Exhibit 99(b)(2)
CONFORMED COPY
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CREDIT AGREEMENT
Dated as of February 3, 1998,
among
PACIFICORP GROUP HOLDINGS COMPANY,
PACIFICORP ENERGYCO,
THE LENDERS NAMED HEREIN,
CITIBANK, N.A.,
as Paying Agent and Issuing Bank
and
CITICORP USA, INC.,
as Collateral Agent
--------------------------
CITICORP SECURITIES, INC.,
XXXXXXX XXXXX CREDIT PARTNERS L.P.
and
X.X. XXXXXX SECURITIES INC.,
as Arrangers
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[CS&M Ref. No. 6558-145]
TABLE OF CONTENTS
Page
ARTICLE I Definitions
Section 1.01. Defined Terms. . . . . . . . . . . . . . . . . . .2
SECTION 1.02. Terms Generally . . . . . . . . . . . . . . . . 31
SECTION 1.03. Exchange Rates. . . . . . . . . . . . . . . . . 31
ARTICLE II The Credits
SECTION 2.01. Commitments . . . . . . . . . . . . . . . . . . 32
SECTION 2.02. Loans . . . . . . . . . . . . . . . . . . . . . 32
SECTION 2.03. Borrowing Procedure . . . . . . . . . . . . . . 34
SECTION 2.04. Evidence of Debt; Repayment of Loans. . . . . . 35
SECTION 2.05. Fees. . . . . . . . . . . . . . . . . . . . . . 35
SECTION 2.06. Interest on Loans . . . . . . . . . . . . . . . 36
SECTION 2.07. Default Interest. . . . . . . . . . . . . . . . 36
SECTION 2.08. Alternate Rate of Interest. . . . . . . . . . . 37
SECTION 2.09. Termination and Reduction of Commitments. . . . 37
SECTION 2.10. Conversion and Continuation of Borrowings . . . 38
SECTION 2.11. [Intentionally Omitted] . . . . . . . . . . . . 39
SECTION 2.12. Optional Prepayments. . . . . . . . . . . . . . 39
SECTION 2.13. Mandatory Prepayments . . . . . . . . . . . . . 40
SECTION 2.14. Reserve Requirements; Change in Circumstances . 41
SECTION 2.15. Change in Legality. . . . . . . . . . . . . . . 43
SECTION 2.16. Indemnity . . . . . . . . . . . . . . . . . . . 43
SECTION 2.17. Pro Rata Treatment. . . . . . . . . . . . . . . 44
SECTION 2.18. Sharing of Setoffs. . . . . . . . . . . . . . . 44
SECTION 2.19. Payments. . . . . . . . . . . . . . . . . . . . 45
SECTION 2.20. Taxes . . . . . . . . . . . . . . . . . . . . . 45
SECTION 2.21. Assignment of Commitments Under Certain
Circumstances; Duty
to Mitigate . . . . . . . . . . . . . . . . . . 47
SECTION 2.22. Letters of Credit . . . . . . . . . . . . . . . 48
SECTION 2.23. Extension of Revolving Credit Commitments . . . 52
ARTICLE III Representations and Warranties
SECTION 3.01. Organization. . . . . . . . . . . . . . . . . . 53
SECTION 3.02. Corporate and Governmental Authorization; No
Contravention . . . . . . . . . . . . . . . . . 53
SECTION 3.03. Enforceability. . . . . . . . . . . . . . . . . 53
SECTION 3.04. Financial Statements. . . . . . . . . . . . . . 54
SECTION 3.05. No Material Adverse Change. . . . . . . . . . . 55
SECTION 3.06. Title to Properties; Possession Under Leases. . 55
SECTION 3.07. Subsidiaries. . . . . . . . . . . . . . . . . . 55
SECTION 3.08. Litigation; Compliance with Laws. . . . . . . . 55
