part, other Debt or
securities.
"Register": as defined in subsection 10.6(d).
"Regulation U": Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.
"Reimbursement Obligation": the obligation of the Borrower to
reimburse the Issuing Bank pursuant to subsection 3.5(a) for amounts
drawn under Letters of Credit.
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"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty day
notice period is waived under subsections .13, .14, .16, .18, .19 or
.20 of PBGC Reg. ss. 2615.
"Required Lenders": at any time, Lenders the Commitment
Percentages of which aggregate at least 66-2/3%.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its property or to which such Person or any of its property is
subject.
"Responsible Officer": the chief executive officer or the
president of the Borrower or, with respect to financial matters, the
chief financial officer, the vice president-finance or the treasurer of
the Borrower.
"Restricted Payment": with respect to any Person, (i) any
dividend or other distribution on any shares of such Person's Capital
Stock; (ii) any payment on account of the purchase, redemption,
retirement or acquisition for value of such Person's Capital Stock;
(iii) any defeasance, redemption, repurchase or other acquisition or
retirement for value prior to the Stated Maturity of any Debt ranked
subordinate in right of payment to the Obligations; and (iv) any
Investment made in an Affiliate (other than the Borrower or CDH).
Notwithstanding the foregoing, "Restricted Payment" shall not include
any Permitted Payment.
"Revolving Credit Loans": as defined in subsection 2.1.
"Secured Parties": the collective reference to the Agent, the
Issuing Bank, the Lenders and the L/C Participants.
"Securities Account Control Agreement": as defined in
subsection 3.9(a).
"Security Documents": the Account Pledge Agreement and the
Securities Account Control Agreement.
"Significant Subsidiary": of a Person, as of any date, any
Subsidiary, or two or more Subsidiaries taken together in the event of
a cross-collateralization of such multiple Subsidiaries' Debt, which
has two or more of the following attributes: (i) it contributes 20% or
more of such Person's Excess Cash Flow for its most recently completed
fiscal quarter or (ii) it contributed 15% or more of Net Income before
tax of such Person and its consolidated Subsidiaries for such Person's
most recently completed fiscal quarter or (iii) it constituted 20% or
more of Consolidated Total Assets of such Person at the end of such
Person's most recently completed fiscal quarter.
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"Single Employer Plan": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Stated Maturity": with respect to any debt security or any
installment of interest thereon, the date specified in such debt
security as the fixed date on which any principal of such debt security
or any such installment of interest is due and payable.
"Subsidiary": with respect to any Person, any corporation or
other entity of which a majority of the Capital Stock or other
ownership interests having ordinary voting power (other than stock or
such other ownership interests having such power only by reason of the
happening of a contingency) to elect a majority of the board of
directors or other persons performing similar functions are at the time
directly or indirectly owned by such Person. Unless otherwise
qualified, all references to a "Subsidiary" or to "Subsidiaries" in
this Agreement shall refer to a Subsidiary or Subsidiaries of the
Borrower.
"Tangible Net Worth": with respect to any Person, as of the
date of determination, the Net Worth of such Person at such date, after
deducting therefrom all intangible assets, including without limitation
the following:
(a) any surplus resulting from the write-up of assets
subsequent to June 30, 1998;
(b) goodwill, including any amounts (however
designated on the balance sheet) representing Acquisition
Premiums;
(c) patents, trademarks, copyrights, franchises,
licenses, service marks and brand names;
(d) leasehold improvements not recoverable at the
expiration of a lease; and
(e) deferred charges (including, but not limited to,
unamortized debt discount and expense, organization expenses
and experimental expenses and project and other development
expenses, but excluding prepaid expenses).
"Trade Payables": with respect to any Person, any accounts
payable or any other indebtedness or monetary obligation to trade
creditors created, assumed or Guaranteed by such Person or any of its
Subsidiaries arising in the ordinary course of business in connection
with the acquisition of goods or services.
"Tranche": the collective reference to Eurodollar Loans the
then current Interest Periods with respect to all of which begin on the
same date and end on the same later date (whether or not such Revolving
Credit Loans shall originally have been made on the same day).
"Transferee": as defined in subsection 10.6(f).
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"2004 Senior Note Indenture": the Indenture, dated as of March
15, 1994, between the Borrower and the First Union National Bank of
North Carolina, a National Banking Association, as trustee, as amended,
supplemented or otherwise modified from time to time.
"2004 Senior Notes": the 8.10% Senior Notes Due 2004 issued by
the Borrower pursuant to the 2004 Senior Note Indenture.
"2008 Senior Note Indenture": the Indenture, dated as of
October 20, 1998, between the Borrower and First Union National Bank of
North Carolina, as trustee, as supplemented by the first Supplemental
Indenture thereto dated as of October 20, 1998, as amended,
supplemented or otherwise modified from time to time.
"2008 Senior Notes": the 8.75% Senior Notes Due 2008 issued by
the Borrower pursuant to the 2008 Senior Note Indenture.
"Type": (a) as to any Revolving Credit Loan, its nature as an
ABR Loan or a Eurodollar Loan and (b) as to any Letter of Credit, its
nature as a Financial Letter of Credit or a Performance Letter of
Credit.
"Uniform Customs": the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be amended from time to time.
"Voting Stock": with respect to any Person, Capital Stock of
any class or kind ordinarily having the power to vote for the election
of directors (or persons fulfilling similar responsibilities) of such
Person.
"Wholly-Owned Subsidiary": with respect to any Person, any
Subsidiary of such Person if all of the Capital Stock or other
ownership interests in such Subsidiary having ordinary voting power
(other than stock or such other ownership interests having such power
only by reason of the happening of a contingency) to elect the entire
board of directors or entire group of other persons performing similar
functions (other than any director's qualifying shares or Investments
by foreign nationals mandated by applicable law) is owned directly or
indirectly, by one or more Wholly-Owned Subsidiaries of such Person's
Wholly-Owned Subsidiaries, by such Person.
1.2 Other Definitional Provisions (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in any Notes or any certificate or other document made or
delivered pursuant hereto.
(b) As used herein and in any Notes, and any certificate or
other document made or delivered pursuant hereto, accounting terms relating to
the Borrower and its Subsidiaries not defined in subsection 1.1 and accounting
terms partly defined in subsection 1.1, to the extent not defined, shall have
the respective meanings given to them under GAAP.
(c) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any
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particular provision of this Agreement, and Section, subsection, Schedule and
Exhibit references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Revolving Credit Commitments (a) Subject to the terms and
conditions hereof, each Lender severally agrees to make revolving credit loans
("Revolving Credit Loans") to the Borrower from time to time during the
Commitment Period in an aggregate principal amount at any one time outstanding
which, when added to such Lender's Commitment Percentage of the then outstanding
L/C Obligations, does not exceed the amount of such Lender's Commitment at such
time. During the Commitment Period the Borrower may use the Commitments by
borrowing, prepaying and reborrowing the Revolving Credit Loans in whole or in
part, all in accordance with the terms and conditions hereof. At no time may the
aggregate outstanding principal amount of all Lenders' Revolving Credit Loans,
when added to then outstanding L/C Obligations, exceed the aggregate of all
Lenders' Commitments at such time.
(b) The Revolving Credit Loans may from time to time be (i)
Eurodollar Loans, (ii) ABR Loans or (iii) a combination thereof, as determined
by the Borrower and notified to the Agent in accordance with subsections 2.2 and
2.7, provided that no Revolving Credit Loan shall be made as a Eurodollar Loan
after the day that is one month prior to the Final Maturity Date.
(c) The Final Maturity Date may be extended, in the manner set
forth in this subsection 2.1(c), on October 29, 2001 and on the first
anniversary thereof (each, an "Extension Date"), in each case for a period of
one year after the Final Maturity Date theretofore in effect. If the Borrower
wishes to request an extension of the Final Maturity Date on any Extension Date,
it shall give written notice to that effect to the Agent not less than 45 nor
more than 90 days prior to such Extension Date, whereupon the Agent shall notify
each of the Lenders of such notice. Each Lender will use reasonable efforts to
respond to such request, whether affirmatively or negatively, no later than 15
days prior to such Extension Date. If all Lenders respond affirmatively (any
Lender which does not respond being deemed to have responded negatively), then,
subject to receipt by the Agent prior to such Extension Date of counterparts of
an Extension Agreement in substantially the form of Exhibit D duly completed and
signed by all of the parties hereto, the Final Maturity Date shall be extended,
effective on such Extension Date, for a period of one year to the date stated in
such Extension Agreement.
2.2 Procedure for Revolving Credit Borrowing. The Borrower may
borrow under the Commitments during the Commitment Period on any Business Day in
the case of ABR Loans and on any Eurodollar Business Day in the case of
Eurodollar Loans, provided that the Borrower shall have delivered to the Agent a
properly completed Borrowing Request, duly executed by a Responsible Officer of
the Borrower, which notice shall be irrevocable and must be received by the
Agent prior to 10:00 A.M., New York City time, (a) three Eurodollar Business
Days prior to the requested Borrowing Date, if all or any part of the requested
Revolving Credit
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Loans are to be initially Eurodollar Loans or (b) one Business Day prior to the
requested Borrowing Date, otherwise. In each such Borrowing Request, the
Borrower shall, in addition to any other information required to be therein,
specify (i) the amount to be borrowed, (ii) the requested Borrowing Date, (iii)
whether the borrowing is to be of Eurodollar Loans, ABR Loans or a combination
thereof and (iv) if the borrowing is to be entirely or partly of Eurodollar
Loans, the respective amounts of each such Type of Revolving Credit Loan and the
respective lengths of the initial Interest Periods therefor. Each borrowing
under the Commitments of ABR Loans and each borrowing under the Commitments of
Eurodollar Loans shall be in an amount equal to $1,000,000 or a whole multiple
of $500,000 in excess thereof. Upon receipt of any such notice from the
Borrower, the Agent shall promptly notify each Lender thereof. Each Lender will
make the amount of its pro rata share of each borrowing available to the Agent,
by wire transfer using Fedwire or such other method as reasonably specified by
the Agent, for the account of the Borrower at the office of the Agent specified
in subsection 10.2 prior to 11:00 A.M., New York City time, on the Borrowing
Date requested by the Borrower in funds immediately available to the Agent. Such
borrowing will then be made available to the Borrower by the Agent by wire
transfer to the account specified in the Borrowing Request, in the amount of the
aggregate of the amounts made available to the Agent by the Lenders and in like
funds as received by the Agent.
2.3 Fees (a) Commitment Fee. The Borrower agrees to pay to the
Agent for the account of each Lender a commitment fee (a "Commitment Fee") for
the Commitment Period computed at a rate per annum equal to the Applicable
Margin in effect from time to time for the Commitment Fee, such fee to be paid
on the average daily amount of the Available Commitment of such Lender during
the period for which payment is made. The Commitment Fee shall be payable
quarterly in arrears on the last day of each March, June, September and December
and on the Final Maturity Date or such earlier date as the Commitments shall
terminate as provided herein, commencing on the first of such dates to occur
after the date hereof.
(b) [intentionally omitted]
(c) Administration Fee. The Borrower agrees to pay to the
Agent, for its own account, a non-refundable fee (the "Administration Fee") for
its administration of this Agreement in the amount and at the times as agreed
between the Agent and the Borrower.
2.4 Termination or Reduction of Commitments
(a) Optional. The Borrower shall have the right, upon not less
than thirty days' notice to the Agent, to terminate the Commitments or, from
time to time, to reduce the amount of the Commitments. Any such reduction shall
be in an amount equal to $1,000,000 or a whole multiple of $500,000 in excess
thereof and shall reduce permanently the Commitments then in effect.
(b) Mandatory. In the event that (i) the Borrower or any of
its Subsidiaries shall at any time before the day that is 366 days before the
Final Maturity Date receive any payment representing all or any part of the Net
Cash Proceeds of an Asset Disposition made by the Borrower or any of its
Subsidiaries or any Recovery Event and (ii) such payment shall not have been
invested in its entirety by the Borrower or its Subsidiaries in the
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business or businesses of the Borrower or any of its Subsidiaries within 364
days of the receipt of such payment, the amount of the Commitments shall be
mandatorily reduced on the day that is 365 days after the receipt of such
payment in an amount equal to the product of (x) the amount of the payment of
Net Cash Proceeds not so invested times (y) the fraction obtained by dividing
(A) the amount of the Commitments then in effect by (B) the sum of the amount of
the Commitments then in effect plus the aggregate principal amount of the Other
Borrower Indebtedness then outstanding.
2.5 Repayment of Revolving Credit Loans; Evidence of Debt. (a)
The Borrower hereby unconditionally promises to pay to the Agent for the account
of each Lender the then unpaid principal amount of each Revolving Credit Loan of
such Lender on the Final Maturity Date (or such earlier date on which the
Revolving Credit Loans become due and payable pursuant to Section 8). The
Borrower hereby further agrees to pay interest on the unpaid principal amount of
the Revolving Credit Loans from time to time outstanding from the date hereof
until payment in full thereof at the rates per annum, and on the dates, set
forth in subsection 2.9.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrower to such
Lender resulting from each Revolving Credit Loan of such Lender from time to
time, including the amounts of principal and interest payable and paid to such
Lender from time to time under this Agreement.
(c) The Agent shall maintain the Register pursuant to
subsection 10.6(d), and a subaccount therein for each Lender, in which shall be
recorded (i) the amount of each Revolving Credit Loan made hereunder, the Type
thereof and each Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) both the amount of any sum received
by the Agent hereunder from the Borrower and each Lender's share thereof.
(d) The entries made in the Register and the accounts of each
Lender maintained pursuant to subsection 2.5(b) shall, to the extent permitted
by applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Agent to maintain the Register or any such account,
or any error therein, shall not in any manner affect the obligation of the
Borrower to repay (with applicable interest) the Revolving Credit Loans made to
such Borrower by such Lender in accordance with the terms of this Agreement.
(e) The Borrower agrees that it will execute and deliver to
each Lender upon the Closing Date, a promissory note of the Borrower evidencing
the Revolving Credit Loans of such Lender, substantially in the form of Exhibit
A with appropriate insertions as to date and principal amount (a " Note").
2.6 Prepayments.
(a) Optional. The Borrower may on the last day of any Interest
Period with respect thereto, in the case of Eurodollar Loans, or at any time and
from time to time, in the case of ABR Loans, prepay the Revolving Credit Loans,
in whole or in part, without premium or
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penalty, upon irrevocable notice to the Agent, specifying the date and amount of
prepayment and whether the prepayment is of Eurodollar Loans, ABR Loans or a
combination thereof, and, if of a combination thereof, the amount allocable to
each, which notice must be received by the Agent at least (i) three Eurodollar
Business Days prior to the date of prepayment if any of the Revolving Credit
Loans to be prepaid are Eurodollar Loans and (ii) one Business Day prior to the
date of prepayment, otherwise. Upon receipt of any such notice the Agent shall
promptly notify each Lender thereof. If any such notice is given, the amount
specified in such notice shall be due and payable on the date specified therein,
together with any amounts payable pursuant to subsection 2.16 and accrued
interest to such date on the amount prepaid. Partial prepayments shall be in an
aggregate principal amount of $1,000,000 or a whole multiple of $500,000 in
excess thereof.
(b) Mandatory.
(i) In the event that the Commitments shall have been
reduced pursuant to subsection 2.4 and the aggregate principal
amount of the Revolving Credit Loans then outstanding, when
added to the then outstanding L/C Obligations, exceed the
Commitments in effect after such reduction less the aggregate
amount then on deposit in the Collateral Account (excluding
any amounts then on deposit representing interest or other
earnings thereon), the Borrower shall apply an amount equal to
the amount of such excess to prepay the Revolving Credit Loans
or to collateralize the Letters of Credit or both.
(ii) Amounts to be applied pursuant to clause (i) of
this subsection 2.6(b) shall be applied first to prepay the
principal amount of the Revolving Credit Loans then
outstanding until all such Revolving Credit Loans shall have
been prepaid in full, and if any excess then remains such
excess shall be deposited in the Collateral Account to be
held, applied or released for application as provided in
subsection 3.9. The particular Revolving Credit Loans to be
prepaid shall be designated by the Borrower (or, failing such
designation, as the Agent may determine). Each prepayment
shall be applied to prepay ratably the Revolving Credit Loans
of the Lenders. Each payment of principal shall be made
together with interest accrued on the amount prepaid to the
date of payment.
2.7 Conversion and Continuation Options. (a) The Borrower may
elect from time to time to convert Eurodollar Loans to ABR Loans by giving the
Agent at least two Eurodollar Business Days' prior irrevocable notice of such
election, provided that any such conversion of Eurodollar Loans may only be made
on the last day of an Interest Period with respect thereto. The Borrower may
elect from time to time to convert ABR Loans to Eurodollar Loans by giving the
Agent at least three Eurodollar Business Days' prior irrevocable notice of such
election. Any such notice of conversion to Eurodollar Loans shall specify the
length of the initial Interest Period or Interest Periods therefor. Upon receipt
of any such notice the Agent shall promptly notify each Lender thereof. All or
any part of outstanding Eurodollar Loans or ABR Loans may be converted as
provided herein, provided that (i) no Revolving Credit Loan may be converted
into a Eurodollar Loan when any Event of Default has occurred and is continuing
and (ii) no Revolving Credit Loan may be converted into a Eurodollar Loan after
the date that is one month prior to the Final Maturity Date.
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(b) Any Eurodollar Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving notice to the Agent, in accordance with the applicable
provisions of the term "Interest Period" set forth in subsection 1.1, of the
length of the next Interest Period to be applicable to such Revolving Credit
Loans, provided that no Eurodollar Loan may be continued as such (i) when any
Event of Default has occurred and is continuing or (ii) after the date that is
one month prior to the Final Maturity Date and provided, further, that if the
Borrower shall fail to give such notice or if such continuation is not permitted
such Revolving Credit Loans shall be automatically converted to ABR Loans on the
last day of such then expiring Interest Period.
2.8 Minimum Amounts and Maximum Number of Tranches. All
borrowings, conversions and continuations of Revolving Credit Loans hereunder
and all selections of Interest Periods hereunder shall be in such amounts and be
made pursuant to such elections so that, after giving effect thereto, the
aggregate principal amount of the Revolving Credit Loans comprising each Tranche
shall be equal to $1,000,000 or a whole multiple of $500,000 in excess thereof.
2.9 Interest Rates and Payment Dates (a) Each Eurodollar Loan
shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus the Applicable Margin for such Type of Revolving Credit Loan.
(b) Each ABR Loan shall bear interest at a rate per annum
equal to the ABR plus the Applicable Margin for such Type of Revolving Credit
Loan.
(c) If all or a portion of (i) any principal of any Revolving
Credit Loan, (ii) any interest payable thereon, (iii) the Commitment Fee, the
Administration Fee, any Fronting Fee or any Letter of Credit Fee or (iv) any
other amount payable hereunder or under any other Loan Document shall not be
paid when due (whether at the stated maturity, by acceleration or otherwise),
the principal of the Revolving Credit Loans and any such overdue interest,
Commitment Fee, Administration Fee, Fronting Fee, Letter of Credit Fee or other
amount shall bear interest at a rate per annum which is (x) in the case of
principal, the rate that would otherwise be applicable thereto pursuant to the
foregoing provisions of this subsection plus 2% or (y) in the case of any such
overdue interest, Commitment Fee, Administration Fee, Fronting Fee, Letter of
Credit Fee or other amount, the rate described in paragraph (b) of this
subsection plus 2%, in each case from the date of such non-payment until such
overdue principal, interest, Commitment Fee, Administration Fee, Fronting Fee,
Letter of Credit Fee or other amount is paid in full (as well after as before
judgment).