SECTION 3.09. Agreements. . . . . . . . . . . . . . . . . . . 56
SECTION 3.10. Federal Reserve Regulations . . . . . . . . . . 56
SECTION 3.11. Investment Company Act; Public Utility Holding
Company Act . . . . . . . . . . . . . . . . . . 56
SECTION 3.12. Tax Matters . . . . . . . . . . . . . . . . . . 56
SECTION 3.13. No Material Misstatements . . . . . . . . . . . 56
SECTION 3.14. Employee Benefit Plans. . . . . . . . . . . . . 57
SECTION 3.15. Environmental Matters . . . . . . . . . . . . . 57
SECTION 3.16. Insurance . . . . . . . . . . . . . . . . . . . 58
SECTION 3.17. Security Documents. . . . . . . . . . . . . . . 58
SECTION 3.18. Solvency. . . . . . . . . . . . . . . . . . . . 59
SECTION 3.19. Labor Matters . . . . . . . . . . . . . . . . . 59
ARTICLE IV Conditions
SECTION 4.01. Effective Date. . . . . . . . . . . . . . . . . 59
SECTION 4.02. Borrowings. . . . . . . . . . . . . . . . . . . 60
ARTICLE V Affirmative Covenants
SECTION 5.01. Existence; Businesses and Properties. . . . . . 62
SECTION 5.02. Insurance . . . . . . . . . . . . . . . . . . . 62
SECTION 5.03. Obligations and Taxes . . . . . . . . . . . . . 62
SECTION 5.04. Financial Statements, Reports, etc. . . . . . . 63
SECTION 5.05. Litigation and Other Notices. . . . . . . . . . 64
SECTION 5.06. Maintaining Records; Access to Properties and
Inspections . . . . . . . . . . . . . . . . . . 64
SECTION 5.07. Use of Proceeds . . . . . . . . . . . . . . . . 65
SECTION 5.08. Compliance with Laws. . . . . . . . . . . . . . 65
SECTION 5.09. Further Assurances. . . . . . . . . . . . . . . 65
SECTION 5.10. Interest Rate Protection Agreements . . . . . . 65
SECTION 5.11. Tax Sharing Accounts. . . . . . . . . . . . . . 65
SECTION 5.12. Tax Sharing Agreements. . . . . . . . . . . . . 66
SECTION 5.13. Peabody Transfer; PPM Contribution; Citizens
Transfer. . . . . . . . . . . . . . . . . . . . 66
SECTION 5.14. Open Market Shares. . . . . . . . . . . . . . . 66
ARTICLE VI Negative Covenants
SECTION 6.01. Indebtedness. . . . . . . . . . . . . . . . . . 66
SECTION 6.02. Liens . . . . . . . . . . . . . . . . . . . . . 68
SECTION 6.03. Sale and Lease-Back Transactions. . . . . . . . 70
SECTION 6.04. Investments, Loans and Advances . . . . . . . . 70
SECTION 6.05. Mergers, Consolidations, Sales of Assets and
Acquisitions. . . . . . . . . . . . . . . . . . 71
SECTION 6.06. Dividends and Distributions; Restrictions on
Ability of
Subsidiaries to Pay Dividends . . . . . . . . . 72
SECTION 6.07. Transactions with Affiliates. . . . . . . . . . 73
SECTION 6.08. Business of PGH and Subsidiaries. . . . . . . . 73
SECTION 6.09. Other Indebtedness and Agreements . . . . . . . 73
SECTION 6.10. Fixed Charge Coverage Ratio . . . . . . . . . . 74
SECTION 6.11. Leverage Ratio. . . . . . . . . . . . . . . . . 74
SECTION 6.12. Consolidated EBITDA . . . . . . . . . . . . . . 75
SECTION 6.13. Fiscal Year . . . . . . . . . . . . . . . . . . 75
ARTICLE VII Events of Default
ARTICLE VIII The Paying Agent and the Collateral Agent
ARTICLE IX Miscellaneous
SECTION 9.01. Notices . . . . . . . . . . . . . . . . . . . . 81
SECTION 9.02. Survival of Agreement . . . . . . . . . . . . . 82
SECTION 9.03. Binding Effect. . . . . . . . . . . . . . . . . 82
SECTION 9.04. Successors and Assigns. . . . . . . . . . . . . 82
SECTION 9.05. Expenses; Indemnity . . . . . . . . . . . . . . 85
SECTION 9.06. Right of Setoff . . . . . . . . . . . . . . . . 86
SECTION 9.07. APPLICABLE LAW. . . . . . . . . . . . . . . . . 86
SECTION 9.08. Waivers; Amendment. . . . . . . . . . . . . . . 86
SECTION 9.09. Interest Rate Limitation. . . . . . . . . . . . 87
SECTION 9.10. Entire Agreement. . . . . . . . . . . . . . . . 87
SECTION 9.11. WAIVER OF JURY TRIAL. . . . . . . . . . . . . . 88
SECTION 9.12. Severability. . . . . . . . . . . . . . . . . . 88
SECTION 9.13. Counterparts. . . . . . . . . . . . . . . . . . 88
SECTION 9.14. Headings. . . . . . . . . . . . . . . . . . . . 88
SECTION 9.15. Jurisdiction; Consent to Service of Process . . 88
SECTION 9.16. Conversion of Currencies. . . . . . . . . . . . 89
SECTION 9.17. Confidentiality . . . . . . . . . . . . . . . . 89
SECTION 9.18. Margin Regulations . . . . . . . . . . . . . . . 90
SECTION 9.19. European Monetary Union . . . . . . . . . . . . 90
Contents, p.5
Page
Contents, p.6
Page
Exhibits and Schedules
EXHIBIT A Administrative Questionnaire
EXHIBIT B Assignment and Acceptance
EXHIBIT C Borrowing Request
EXHIBIT D Collateral Assignment
EXHIBIT E Guarantee Agreement
EXHIBIT F Pledge Agreement
EXHIBIT G U.K. Tax Sharing Agreement
EXHIBIT H U.S. Tax Sharing Policy
EXHIBIT I-1 Opinion of Stoel Rives LLP
EXHIBIT I-2 Opinion of Xxxxx Xxxx & Xxxxxxxx
EXHIBIT I-3 Opinion of Linklaters & Paines
EXHIBIT I-4 Opinion of Xxxxxxxx Chance
SCHEDULE 1.01(a) Additional Cost
SCHEDULE 1.01(b) Excluded Assets
SCHEDULE 1.01(c) Offer Conditions Precedent
SCHEDULE 1.01(d) Refinanced Indebtedness
SCHEDULE 2.01 Commitments
SCHEDULE 3.06 (b) Leases
SCHEDULE 3.07 (a) Closing Date Subsidiaries
SCHEDULE 3.07(b) Funding Date Subsidiaries
SCHEDULE 3.08 Litigation
SCHEDULE 3.15 Environmental Matters
SCHEDULE 3.16 Insurance
SCHEDULE 6.01(a) Indebtedness
SCHEDULE 6.02(a) Liens
SCHEDULE 6.04(b) Commitments for Investments, Loans and
Advances of PGH and its Subsidiaries
CREDIT AGREEMENT dated as of February 3,
1998, among PACIFICORP GROUP HOLDINGS COMPANY
(formerly known as PacifiCorp Holdings, Inc.), a
Delaware corporation ("PGH" or the "Guarantor"),
PACIFICORP ENERGYCO, an unlimited company
incorporated in England and Wales (the
"Borrower"), the Lenders (as defined in
Article I), CITIBANK, N.A., a national banking
association ("Citibank"), as paying agent (in such
capacity, the "Paying Agent") for the Lenders, and
as issuing bank (in such capacity, the "Issuing
Bank"), and CITICORP USA, INC., a Delaware
corporation ("Citicorp USA"), as collateral agent
(in such capacity, the "Collateral Agent") for the
Lenders.