(d) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing pursuant to paragraph (c) of this
subsection shall be payable from time to time on demand.
2.10 Computation of Interest and Fees. (a) The Commitment Fee
and, whenever it is calculated on the basis of the Prime Rate, interest shall be
calculated on the basis of a 365- (or 366-, as the case may be) day year for the
actual days elapsed; and, otherwise, interest shall be calculated on the basis
of a 360-day year for the actual days elapsed. The Agent shall as soon as
practicable notify the Borrower and the Lenders of each determination of a
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Eurodollar Rate. Any change in the interest rate on a Revolving Credit Loan
resulting from a change in the ABR or the Eurocurrency Reserve Requirements
shall become effective as of the opening of business on the day on which such
change becomes effective. The Agent shall as soon as practicable notify the
Borrower and the Lenders of the effective date and the amount of each such
change in interest rate.
(b) Each determination of an interest rate by the Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error. The Agent shall,
at the request of the Borrower, deliver to the Borrower a statement showing the
quotations used by the Agent in determining any interest rate pursuant to
subsection 2.9(a) or (c).
2.11 Inability to Determine Interest Rate. If prior to the
first day of any Interest Period:
(a) the Agent shall have determined (which determination shall
be conclusive and binding upon the Borrower) that, by reason of
circumstances affecting the relevant market, adequate and reasonable
means do not exist for ascertaining the Eurodollar Rate for such
Interest Period, or
(b) the Agent shall have received notice from the Majority
Lenders that the Eurodollar Rate determined or to be determined for
such Interest Period will not adequately and fairly reflect the cost to
such Lenders (as conclusively certified by such Lenders) of making or
maintaining their affected Revolving Credit Loans during such Interest
Period,
the Agent shall give telecopy or telephonic notice thereof to the Borrower and
the Lenders as soon as practicable thereafter. If such notice is given (x) any
Eurodollar Loans requested to be made on the first day of such Interest Period
shall be made as ABR Loans, (y) any Revolving Credit Loans that were to have
been converted on the first day of such Interest Period to Eurodollar Loans
shall be continued as ABR Loans and (z) any outstanding Eurodollar Loans that
were to have been continued as such on such first day shall be converted on such
day to ABR Loans. Until such notice has been withdrawn by the Agent, no further
Eurodollar Loans shall be made or continued as such, nor shall the Borrower have
the right to convert ABR Loans to Eurodollar Loans.
2.12 Pro Rata Treatment and Payments. (a) Each borrowing by
the Borrower from the Lenders hereunder, each payment by the Borrower of the
Commitment Fee or any Letter of Credit Fee and any reduction of the Commitments
of the Lenders shall be made pro rata according to the respective Commitment
Percentages of the Lenders. Each payment (including each prepayment) by the
Borrower on account of principal of and interest on the Revolving Credit Loans
shall be made pro rata according to the respective outstanding principal amounts
of the Revolving Credit Loans then held by the Lenders. All payments (including
prepayments) to be made by the Borrower hereunder, whether on account of
principal, interest, fees or otherwise, shall be made without set off or
counterclaim and shall be made prior to 11:00 a.m., New York City time, on the
due date thereof to the Agent, for the account of the Lenders, at the Agent's
office specified in subsection 10.2, in Dollars and in immediately
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available funds. The Agent shall distribute such payments to the Lenders
promptly upon receipt in like funds as received. If any payment hereunder (other
than a payment on any Eurodollar Loan) becomes due and payable on a day other
than a Business Day, such payment shall be extended to the next succeeding
Business Day, and, with respect to payments of principal, interest thereon shall
be payable at the then applicable rate during such extension. If any payment on
a Eurodollar Loan becomes due and payable on a day other than a Eurodollar
Business Day, the maturity thereof shall be extended to the next succeeding
Eurodollar Business Day (unless the result of such extension would be to extend
such payment into another calendar month, in which event such payment shall be
made on the immediately preceding Eurodollar Business Day) and, with respect to
payments of principal, interest thereon shall be payable at the then applicable
rate during any such extension.
(b) Unless the Agent shall have been notified in writing by
any Lender prior to a borrowing that such Lender will not make the amount that
would constitute its Commitment Percentage of such borrowing available to the
Agent, the Agent may assume that such Lender is making such amount available to
the Agent, and the Agent may, in reliance upon such assumption, make available
to the Borrower a corresponding amount. If such amount is not made available to
the Agent by the required time on the Borrowing Date therefor, such Lender shall
pay to the Agent, on demand, such amount with interest thereon at a rate equal
to the daily average Federal Funds Effective Rate for the period until such
Lender makes such amount immediately available to the Agent. A certificate of
the Agent submitted to any Lender with respect to any amounts owing under this
subsection shall be conclusive in the absence of manifest error. If such
Lender's Commitment Percentage of such borrowing is not made available to the
Agent by such Lender within three Business Days of such Borrowing Date, the
Agent shall also be entitled to recover such amount with interest thereon at the
rate per annum applicable to ABR Loans hereunder, on demand, from the Borrower.
2.13 Illegality. Notwithstanding any other provision herein,
if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the
commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert ABR Loans to Eurodollar Loans shall
forthwith be cancelled and (b) such Lender's Revolving Credit Loans then
outstanding as Eurodollar Loans, if any, shall be converted automatically to ABR
Loans on the respective last days of the then current Interest Periods with
respect to such Revolving Credit Loans or within such earlier period as required
by law. If any such conversion of a Eurodollar Loan occurs on a day which is not
the last day of the then current Interest Period with respect thereto, the
Borrower shall pay to such Lender such amounts, if any, as may be required
pursuant to subsection 2.16.
2.14 Requirements of Law. (a) If the adoption of or any change
in any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender or the Issuing Bank with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the date hereof:
(i) shall subject any Lender or the Issuing Bank to any tax of
any kind whatsoever with respect to this Agreement or any other Loan
Document or any Eurodollar Loan made by it, or change the basis of
taxation of payments to such
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Lender or the Issuing Bank in respect thereof (except for Non-Excluded
Taxes covered by subsection 2.15 and changes in the rate of tax on the
overall net income of such Lender or the Issuing Bank);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender or the Issuing Bank
which is not otherwise included in the determination of the Eurodollar
Rate hereunder; or
(iii) shall impose on such Lender or the Issuing Bank any
other condition;
and the result of any of the foregoing is to increase the cost to such Lender or
the Issuing Bank, by an amount which such Lender or the Issuing Bank, as the
case may be, deems to be material, of making, converting into, continuing or
maintaining Eurodollar Loans or issuing or participating in Letters of Credit or
to reduce any amount receivable hereunder in respect thereof, then, in any such
case, the Borrower shall promptly pay such Lender or the Issuing Bank such
additional amount or amounts as will compensate such Lender or the Issuing Bank,
as the case may be, for such increased cost or reduced amount receivable.
(b) If any Lender or the Issuing Bank shall have determined
that the adoption of or any change in any Requirement of Law regarding capital
adequacy or in the interpretation or application thereof or compliance by such
Lender or the Issuing Bank or any corporation controlling such Lender or the
Issuing Bank with any request or directive regarding capital adequacy (whether
or not having the force of law) from any Governmental Authority made subsequent
to the date hereof shall have the effect of reducing the rate of return on such
Lender's or the Issuing Bank's or such corporation's capital as a consequence of
its obligations hereunder or under any Letter of Credit to a level below that
which such Lender or the Issuing Bank or such corporation could have achieved
but for such adoption, change or compliance (taking into consideration such
Lender's or the Issuing Bank's or such corporation's policies with respect to
capital adequacy) by an amount deemed by such Lender or the Issuing Bank to be
material, then from time to time, the Borrower shall promptly pay to such Lender
or the Issuing Bank such additional amount or amounts as will compensate such
Lender or the Issuing Bank, as the case may be, for such reduction.
(c) If any Lender or the Issuing Bank becomes entitled to
claim any additional amounts pursuant to this subsection, it shall promptly
notify the Borrower (with a copy to the Agent) of the event by reason of which
it has become so entitled. A certificate as to any additional amounts payable
pursuant to this subsection submitted by such Lender or the Issuing Bank to the
Borrower (with a copy to the Agent) shall be conclusive in the absence of
manifest error. The agreements in this subsection shall survive the termination
of this Agreement and the payment of the Notes, the Revolving Credit Loans and
all other Obligations.
2.15 Taxes. (a) All payments made by the Borrower under this
Agreement and any Notes shall be made free and clear of, and without deduction
or withholding for or on
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account of, any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority, excluding
net income taxes and franchise taxes (imposed in lieu of net income taxes)
imposed on the Agent or the Issuing Bank or any Lender as a result of a present
or former connection between the Agent or the Issuing Bank or such Lender and
the jurisdiction of the Governmental Authority imposing such tax or any
political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the Agent or the Issuing Bank or such Lender
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or any Note). If any such non-excluded taxes,
levies, imposts, duties, charges, fees, deductions or withholdings
("Non-Excluded Taxes") are required to be withheld from any amounts payable to
the Agent or the Issuing Bank or any Lender hereunder or under any Note, the
amounts so payable to the Agent or the Issuing Bank or such Lender shall be
increased to the extent necessary to yield to the Agent or the Issuing Bank or
such Lender (after payment of all Non-Excluded Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement, provided, however, that the Borrower shall not be required to
increase any such amounts payable to any Lender that is not organized under the
laws of the United States of America or a state thereof if such Lender fails to
comply with the requirements of paragraph (b) of this subsection. Whenever any
Non-Excluded Taxes are payable by the Borrower, as promptly as possible
thereafter the Borrower shall send to the Agent for its own account or for the
account of the Issuing Bank or such Lender, as the case may be, a certified copy
of an original official receipt received by the Borrower showing payment
thereof. If the Borrower fails to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to the Agent the required
receipts or other required documentary evidence, the Borrower shall indemnify
the Agent, the Issuing Bank and the Lenders for any incremental taxes, interest
or penalties that may become payable by the Agent or the Issuing Bank or any
Lender as a result of any such failure. The agreements in this subsection
2.15(a) shall survive the termination of this Agreement and the payment of the
Notes, the Revolving Credit Loans and all other Obligations.
(b) Each Lender that is not incorporated under the laws of the
United States of America or a state thereof shall:
(i) deliver to the Borrower and the Agent (A) two duly
completed copies of United States Internal Revenue Service Form 1001 or
4224, or successor applicable form, as the case may be, and (B) an
Internal Revenue Service Form W-8 or W-9, or successor applicable form,
as the case may be;
(ii) deliver to the Borrower and the Agent two further copies
of any such form or certification on or before the date that any such
form or certification expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrower; and
(iii) obtain such extensions of time for filing and complete
such forms or certifications as may reasonably be requested by the
Borrower or the Agent;
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be
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required which renders all such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form with respect to it and
such Lender so advises the Borrower and the Agent. Such Lender shall certify (i)
in the case of a Form 1001 or 4224, that it is entitled to receive payments
under this Agreement without deduction or withholding of any United States
federal income taxes and (ii) in the case of a Form W-8 or W-9, that it is
entitled to an exemption from United States backup withholding tax. Each Person
that shall become a Lender or a Participant pursuant to subsection 10.6 shall,
upon the effectiveness of the related transfer, be required to provide all of
the forms and statements required pursuant to this subsection, provided that in
the case of a Participant such Participant shall furnish all such required forms
and statements to the Lender from which the related participation shall have
been purchased.
2.16 Indemnity. The Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss or expense which such Lender may
sustain or incur as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment after the Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making of a prepayment of Eurodollar
Loans on a day which is not the last day of an Interest Period with respect
thereto. Such indemnification may include an amount equal to the excess, if any,
of (i) the amount of interest which would have accrued on the amount so prepaid,
or not so borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Revolving
Credit Loans provided for herein (excluding, however, the Applicable Margin
included therein, if any) over (ii) the amount of interest (as reasonably
determined by such Lender) which would have accrued to such Bank on such amount
by placing such amount on deposit for a comparable period with leading banks in
the interbank eurodollar market. This covenant shall survive the termination of
this Agreement and the payment of the Notes, the Revolving Credit Loans and all
other Obligations.
2.17 Change of Lending Office. Each Lender agrees that if it
makes any demand for payment under subsection 2.14 or 2.15(a), or if any
adoption or change of the type described in subsection 2.13 shall occur with
respect to it, it will use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions and so long as such efforts would
not be disadvantageous to it, as determined in its sole discretion) to designate
a different lending office if the making of such a designation would reduce or
obviate the need for the Borrower to make payments under subsection 2.14 or
2.15(a), or would eliminate or reduce the effect of any adoption or change
described in subsection 2.13.
2.18 Use of Proceeds. The Borrower shall use the proceeds of
the Revolving Credit Loans solely for working capital and general corporate
purposes in the ordinary course of business.
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SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Subject to the terms and conditions
hereof, the Issuing Bank agrees to issue standby letters of credit ("Letters of
Credit") for the account of the Borrower or, at the Borrower's request, any
Subsidiary of the Borrower on any Business Day during the Commitment Period in
such form as may be approved from time to time by the Issuing Bank; provided,
that the Issuing Bank shall have no obligation to issue any Letter of Credit if,
after giving effect to such issuance, the Available Commitment for any Lender,
or the Letter of Credit Availability, would be less than zero.
(b) Each Letter of Credit shall:
(i) be denominated in Dollars and shall be either (1) a
standby letter of credit issued to support financial obligations
(incurred in the ordinary course of business) of the Borrower or any
Subsidiary of the Borrower, contingent or otherwise, to pay money (a
"Financial Letter of Credit") or (2) a standby letter of credit issued
to support non-financial obligations of the Borrower or any Subsidiary
of the Borrower, contingent or otherwise, to provide goods or services
in the ordinary course of business (a "Performance Letter of Credit");
(ii) have a face amount of (1) not less than $300,000 and (2)
not more than the amount that would, after giving effect to the
issuance thereof, cause the Available Commitment of any Lender or the
Letter of Credit Availability to be less than zero; and
(iii) expire (1) no earlier than 30 days after its date of
issue and (2) no later than five Business Days prior to the then Final
Maturity Date.
(c) Each Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent therewith, the laws of the State of
New York.
(d) The Issuing Bank shall not at any time be obligated to
issue any Letter of Credit hereunder if such issuance would conflict with, or
cause the Issuing Bank or any L/C Participant to exceed any limits imposed by,
any applicable Requirement of Law.
(e) Each party hereto acknowledges and agrees that each of the
Existing Letters of Credit is a Letter of Credit issued by the Issuing Bank
pursuant hereto for all purposes hereunder and under the other Loan Documents.
No amendment, modification or waiver of any provision of this Section 3 (or any
other provision in any manner that would affect any right or duty of the Issuing
Bank) may be made without the written consent of the Issuing Bank.
3.2 Procedure for Issuance of Letters of Credit. (a) The
Borrower may from time to time request that the Issuing Bank issue a Letter of
Credit by delivering to the Agent and the Issuing Bank a duly executed and
completed Issuance Request therefor, completed to the satisfaction of the Agent
and the Issuing Bank, and such other certificates, documents and other papers
and information relating to such Letter of Credit as the Issuing Bank may
reasonably request consistent with its current practices and procedures with
respect to letters of
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credit of the same type. In addition to such other information as is required to
be therein, the Borrower shall specify in any Issuance Request:
(i) the proposed party for whose account the requested Letter
of Credit would be issued (which shall be either the Borrower or a
Subsidiary of the Borrower);
(ii) the proposed beneficiary of the requested Letter of
Credit;
(iii) the proposed date of issuance of the requested Letter of
Credit;
(iv) the proposed expiry date of the requested Letter of
Credit;
(v) the proposed terms of the requested Letter of Credit,
including the proposed face amount thereof and whether it would
constitute a Financial Letter of Credit or a Performance Letter of
Credit; and
(vi) the transaction that is to be supported or financed with
the requested Letter of Credit, including identification of the Power
Generation Facility, if any, to which such Letter of Credit would
relate.
(b) Upon receipt of any Issuance Request, the Issuing Bank
will process such Issuance Request and the certificates, documents and other
papers and information delivered to it in connection therewith in accordance
with its customary procedures and shall promptly issue the Letter of Credit
requested thereby (but in no event shall the Issuing Bank be required to issue
any Letter of Credit earlier than three Business Days after its receipt of the
Issuance Request therefor and all such other certificates, documents and other
papers and information relating thereto) by issuing the original of such Letter
of Credit to the beneficiary thereof or as otherwise may be agreed by the
Issuing Bank and the Borrower. The Issuing Bank shall furnish a copy of such
Letter of Credit to the Borrower promptly following the issuance thereof.
3.3 Fees, Commissions and Other Charges. (a) The Borrower
shall pay to the Agent, for the account of the Issuing Bank, a fronting fee
("Fronting Fee") with respect to each Letter of Credit in the amount and at the
times as agreed between the Issuing Bank and the Borrower.
(b) The Borrower shall pay to the Agent, for the account of
the Issuing Bank and the L/C Participants, a letter of credit fee ("Letter of
Credit Fee") with respect to each Letter of Credit, computed for the period from
and including the date of the issuance of such Letter of Credit and to but
excluding the date such Letter of Credit expires, at a rate per annum,
calculated on the basis of a 365- (or 366-, as the case may be) day year, equal
to the Applicable Margin in effect from time-to-time for the Type of such Letter
of Credit and calculated on the aggregate amount available for drawing under
such Letter of Credit for each day during the period for which such fee is then
being calculated. Each Letter of Credit Fee shall be payable to the L/C
Participants to be shared ratably among them in accordance with their respective
Commitment Percentages. Each Letter of Credit Fee shall be payable in arrears on
each L/C Fee Payment Date to occur after the date of issuance of each Letter of
Credit and shall be nonrefundable.
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(c) In addition to the foregoing fees and commissions, the
Borrower shall pay or reimburse the Issuing Bank for such normal and customary
costs and expenses as are incurred or charged by the Issuing Bank in issuing,
effecting payment under, amending or otherwise administering any Letter of
Credit.
(d) The Agent shall, promptly following its receipt thereof,
distribute to the Issuing Bank and the L/C Participants all fees and commissions
received by the Agent for their respective accounts pursuant to this subsection.
3.4 L/C Participations. (a) The Issuing Bank irrevocably
agrees to grant and hereby grants to each L/C Participant, and, to induce the
Issuing Bank to issue Letters of Credit hereunder, each L/C Participant
irrevocably agrees to accept and purchase and hereby accepts and purchases from
the Issuing Bank, on the terms and conditions hereinafter stated, for such L/C
Participant's own account and risk an undivided interest equal to such L/C
Participant's Commitment Percentage in the Issuing Bank's obligations and rights
under each Letter of Credit issued hereunder and the amount of each draft paid
by the Issuing Bank thereunder. Each L/C Participant unconditionally and
irrevocably agrees with the Issuing Bank that, if a draft is paid under any
Letter of Credit for which the Issuing Bank is not reimbursed in full by the
Borrower in accordance with the terms of this Agreement, such L/C Participant
shall pay to the Issuing Bank upon first demand at the Issuing Bank's address
for notices specified herein an amount equal to such L/C Participant's
Commitment Percentage of the amount of such draft, or any part thereof, which is
not so reimbursed.