Pursuant to the Offer (such term and each other capitalized term used but
not defined herein having the meaning given to it in Article I), PA has
offered or will offer to purchase each outstanding Share (including Shares
represented by Depositary Shares) at a purchase price of xxxxx net
per share in cash to the holder thereof. In connection therewith and to
provide a portion of the financing therefor, (a) PA has entered into the PA
Facility Agreement and (b) Powercoal has entered into the Powercoal Credit
Agreement.
The Borrower has requested the Lenders to extend credit in the form of (a)
Term Loans at any time during the Term Loan Availability Period, in an
aggregate principal amount not in excess of $1,500,000,000 (or the Sterling
Equivalent thereof) and (b) Revolving Loans at any time and from time to time
prior to the Revolving Credit Maturity Date, in an aggregate principal amount
at any time outstanding not in excess of $400,000,000 (or the Sterling
Equivalent thereof). The Borrower has requested the Issuing Bank to issue
letters of credit, in an aggregate face amount at any time outstanding not in
excess of $350,000,000 (or the Sterling Equivalent thereof) to support
payment obligations incurred in the ordinary course of business by the
Borrower, PGH or any of their respective subsidiaries.
The proceeds of the Term Loans, together with approximately $606,000,000
in net cash proceeds of an equity contribution (the "PGH Equity
Contribution") to be made by PGH to the Borrower, are to be used solely (a)
to distribute to PA through certain of the Borrower's direct and indirect
subsidiaries a portion of the funds necessary to finance the Offer and for
the other purposes specified in Clause 3.1(a)(i) of the PA Facility Agreement
and (b) for the payment of fees and expenses in connection with the Offer.
The proceeds of the Revolving Loans (other than the Revolving Loans used for
the purposes specified in the immediately preceding sentence) are to be used
solely for the ordinary working capital needs of the Borrower, PGH and their
respective subsidiaries. PA will use (a) the proceeds from each Acquisition
Borrowing, (b) the proceeds of the Powercoal/PA Loans and (c) certain
proceeds from borrowings by PA under the PA Facility Agreement to finance the
Offer and for the other purposes specified in Clause 3.1(a)(i) of the PA
Facility Agreement.
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The Lenders are willing to extend such credit to the Borrower and the
Issuing Bank is willing to issue letters of credit for the account of the
Borrower on the terms and subject to the conditions set forth herein.
Accordingly, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the following
terms shall have the meanings specified below:
"Acquisition Borrowing" shall mean any Borrowing, the proceeds of which
are distributed to PA through certain of the Borrower's direct and indirect
subsidiaries to be used by PA to finance a portion of the Offer and/or for
the other purposes specified in Clause 3.1(a)(i) of the PA Facility Agreement.
"Additional Cost" shall mean, in relation to any Sterling Borrowing for
any Interest Period, the cost as calculated by the Paying Agent in accordance
with Schedule 1.01(a) imputed to each Lender participating in such Sterling
Borrowing of compliance with the mandatory liquid assets requirements of the
Bank of England during that Interest Period, expressed as a percentage.
"Adjusted LIBO Rate" shall mean, with respect to any Eurocurrency
Borrowing for any Interest Period, an interest rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to (a) if such
Eurocurrency Borrowing is a Dollar Borrowing, the LIBO Rate in effect for
such Interest Period multiplied by Statutory Reserves and (b) if such
Eurocurrency Borrowing is a Sterling Borrowing, the LIBO Rate in effect for
such Interest Period plus Additional Cost.
"Adjustment Amount" shall mean the cumulative amount (during the period
from April 1, 1998, hereunder to the end of the period relating to the
relevant determination) by which the cash expenditures of Powercoal and its
subsidiaries (after giving effect to the Peabody Transfer) for reclamation
and related liabilities, workers compensation liabilities, postretirement
benefit costs, industry fund obligations and similar items exceed the sum of:
(a) the cumulative expense during such period recognized in Consolidated Net
Income of Powercoal and its subsidiaries (after giving effect to the Peabody
Transfer) for reclamation and related liabilities, workers compensation
liabilities, postretirement benefit costs, industry fund obligations and
similar items and (b) $50,000,000.
"Administrative Questionnaire" shall mean an Administrative Questionnaire
in the form of Exhibit A or such other form as shall be approved by the
Paying Agent.
"Affiliate" shall mean, when used with respect to a specified person, any
other person that directly or indirectly, through one or more intermediaries,
Controls or is Controlled by or is under direct or indirect common Control
with such specified person; provided that, for purposes of Section 6.07 only,
beneficial ownership of 10% or more of the voting securities of a person
shall be deemed to be Control for purposes of the definition of "Affiliate".
Neither the Lenders nor any of
3
their Affiliates will be treated as an Affiliate of the Borrower or any of
its subsidiaries for purposes of this Agreement.
"Aggregate Revolving Credit Exposure" shall mean the aggregate amount of
the Lenders' Revolving Credit Exposures.
"Agreement Currency" shall have the meaning assigned to such term in
Section 9.16.
"Announcement Date" shall mean the date on which the Press Release is
issued.
"Assessment Rate" shall mean for any date the annual rate (rounded
upwards, if necessary, to the next 1/100 of 1%) most recently estimated by
the Paying Agent as the then current net annual assessment rate that will be
employed in determining amounts payable by the Paying Agent to the Federal
Deposit Insurance Corporation (or any successor thereto) for insurance by
such Corporation (or such successor) of time deposits made in Dollars at the
Paying Agent's domestic offices.
"Asset Sale" shall mean the sale, lease, transfer or other disposition (by
way of merger or otherwise, including as a result of a Condemnation Event or
a Casualty Event) by PGH, the Borrower or any of their respective
subsidiaries to any person other than PGH, the Borrower or any of their
respective subsidiaries of (a) any capital stock or other equity interests of
the Borrower or any of the subsidiaries of PGH or the Borrower or (b) any
other assets of PGH, the Borrower or any of their respective subsidiaries
(other than inventory, obsolete or worn-out assets, scrap and Permitted
Investments, in each case disposed of in the ordinary course of business),
except for (i) any sale, lease, transfer or other disposition in one
transaction or a series of related transactions having a value of $25,000,000
(or the Dollar Equivalent thereof in another currency) or less and (ii)
payment of a cash dividend permitted by Section 6.06(a). Notwithstanding the
foregoing, the term "Asset Sale" shall not include (a) the transfer of Open
Market Shares in accordance with Section 5.15, (b) transfers of assets as
part of a sale and leaseback transaction permitted by Section 6.03 and (c)
the transfer to PacifiCorp or a subsidiary of PacifiCorp of any of the
Excluded Assets.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Lender and an assignee, and accepted by the Paying Agent,
in the form of Exhibit B or such other form as shall be approved by the
Paying Agent.
"Base CD Rate" shall mean the sum of (a) the product of (i) the
Three-Month Secondary CD Rate and (ii) Statutory Reserves and (b) the
Assessment Rate.
"Base Rate" shall mean, for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greatest of (a) the Prime
Rate in effect on such day, (b) the Base CD Rate in effect on such day plus
1% and (c) the Federal Funds Effective Rate in effect on such day plus 1/2 of
1%. If for any reason the Paying Agent shall have determined (which
determination shall be conclusive absent manifest error) that it is unable to
ascertain the Base CD Rate or the Federal Funds Effective Rate or both for
any reason, including the inability or failure of the Paying Agent to obtain
sufficient quotations in accordance with the terms of the definition thereof,
the Base Rate shall be determined without regard to clause (b) or (c), or
both, of the preceding sentence, as appropriate, until the circumstances
giving rise to such inability no longer exist. Any change in the Base Rate
due to a change in the Prime Rate, the Base CD Rate or the Federal Funds
Effective Rate
4
shall be effective on the effective date of such change in the Prime Rate,
the Base CD Rate or the Federal Funds Effective Rate, respectively.