(b) If any amount required to be paid by any L/C Participant
to the Issuing Bank pursuant to subsection 3.4(a) in respect of any unreimbursed
portion of any payment made by the Issuing Bank under any Letter of Credit is
paid to the Issuing Bank within three Business Days after the date such payment
is due, such L/C Participant shall pay to the Issuing Bank on demand an amount
equal to the product of (i) such amount, times (ii) the daily average Federal
funds rate, as quoted by the Issuing Bank, during the period from and including
the date such payment is required to the date on which such payment is
immediately available to the Issuing Bank, times (iii) a fraction the numerator
of which is the number of days that elapse during such period and the
denominator of which is 360. If any such amount required to be paid by any L/C
Participant pursuant to subsection 3.4(a) is not in fact made available to the
Issuing Bank by such L/C Participant within three Business Days after the date
such payment is due, the Issuing Bank shall be entitled to recover from such L/C
Participant, on demand, such amount with interest thereon calculated from such
due date at the rate per annum applicable to ABR Loans hereunder. A certificate
of the Issuing Bank submitted to any L/C Participant with respect to any amounts
owing under this subsection shall be conclusive in the absence of manifest
error.
(c) Whenever, at any time after the Issuing Bank has made
payment under any Letter of Credit and has received from any L/C Participant its
pro rata share of such payment in accordance with subsection 3.4(a), the Issuing
Bank receives any payment related to such Letter of Credit (whether directly
from the Borrower or otherwise, including proceeds of collateral applied thereto
by the Issuing Bank), or any payment of interest on account thereof, the Issuing
Bank will distribute to such L/C Participant its pro rata share thereof;
provided, however,
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that in the event that any such payment received by the Issuing Bank shall be
required to be returned by the Issuing Bank, such L/C Participant shall return
to the Issuing Bank the portion thereof previously distributed by the Issuing
Bank to it.
3.5 Reimbursement Obligation of the Borrower. (a) The Borrower
agrees to reimburse the Issuing Bank on each date on which the Issuing Bank
notifies the Borrower of the date and amount of a draft presented under any
Letter of Credit and paid by the Issuing Bank for the amount of such draft so
paid. Each such payment shall be made to the Issuing Bank at its address for
notices specified herein in lawful money of the United States of America and in
immediately available funds.
(b) Interest shall be payable on any and all amounts remaining
unpaid by the Borrower under this subsection from the date such amounts become
payable (whether at stated maturity, by acceleration or otherwise) until payment
in full at the rate which would be payable on any outstanding ABR Loans which
were then overdue.
(c) Each drawing under any Letter of Credit during the
Commitment Period shall be deemed a request by the Borrower to the Agent for a
borrowing pursuant to subsection 2.2 (Procedure for Revolving Credit Borrowing)
of ABR Loans in the amount of such drawing. The Borrowing Date with respect to
such borrowing shall be the date of such drawing.
3.6 Obligations Absolute. (a) The Borrower's obligations under
this Section 3 shall be absolute and unconditional under any and all
circumstances and irrespective of any set-off, counterclaim or defense to
payment which the Borrower may have or have had against the Issuing Bank or any
beneficiary of a Letter of Credit.
(b) The Borrower also agrees with the Issuing Bank that the
Issuing Bank shall not be responsible for, and the Borrower's Reimbursement
Obligations under subsection 3.5(a) shall not be affected by, among other
things, (i) the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or (ii) any dispute between or among the Borrower and any
beneficiary of any Letter of Credit or any other party to which such Letter of
Credit may be transferred or (iii) any claims whatsoever of the Borrower against
any beneficiary of such Letter of Credit or any such transferee.
(c) The Issuing Bank shall not be liable for any error,
omission, interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Letter of Credit,
except for errors or omissions caused by the Issuing Bank's gross negligence or
willful misconduct.
(d) The Borrower agrees that any action taken or omitted by
the Issuing Bank under or in connection with any Letter of Credit or the related
drafts or documents, if done in the absence of gross negligence or willful
misconduct and in accordance with the standards of care specified in the Uniform
Commercial Code of the State of New York, shall be binding on the Borrower and
shall not result in any liability of the Issuing Bank to the Borrower.
3.7 Letter of Credit Payments. If any draft shall be presented
for payment under any Letter of Credit, the Issuing Bank shall promptly notify
the Borrower of the date and
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amount thereof. The responsibility of the Issuing Bank to the Borrower in
connection with any draft presented for payment under any Letter of Credit
shall, in addition to any payment obligation expressly provided for in such
Letter of Credit, be limited to determining that the documents (including each
draft) delivered under such Letter of Credit in connection with such presentment
are in conformity with such Letter of Credit.
3.8 Issuance Request. To the extent that any provision of any
Issuance Request related to any Letter of Credit is inconsistent with the
provisions of this Section 3, the provisions of this Section 3 shall apply.
3.9 Collateralization. (a) All amounts required to be
deposited as Collateral with the Agent pursuant to subsection 2.6(b) or Section
8 shall be deposited in a collateral account established by CDH with the Agent
(the "Collateral Account"), to be held, applied or released for application as
provided in this subsection 3.9. Promptly after being requested by the Agent,
the Borrower shall cause CDH to execute and deliver to the Agent, (i) an Account
Pledge Agreement substantially in the form of Exhibit H (the "Account Pledge
Agreement") pursuant to which, as provided therein, CDH shall grant to the
Agent, for the benefit of the Secured Parties, a security interest in, among
other things, all cash, securities and other financial instruments in the
Collateral Account to secure the Obligations, (ii) a securities account control
agreement substantially in the form of Exhibit I (the "Securities Account
Control Agreement") and (iii) such further documents and instruments as the
Agent may reasonably request to evidence the creation and perfection of such
security interest in the Collateral Account.
(b) In the event of a payment by the Issuing Bank of a draft
presented under any Letter of Credit, the amount of such drawing (but not more
than the amount in the Collateral Account at the time) shall be withdrawn by the
Agent from the Collateral Account and shall be paid to the Issuing Bank to be
applied against such drawing. If on any L/C Fee Payment Date the amount in the
Collateral Account exceeds the then outstanding L/C Obligations, the excess
amount shall, so long as no Default shall have occurred and be continuing, be
withdrawn by the Agent and paid to the Borrower on such L/C Fee Payment Date. If
an Event of Default shall have occurred and be continuing, such excess amount
shall, if and when requested by the Required Lenders, be withdrawn by the Agent
and applied first to repay the Reimbursement Obligations, second to repay the
Revolving Credit Loans and other due and unpaid amounts required to be paid by
the Borrower hereunder and third any remaining excess shall be paid to the
Borrower.
(c) Interest and other payments and distributions made on or
with respect to the Collateral held in the Collateral Account shall be for the
account of CDH and shall constitute Collateral to be held by the Agent or
returned to the Borrower in accordance with subsection 3.9(b). Funds held in the
Collateral Account shall be invested in time deposits with the Agent which pay a
market rate of interest for a like deposit with a comparable financial
institution. Beyond the exercise of reasonable care in the custody thereof, the
Agent shall have no duty as to any Collateral in its possession or control or in
the possession or control of any agent or bailee or any income thereon or as to
the preservation of rights against prior parties or any other rights the
preservation of rights against prior parties or any other rights pertaining
thereto. The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the Collateral in its possession if the Collateral
is accorded treatment
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substantially equal to that which it accords its own property, and shall not be
liable or responsible for any loss or damage to any of the Collateral, or for
any diminution in the value thereof, by reason of the act or omission of any
agent or bailee selected by the Agent in good faith. All expenses and
liabilities incurred by the Agent in connection with taking, holding and
disposing of any Collateral (including customary custody and similar fees with
respect to any Collateral held directly by the Agent) shall be paid by the
Borrower or CDH from time to time upon demand. Upon a Default, the Agent shall
be entitled to apply (and, at the request of the Required Lenders but subject to
applicable law, shall apply) Collateral or the proceeds thereof to payment of
any such expenses, liabilities and fees.
3.10 Substitution/Replacement of Issuing Bank. (a) In the
event that the Issuing Bank shall refuse pursuant to subsection 3.1(d) to issue
any Letter of Credit requested by the Borrower, the Borrower may request any L/C
Participant to issue such Letter of Credit hereunder in substitution for the
Issuing Bank by delivering to such L/C Participant and to the Agent a duly
executed and completed Issuance Request in accordance with subsection 3.2, and
such L/C Participant may agree to issue such Letter of Credit (but no L/C
Participant shall be under any obligation to do so); provided, that the issuance
by such L/C Participant of such Letter of Credit would not conflict with any
Requirement of Law applicable to any other L/C Participant or cause any other
L/C Participant to exceed any limits imposed by any applicable Requirement of
Law. Any L/C Participant issuing a Letter of Credit pursuant to this subsection
3.10(a) shall be deemed hereunder and under the other Loan Documents to be, and
to have all rights, powers, duties and obligations of, the Issuing Bank for the
purposes of such Letter of Credit without any further act or deed on the part of
any of the L/C Participants or any other party to this Agreement.
(b) If at any time the senior unsecured long-term debt
securities of ANZ shall be rated less than "A1" by ▇▇▇▇▇'▇ Investors Service,
Inc. or less than "A+" by Standard & Poor's Rating Group, the Borrower may
request any L/C Participant, and such L/C Participant may agree, to succeed ANZ
as Issuing Bank hereunder (but no L/C Participant shall be under any obligation
to do so). In such event, upon 10 days' prior written notice to the Agent, ANZ
and each L/C Participant but without any further act or deed on the part of any
of the L/C Participants or any other party to this Agreement, such L/C
Participant shall succeed ANZ as Issuing Bank hereunder and be deemed hereunder
and under the other Loan Documents to be, and to have all rights, powers, duties
and obligations of, the Issuing Bank for the purposes of each Letter of Credit
issued thereafter by such L/C Participant; provided, that ANZ shall remain, and
have all rights, powers, duties and obligations of, the Issuing Bank with
respect to (i) any actions taken or omitted to be taken by it while it was
Issuing Bank and (ii) each Letter of Credit issued by ANZ as Issuing Bank that
shall not have been surrendered and returned to ANZ by the beneficiary thereof
in a manner acceptable to ANZ in its sole discretion.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Agent, the Issuing Bank and the Lenders to enter
into this Agreement and to make the Revolving Credit Loans and issue or
participate in the Letters of Credit, the Borrower hereby represents and
warrants to the Agent, the Issuing Bank and each Lender that:
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4.1 Financial Information. (a) (i) The audited consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at December
31, 1999 and the related audited consolidated statements of income, of retained
earnings and of cash flows for the fiscal period ended on such date, reported on
by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP, copies of which have heretofore been furnished to each
Lender, are complete and correct and present fairly the consolidated financial
condition of the Borrower and its consolidated Subsidiaries as at such date, and
the consolidated results of their operations and their consolidated cash flows
for the fiscal period then ended.
(ii) The unaudited unconsolidated balance sheets of the
Borrower and of CDH as at December 31, 1999 and the related unaudited
unconsolidated statement of income for the fiscal period ended on such date,
certified by a Responsible Officer, copies of which have heretofore been
furnished to each Lender, are complete and correct and present fairly the
unconsolidated financial condition of the Borrower and CDH as at such date, and
the unconsolidated results of their operations for the fiscal period then ended.
(iii) The unaudited consolidating balance sheet of the
Borrower and its consolidated Subsidiaries as at December 31,1999 and the
related unaudited consolidating statement of income for the fiscal period ended
on such date, certified by a Responsible Officer, copies of which have
heretofore been furnished to each Lender, are complete and correct and present
fairly the consolidating financial condition of the Borrower and its
consolidated Subsidiaries as at such date, and the consolidating results of
their operations for the fiscal period then ended.
(iv) The unaudited statements of cash flow to the Borrower
from each of its consolidated Subsidiaries for the fiscal period ended on
December 31, 1999, certified by a Responsible Officer, copies of which have
heretofore been furnished to each Lender, are complete and correct and present
fairly the cash flow to the Borrower from each of its consolidated Subsidiaries
for the fiscal period then ended.
(i) The unaudited consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at June 30, 2000 and the related unaudited
consolidated statements of income, of retained earnings and of cash flows for
the fiscal period ended on such date, certified by a Responsible Officer, copies
of which have heretofore been furnished to each Lender, are complete and correct
and present fairly the consolidated financial condition of the Borrower and its
consolidated Subsidiaries as at such date, and the consolidated results of their
operations for the fiscal period then ended (subject to normal year-end audit
adjustments).
(ii) The unaudited unconsolidated balance sheets of the
Borrower and CDH as at June 30, 2000 and the related unaudited unconsolidated
statements of income for the fiscal period then ended, certified by a
Responsible Officer, copies of which have heretofore been furnished to each
Lender, are complete and correct and present fairly the unconsolidated financial
condition of the Borrower and CDH as at such dates, and the unconsolidated
results of their operations for the fiscal period then ended (subject to normal
year-end audit adjustments).
(iii) The unaudited consolidating balance sheet of the
Borrower and its consolidated Subsidiaries as at June 30, 2000 and the related
unaudited consolidating statement
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of income for the fiscal period then ended, certified by a Responsible Officer,
copies of which have heretofore been furnished to each Lender, are complete and
correct and present fairly the consolidating financial condition of the Borrower
and its consolidated Subsidiaries as at such date, and the consolidating results
of their operations for the fiscal period then ended (subject to normal year-end
audit adjustments).
(iv) The unaudited statements of cash flow to the Borrower
from each of its consolidated Subsidiaries for the fiscal period ended on June
30, 2000, certified by a Responsible Officer, copies of which have heretofore
been furnished to each Lender, are complete and correct and present fairly the
cash flow to the Borrower from each of its consolidated Subsidiaries for the
fiscal period then ended (subject to normal year-end audit adjustments).
(c) All of the financial statements referred to in clause (a)
and (b) above, including the related schedules and notes thereto, have been
prepared in accordance with GAAP applied consistently throughout the periods
involved (except as approved by such accountants or Responsible Officer, as the
case may be, and as disclosed therein).
(d) Neither the Borrower nor any of its consolidated
Subsidiaries had, at the date of the most recent balance sheet referred to
above, any material Guarantee Obligation, contingent liability or liability for
taxes, or any long-term lease or unusual forward or long-term commitment,
including, without limitation, any interest rate or foreign currency swap or
exchange transaction, which is not reflected in the foregoing statements or in
the notes thereto. Except as disclosed on Schedule III, during the period from
December 31, 1999 to and including the date of this Agreement there has been no
sale, transfer or other disposition by the Borrower or any of its consolidated
Subsidiaries of any material part of its business or property and no purchase or
other acquisition of any business or property (including any capital stock of
any other Person) material in relation to the consolidated financial condition
of the Borrower and its consolidated Subsidiaries at December 31, 1999.
4.2 No Change. (a) Except as disclosed on Schedule III, since
December 31, 1999 there has been no development or event which has had or could
reasonably be expected to have a Material Adverse Effect, and (b) during the
period from December 31, 1999 to and including the date of this Agreement no
dividends or other distributions have been declared, paid or made upon the
Capital Stock of the Borrower nor has any of the Capital Stock of the Borrower
been redeemed, retired, purchased or otherwise acquired for value by the
Borrower or any of its Subsidiaries.
4.3 Corporate Existence; Compliance with Law. Each of the
Borrower and its Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization (except, in
the case of the Borrower's Subsidiaries, to the extent that the failure to be so
organized, validly existing or in good standing could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect), (b) has the corporate
or partnership power and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged (except, in the case of the Borrower's
Subsidiaries, to the extent that the failure to have such power and authority or
legal right could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect), (c) is duly qualified as a foreign corporation and in
good standing
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under the laws of each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such qualification (except, in
the case of the Borrower's Subsidiaries, to the extent that the failure to be so
duly qualified or in good standing could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect) and, (d) is in compliance with all
Requirements of Law except to the extent that the failure to comply therewith
could not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.
4.4 Corporate Power; Authorization; Enforceable Obligations.
The Borrower has the corporate power and authority, and the legal right, to
make, deliver and perform the Loan Documents to which it is a party and to
borrow hereunder and has taken all necessary corporate action to authorize the
borrowings on the terms and conditions of this Agreement and the Notes and to
authorize the execution, delivery and performance of the Loan Documents to which
it is a party. No consent or authorization of, filing with, notice to or other
act by or in respect of, any Governmental Authority or any other Person (other
than those that have been given or made) is required in connection with the
borrowings hereunder or with the execution, delivery, performance, validity or
enforceability of the Loan Documents to which the Borrower is a party. This
Agreement has been, and each other Loan Document to which it is a party will be,
duly executed and delivered on behalf of the Borrower. This Agreement
constitutes, and each other Loan Document to which it is a party when executed
and delivered will constitute, a legal, valid and binding obligation of the
Borrower enforceable against the Borrower in accordance with its terms, subject
to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
4.5 No Legal Bar. The execution, delivery and performance of
the Loan Documents to which the Borrower is a party, the borrowings hereunder
and the use of the proceeds thereof will not violate any Requirement of Law or
Contractual Obligation of the Borrower or of any of its Subsidiaries and will
not result in, or require, the creation or imposition of any Lien (other than
any Lien created by the Loan Documents) on any of its or their respective
properties or revenues pursuant to any such Requirement of Law or Contractual
Obligation.
4.6 No Material Litigation. Except as disclosed on Schedule
IV, no litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Borrower,
threatened by or against the Borrower or any of its Subsidiaries or against any
of its or their respective properties or revenues (a) with respect to any of the
Loan Documents or any of the transactions contemplated hereby or thereby or (b)
which could reasonably be expected to have a Material Adverse Effect.
4.7 No Default. The Borrower is not in default under or in
respect of any of its obligations under either Borrower Indenture, and no "Event
of Default" (as defined in either Borrower Indenture) has occurred and is
continuing under such Borrower Indenture. Neither the Borrower nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which could reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
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4.8 Ownership of Property; Liens. Each of the Borrower and its
Subsidiaries has good record and marketable title in fee simple to, or a valid
leasehold interest in, all its real property, and good title to, or a valid
leasehold interest in, all its other property, and none of the Borrower's
property is subject to any Lien except as permitted by subsection 7.8.
4.9 Taxes. Each of the Borrower and its Subsidiaries has filed
or caused to be filed all tax returns which, to the knowledge of the Borrower,
are required to be filed and has paid all taxes shown to be due and payable on
said returns or on any assessments made against it or any of its property and
all other taxes, fees or other charges imposed on it or any of its property by
any Governmental Authority (other than any the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of the Borrower or its Subsidiaries, as the case may be); no tax Lien has
been filed, and, to the knowledge of the Borrower, no claim is being asserted,
with respect to any such tax, fee or other charge.
4.10 Federal Regulations. No part of the proceeds of any
Revolving Credit Loans will be used for "purchasing" or "carrying" any "margin
stock" within the respective meanings of each of the quoted terms under
Regulation G or Regulation U of the Board of Governors of the Federal Reserve
System as now and from time to time hereafter in effect. If requested by any
Lender or the Agent, the Borrower will furnish to the Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
G-1 or FR Form U-1 referred to in said Regulation G or Regulation U, as the case
may be.
4.11 ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code. No termination of a Single Employer Plan has occurred,
and no Lien in favor of the PBGC or a Plan has arisen, during such five-year
period. The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits. Neither the Borrower nor any Commonly Controlled Entity
has had a complete or partial withdrawal from any Multiemployer Plan, and
neither the Borrower nor any Commonly Controlled Entity would become subject to
any liability under ERISA if the Borrower or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made. No such Multiemployer Plan is in Reorganization or Insolvent. The
present value (determined using actuarial and other assumptions which are
reasonable in respect of the benefits provided and the employees participating)
of the liability of the Borrower and each Commonly Controlled Entity for post
retirement benefits to be provided to their current and former employees under
Plans which are welfare benefit plans (as defined in Section 3(1) of ERISA) does
not, in the aggregate, exceed the assets under all such Plans allocable to such
benefits.
4.12 Investment Company Act; Public Utility Holding Company
Act; Other Regulations. The Borrower is not (a) an "investment company," or a
company "controlled" by
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an "investment company," within the meaning of the Investment Company Act of
1940, as amended, or (b) a "holding company," a "subsidiary company" of a
"holding company" or an "affiliate" of a "holding company" within the meaning of
the Public Utility Holding Company Act of 1935, as amended. The Borrower is not
subject to regulation under any Federal or State statute or regulation (other
than Regulation X of the Board of Governors of the Federal Reserve System) which
limits its ability to incur Debt.
4.13 Subsidiaries. All the Subsidiaries of the Borrower at the
date of this Agreement are listed on Schedule V.
4.14 Purpose of the Revolving Credit Loans. The proceeds of
the Revolving Credit Loans shall be used by the Borrower for working capital and
general corporate purposes in the ordinary course of business.
4.15 Environmental Matters. Except as set forth on Schedule
VI:
(a) To the best knowledge of the Borrower, the facilities and
properties owned, leased or operated by the Borrower or any of its Subsidiaries
(the "Project Properties") do not contain, and have not previously contained,
any Materials of Environmental Concern in amounts or concentrations which (i)
constitute or constituted a violation of, or (ii) could reasonably be expected
to give rise to liability under, any Environmental Law, except in either case
insofar as such violation or liability, or any aggregation thereof, is not
reasonably likely to have a Material Adverse Effect.
(b) To the best knowledge of the Borrower, the Project
Properties and all operations at the Project Properties are in compliance, and
have been in compliance while owned, leased or operated by the Borrower or any
of its Subsidiaries, in all material respects with all applicable Environmental
Laws, and there is no contamination at, under or about the Project Properties or
violation of any Environmental Law with respect to the Project Properties or the
business operated by the Borrower or any of its Subsidiaries (the "Business")
which could materially interfere with the continued operation of the Project
Properties or materially impair the fair saleable value thereof.
(c) Neither the Borrower nor any of its Subsidiaries has
received any notice of violation, alleged violation, non-compliance, liability
or potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Project Properties or the Business,
nor does the Borrower have knowledge or reason to believe that any such notice
will be received or is being threatened, except insofar as such notice or
threatened notice, or any aggregation thereof, does not involve a matter or
matters that is or are reasonably likely to have a Material Adverse Effect.
(d) To the best knowledge of the Borrower, Materials of
Environmental Concern have not been transported or disposed of from the Project
Properties in violation of, or in a manner or to a location which could
reasonably be expected to give rise to liability under, any Environmental Law,
nor have any Materials of Environmental Concern been generated, treated, stored
or disposed of at, on or under any of the Project Properties (i) in violation of
any applicable Environmental Law which violation, or any aggregation thereof,
could reasonably be
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expected to give rise to material liability to the Borrower or any of its
Subsidiaries under any applicable Environmental Law or (ii) in a manner that
could reasonably be expected to give rise to material liability to the Borrower
or any of its Subsidiaries under any applicable Environmental Law.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower or any Subsidiary is or will be named as
a party with respect to the Project Properties or the Business, nor are there
any consent decrees or other decrees, consent orders, administrative orders or
other orders, or other administrative or judicial requirements outstanding under
any Environmental Law with respect to the Project Properties or the Business
that could reasonably be expected to give rise to material liability to the
Borrower or any of its Subsidiaries under any applicable Environmental Law.
(f) To the best knowledge of the Borrower, there has been no
release or threat of release of Materials of Environmental Concern at or from
the Project Properties, or arising from or related to the operations of the
Borrower or any Subsidiary in connection with the Project Properties or
otherwise in connection with the Business, (i) in violation of any applicable
Environmental Law which violation, or any aggregation thereof, could reasonably
be expected to give rise to material liability to the Borrower or any of its
Subsidiaries under any applicable Environmental Law or (ii) in amounts or in a
manner that could reasonably give rise to material liability to the Borrower or
any of its Subsidiaries under any applicable Environmental Law.
4.16 Accuracy of Information; Full Disclosure. No
representation, warranty or other statement made by any Loan Party in this
Agreement, the CDH Guarantee or any other Loan Document or in any certificate,
written statement or other document furnished to the Agent or any Lender by or
on behalf of any Loan Party pursuant to or in connection with this Agreement,
the CDH Guarantee or any other Loan Document or the transactions contemplated
hereby or thereby, contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained herein
or therein, in light of the circumstances under which they were made, not
misleading. There is no fact known to the Borrower as of the date of this
Agreement which the Borrower has not disclosed to the Agent and the Lenders in
writing prior to the date of this Agreement which has had, or could reasonably
be expected to have, a Material Adverse Effect.
4.17 Security Documents. The provisions of the Security
Documents, when executed and delivered, will be sufficient to create in favor of
the Agent for the benefit of the Secured Parties a legal, valid and enforceable
security interest in the Collateral and all proceeds thereof to the extent a
security interest can be created therein under the Uniform Commercial Code of
the State of New York.
4.18 Year 2000 Matters. Any reprogramming required to permit
the proper functioning (but only to the extent that such proper functioning
would otherwise be impaired by the occurrence of the year 2000) in and following
the year 2000 of computer systems and other equipment containing embedded
microchips, in either case owned or operated by the Borrower or any of its
Subsidiaries or used or relied upon in the conduct of their business (including
any such systems and other equipment supplied by others to the Borrower or any
of its Subsidiaries),
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and the testing of all such systems and other equipment as so reprogrammed, have
been completed. The costs to the Borrower and its Subsidiaries for such
reprogramming and testing and for the other reasonably foreseeable consequences
to them of any improper functioning of their computer systems and other
equipment containing embedded microchips due to the occurrence of the year 2000
could not reasonably be expected to result in a Default or Event of Default or
to have a Material Adverse Effect. The computer systems of the Borrower and its
Subsidiaries are and, with ordinary course upgrading and maintenance, will
continue for the term of this Agreement to be, sufficient for the conduct of
their business as currently conducted.
4.19 Intermediate Holding Company Debt and Liens. As of the
date of this Agreement, no Intermediate Holding Company has any Debt or Liens
outstanding on any of its Property, other than (i) Debt Incurred and Liens
created under this Agreement and the other Loan Documents, (ii) in the case of
CMA, Debt Incurred under the CMA Credit Agreement in the amount of $14,516,000
and Liens created in connection therewith, (iii) in the case of CEA, Debt
Incurred under the CEA Credit Agreement in the amount of $66,400,000 and Liens
created in connection therewith and (iv) Liens described in clause (iii) of the
parenthetical contained in subsection 7.12(A).
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Effectiveness of Agreement. This Agreement
shall become effective on the date on which each of the following conditions
shall have been fulfilled, as such date is specified in a notice given by the
Agent to the other parties hereto:
(a) Loan Documents. The Agent shall have received (i) this
Agreement, executed and delivered by a duly authorized officer of each of the
Borrower, the Issuing Bank and each Lender, with a counterpart for each Lender,
(ii) for the account of each Lender, a Note, dated the Closing Date, conforming
to the requirements hereof and executed and delivered by a duly authorized
officer of the Borrower, and (iii) the CDH Guarantee, executed and delivered by
a duly authorized officer of CDH, with a counterpart for each Lender.
(b) Related Agreements. The Agent shall have received, with a
copy for each Lender, a true and correct copy, certified as to authenticity by
the Borrower, of each of the Borrower Indentures.
(c) Corporate Proceedings of the Borrower. The Agent shall
have received, with a counterpart for each Lender, a copy of the resolutions, in
form and substance satisfactory to the Agent, of the Board of Directors of the
Borrower authorizing (i) the execution, delivery and performance of this
Agreement, the Notes and the other Loan Documents to which it is a party and
(ii) the borrowings contemplated hereunder, certified by the Secretary or an
Assistant Secretary of the Borrower as of the Closing Date, which certificate
shall be in form and substance satisfactory to the Agent and shall state that
the resolutions thereby certified have not been amended, modified, revoked or
rescinded.
(d) Borrower Incumbency Certificate. The Agent shall have
received, with a counterpart for each Lender, a Certificate of the Borrower,
dated the Closing Date, as to the incumbency and signature of the officers of
the Borrower executing any Loan Document
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satisfactory in form and substance to the Agent, executed by the Secretary or
any Assistant Secretary of the Borrower and countersigned by one such officer of
the Borrower.
(e) Corporate Proceedings of CDH. The Agent shall have
received, with a counterpart for each Lender, a copy of the resolutions, in form
and substance satisfactory to the Agent, of the Board of Directors of CDH
authorizing the execution, delivery and performance of the CDH Guarantee,
certified by the Secretary or an Assistant Secretary of CDH as of the Closing
Date, which certificate shall be in form and substance satisfactory to the Agent
and shall state that the resolutions thereby certified have not been amended,
modified, revoked or rescinded.
(f) Incumbency Certificate of CDH. The Agent shall have
received, with a counterpart for each Lender, a certificate of CDH, dated the
Closing Date, as to the incumbency and signature of the officer of CDH executing
the CDH Guarantee, satisfactory in form and substance to the Agent, executed by
the Secretary or any Assistant Secretary of CDH and countersigned by such
officer of CDH.
(g) Corporate Documents. The Agent shall have received, with a
counterpart for each Lender, true and complete copies of the certificate or
articles of incorporation and by-laws of each Loan Party, certified as of the
Closing Date as complete and correct copies thereof by the Secretary or an
Assistant Secretary of such Loan Party.
(h) Fees and Expenses. The Agent shall have received, for its
own account and the accounts of the Lenders entitled thereto, all fees payable
by the Borrower on the Closing Date as previously agreed by the Borrower. The
Agent shall have received payment for all of its costs and expenses then payable
to it as the Agent pursuant to subsection 10.5.
(i) Legal Opinion. The Agent shall have received, with a
counterpart for each Lender (1) the executed legal opinion of ▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇
PLLC, counsel to the Borrower and CDH, substantially in the form of Exhibit F-1
and (2) the executed legal opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, special New York
counsel to the Borrower and CDH, substantially in the form of Exhibit F-2. Each
such legal opinion shall cover such other matters incident to the transactions
contemplated by this Agreement as the Agent may reasonably require.
(j) Lien Searches. The Agent shall have received the results
of a recent search by a Person satisfactory to the Agent of the Uniform
Commercial Code, judgement and tax lien filings which may have been filed with
respect to personal property of the Borrower and CDH, and the results of such
search shall be reasonably satisfactory to the Agent.
(k) [intentionally omitted]
(l) Existing Credit Agreement. All accrued and unpaid fees
under the Existing Credit Agreement shall have been paid in full.
(m) Financial Statements and Financial Projections. The
Lenders shall have received all of the financial statements described in
subsection 4.1 and financial projections of the Borrower and its Subsidiaries in
form and substance and for a period of time reasonably satisfactory to the
Lenders.
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(n) [intentionally omitted]
(o) Additional Matters. All corporate and other proceedings,
and all documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement and the other Loan Documents shall
be satisfactory in form and substance to the Agent, and the Agent shall have
received such other documents and legal opinions in respect of any aspect or
consequence of the transactions contemplated hereby or thereby as it shall
reasonably request.
5.2 Conditions to Each Revolving Credit Loan and Each Letter
of Credit. The agreement of each Lender to make any Revolving Credit Loan, and
of the Issuing Bank to issue any Letter of Credit, requested to be made or
issued by it on any date (including, without limitation, its initial Revolving
Credit Loan or Letter of Credit) is subject to the satisfaction of the following
conditions precedent:
(a) Borrowing or Issuance Request. Except in the case of a
request for a borrowing deemed to be made pursuant to subsection 3.5(c), the
Agent and, in the case of a request for a Letter of Credit, the Issuing Bank
shall have received a Borrowing Request or Issuance Request, as the case may be,
for such Revolving Credit Loan or Letter of Credit, duly executed by a
Responsible Officer of the Borrower and completed, with the appropriate
insertions and attachments, to the satisfaction of the Agent and, in the case of
an Issuance Request, the Issuing Bank.
(b) Representations and Warranties. Each of the
representations and warranties made by the Borrower or CDH in or pursuant to the
Loan Documents shall be true and correct in all material respects on and as of
such date as if made on and as of such date (or, if such representation or
warranty is expressly stated to have been made as of a specific date, such
specific date).
(c) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to all Extensions
of Credit requested to be made on such date.
(d) Financial Covenants. The Agent shall have received a
certificate of a Responsible Officer of the Borrower (i) setting forth in
reasonable detail the calculations and financial information necessary to
determine the Parent Cash Flow Coverage Ratio, for the four most recent
consecutive fiscal quarters of the Borrower and the Leverage Ratio and the
Adjusted Tangible Net Worth of the Borrower as at the last day of the most
recently ended fiscal quarter and (ii) certifying that the Borrower is then in
compliance with subsection 7.1.
Each borrowing of a Revolving Credit Loan by and Letter of Credit issued at the
request of the Borrower hereunder shall constitute a representation and warranty
by the Borrower as of the date thereof that the conditions contained in this
subsection have been satisfied.
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SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, until the Commitments are
terminated, all Obligations have been paid and performed in full, no L/C
Obligations are outstanding and all Letters of Credit have expired and are no
longer outstanding, the Borrower shall:
6.1 Financial Statements. Furnish to each Lender:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Borrower, (i) a copy of the audited
consolidated balance sheet of the Borrower and its consolidated Subsidiaries as
at the end of such fiscal year and the related consolidated statements of income
and retained earnings and of cash flows for such fiscal year, setting forth in
each case in comparative form the figures for the fiscal year immediately
preceding such fiscal year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope of the
audit, by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP or other independent certified public accountants
of nationally recognized standing, (ii) a copy of the unaudited unconsolidated
balance sheet of the Borrower as at the end of such fiscal year and the related
unconsolidated statements of income for such fiscal year, setting forth in each
case in comparative form the figures for the fiscal year immediately preceding
such fiscal year, certified by a Responsible Officer as being fairly stated in
all material respects, (iii) a copy of the unaudited consolidating balance sheet
of the Borrower and its consolidated Subsidiaries as at the end of such fiscal
year and the related consolidating statement of income for such fiscal year,
setting forth in each case in comparative form the figures for the fiscal year
immediately preceding such fiscal year, certified by a Responsible Officer as
being fairly stated in all material respects, (iv) a statement of cash flows for
such fiscal year to the Borrower from each of its Subsidiaries, setting forth in
each case in comparative form the figures for the fiscal year immediately
preceding such fiscal year, certified by a Responsible Officer as being fairly
stated in all material respects and (v) a copy of the unaudited unconsolidated
balance sheet of CDH as at the end of such fiscal year and the related
unconsolidated statements of income for such fiscal year, setting forth in
comparative figures for the fiscal year immediately preceding such fiscal year,
certified by a Responsible Officer as being fairly stated in all material
respects; and
(b) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of each fiscal
year of the Borrower, (i) the unaudited consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of such quarter and the
related unaudited consolidated statements of income and retained earnings and of
cash flows of the Borrower and its consolidated Subsidiaries for such quarter
and the portion of the fiscal year through the end of such quarter, (ii) the
unaudited unconsolidated balance sheet of the Borrower as at the end of such
quarter and the related unconsolidated statements of income for such quarter and
the portion of the fiscal year through the end of such quarter, (iii) the
unaudited consolidating balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such quarter and the related consolidating
statement of income for such quarter and the portion of the fiscal year through
the end of such quarter, (iv) a statement of cash flows to the Borrower from
each of its Subsidiaries for such quarter and the portion of the fiscal year
through the end of such quarter and (v) the unaudited balance sheet of CDH as at
the end of such quarter and the related statements of income of CDH for such
quarter and the portion of the fiscal year through the end of such quarter,
setting forth in the case of each of subclause
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(i), (ii), (iii), (iv) and (v) in comparative form the figures for the
corresponding quarter in the fiscal year immediately preceding such fiscal year,
certified by a Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
6.2 Certificates; Other Information. Furnish to each Lender:
(a) concurrently with the delivery of the financial statements
referred to in clause (i) of subsection 6.1(a), a certificate of the independent
certified public accountants reporting on such financial statements stating that
in making the examination necessary therefor no knowledge was obtained of any
Default or Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements
referred to in subsections 6.1(a) and 6.1(b), a certificate of a Responsible
Officer (i) stating that, to the best of such Officer's knowledge, during such
period the Borrower has observed or performed all of its covenants and other
agreements, and satisfied every condition, contained in this Agreement and the
other Loan Documents to be observed, performed or satisfied by it, and that such
Officer has obtained no knowledge of any Default or Event of Default except as
specified in such certificate, (ii) setting forth in reasonable detail the
calculations and financial information required to establish whether the
Borrower is in compliance with subsection 7.1 and (iii) certifying the amount,
as of the end of such period, of the sum of clauses (i) through (v) of
subsection 7.4(c) and setting forth in reasonable detail the calculations and
financial information required to determine such sum;
(c) not later than thirty days prior to the end of each fiscal
year of the Borrower, a copy of the projections by the Borrower of the
consolidated operating budget and cash flow budget of the Borrower and its
consolidated Subsidiaries for the succeeding fiscal year, such projections to be
accompanied by a certificate of a Responsible Officer to the effect that such
projections have been prepared on the basis of sound financial planning practice
and that such Officer has no reason to believe they are based on unreasonable
assumptions or misleading in any material respect;
(d) within five days after the same are filed, copies of all
financial statements and reports which the Borrower may make to, or file with,
the Securities and Exchange Commission or any successor or analogous
Governmental Authority;
(e) concurrently with the delivery thereof, copies of all
certificates, notices and other written communications which the Borrower
delivers pursuant to either Borrower Indenture to any party thereto;
(f) not less than 10 days prior to the anticipated date of any
Asset Disposition by the Borrower or any of its Subsidiaries, or promptly after
the occurrence of any Recovery Event which will result in Net Cash Proceeds, a
certificate of a Responsible Officer of the
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Borrower setting forth (i) in the case of any Asset Disposition, a description
of the transaction resulting in such Asset Disposition (including, without
limitation, an identification of the securities, assets or other Property to be
sold or otherwise disposed of) and a description and valuation of the
consideration to be received by the Borrower or such Subsidiary for such Asset
Disposition, (ii) in the case of any Recovery Event, a description of such
Recovery Event (including, without limitation, an identification of the Property
which is the subject of such Recovery Event) and (iii) in the case of any Asset
Disposition or any Recovery Event, the date or dates upon which any Net Cash
Proceeds therefrom are anticipated to be received by the Borrower or such
Subsidiary and the amount of the Net Cash Proceeds anticipated to be received on
such date or each of such dates; and
(g) promptly, such additional financial and other information
as any Lender may from time to time reasonably request.