"Base Rate Borrowing" shall mean a Borrowing comprised of Base Rate Loans.
"Base Rate Loan" shall mean any Base Rate Term Loan or Base Rate Revolving
Loan.
"Base Rate Revolving Loan" shall mean any Revolving Loan bearing interest
at a rate determined by reference to the Base Rate in accordance with the
provisions of Article II.
"Base Rate Spread" shall mean 1.75%; provided, however, that (a) the Base
Rate Spread shall be 1.25% if within 10 Business Days of the initial
Acquisition Borrowing the credit facilities under this Agreement shall have
received credit ratings from Standard & Poor's Ratings Services and Xxxxx'x
Investors Service, Inc. of BB+ and Ba1 or higher, respectively, and (b) the
Base Rate Spread shall be increased by 0.75% during the Extension Period.
"Base Rate Term Borrowing" shall mean a Borrowing comprised of Base Rate
Term Loans.
"Base Rate Term Loan" shall mean any Term Loan bearing interest at a rate
determined by reference to the Base Rate in accordance with the provisions of
Article II.
"Board" shall mean the Board of Governors of the Federal Reserve System of
the United States of America.
"Borrowing" shall mean (a) Revolving Loans or (b) Term Loans, in each
case, of the same Type, Class and currency, made, converted or continued on
the same date and, in the case of Eurocurrency Loans, as to which a single
Interest Period is in effect.
"Borrowing Request" shall mean a request by the Borrower in accordance
with the terms of Section 2.03 and substantially in the form of Exhibit C or
such other form as shall be approved by the Paying Agent.
"Business Day" shall mean any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by
law to remain closed; provided that, when used in connection with a
Eurocurrency Loan, the term "Business Day" shall also exclude any day on
which banks are not open for dealings in deposits in the London interbank
market.
"Calculation Date" shall mean (a) the last Business Day of each calendar
month, (b) if at any time the Aggregate Revolving Credit Exposure exceeds 75%
of the Total Revolving Credit Commitments, the last Business Day of each week
and (c) if a Default or an Event of Default shall have occurred and be
continuing, such additional dates as the Paying Agent or the Required Lenders
shall specify.
"Capital Lease Obligations" of any person shall mean the obligations of
such person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
5
accounted for as capital leases on a balance sheet of such person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Cash Available for Fixed Charges" shall mean, for any period, without
duplication, the excess of (a) the sum of (i) the aggregate amount of cash
dividends or distributions actually received by the Loan Parties during such
period in respect of the common stock of, or other ownership interests in,
their respective subsidiaries; (ii) the aggregate amount of payments actually
received by PGH during such period with respect to PGH's interest in the
Spring Creek Obligations; (iii) the aggregate amount of any interest payments
actually received by PGH during such period with respect to Indebtedness due
to PGH under the Intercompany Loan Agreements and with respect to any other
intercompany loans or advances; (iv) the aggregate amount of cash equity
investments made by PacifiCorp in PGH during such period; and (v) the
aggregate amount of payments received by the Loan Parties under or in respect
of the Tax Sharing Agreements, net of any tax payments made by the Loan
Parties under or in respect of the Tax Sharing Agreements or in respect of
taxes over (b) cash expenses (other than Cash Interest Expense) paid by the
Loan Parties during such period. For purposes of clause (d) of this
definition, a cash equity investment made by PacifiCorp in PGH within 45 days
after the end of any fiscal quarter shall be deemed to have been made during
such fiscal quarter (and not during the following fiscal quarter) if PGH so
elects by giving written notice of such election to the Paying Agent within
such 45-day period.