6.3 Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, (a) all of the Obligations and (b) all of its other obligations of whatever
nature, except in the case of this clause(c) where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the Borrower; provided, that no Default or Event of Default shall
exist under this subsection 6.3(b) at any time unless the aggregate amount of
such unpaid, undischarged or unsatisfied obligations outstanding at such time
shall be equal to at least $5 million.
6.4 Conduct of Business and Maintenance of Existence.
Preserve, renew and keep in full force and effect its corporate existence and
take all action necessary to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business; comply with all
Contractual Obligations and Requirements of Law except to the extent that
failure to comply therewith could not, in the aggregate, have a Material Adverse
Effect.
6.5 Maintenance of Property; Insurance. Keep or cause its
Subsidiaries to keep all property useful and necessary in its and its
Subsidiaries' businesses in good working order and condition and maintain and
operate such property in accordance with prudent engineering and business
practices no less rigorous than, in the case of Power Generation Facilities,
those customary in the independent power industry and, in the case of any other
property, those customary in the industry in which such property is used,
except, in either such case, to the extent that the failure to comply herewith
with respect to its Subsidiaries' businesses could not, in the aggregate, be
reasonably expected to have a Material Adverse Effect; maintain or cause its
Subsidiaries to maintain with financially sound and reputable insurance
companies insurance on all its and its Subsidiaries' properties in at least such
amounts and against at least such risks (but including in any event public
liability, product liability and business interruption) as are usually insured
against in the same general area by companies engaged in the same or a similar
business; and furnish to each Lender, upon written request, full information as
to the insurance carried.
6.6 Inspection of Property; Books and Records; Discussions.
Keep proper books of records and account in which full, true and correct entries
in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its
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business and activities; and permit representatives of any Lender to visit and
inspect any of its properties and examine and make abstracts from any of its
books and records at any reasonable time and as often as may reasonably be
desired and to discuss the business, operations, properties and financial and
other condition of the Borrower and its Subsidiaries with officers and employees
of the Borrower and its Subsidiaries and with its independent certified public
accountants.
6.7 Notices. Promptly give notice to the Agent and each Lender
of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries (including, without
limitation, either Borrower Indenture) or (ii) litigation, investigation or
proceeding which may exist at any time between the Borrower or any of its
Subsidiaries and any Governmental Authority, which in either case, if not cured
or if adversely determined, as the case may be, could reasonably be expected to
have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or any
of its Subsidiaries in which the amount involved is $3 million or more or in
which injunctive or similar relief is sought or that could reasonably be
expected to have a Material Adverse Effect; and
(d) the following events, as soon as possible and in any event
within 30 days after the Borrower knows or has reason to know thereof: (i) the
occurrence or expected occurrence of any Reportable Event with respect to any
Plan, a failure to make any required contribution to a Plan, the creation of any
Lien in favor of the PBGC or a Plan or any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan or (ii) the institution
of proceedings or the taking of any other action by the PBGC or the Borrower or
any Commonly Controlled Entity or any Multiemployer Plan with respect to the
withdrawal from, or the terminating, Reorganization or Insolvency of, any Plan.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower proposes to take with respect thereto.
6.8 Environmental Laws. (a) Comply with, and ensure compliance
by all tenants and subtenants, if any, with, all applicable Environmental Laws
and obtain and comply in all material respects with and maintain, and ensure
that all tenants and subtenants obtain and comply in all material respects with
and maintain, any and all licenses, approvals, notifications, registrations or
permits required by applicable Environmental Laws except to the extent that
failure to do so could not be reasonably expected to have a Material Adverse
Effect.
(b) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws except to the extent that the same are being contested in good faith by
appropriate proceedings and the pendency of such proceedings could not be
reasonably expected to have a Material Adverse Effect.
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6.9 Indemnification. The Borrower shall pay, and protect,
indemnify and save harmless the Agent, the Lead Arrangers, the Issuing Bank and
the Lenders and, in their capacity as such, their officers, directors,
shareholders, controlling persons, employees, agents and servants (individually
an "Indemnified Party," collectively the "Indemnified Parties") from and
against, all liabilities, losses, claims, damages, penalties, causes of action,
suits, costs, expenses and disbursements of any kind whatsoever (including,
without limitation, reasonable attorneys' fees and expenses), incurred by or
asserted against any Indemnified Party arising out of, in any way in connection
with, or as a result of (a) the execution, delivery, enforcement, performance or
administration of this Agreement, the CDH Guarantee, any other Loan Document or
any document contemplated hereby or thereby or any of the transactions
contemplated by any Loan Document, (b) the use of the proceeds of the Revolving
Credit Loans, (c) the issuance or use of the proceeds of, or any drawing under,
any Letter of Credit or (d) any claim, litigation, investigation or proceeding
relating to any of the foregoing, whether or not any Indemnified Party is a
party thereto (including, without limitation, any of the foregoing relating to
the violation of, noncompliance with or liability under, any Environmental Law
applicable to the operations of the Borrower, any of its Subsidiaries or any of
the Project Properties); provided that the Borrower will not be liable to any
Indemnified Party for such liabilities, losses, claims, damages, penalties,
causes of action, suits, costs and expenses (including, without limitation,
attorneys' fees) or judgments arising from such Indemnified Party's gross
negligence or wilful misconduct. With respect to any action, suit or proceeding
against it, or any of its officers, directors, shareholders, controlling
persons, employees, agents and servants, in respect of which indemnity may be
sought hereunder, the Agent, the Issuing Bank, each Lead Arranger and each
Lender agrees that it will give written notice of the commencement of such
action, suit or proceeding to the Borrower within a reasonable time after it is
made a party to such action, suit or proceeding; but the omission to so notify
the Borrower will not relieve the Borrower from any liability which it might
have to any Indemnified Party, except to the extent that the failure to give
notice of the commencement of such action, suit or proceeding shall preclude the
Borrower from effectively defending such action, suit or proceeding. Upon
receipt of any such notice by the Borrower, the Borrower shall be entitled to
assume the defense of such action, suit or proceeding, including the employment
of counsel and the payment of all expenses in connection with such defense, and
shall have the right to negotiate and consent to settlement; provided that (A)
any counsel employed by the Borrower shall be reasonably acceptable to the
relevant Indemnified Party and (B) the Borrower shall not (xxxiv) settle or
compromise any action, suit or proceeding on the part of any Indemnified Party
if such settlement would require the Indemnified Party to admit liability
without such Indemnified Party's consent or (ii) otherwise settle or compromise
any action, suit or proceeding on behalf of any Indemnified Party without such
Indemnified Party's consent, which, in the case of this clause (ii), shall not
be unreasonably withheld. Any Indemnified Party shall have the right to employ
separate counsel in any such action, suit or proceeding against it and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party unless (i) the employment of
such counsel shall have been specifically authorized in writing by the Borrower
or (ii) the Borrower shall have elected not to assume the defense of such
action, suit or proceeding or (iii) such Indemnified Party has been advised by
its own counsel that there are legal defenses available to such Indemnified
Party which are different from, additional to or in conflict with the defenses
available to the Borrower. The Borrower shall not be liable for any settlement
of any such action, suit or proceeding effected without its consent, which
consent
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shall not be unreasonably withheld; but if any such action, suit or proceeding
is settled with the consent of the Borrower or if there is a final judgment for
the plaintiff in any such action, suit or proceeding (of which the Borrower
shall have been notified), the Borrower shall indemnify and hold harmless each
Indemnified Party from and against any losses, claims, damages, liabilities or
expenses incurred or suffered by reason of such settlement or judgment. This
covenant shall survive the termination of this Agreement and the payment of the
Notes, the Revolving Credit Loans and all other Obligations.
SECTION 7. NEGATIVE COVENANTS
The Borrower hereby agrees that, until the Commitments are
terminated, all Obligations have been paid and performed in full, no L/C
Obligations are outstanding and all Letters of Credit have expired or are no
longer outstanding, the Borrower shall not do any of the following:
7.1 Financial Condition. (a) Parent Cash Flow Coverage Ratio.
The Borrower shall not permit the Parent Cash Flow Coverage Ratio to be less
than 2.0 to 1 for any period of four consecutive fiscal quarters of the
Borrower.
(b) Leverage Ratio. The Borrower shall not permit the Leverage
Ratio as at the last day of any fiscal quarter of the Borrower ending within any
calendar year set forth below to exceed the ratio set forth below opposite such
calendar year:
Calendar year Ratio
------------- -----
2000 6.25 to 1.0
2001 6.25 to 1.0
2002 5.95 to 1.0
2003 5.95 to 1.0
(c) Adjusted Tangible Net Worth. The Borrower shall not permit
its Adjusted Tangible Net Worth at any time to be less than the sum of (i)
$95,511,000 less (ii) the aggregate amount of all deferred financing costs
reasonably incurred by the Borrower in connection with this Agreement, plus
(iii) 65% of cumulative Net Income of the Borrower and its consolidated
Subsidiaries for each fiscal quarter (beginning with the fiscal quarter ending
September 30, 2000) for which Net Income is positive plus (iv) 100% of the Net
Cash Proceeds of any offering by the Borrower of Capital Stock consummated after
the Closing Date plus (v) 100% of any capital contribution made to the Borrower
or any of its Subsidiaries after the Closing Date by any holder of the
Borrower's Capital Stock.
7.2 Limitation on Debt. (a) The Borrower shall not Incur any
Debt, including Acquisition Debt, unless after giving effect to the Incurrence
of such Debt and the receipt and application of the proceeds therefrom, the
Fixed Charge Ratio of the Borrower would be equal to or greater than 2.0 to 1.
(b) Notwithstanding the foregoing, the Borrower may Incur each
and all of the following:
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(i) Debt issued in exchange for, or the proceeds of which are
used to Refinance, Debt of the Borrower in an amount (or, if such new
Debt provides for an amount less than the principal amount thereof to
be due and payable upon a declaration of acceleration thereof, with an
original issue price) not to exceed the amount so exchanged or
Refinanced (plus accrued interest and fees and expenses related to such
exchange or Refinancing), the amount so exchanged or Refinanced being
equal to the lesser of (x) the principal amount or involuntary
liquidation preference of the Debt so exchanged or Refinanced and (y)
if the Debt being exchanged or Refinanced was issued with an original
issue discount, the accreted value thereof (as determined in accordance
with GAAP) at the time of such Refinancing; provided that such Debt of
the Borrower will rank pari passu with or expressly subordinated in
right of payment to the Obligations and the Average Life of the new
Debt shall be equal to or greater than the Average Life of the Debt to
be exchanged or Refinanced;
(ii) Debt of the Borrower to any of its Subsidiaries and to
any Joint Ventures in which the Borrower is a direct or indirect
partner, shareholder, member or other participant if such Debt of the
Borrower is expressly subordinated in right of payment to the
Obligations; provided that any transfer of such Debt by a Subsidiary or
a Joint Venture (other than to another Subsidiary or Joint Venture)
will be deemed to be an Incurrence of Debt unless (x) such Debt has an
Average Life which is greater than that of the Borrower Indenture
Securities and which extends to a date later than the then Final
Maturity Date or (y) the aggregate amount of such Debt which has an
Average Life which is equal to or less than that of the Borrower
Indenture Securities or which extends to, or to a date earlier than,
the then Final Maturity Date does not exceed $3 million;
(iii) Debt in an aggregate principal amount not to exceed $10
million at any one time outstanding;
(iv) Debt in respect of Currency Protection Agreements or
Interest Rate Protection Agreements; and
(v) Debt outstanding as of the date of this Agreement.
For purposes of determining any particular amount of Debt
under this subsection 7.2, Guarantees of, or obligations with respect to letters
of credit supporting, Debt otherwise included in the determination of such
particular amount shall not be included. For purposes of determining compliance
with the provisions of this subsection 7.2, in the event that an item of Debt
meets the criteria of more than one of the types of Debt described in the above
clauses, the Borrower, in its sole discretion, shall classify such item of Debt
and only be required to include the amount and type of such Debt in one of such
clauses.
(c) Notwithstanding any other provision hereof, including
without limitation any other provision of this subsection 7.2, the Borrower
shall not Incur any Debt at any time unless no payment or prepayment in respect
of principal of such Debt (including, without
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limitation, any payments in respect of any sinking fund) shall be due or can
become due (other than as a result of the acceleration thereof) on or prior to
the then Final Maturity Date.
(d) In the event that (i) the Borrower shall have obtained any
new loan or other credit facility and (ii) any of the documentation for such new
loan or other credit facility shall include any covenant or event of default
that shall not also be included hereunder (an "additional covenant or event of
default") or that shall be more restrictive in any material manner than the
correlative covenant or event of default hereunder (a "more restrictive covenant
or event of default"), then the Borrower shall (1) promptly but not more than
five days after the Borrower's entering into such documentation for such new
loan or other credit facility, notify the Agent thereof and (2) at the request
of the Agent (made either at its own direction or at the direction of the
Required Lenders), enter into an amendment to this Agreement (in form and
substance satisfactory to the Agent) to include such additional covenant or
event of default or to make such correlative covenant or event of default as
restrictive as such more restrictive covenant or event of default.
7.3 Limitation on Subsidiary Debt. (a)The Borrower shall not
permit any Subsidiary to Incur, assume or otherwise cause or suffer to exist,
directly or indirectly, any Debt.
(b) Notwithstanding the foregoing (but subject to the
provisions of subsections 7.10, 7.12 and 7.13 and the other provisions of this
Agreement), each and all of the following Debt may be Incurred, assumed or
otherwise caused or suffered to exist by a Subsidiary:
(i) Debt outstanding as of the date of this Agreement;
(ii) Debt owed by a Subsidiary to the Borrower;
(iii) Debt Incurred to finance the development, acquisition,
construction or operation of a Power Generation Facility in which such
Subsidiary has a direct or indirect interest; provided that such Debt
shall be permitted under this clause (iii) only to the extent of the
amount thereof which is Non-Recourse to the Borrower and is
Non-Recourse to any other Subsidiary with a direct or indirect interest
in any other Power Generation Facility;
(iv) Debt issued in exchange for, or the proceeds of which are
used to Refinance, outstanding Debt of such Subsidiary otherwise
permitted under this Agreement in an amount (or, if such new Debt
provides for an amount less than the principal amount thereof to be due
and payable upon a declaration of acceleration thereof, with an
original issue price) not to exceed the amount so exchanged or
Refinanced (plus accrued interest and fees and expenses related to such
exchange or Refinancing), the amount so exchanged or Refinanced being
equal to the lesser of (x) the principal amount or involuntary
liquidation preference of the Debt so exchanged or Refinanced and (y)
if the Debt being exchanged or Refinanced was issued with an original
issue discount, the accreted value thereof (as determined in accordance
with GAAP) at the time of such Refinancing; provided that (A) the new
Debt shall be Non-Recourse to the
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Borrower to no lesser extent than the Debt to be exchanged or
Refinanced, (B) the new Debt shall be Non-Recourse to any other
Subsidiary with a direct or indirect interest in any other Power
Generation Facility to no lesser extent than the Debt to be exchanged
or Refinanced, and (C) the Average Life of the new Debt shall be equal
to or greater than the Average Life of the Debt to be exchanged or
Refinanced;
(v) Debt issued in exchange for, or the proceeds of which are
used to Refinance, outstanding Debt of such Subsidiary otherwise
permitted under this Agreement in an amount (or, if such new Debt
provides for an amount less than the principal amount thereof to be due
and payable upon a declaration of acceleration thereof, with an
original issue price) in excess of the amount so exchanged or
Refinanced (plus accrued interest and fees and expenses related to such
exchange or Refinancing); provided that (A) the new Debt shall be
Non-Recourse to the Borrower to no lesser extent than the Debt to be
exchanged or Refinanced, (B) the new Debt shall be Non-Recourse to any
other Subsidiary with a direct or indirect interest in any other Power
Generation Facility to no lesser extent than the Debt to be exchanged
or Refinanced, and (C) the Average Life of the new Debt shall be equal
to or greater than the Average Life of the Debt to be exchanged or
Refinanced; provided further that (x) after giving effect to the
Incurrence of such new Debt and the retirement of the Debt to be
exchanged or Refinanced, the Fixed Charge Ratio of the Borrower would
be equal to or greater than 2.0 to 1 and (y) all of the following are
satisfied: (i) such Subsidiary directly owns an interest in a Power
Generation Facility; (ii) the Borrower shall have provided evidence
reasonably satisfactory to the Required Lenders (including pro forma
projections) demonstrating average and minimum debt service coverage
ratios reasonably acceptable to the Required Lenders for such
Subsidiary with respect to such new Debt; (iii) the proceeds of such
new Debt are used solely by one or more Subsidiaries of the Borrower to
finance the acquisition of an interest or interests in, or to make an
initial equity investment in, one or more constructed and operating
Power Generation Facilities; and (iv) the Borrowers shall have provided
evidence reasonably satisfactory to the Required Lenders (including pro
forma projections) that such acquisitions or investment, after taking
into account the effect of such new Debt (but excluding the proceeds
therefrom), are reasonably projected to increase the Parent Operating
Cash Flow to an amount greater than otherwise reasonably projected for
the fiscal year of the Borrower in which such acquisitions occurred or
investments were made and for each of the four fiscal years of the
Borrower next succeeding such fiscal year;
(vi) Debt issued in exchange for, or the proceeds of which are
used to Refinance, outstanding Debt which is not Non-Recourse to the
Borrower or to any other Subsidiary in an amount (or if such new Debt
provides for an amount less than the principal amount thereof to be due
and payable upon a declaration or acceleration thereof, with an
original issue price) not to exceed the amount so exchanged or
Refinanced (plus accrued interest and fees and expenses related to such
exchange or Refinancing), the amount so exchanged or Refinanced being
equal to the lesser of (x) the principal amount of the Debt so
exchanged or
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Refinanced and (y) if the Debt being so exchanged or Refinanced was
issued with an original issue discount, the accreted value thereof (as
determined in accordance with GAAP) at the time of such Refinancing;
provided that the Average Life of the new Debt shall be equal to or
greater than the Average Life of the Debt to be exchanged or
Refinanced;
(vii) Debt Incurred to support the performance obligations of
a Subsidiary engaged in providing construction management or operating
services to a Power Generation Facility; provided that such Debt shall
be permitted under this clause (vii) only to the extent of the amount
thereof which is Non-Recourse to the Borrower and is Non-Recourse to
any other Subsidiary with a direct or indirect interest in any other
Power Generation Facility;
(viii) [intentionally omitted]
(ix) Debt Incurred by a Person prior to the time: (A) such
Person became a Subsidiary of the Borrower; (B) such Person merges with
or into a Subsidiary of the Borrower; or (C) another Subsidiary of the
Borrower merges with or into such Person (in a transaction in which
such Person becomes a Subsidiary of the Borrower); provided that,
giving effect to such transaction, such Debt could have been Incurred
at the time of such merger or acquisition by the Borrower pursuant to
subsection 7.2 or by the Subsidiary pursuant to either of clauses (iii)
or (iv) of this paragraph (b) of this subsection 7.3;
(x) Debt Incurred by a Subsidiary of which at least 80% of
each class of Common Stock is owned, directly or indirectly, by the
Borrower, to another Subsidiary of which at least 80% of each class of
Common Stock is owned, directly or indirectly, by the Borrower; and
(xi) Debt Incurred by CMA under the CMA Credit Agreement and
Debt Incurred by CEA under the CEA Credit Agreement, provided that (A)
the aggregate of the Debt Incurred under the CMA Credit Agreement and
the CEA Credit Agreement shall not be greater than $100,000,000
outstanding at any time during calendar year 2000, shall not be greater
than $92,500,000 outstanding at any time during calendar year 2001, and
shall not be greater than $85,000,000 outstanding at any time during
calendar year 2002 and any calendar year thereafter and (B) CMA shall
not Incur any Debt under the CMA Credit Agreement (other than any
increase provided to occur thereunder in the stated amount of either of
the debt service reserve letters of credit issued thereunder with
respect to the financing of the Cottage Grove power project and
Whitewater power project) and CEA shall not Incur any Debt under the
CEA Credit Agreement, unless, in either case, all of the following are
satisfied: (1) the proceeds of such Debt are used solely by one or more
Subsidiaries of the Borrower (but which is not CEA, CMA or a Subsidiary
of CEA or CMA) to finance the acquisition of an interest or interests
in, or to make an initial equity investment in, one or more constructed
and operating Power Generation Facilities; and (2) the Borrower shall
have provided evidence reasonably
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satisfactory to the Required Lenders (including pro forma projections)
that such acquisitions or investment, after taking into account the
effect of such borrowing (but excluding the proceeds therefrom), are
reasonably projected to increase the Parent Operating Cash Flow to an
amount greater than otherwise reasonably projected for the fiscal year
of the Borrower in which such acquisitions occurred or investments were
made and for each of the four fiscal years of the Borrower next
succeeding such fiscal year.
For purposes of determining any particular amount of Debt
under this subsection 7.3, Guarantees of, or obligations with respect to letters
of credit supporting, Debt otherwise included in the determination of such
particular amount shall not be included. For purposes of determining compliance
with the provisions of this subsection 7.3, in the event that an item of Debt
meets the criteria of more than one of the types of Debt described in the above
clauses, the Borrower, in its sole discretion, shall classify such item of Debt
and only be required to include the amount and type of such Debt in one of such
clauses.
7.4 Limitation on Restricted Payments. The Borrower will not,
and will not permit any Subsidiary to, directly or indirectly, make any
Restricted Payment if at the time of such Restricted Payment and after giving
effect thereto:
(a) an Event of Default or an event that, after the giving of
notice or lapse of time or both would become an Event of Default, shall have
occurred and be continuing;
(b) the Borrower could not Incur at least $1 of Debt under
subsection 7.2(a);
(c) the aggregate amount of all Restricted Payments made by
the Borrower and its Subsidiaries after March 15, 1994 (the amount so made, if
other than in cash, to be determined in good faith by the Board of Directors, as
evidenced by a Board resolution) shall exceed the sum (without duplication) of:
(i) $5 million plus 50% of the Net Income of the Borrower and its consolidated
Subsidiaries for the period (taken as one accounting period) beginning on March
15, 1994 and ending on the last day of the fiscal quarter immediately prior to
the date of such calculation; provided that if Net Income for such period is
less than zero, then minus 100% of the amount of such net loss; plus (ii) if the
Borrower Indenture Securities are Investment Grade at the time of and after
giving effect to the Restricted Payment (or in the case of a dividend, its
declaration) in connection with which the calculation is made, an additional 25%
of Net Income of the Borrower and its consolidated Subsidiaries for any period
of one or more completed fiscal quarters ending with the last fiscal quarter
completed prior to the date of such Restricted Payment during which the Borrower
Indenture Securities were Investment Grade for the entire period; plus (iii) the
aggregate net proceeds (including the Fair Market Value of proceeds other than
cash) received by the Borrower from and after March 15, 1994 from the issuance
and sale (other than to a Subsidiary) of its Capital Stock (excluding Redeemable
Stock, but including Capital Stock other than Redeemable Stock issued upon
conversion of, or in exchange for, Redeemable Stock or securities other than its
Capital Stock), and warrants, options and rights to purchase its Capital Stock
(other than Redeemable Stock), but excluding the net proceeds from the issuance,
sale, exchange, conversion or other disposition of its Capital Stock convertible
(whether at the option of the Borrower or the holder thereof or upon the
happening of any event) into (x) any security other than its Capital Stock or
(y) its Redeemable Stock; plus
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(iv) the net reduction in Investments of the type specified in clause (iv) of
the definition of "Restricted Payment" resulting from payments of interest on
Debt, dividends, repayments of loans or advances, or other transfers of assets
to the Borrower or other Person that made the original Investment from the
Person in which such Investment was made; provided that such payment shall not
exceed the amount of the original Investment; plus (v) any amount previously
included as a Restricted Payment on account of an obligation by the Borrower or
any Subsidiary to make a Restricted Payment which has not actually been made by
the Borrower or any Subsidiary; provided that this clause (c) shall not prevent
the payment of any dividend within 60 days after the date of its declaration if
such dividend could have been made on the date of its declaration without
violation of the provisions of this subsection 7.4.
7.5 Limitations on Dividends and Other Payment Restrictions
Affecting Subsidiaries. The Borrower will not, and will not permit any
Subsidiary to, create or otherwise cause or suffer to exist or become effective
any consensual encumbrance or restriction of any kind on the ability of any
Subsidiary to (a) pay dividends or make any other distributions permitted by
applicable law on any Capital Stock of such Subsidiary owned by the Borrower or
any other Subsidiary, (b) make payments in respect of any Debt owed to the
Borrower or any other Subsidiary of the Borrower, (c) make loans or advances to
the Borrower or any other Subsidiary of the Borrower or (d) transfer any of its
Property to the Borrower or any other Subsidiary, other than those encumbrances
and restrictions created or existing (i) on the date of this Agreement, (ii)
pursuant to this Agreement, the CDH Guarantee or either Borrower Indenture,
(iii) in connection with the Incurrence of any Debt permitted under clauses
(iii) and (vii) of subsection 7.3(b) hereof; provided that such encumbrances or
restrictions are required in order to effect such financing and are not
materially more restrictive, taken as a whole, on the ability of the applicable
Subsidiary to make the payments, distributions, loans, advances or transfers
referred to in clauses (a) through (d) above than encumbrances and restrictions,
taken as a whole, customarily accepted (or, in the absence of any industry
custom, reasonably acceptable) in substantially Non-Recourse financing, (iv) in
connection with the execution and delivery of an electric power or thermal
energy purchase contract to which such Subsidiary is the supplying party or
other contracts with customers, suppliers and contractors to which such
Subsidiary is a party and where such Subsidiary is engaged, directly or
indirectly, in the development, construction, acquisition or operation of a
Power Generation Facility; provided that such encumbrances or restrictions are
required in order to effect such contracts and are not materially more
restrictive, taken as a whole, on the ability of the applicable Subsidiary to
make the payments, distributions, loans, advances or transfers referred to in
clauses (a) through (d) above than encumbrances and restrictions, taken as a
whole, customarily accepted (or, in the absence of any industry custom,
reasonably acceptable) in comparable transactions, (v) in connection with any
Debt of a Person outstanding when such Person becomes a Subsidiary permitted
under clause (ix) of subsection 7.3(b); provided that such encumbrance or
restriction was not Incurred in contemplation of such Subsidiary becoming a
Subsidiary, (vi) in connection with the Incurrence of any Debt permitted under
clause (iv), (v), (vi) or (to the extent not covered by (iii) above) (iii) of
subsection 7.3(b) hereof; provided that such encumbrances or restrictions taken
as a whole are not materially more restrictive on the ability of the applicable
Subsidiary to make the payments, distributions, loans, advances or transfers
referred to in clauses (a) through (d) above than those, taken as a whole,
customarily accepted (or, in the absence of any industry custom, reasonably
acceptable) in comparable financing transactions of the same nature as the Debt
being Incurred, (vii) customary non-assignment provisions in leases or other
contracts entered into in
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the ordinary course of business of the Borrower or any Subsidiary and (viii) any
restrictions imposed pursuant to an agreement entered into for the sale or
disposition of all or substantially all of the Capital Stock or assets of any
Subsidiary or Joint Venture that apply pending the closing of such sale or
disposition.
7.6 Restrictions on Dispositions. Subject to the provisions of
subsections 7.9 and 7.10, the Borrower will not make and will not permit any of
its Subsidiaries to make, any Asset Disposition unless the Borrower (or the
Subsidiary, as the case may be) receives, at the time of such Asset Disposition,
consideration with a Fair Market Value at least equal to the Fair Market Value
of the securities, assets or other Property sold or otherwise disposed of. In
determining the Fair Market Value of the consideration received for any Asset
Disposition, in addition to any other adjustment necessary to determine such
consideration's Fair Market Value, any payment or other amount that is to be
received after the date of such Asset Disposition (whether paid pursuant to a
note or installment receivable or otherwise or in the form of a dividend or
distribution on any shares of any Person's Capital Stock) shall be valued at the
net present value of such payment or other amount calculated by discounting such
payment or other amount to the date of such Asset Disposition using an assumed
discount rate proposed by the Borrower and reasonably acceptable to the Agent.
7.7 Limitations on Transactions with Affiliates. The Borrower
will not, and will not permit any of its Subsidiaries to, directly or
indirectly, enter into any transaction after the date of this Agreement
(including, without limitation, the sale, purchase or lease of any assets or
properties or the rendering of any services) involving aggregate consideration
with respect to such transaction in excess of $1 million with any Affiliate or
holder of 5% or more of any class of Capital Stock of the Borrower except for
transactions (including, subject to subsection 7.4, any loans or advances by or
to, or guarantee on behalf of, any Affiliate or holder) made in good faith the
terms of which are fair and reasonable to the Borrower or such Subsidiary, as
the case may be, and are at least as favorable as the terms which could be
obtained by the Borrower or such Subsidiary, as the case may be, in a comparable
transaction made on an arm's-length basis with Persons who are not such a holder
or Affiliate; provided that the fairness, reasonableness and arm's-length nature
of the terms of any transaction which is part of a series of related
transactions may be determined on the basis of the terms of the series of
related transactions taken as a whole. This covenant shall not apply to (a) the
payment of reasonable and customary regular fees to directors of the Borrower or
a Subsidiary of the Borrower (including directors who are employees), (b) any
transaction between the Borrower and any of its Subsidiaries the terms of which
are not unfair or unreasonable to the Borrower, (c) any Permitted Payment, and
any Restricted Payment not otherwise prohibited by subsection 7.4 or (d)
equipment and real property lease transactions with and loans to Equipment
Leasing Partners, a North Carolina general partnership, outstanding on the date
of this Agreement, indebtedness of the shareholders of the Borrower outstanding
on the date of this Agreement and the agreements between the Borrower and ▇▇▇▇▇▇
▇. ▇▇▇▇▇, ▇▇., ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, in each case as in effect on
the date of this Agreement.
7.8 Limitations on Liens. The Borrower may not Incur any Debt
which is secured, directly or indirectly, with, nor will the Borrower grant or
cause or suffer to exist, a Lien on the Property of the Borrower now owned or
hereafter acquired unless contemporaneous therewith or prior thereto the
Obligations are equally and ratably secured thereof except for
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(a) any such Debt secured by Liens existing on the assets of any entity at the
time such assets are acquired by the Borrower, whether by merger, consolidation,
purchase of assets or otherwise; provided that such Liens (x) are not created,
incurred or assumed in contemplation of such assets being acquired by the
Borrower and (y) do not extend to any other Property of the Borrower; (b) Liens
granted to secure any other Debt required by its terms to be equally and ratably
secured as a result of the Incurrence of such Debt; (c) any pledge to lenders by
the Borrower of the Capital Stock of any of its Subsidiaries granted in good
faith as part of such lenders' providing to such Subsidiary project financing
for the construction of a Power Generation Facility in which such Subsidiary has
a direct interest, provided that such pledge is required in order to effect such
project financing and is not materially more restrictive than pledges
customarily accepted in substantially Non-Recourse project financing and all of
the Debt Incurred as part of such project financing is Non-Recourse to the
Borrower; (d) [intentionally omitted]; (e) Liens in existence on the date of
this Agreement or established pursuant to this Agreement; (f) purchase money
Liens incurred to secure Debt incurred by the Borrower as permitted by
subsection 7.2, which Debt finances the purchase price of Property acquired in
the ordinary course of business, and which Liens will not cover any Property
other than that being purchased, improved or constructed; (g) [intentionally
omitted]; (h) Liens incurred in connection with Capitalized Lease Obligations
incurred by the Borrower as permitted by subsection 7.2; (i) Liens in respect of
extensions, renewals, refunding or Refinancing of any Debt secured by the Liens
referred to in clauses (a), (b), (c), (d), (e), (f) or (h) above, provided that
the Liens in connection with such renewal, extension, refunding or Refinancing
shall be limited to all or part of the specific Property which was subject to
the original Lien; (j) any Lien arising by reason of (A) any judgment, decree or
order or any court, so long as such Lien is being contested in good faith and is
adequately bonded, and any appropriate legal proceedings which may have been
duly initiated for the review of such judgment, decree or order shall not have
been finally terminated or the period within which such proceedings may be
initiated shall not have expired, (B) taxes not yet delinquent or which are
being contested in good faith, (C) security for payment of worker's compensation
or other insurance, (D) security for the performance of tenders, contracts
(other than contracts for the payment of money) or leases, (E) deposits to
secure public or statutory obligations, or to secure permitted contracts for the
purchase or sale of any currency entered into in the ordinary course of
business, (F) operation of law in favor of carriers, warehousemen, landlords,
mechanics, materialmen, laborers, employees or suppliers, incurred in the
ordinary course of business for sums which are not yet delinquent or which are
being contested in good faith by negotiations or by appropriate proceedings
which suspend the collection thereof, (G) easements, rights-of-way, zoning and
similar covenants and restrictions and other similar encumbrances or title
defects which, in the aggregate, are not material, and which do not in any case
materially detract from the value of the Property subject thereto or materially
interfere with the ordinary conduct of the business of the Borrower or (H)
leases and subleases of property which do not interfere with the ordinary
conduct of the business of the Borrower, and which are made on customary and
usual terms applicable to similar properties; or (I) Liens in addition to the
foregoing, provided that the amount of the obligations secured by such Liens
does not exceed in the aggregate $1 million.
7.9 Limitations on Mergers, Consolidations, Sales or Transfers
of Assets by or Involving Borrower. The Borrower shall not consolidate with,
merge with or into, or transfer all or substantially all of its assets (as an
entirety or substantially an entirety in one transaction or a series of related
transactions), to any Person unless:
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(a) the Borrower shall be the continuing Person, or the Person
(if other than the Borrower) formed by such consolidation or into which the
Borrower is merged or to which properties and assets of the Borrower are
transferred shall be a corporation organized and existing under the laws of the
United States or any state thereof or the District of Columbia and shall
expressly assume in a writing acceptable to the Lenders all of the Obligations
of the Borrower;
(b) immediately after giving effect to such transaction no
Event of Default or event or condition which through the giving of notice or
lapse of time or both would become an Event of Default shall have occurred and
be continuing;
(c) the Net Worth of the Borrower or the surviving entity, as
the case may be, on a pro forma basis after giving effect to such transaction is
not less than the Net Worth of the Borrower immediately prior to such
transaction; and
(d) immediately after giving effect to such transaction on a
pro forma basis, the Borrower or the surviving entity would be able to incur at
least $1 of Debt under subsection 7.2(a).
7.10 Limitations on Certain Mergers, Consolidations and
Investments by Subsidiaries. Notwithstanding any other provision hereof
(including, without limitation, any provision of subsection 7.3(b)), without the
prior written consent of the Required Lenders (which shall not be unreasonably
withheld), the Borrower shall not permit any Subsidiary with any direct or
indirect interest in (a) a Power Generation Facility to make any Investment in,
or to consolidate or merge with, any other Person with a direct or indirect
interest in any other Power Generation Facility or any unrelated business or (b)
any unrelated business to make any Investment in, or to consolidate or merge
with, any other Person with a direct or indirect interest in any Power
Generation Facility; provided, that to the extent otherwise permitted under this
Agreement and the other Loan Documents (i) Cogentrix Virginia Leasing
Corporation and ▇▇▇▇▇ River Cogeneration Company may each make Investments in
and consolidate or merge with each other and (ii) CDH, Cogentrix International
Holdings, Inc., Cogentrix International Ltd., and Cogentrix International
Holdings, B.V. may each make any Investment in any Person.
7.11 CDH Permitted Investments. Notwithstanding any other
provision of this Agreement, the Borrower shall not make any advance, loan,
extension of credit or capital contribution to, or purchase any stock, bonds,
notes, debentures or other securities of or any assets constituting a business
unit of, or make any other Investment in, any Person, other than (i) Investments
in any Subsidiary of the Borrower (or any Person that will become a Subsidiary
of the Borrower as a result of such Investment) otherwise permitted hereunder
(including, without limitation, subsection 7.4) and under the other Loan
Documents and (ii) CDH Permitted Investments; provided, that so long as the
total of the aggregate amount of CDH Permitted Investments owned by the Borrower
plus the aggregate amount of CDH Permitted Investments owned by CDH (exclusive
of, in the case of both the Borrower and CDH, any CDH Permitted Investments
subject to or otherwise covered by any Lien other than the Lien created under
this Agreement in the Collateral Account) shall have a value of $50 million or
more, the Borrower may make any Investment that the Borrower is otherwise
permitted to make hereunder (including, without limitation, subsection 7.4) and
under the other Loan Documents.
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7.12 Limitations on Intermediate Holding Companies.