"Cash Interest Expense" shall mean, for any period, the interest expense
of any Loan Party (including related commitment fees, facilities fees and
similar fees, and the interest component in respect of Capital Lease
Obligations but excluding fees and expenses paid in connection with the
closing of the Transactions) paid in cash during such period, as determined
in accordance with GAAP.
"Casualty Event" shall mean an event pursuant to which PGH or any of its
subsidiaries has the right to collect insurance proceeds under any insurance
policies with respect to any insured casualty or other insured damage to any
property of PGH or any of its subsidiaries.
A "Change in Control" shall be deemed to have occurred if (a) any person
or group (within the meaning of Rule 13d-5 of the Securities Exchange Act of
1934 as in effect on the Closing Date) shall own, directly or indirectly,
beneficially or of record, shares representing more than 35% of the aggregate
ordinary voting power represented by the issued and outstanding capital stock
of PacifiCorp; (b) a majority of the seats (other than vacant seats) on the
board of directors of PacifiCorp, PGH or the Borrower shall at any time be
occupied by persons who were neither (i) nominated by the board of directors
of PacifiCorp, nor (ii) appointed by directors so nominated; (c) any change
in control (or similar event, however denominated) with respect to PacifiCorp
shall occur under and as defined in any indenture or agreement in respect of
Indebtedness to which PGH, any person directly or indirectly Controlling the
Borrower or any subsidiary of PGH is a party; (d) PacifiCorp consolidates
with, or merges with or into, any person, or any person consolidates with, or
merges with or into, PacifiCorp in any such event pursuant to a transaction
in which any of the issued and outstanding capital stock of PacifiCorp is
converted into or exchanged for cash, securities or other property, other
than any such transaction where the capital stock of PacifiCorp outstanding
immediately prior to such transaction is converted into or exchanged for
capital stock of the surviving or transferee person constituting a majority
of the issued and outstanding shares of such capital stock of such surviving
or transferee person (immediately after giving effect to such
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conversion or exchange); (e) PacifiCorp shall own, directly or indirectly,
beneficially and of record, less than 80% of the outstanding capital stock of
PGH, free and clear of all Liens (other than Liens permitted under the
Transaction Documents); or (f) PGH shall cease to own, directly or
indirectly, beneficially and of record, 100% of the outstanding capital stock
of the Borrower, free and clear of all Liens (other than Liens permitted
under the Transaction Documents).
"Citibank" shall have the meaning assigned to such term in the preamble to
this Agreement.
"Citicorp USA" shall have the meaning assigned to such term in the
preamble to this Agreement.
"Citizens" shall mean Citizens Power LLC, a limited liability company
organized under the laws of the State of Delaware, all the limited liability
company interests of which on the date hereof are directly owned by Peabody
Investments.
"Citizens Transfer" shall mean the direct or indirect transfer by PA or
any of its subsidiaries of all the issued and outstanding limited liability
company interests of Citizens to Powercoal or any of its subsidiaries.
"Class", when used in reference to any Loan or Borrowing, shall refer to
whether such Loan, or the Loans comprising such Borrowing, are Revolving
Loans or Term Loans and, when used in reference to any Commitment, refers to
whether such Commitment is a Revolving Commitment or a Term Loan Commitment.
"Clean-up Period" shall mean the period commencing on the Closing Date and
ending on the date that is 180 (or, in the case of Citizens, 270) days after
the date of the initial Borrowing hereunder.
"Closing Date" shall mean February 3, 1998.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"Collateral" shall mean all the "Collateral", as defined in any Security
Document.
"Collateral Assignment" shall mean the Collateral Assignment,
substantially in the form of Exhibit D, made by the Loan Parties in favor of
the Collateral Agent for the benefit of the Secured Parties.