Notwithstanding any other provision hereof (including, without limitation, any
provision of subsections 7.3(b) or 7.5), the Borrower shall not permit any
Intermediate Holding Company: (A) to Incur any Debt or assume, create or suffer
to exist any Liens on any of its Property (other than (i) Debt or Liens
outstanding as of the date of this Agreement with respect to the Subsidiaries of
the Borrower that are Intermediate Holding Companies as of the date of this
Agreement; (ii) Debt Incurred and Liens created under this Agreement or any of
the other Loan Documents; (iii) in the case of CMA and CEA, Debt permitted to be
Incurred by such Intermediate Holding Companies under subsection 7.3(b)(xi);
(iv) any pledge to lenders by an Intermediate Holding Company of the Capital
Stock of any of its Subsidiaries granted in good faith as part of such lenders'
providing to such Subsidiary project financing for the construction of a Power
Generation Facility in which such Subsidiary has a direct or indirect interest,
provided that such Subsidiary does not own, directly or indirectly, any interest
in any other Power Generation Facility or other business and such pledge is
required in order to effect such project financing and is not materially more
restrictive than pledges customarily accepted in substantially Non-Recourse
project financing and all of the Debt Incurred as part of such project financing
is Non-Recourse to such Intermediate Holding Company, and provided further that,
prior to such pledge being granted, the Borrower shall have certified in writing
to the Agent and the Lenders that the Borrower will be in compliance with this
clause (iv) with respect to such pledge; (v) Debt Incurred by an Intermediate
Holding Company in respect of any letter of credit posted on behalf of such
Intermediate Holding Company in good faith as part of the project financing of
the construction of a Power Generation Facility in which a Subsidiary of such
Intermediate Holding Company (or other Person in which such Intermediate Holding
Company directly or indirectly holds Capital Stock) directly or indirectly has
an interest, in order to secure an obligation of such Intermediate Holding
Company to make equity contributions in such Subsidiary (or such other Person),
provided that any portion of such letter of credit not issued under the Credit
Agreement, together with any obligations of such Intermediate Holding Company
with respect to such letter of credit, shall be fully cash collateralized by
such Intermediate Holding Company for so long as such letter of credit is in
effect (provided further that such Intermediate Holding Company shall not
provide any other security in respect thereof), and provided further that, prior
to such letter of credit being issued, the Borrower shall have certified in
writing to the Agent and the Lenders that the Borrower will be in compliance
with this clause (v) with respect to such letter of credit (including, without
limitation, that such Intermediate Holding Company (or such other Person) is
required to fully cash collateralize any portion of such letter of credit not
issued under the Credit Agreement, together with any obligations of such
Intermediate Holding Company with respect to such letter of credit, for so long
as such letter of credit is in effect); and (vi) Liens granted by any
Intermediate Holding Company on whose behalf a letter of credit has been posted
as permitted under clause (v) above to cash collateralize its obligations with
respect to such letter of credit, as required under such clause); (B) to create
or allow to exist any restriction or encumbrance of any kind on its ability to
pay dividends or make distributions on its Capital Stock or to make any of the
other payments described in clauses (a) through (d) of subsection 7.5 (other
than such restrictions and encumbrances created or existing (i) on the date of
this Agreement or (ii) pursuant to this Agreement or any of the other Loan
Documents); (C) to provide any Guarantee, other than (x) Guarantees of Debt
otherwise permitted hereunder (including, without limitation, this subsection
7.12) and (y) Guarantees of performance obligations of any Subsidiary of such
Intermediate Holding Company with respect to a Power Generation Facility in
which such
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Subsidiary has a direct or indirect interest, provided that such Intermediate
Holding Company does not own, directly or indirectly, any interest in any other
Power Generation Facility or other business; or (D) to engage in any business or
activity other than the holding of such interests.
7.13 Limitations on Investments in CMA or CEA. Notwithstanding
any other provisions hereof, the Borrower, for so long as either of the CMA
Credit Agreement or the CEA Credit Agreement (or any agreement succeeding either
such agreement, whether as a Refinancing or otherwise) is in effect, shall not
make or permit (i) any of its Subsidiaries to make any Investment in CMA, CEA or
any Subsidiary of either thereof or any other Person in which either CEA or CMA
shall, directly or indirectly, have an interest (other than (a) Investments made
prior to the date of this Agreement and (b) any Investment solely for the
purpose of funding the repair or replacement of major equipment at a Power
Generation Facility) or (ii) CMA or CEA, directly or indirectly, to acquire any
new interest in any Power Generation Facility or any other business or to
increase its interest in any Power Generation Facility or other business in
which it already has a direct or indirect interest.
7.14 Limitations on Accumulation of Funds by Subsidiaries. The
Borrower shall not permit the accumulation of funds at any of its Subsidiaries
(excluding CDH), other than (i) cash balances as may be reasonably required to
be maintained by such Subsidiary for the payment of ordinary operating expenses
incurred in the ordinary course of business, (ii) in the case of any such
Subsidiary directly owning an interest in a Power Generation Facility, funds
required to be accumulated pursuant to reasonable and customary restrictions
imposed under the documentation for the financing or operation of such Power
Generation Facility and required for such financing or operation, (iii) in the
case of CMA, funds required to be accumulated pursuant to the CMA Credit
Agreement and the security deposit agreement entered into in connection
therewith as in effect on the date of this Agreement, (iv) in the case of CEA,
funds required to be accumulated pursuant to the CEA Credit Agreement and the
security deposit agreement entered into in connection therewith as in effect on
the date of this Agreement and (v) funds accumulated by an Intermediate Holding
Company for the purpose of cash collateralizing its obligations with respect to
any letter of credit posted on behalf of such Intermediate Holding Company as
permitted under clause (v) of the parenthetical contained in subsection 7.12(A).
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay when due any principal of
any Revolving Credit Loan or any Reimbursement Obligation in accordance with the
terms hereof; or the Borrower shall fail to make in full any deposit required to
be made hereunder into the Collateral Account on the day such deposit is due in
accordance with the terms hereof; or the Borrower shall fail to pay any interest
on any Revolving Credit Loan, or any fee or other amount payable hereunder or
under any other Loan Document (including, without limitation, any Commitment
Fee, Administration Fee, Fronting Fee or Letter of Credit Fee), when due in
accordance with the terms hereof, and such interest or fee or other amount shall
remain unpaid for a period of five or more Business Days after notice to the
Borrower by the party to whom such payment was due (or by the Agent on behalf of
such party); or
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(b) Any representation or warranty made or deemed made by any
Loan Party herein, the CDH Guarantee or in any other Loan Document or which is
contained in any certificate, document or financial or other statement furnished
at any time under or in connection with this Agreement, the CDH Guarantee or any
other Loan Document shall prove to have been false or misleading as of the time
made or furnished in any material respect and either such false or misleading
representation or warranty (i) has resulted in a Material Adverse Effect or (ii)
could reasonably be expected to result in a Material Adverse Effect; or
(c) The Borrower shall default in the observance or
performance of any covenant contained in subsection 7.1, 7.9, 7.10 or 7.13; or
the Borrower shall default in the observance or performance of any other
covenant contained in Section 7 or CDH shall default in the observance or
performance of any covenant in Section 10 of the CDH Guarantee, and in either
case such default shall continue unremedied for a period of 10 days after the
earlier to occur of (i) the date the Agent shall have provided notice to the
Borrower of such default and (ii) the date a Responsible Officer of the Borrower
shall have learned or reasonably should have learned of such default; or
(d) The Borrower shall default in the observance or
performance of any other covenant contained in this Agreement (other than as
provided in paragraphs (a) through (c) of this Section), and such default shall
continue unremedied for a period of 30 Business Days after notice to the
Borrower by the Agent of such default; or
(e) The Borrower or CDH shall (i) default in any payment of
principal of or interest on any Debt (other than the Revolving Credit Loans) or
in the payment of any Guarantee Obligation, beyond the period of grace (not to
exceed 30 days), if any, provided in the instrument or agreement under which
such Debt or Guarantee Obligation was created and such default permits the
holder or holders of such Debt or beneficiary or beneficiaries of such Guarantee
Obligation (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice if required,
such Debt to become due prior to its stated maturity or such Guarantee
Obligation to become payable; or (ii) default in the observance or performance
of any other agreement or condition relating to any such Debt or Guarantee
Obligation or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event shall occur or condition exist, the effect
of which default or other event or condition is to cause such Debt to become due
prior to its stated maturity or such Guarantee Obligation to become payable;
provided, however, that no Default or Event of Default shall exist under this
paragraph unless the aggregate amount of Debt and/or Guarantee Obligations in
respect of which any default or other event or condition referred to in this
paragraph shall have occurred shall be equal to at least $5 million; or
(f) (i) The Borrower or CDH shall commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian, conservator or other
similar official for it or for all or any substantial part of its assets, or the
Borrower or CDH shall make a general assignment for the benefit of its
creditors; or
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(ii) there shall be commenced against the Borrower or CDH any case, proceeding
or other action of a nature referred to in clause (i) above which (A) results in
the entry of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against the Borrower or CDH any case, proceeding or
other action seeking issuance of a warrant of attachment, execution, distraint
or similar process against all or any substantial part of its assets which
results in the entry of an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal within 60 days from the
entry thereof; or (iv) the Borrower or CDH shall take any action in furtherance
of, or indicating its consent to, approval of, or acquiescence in, any of the
acts set forth in clause (i), (ii), or (iii) above; or (v) the Borrower or CDH
shall generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; or
(g) (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 the
Borrower or any Commonly Controlled Entity, (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 Required Lenders, likely to result
in the termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the
Borrower or any Commonly Controlled Entity shall, or in the reasonable opinion
of the Required Lenders 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 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; or
(h) One or more judgments or decrees shall be entered against
the Borrower or any Significant Subsidiary involving in the aggregate a
liability (not paid or fully covered by insurance) of $3 million or more, and
all such judgments or decrees shall not have been vacated, satisfied,
discharged, stayed or bonded pending appeal within 60 days from the entry
thereof; provided, that no Default or Event of Default shall exist under this
paragraph (h) as a result of any such judgment or decree if such judgment or
decree is not against the Borrower and the Borrower is not liable, by contract
or otherwise, to make any payment in respect of such judgment or decree; or
(i) (i) The CDH Guarantee shall cease, for any reason, to be
in full force and effect or CDH shall so assert or (ii) CDH shall fail, at any
time, to be a direct Wholly-Owned Subsidiary of the Borrower; or
(j) (i) Any Person not a Permitted Holder, or any "group"
(within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of
1934, as amended) not composed entirely of Permitted Holders, (A) shall have
acquired beneficial ownership of more than 50% of any outstanding class of
Capital Stock having ordinary voting power in the election
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of directors of the Borrower or (B) shall obtain the power (whether or not
exercised) to elect a majority of the Borrower's directors or (ii) during any
period of twelve consecutive calendar months, individuals who were either (x)
directors of the Borrower on the first day of such period (or who were appointed
or nominated for election as directors of the Borrower by at least a majority of
the individuals who were directors of the Borrower on the first day of such
period) or (y) appointed directors to replace directors removed solely as a
result of death or mental or physical disability, shall cease to constitute a
majority of the Board of Directors;
(k) an event of default, as defined in any indenture or
instrument evidencing or under which any Significant Subsidiary has at the date
of this Agreement or shall hereafter have outstanding any Debt, shall happen and
be continuing and either (i) such default results from the failure to pay
principal of such Debt in excess of $10 million at final maturity of such Debt
or (ii) as a result of such default, the maturity of such Debt shall have been
accelerated so that the same shall be or become due and payable prior to the
date on which the same would otherwise have become due and payable, and such
acceleration shall not be rescinded or annulled within 30 days and the principal
amount of such Debt of any Significant Subsidiary in default, or the maturity of
which has been accelerated aggregates $10 million or more; provided that such
default shall not be an Event of Default if such Debt is Non-Recourse to the
Borrower in respect of the amounts not paid or due upon acceleration and the
Borrower could, at the time of default, Incur at least $1 of Debt under
subsection 7.2(a); or
(l) any of the Security Documents shall cease, for any reason
after the execution and delivery thereof, to be in full force and effect (other
than as a result of the expiration or termination of such Security Document in
accordance with its terms), or any Loan Party shall so assert, or any Lien
created by any of the Security Documents shall cease to be enforceable and of
the same effect and priority purported to be created thereby (other than as a
result of the expiration or termination of such Security Document in accordance
with its terms);
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) of this Section with respect to the
Borrower, automatically the Commitments shall immediately terminate and the
Revolving Credit Loans hereunder (with accrued interest thereon), the Notes and
all other amounts owing under this Agreement (including, without limitation, all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) shall immediately become due and payable, and (B) if such event is
any other Event of Default, either or both of the following actions may be
taken: (i) with the consent of the Required Lenders, the Agent may, or upon the
request of the Required Lenders, the Agent shall, by notice to the Borrower
declare the Commitments to be terminated forthwith, whereupon the Commitments
shall immediately terminate; and (ii) with the consent of the Required Lenders,
the Agent may, or upon the request of the Required Lenders, the Agent shall, by
notice to the Borrower, declare the Revolving Credit Loans hereunder (with
accrued interest thereon), the Notes and all other amounts owing under this
Agreement (including, without limitation, all amounts of L/C Obligations,
whether or not the beneficiaries of the then outstanding Letters of Credit shall
have presented the documents required thereunder) to be due and payable
forthwith, whereupon the same shall immediately become due and payable.
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With respect to all Letters of Credit with respect to which
presentment for honor shall not have occurred at the time of an acceleration
pursuant to the preceding paragraph, the Borrower shall at such time deposit in
the Collateral Account an amount equal to the aggregate then undrawn and
unexpired amount of such Letters of Credit, to be held, applied or released for
application as Collateral as provided in subsection 3.9.
Except as expressly provided above in this Section,
presentment, demand, protest and all other notices of any kind are hereby
expressly waived.
SECTION 9. THE AGENT
9.1 Appointment. Each Lender and the Issuing Bank hereby
irrevocably designates and appoints the Agent as the agent of such Lender and
the Issuing Bank under this Agreement and the other Loan Documents, and each
such Lender and the Issuing Bank irrevocably authorizes the Agent, in such
capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender or the Issuing Bank, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Agent.
9.2 Delegation of Duties. The Agent may execute any of its
duties under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
9.3 Exculpatory Provisions. Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be
(i) liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement or any other Loan Document
(except for its or such Person's own gross negligence or willful misconduct) or
(ii) responsible in any manner to any of the Lenders or the Issuing Bank for any
recitals, statements, representations or warranties made by the Borrower or any
officer thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of the Borrower to perform its obligations hereunder or
thereunder. The Agent shall not be under any obligation to any Lender or the
Issuing Bank to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the properties, books or records of the
Borrower.
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9.4 Reliance by Agent. The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any Note, writing, resolution,
notice, consent, certificate, affidavit, letter, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrower), independent accountants and other experts
selected by the Agent. The Agent may deem and treat the payee of any Note as the
owner thereof for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the Agent. The Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice
or concurrence of the Required Lenders as it deems appropriate or it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Agent shall in all cases be fully protected in acting,
or in refraining from acting, under this Agreement and the other Loan Documents
in accordance with a request of the Required Lenders, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders, the Issuing Bank and all future holders of the Revolving Credit Loans.
9.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has received notice from a Lender, the Issuing Bank
or the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default." In the event that
the Agent receives such a notice, the Agent shall give notice thereof to the
Lenders and the Issuing Bank. The Agent shall take such action with respect to
such Default or Event of Default as shall be reasonably directed by the Required
Lenders; provided that unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders and the
Issuing Bank.
9.6 Non-Reliance on Agent and Other Lenders. Each Lender and
the Issuing Bank expressly acknowledges that neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates has made
any representations or warranties to it and that no act by the Agent hereinafter
taken, including any review of the affairs of the Borrower, shall be deemed to
constitute any representation or warranty by the Agent to any Lender or the
Issuing Bank. Each Lender and the Issuing Bank represents to the Agent that it
has, independently and without reliance upon the Agent or any other Lender or
the Issuing Bank, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Borrower and made its own decision to make its Revolving Credit Loans hereunder
and enter into this Agreement. Each Lender and the Issuing Bank also represents
that it will, independently and without reliance upon the Agent or any other
Lender or the Issuing Bank, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Borrower. Except for notices, reports and
other documents expressly required to be furnished to the Lenders and the
Issuing Bank by the Agent hereunder, the Agent
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shall not have any duty or responsibility to provide any Lender or the Issuing
Bank with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
the Borrower which may come into the possession of the Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates.
9.7 Indemnification. The Lenders agree to indemnify the Agent
in its capacity as such (to the extent not reimbursed by the Borrower and
without limiting the obligation of the Borrower to do so), ratably according to
their respective Commitment Percentages in effect on the date on which
indemnification is sought, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the
Revolving Credit Loans) be imposed on, incurred by or asserted against the Agent
in any way relating to or arising out of, the Commitments, this Agreement, any
of the other Loan Documents or any documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by the Agent under or in connection with any of the
foregoing; provided that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from the
Agent's gross negligence or willful misconduct. The agreements in this
subsection shall survive the termination of this Agreement and payment of the
Notes, the Revolving Credit Loans and all other Obligations.
9.8 Agent in Its Individual Capacity. The Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Borrower as though the Agent were not the Agent
hereunder and under the other Loan Documents. With respect to the Revolving
Credit Loans made by it and any Note issued to it and with respect to any Letter
of Credit issued or participated in by it, the Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Lender and
may exercise the same as though it were not the Agent, and the terms "Lender"
and "Lenders" shall include the Agent in its individual capacity.
9.9 Successor Agent. The Agent may resign as Agent upon 10
days' notice to the Lenders and the Issuing Bank. If the Agent shall resign as
Agent under this Agreement and the other Loan Documents, then the Required
Lenders shall appoint from among the Lenders a successor agent for the Lenders
and the Issuing Bank, which successor agent (provided that it shall have been
approved by the Borrower), shall succeed to the rights, powers and duties of the
Agent hereunder. Effective upon such appointment and approval, the term "Agent"
shall mean such successor agent, and the former Agent's rights, powers and
duties as Agent shall be terminated, without any other or further act or deed on
the part of such former Agent or any of the parties to this Agreement or any
holders of the Revolving Credit Loans. After any retiring Agent's resignation as
Agent, the provisions of this Section 9 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement and the other Loan Documents.
9.10 Lead Arranger. The Lead Arranger shall not have any
duties or responsibilities hereunder or under any other Loan Document in its
capacity as such.
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SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement nor any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
subsection. The Required Lenders may, or, with the written consent of the
Required Lenders, the Agent may, from time to time, (a) enter into with the
Borrower written amendments, supplements or modifications hereto and to the
other Loan Documents for the purpose of adding any provisions to this Agreement
or the other Loan Documents or changing in any manner the rights of the Lenders
or of the Borrower hereunder or thereunder or (b) waive, on such terms and
conditions as the Required Lenders or the Agent, as the case may be, may specify
in such instrument, any of the requirements of this Agreement or the other Loan
Documents or any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, supplement or modification
shall (i) reduce the amount or extend the scheduled date of maturity of any
Revolving Credit Loan or reduce the stated rate of any interest or fee payable
hereunder or extend the scheduled date of any payment thereof or increase the
amount or extend the expiration date of any Commitment of any Lender, in each
case without the consent of each Lender affected thereby, or (ii) amend, modify
or waive any provision of this subsection or reduce the percentage specified in
the definition of Required Lenders or Majority Lenders, or consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement and the other Loan Documents, in each case without the
written consent of all the Lenders, or (iii) amend, modify or waive any
provision of Section 9 without the written consent of the Agent. Any such waiver
and any such amendment, supplement or modification shall apply equally to each
of the Lenders and shall be binding upon the Borrower, the Lenders, the Lead
Arrangers, the Issuing Bank, the Agent and all future holders of the Revolving
Credit Loans. In the case of any waiver, the Borrower, the Lenders, the Lead
Arrangers, and the Agent shall be restored to their former positions and rights
hereunder and under the other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; no such waiver
shall extend to any subsequent or other Default or Event of Default or impair
any right consequent thereon. Notwithstanding any provision of this Agreement
(including, without limitation, any provision of this subsection 10.1), the
provisions of this subsection 10.1 shall not apply to any amendment, supplement,
modification, or waiver with respect to the Fee Letter, and the Fee Letter and
any term thereof may be amended, supplemented or modified, and any requirement
or other provision thereof may be waived, as permitted under the Fee Letter
without meeting any requirement (including, without limitation, any requirement
to obtain the agreement or consent of any Person) other than as may be imposed
by the Fee Letter.
10.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and delivered by hand or courier or sent by certified
mail or facsimile transmission and, unless otherwise expressly provided herein,
shall be deemed to have been duly given or made (a) in the case of delivery by
hand or courier, when delivered, (b) in the case of delivery by certified mail,
three Business Days after being deposited in the mails, postage prepaid, or (c)
in the case of delivery by facsimile transmission, when sent and receipt has
been confirmed, addressed as follows in the case of the Borrower, the Issuing
Bank and the Agent, and as set forth in Schedule I in the case of the other
parties hereto, or to such other address as may be hereafter notified by the
respective parties hereto:
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The Borrower: Cogentrix Energy, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
with copy to General Counsel
Fax: ▇▇▇-▇▇▇-▇▇▇▇
The Agent and the
Issuing Bank: Australia and New Zealand Banking Group Limited
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ Pack/▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
w/ copy to (if to Issuing Bank): ▇▇▇▇▇▇ ▇▇▇▇▇▇,
Letter of Credit
Department
Fax: ▇▇▇-▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the Agent, the Issuing
Bank or the Lenders pursuant to subsection 2.2, 2.4, 2.6, 2.7, 2.12, 2.19 or 3.2
shall not be effective until received. The Borrower agrees that the Agent and
the Issuing Bank may act upon telex or facsimile instructions which are received
by either of them from persons purported to be, or which instructions appear to
be, authorized by the Borrower. The Borrower further agrees to indemnify and
hold the Agent and the Issuing Bank harmless from any claims by virtue of such
party's acting upon such telex or facsimile instructions as such instructions
were understood by the such party, except for claims relating solely from such
party's gross negligence or willful misconduct. Neither the Agent nor the
Issuing Bank shall be liable for any errors in transmission or the illegibility
of any telecopied or telexed documents. In the event the Borrower sends the
Agent or the Issuing Bank a manually signed confirmation of previously sent
telex or facsimile instructions, the Agent or the Issuing Bank, as the case may
be, shall have no duty to compare it against the previous instructions received
by such party nor shall such party have any responsibility should the contents
or the written confirmation differ from the telex or facsimile instructions
acted upon by such party.
10.3 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Agent or any Lender, any right,
remedy, power or privilege hereunder or under the other Loan Documents shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
10.4 Survival of Representations and Warranties; Survival of
Certain Agreements and Covenants. All representations and warranties made
hereunder, in the other Loan Documents and in any document, certificate or
statement delivered pursuant hereto or in connection herewith shall survive the
execution and delivery of this Agreement and the making of the Revolving Credit
Loans hereunder. To the extent provided in such subsections, the agreements and
covenants in subsections 2.14, 2.15(a), 2.16, 6.9, 9.7 and 10.5 shall survive
the
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termination of this Agreement and the payment of the Notes, the Revolving Credit
Loans and all other Obligations.
10.5 Payment of Expenses and Taxes. The Borrower agrees (a) to
pay or reimburse the Agent and the Lead Arrangers for all their reasonable
out-of-pocket costs and expenses incurred in connection with the syndication of
the Commitments and the Revolving Credit Loans, including, without limitation,
all such expenses relating to the preparation and distribution of information
memoranda relating thereto, the hosting of meetings of prospective Lenders and
the promotion and advertising of the syndication, (b) to pay or reimburse the
Agent for all its out-of-pocket costs and expenses incurred in connection with
the development, preparation and execution of, and, in the case of the Agent,
any amendment, supplement or modification to, or waiver or consent under or in
respect of, this Agreement and the other Loan Documents and any other documents
prepared in connection herewith or therewith, and the consummation and
administration of the transactions contemplated hereby and thereby, including,
without limitation, the reasonable fees and disbursements of counsel to the
Agent, (c) to pay or reimburse each Lender, the Issuing Bank and the Agent for
all its costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the other Loan Documents and
any such other documents, including, without limitation, the fees and
disbursements of counsel (including without limitation the allocated fees and
expenses of in-house counsel, if applicable) to each Lender and of counsel to
the Agent and (d) to pay, indemnify, and hold each Lender, the Issuing Bank and
the Agent harmless from, any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other taxes, if any, which may be payable or determined to be payable
in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents. The
agreements in this subsection 10.5 shall survive the termination of this
Agreement and the payment of the Notes, the Revolving Credit Loans and all other
Obligations.
10.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Issuing Bank, the Agent and their respective
successors and assigns, except that the Borrower may not assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of each Lender and the Issuing Bank (except as otherwise may be
permitted by subsection 7.9).
(b) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time sell to one
or more banks or other entities ("Participants") participating interests in any
Revolving Credit Loan owing to such Lender, any Commitment of such Lender or any
other interest of such Lender hereunder and under the other Loan Documents. In
the event of any such sale by a Lender of a participating interest to a
Participant, such Lender's obligations under this Agreement to the other parties
to this Agreement shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain the holder of
any such Revolving Credit Loan for all purposes under this Agreement and the
other Loan Documents, and the Borrower and the Agent shall continue to deal
solely and directly with such Lender in connection with such
81
76
Lender's rights and obligations under this Agreement and the other Loan
Documents. No Lender shall be entitled to create in favor of any Participant, in
the participation agreement pursuant to which such Participant's participating
interest shall be created or otherwise, any right to vote on, consent to or
approve any matter relating to this Agreement or any other Loan Document except
for those specified in clauses (i) and (ii) of the proviso to subsection 10.1.
The Borrower agrees that if amounts outstanding under this Agreement are due or
unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall, to the maximum
extent permitted by applicable law, be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement, provided that, in purchasing
such participating interest, such Participant shall be deemed to have agreed to
share with the Lenders the proceeds thereof as provided in subsection 10.7(a) as
fully as if it were a Lender hereunder. The Borrower also agrees that each
Participant shall be entitled to the benefits of subsections 2.14, 2.15 and 2.16
with respect to its participation in the Commitments and the Revolving Credit
Loans outstanding from time to time as if it was a Lender; provided that, in the
case of subsection 2.15, such Participant shall have complied with the
requirements of said subsection and provided, further, that no Participant shall
be entitled to receive any greater amount pursuant to any such subsection than
the transferor Lender would have been entitled to receive in respect of the
amount of the participation transferred by such transferor Lender to such
Participant had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time and from
time to time assign, with the consent of the Issuing Bank, to any Lender or any
affiliate thereof or, with the consent of the Borrower, the Agent, and the
Issuing Bank (which in the case of the Borrower and the Agent shall not be
unreasonably withheld), to an additional bank or financial institution (an
"Assignee") all or any part of its rights and obligations under this Agreement
and the other Loan Documents pursuant to an Assignment and Acceptance,
substantially in the form of Exhibit G, executed by such Assignee, such
assigning Lender (and the Issuing Bank and, in the case of an Assignee that is
not then a Lender or an affiliate thereof, by the Borrower and the Agent) and
delivered to the Agent for its acceptance and recording in the Register,
provided that, in the case of any such assignment to an additional bank or
financial institution, the sum of the aggregate principal amount of the
Revolving Credit Loans, the aggregate amount of the L/C Obligations and the
aggregate amount of the unused Available Commitment being assigned is not less
than $10 million (or such lesser amount as may be agreed to by the Borrower and
the Agent). Upon such execution, delivery, acceptance and recording, from and
after the effective date determined pursuant to such Assignment and Acceptance,
(x) the Assignee thereunder shall be a party hereto and, to the extent provided
in such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder with a Commitment and Commitment Percentage as set forth therein, and
(y) the assigning Lender thereunder shall, to the extent provided in such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such assigning Lender shall cease to be a party hereto).
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(d) The Agent, on behalf of the Borrower, shall maintain at
the address of the Agent referred to in subsection 10.2 a copy of each
Assignment and Acceptance delivered to it and a register (the "Register") for
the recordation of the names and addresses of the Lenders and the Commitment of,
and principal amounts of the Revolving Credit Loans owing to, each Lender from
time to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Agent and the Lenders may (and, in the
case of any Revolving Credit Loan or other obligation hereunder not evidenced by
a Note, shall) treat each Person whose name is recorded in the Register as the
owner of a Revolving Credit Loan or other obligation hereunder as the owner
thereof for all purposes of this Agreement and the other Loan Documents,
notwithstanding any notice to the contrary. Any assignment of any Revolving
Credit Loan or other obligation hereunder not evidenced by a Note shall be
effective only upon appropriate entries with respect thereto being made in the
Register.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an Assignee (and the Issuing Bank and, in the case of
an Assignee that is not then a Lender or an affiliate thereof, by the Borrower
and the Agent) together with payment to the Agent of a registration and
processing fee of $2,500, the Agent shall (i) promptly accept such Assignment
and Acceptance and (ii) on the effective date determined pursuant thereto record
the information contained therein in the Register and give notice of such
acceptance and recordation to the Lenders and the Borrower.
(f) The Borrower authorizes each Lender to disclose to any
Participant or Assignee (each, a "Transferee") and any prospective Transferee,
subject to the provisions of subsection 10.15, any and all financial information
in such Lender's possession concerning the Borrower and its Affiliates which has
been delivered to such Lender by or on behalf of the Borrower pursuant to this
Agreement or which has been delivered to such Lender by or on behalf of the
Borrower in connection with such Lender's credit evaluation of the Borrower and
its Affiliates prior to becoming a party to this Agreement.
(g) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this subsection concerning assignments of
Revolving Credit Loans and Notes relate only to absolute assignments and that
such provisions do not prohibit assignments creating security interests,
including, without limitation, any pledge or assignment by a Lender of any
Revolving Credit Loan or Note to any Federal Reserve Bank in accordance with
applicable law.
10.7 Adjustments; Set-off. (a) If any Lender (a "benefitted
Lender") shall at any time receive any payment of all or part of its Revolving
Credit Loans or the Reimbursement Obligations owing to it, or interest thereon,
or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 8, or otherwise), in a greater proportion than any such
payment to or collateral received by any other Lender, if any, in respect of
such other Lender's Revolving Credit Loans or the Reimbursement Obligations
owing to it, or interest thereon, such benefitted Lender shall purchase for cash
from the other Lenders a participating interest in such portion of each such
other Lender's Revolving Credit Loan or the Reimbursement Obligations owing to
it, or shall provide such other Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
benefitted Lender to share the excess payment or benefits of such collateral or
proceeds ratably with each of the Lenders; provided, however, that
83
78
if all or any portion of such excess payment or benefits is thereafter recovered
from such benefitted Lender, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but without
interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise) to set-off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower. Each Lender agrees
promptly to notify the Borrower and the Agent after any such set-off and
application made by such Lender, provided that the failure to give such notice
shall not affect the validity of such set-off and application.
10.8 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by facsimile transmission), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. A set of the
copies of this Agreement signed by all the parties shall be lodged with the
Borrower and the Agent.
10.9 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Borrower, the Agent and the Lenders with respect
to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Agent or any Lender relative to subject
matter hereof not expressly set forth or referred to herein or in the other Loan
Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.12 Submission To Jurisdiction; Waivers. The Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgement in respect
thereof, to the non-exclusive general jurisdiction of the
84
79
Courts of the State of New York, the courts of the United States of America for
the Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth in subsection 10.2 or at such other address of
which the Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding referred
to in this subsection any special, exemplary, punitive or consequential damages.
10.13 Acknowledgments. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) neither the Agent nor any Lender has any fiduciary
relationship with or duty to the Borrower arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
Agent and Lenders, on one hand, and the Borrower, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Lenders or among the Borrower and the Lenders.
10.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENT AND THE
LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN.
10.15 Confidentiality. Each Lender agrees to keep confidential
all non-public information provided to it by the Borrower pursuant to this
Agreement that is designated by the Borrower in writing as confidential;
provided that nothing herein shall prevent any Lender from disclosing any such
information (i) to the Agent or any other Lender, (ii) to any Transferee which
receives such information having been made aware of the confidential nature
thereof, (iii) to its employees, directors, agents, attorneys, accountants and
other professional advisors, (iv) upon the request or demand of any Governmental
Authority having jurisdiction over such
85
80
Lender, (v) in response to any order of any court or other Governmental
Authority or as may otherwise be required pursuant to any Requirement of Law,
(vi) which has been publicly disclosed other than in breach of this Agreement,
or (vii) in connection with the exercise of any remedy hereunder.
10.16 Rank. The parties hereto, for their own benefit and not
for the benefit of or for the purpose of creating any duty, obligation or
liability to any other Person (including, without limitation, any party to the
Borrower Indenture or any holder of any Borrower Indenture Security),
specifically designate that the Extensions of Credit made by the Lenders and the
Issuing Bank to the Borrower under this Agreement are neither senior nor
subordinate to the Borrower Indenture Securities in right of payment, except to
the extent that the Extensions of Credit are senior to the Borrower Indenture
Securities as a result of the Liens granted by CDH to the Agent pursuant to the
Security Documents.
10.17 Amendment and Restatement. Each of the parties hereto
agree that, at the request of ANZ to facilitate the syndication of the increase
in the aggregate amount of the Commitments effected by this Agreement, such
party shall promptly upon request execute and deliver an amendment and
restatement of this Agreement, solely for the purpose of adding as signatories
hereto the Lenders added by such syndication, and such other consents, documents
and other instruments reasonably required in connection therewith.
86
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
COGENTRIX ENERGY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Group Senior Vice President
and Chief Financial Officer
87
AUSTRALIA AND NEW ZEALAND BANKING
GROUP LIMITED,
as Agent, as the Lead Arranger, as
the Issuing Bank and as a Lender
By: /s/ ▇▇▇▇▇▇▇▇ Pack
--------------------------------------
Name: ▇▇▇▇▇▇▇▇ Pack
Title: Senior Vice President
88
BANK OF AMERICA, N.A.,
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: SVP
▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
90
BNP PARIBAS
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: VP
By: /s/ ▇▇▇▇▇ ▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇
Title: Assistant Vice President
91
CIBC, INC.,
By: /s/ ▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
Title: Executive Director
CIBC World Markets Corp. as
Agent
92
CITIBANK, N.A.
By: /s/ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇. ▇▇▇▇▇▇▇
Title: Vice President
93
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Vice President
94
CREDIT SUISSE FIRST BOSTON
By: /s/ ▇▇▇▇ ▇'▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇'▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Director
95
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Assistant Vice President
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President
▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇ BRANCH
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
97
FLEET NATIONAL BANK, N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
98
THE ROYAL BANK OF SCOTLAND PLC
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President
By:
--------------------------------------
Name:
Title:
99
Schedule I to
Credit Agreement
LENDERS' COMMITMENTS
AND ADDRESSES FOR NOTICES
--------------------------------------------------------------------------------
Commitment
Lender Percentage Commitment
--------------------------------------------------------------------------------
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED 40.0% $100,000,000
ADDRESS FOR NOTICES:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ Pack/
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇/▇▇▇-▇▇▇-▇▇▇▇
Telecopier:▇▇▇-▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
THE BANK OF NOVA SCOTIA 10.0% $25,000,000
ADDRESS FOR NOTICES:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
The Bank of Nova Scotia
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
CIBC INC. 10.0% $25,000,000
ADDRESS FOR NOTICES:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇'▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
CIBC, Inc.
2 Paces West
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
100
--------------------------------------------------------------------------------
BNP PARIBAS 6.0% $15,000,000
ADDRESS FOR NOTICES:
The Equitable Tower
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Specialized Industries--
▇▇▇▇▇▇ ▇▇▇▇▇/▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK 6.0% $15,000,000
ADDRESS FOR NOTICES:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
CITIBANK, N.A. 5.2% $13,000,000
ADDRESS FOR NOTICES:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇/
▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇/▇▇▇-▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
FLEET NATIONAL BANK, N.A. 5.2% $13,000,000
ADDRESS FOR NOTICES:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
DRESDNER BANK AG, NEW YORK BRANCH 4.0% $10,000,000
ADDRESS FOR NOTICES:
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
THE ROYAL BANK OF SCOTLAND 4.0% $10,000,000
ADDRESS FOR NOTICES:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
101
--------------------------------------------------------------------------------
BANK OF AMERICA, N.A. 3.2% $8,000,000
ADDRESS FOR NOTICES:
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
CREDIT LYONNAIS NEW YORK BRANCH 3.2% $8,000,000
ADDRESS FOR NOTICES:
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Attention: Project Finance --
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Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
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CREDIT SUISSE FIRST BOSTON 3.2% $8,000,000
ADDRESS FOR NOTICES:
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Attention: ▇▇▇▇▇ ▇▇▇▇▇/
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Telephone: ▇▇▇-▇▇▇-▇▇▇▇/▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇/▇▇▇-▇▇▇-▇▇▇▇
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102
Schedule II to
Credit Agreement
REVOLVING CREDIT FACILITY
APPLICABLE MARGIN
STATUS: ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇ 5
Commitment Fee (less than
50% utilization) (see
footnote 1 below): 0.45% 0.50% 0.60% 0.70% 0.80%
Commitment Fee (greater
than or equal to 50%
utilization) (see
footnote 2 below): 0.35% 0.375% 0.50% 0.60% 0.70%
Eurodollar Loans: 1.25% 1.50% 1.875% 2.25% 2.625%
ABR Loans: 0.60% 0.85% 1.225% 1.60% 1.975
Financial Letters of Credit: 1.25% 1.50% 1.875% 2.25% 2.625%
Performance Letters of Credit: 1.05% 1.30% 1.675% 2.05% 2.425%
For purposes of this Schedule, capitalized terms shall have the meanings
assigned to them in the Credit Agreement (as amended from time to time) to which
this Schedule is appended, provided that the following terms shall have the
following meanings:
"Level 1 Status" exists at any date if, at such date, the Borrower Indenture
Securities are rated BBB- or higher by S&P and Baa3 or higher by Moody's.
"Level 2 Status" exists at any date if, at such date, (i) the Borrower Indenture
Securities are rated BB+ or higher by S&P and Ba1 or higher by Moody's and (ii)
Level 1 Status does not exist.
"Level 3 Status" exists at any date if, at such date, (i) the Borrower Indenture
Securities are rated BB or higher by S&P and Ba2 or higher by Moody's and (ii)
neither ▇▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇▇ exists.
"Level 4 Status" exists at any date if, at such date, (i) the Borrower Indenture
Securities are rated BB- or higher by S&P and Ba3 or higher by Moody's and (ii)
none of ▇▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇▇ exists.
"Level 5 Status" exists at any date if, at such date, no other Status exists or
the Borrower Indenture Securities are not rated by both S&P and Moody's or no
Borrower Indenture Securities are outstanding.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"S&P" means Standard & Poor's Rating Group.
103
"Status" refers to the determination which of ▇▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇ ▇▇▇▇▇▇,
▇▇▇▇▇ 3 Status, Level 4 Status or Level 5 Status exists at any date. For
purposes of this determination, the credit rating in effect at any date is that
in effect at the close of business on such date.
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1. This Commitment Fee is applicable during any period during which the
Aggregate Extensions of Credit of all of the Lenders is less than 50% of
the aggregate Commitments of all of the Lenders.
2. This Commitment Fee is applicable during any period during which the
Aggregate Extensions of Credit of all of the Lenders is greater than or
equal to 50% of the aggregate Commitments of all of the Lenders.