"Collateral Trust and Intercreditor Agreement" shall mean an agreement
entered into after the Closing Date and in form and substance satisfactory to
the Collateral Agent and the Initial Lenders pursuant to which the Collateral
Agent will agree, on behalf of the Secured Parties, with the trustee or
representative of the holders from time to time of FRNs and/or EnergyCo
Refinancing Indebtedness that such holders may be secured equally and ratably
with the Secured Parties by the Collateral; provided, however, that such
Collateral Trust and Intercreditor Agreement shall provide (and the indenture
or other agreement governing any EnergyCo Refinancing Indebtedness must
provide (and, in the case of clause (c) below, must permit the continuing
lien in the Collateral in favor of the Revolving Credit Lenders or any
replacement revolving credit facility in an aggregate
7
principal amount not less than the then current Total Revolving Credit
Commitment) in order to be so equally and ratably secured) that (a) the
Collateral Agent shall have the absolute discretion as to the timing and
manner of any enforcement against, or disposition of, the Collateral (subject
to the direction of a majority in interest of the Secured Parties and the
holders of FRNs), (b) upon any release of all or any portion of the
Collateral by the Secured Parties and the holders of the FRNs, the liens
thereon in favor of the holders of EnergyCo Refinancing Indebtedness shall be
automatically released and (c) upon the repayment or prepayment in full of
the Term Loans and the FRNs, the liens in favor of the holders of the
EnergyCo Refinancing Indebtedness shall be automatically released,
notwithstanding that the liens in favor of the Revolving Credit Lenders or
any replacement revolving credit facility may continue.
"Commitment" shall mean, with respect to each Lender, such Lender's
Revolving Credit Commitment and Term Loan Commitment.
"Commitment Fee" shall have the meaning assigned to such term in Section
2.05(a).
"Condemnation Event" shall mean an event pursuant to which PGH or any of
its subsidiaries has the right to collect and receive proceeds as a result of
any action or proceeding for the taking of any property of PGH or any of its
subsidiaries, or any part thereof or interest therein, for public or
quasi-public use under the power of eminent domain, by reason of any public
improvement or condemnation proceeding, or in any other manner.
"Confidential Information Memorandum" shall mean the Confidential
Information Memorandum of the Borrower to be used by the Initial Lenders and
their Affiliates in connection with the syndication of the Commitments.
"Consolidated EBITDA" shall mean, for any period, Consolidated Net Income
for such period, plus, without duplication and to the extent deducted from
revenues in determining Consolidated Net Income, the sum of (a) the aggregate
amount of Consolidated Interest Expense for such period, (b) the aggregate
amount of income tax expense for such period (including payments in respect
of income taxes under the Tax Sharing Agreements), (c) all amounts
attributable to depreciation, depletion and amortization for such period
(including, without limitation, amortization of any prepayment made of lease
rentals arising pursuant to the generation lease arrangements in force as of
the date hereof between National Power plc and a member of the TEG Group and
between Powergen Plc and a member of the TEG Group), (d) all noncash
nonrecurring charges during such period, and (e) expenses incurred by PGH and
its subsidiaries in connection with Funding Exchange Rate Protection
Agreements, and minus, without duplication, (i) to the extent included in
determining Consolidated Net Income, all nonrecurring gains during such
period and (ii) the Net Adjustment Amount, all as determined on a
consolidated basis for PGH and its subsidiaries in accordance with GAAP. For
the purposes of determining the Leverage Ratio at December 31, 1998,
Consolidated EBITDA for the period of four fiscal quarters ending December
31, 1998, shall be determined to be the amount of annualized Consolidated
EBITDA for the period from the Unconditional Date to and including December
31, 1998.
"Consolidated Interest Expense" shall mean, for any period, the interest
expense (including the interest component in respect of Capital Lease
Obligations), of PGH and its subsidiaries during such period, minus any
interest income of PGH and its subsidiaries during such period, in each case,
8
as determined on a consolidated basis in accordance with GAAP. For purposes
of the foregoing, interest expense shall be determined after giving effect to
any net payments accrued by PGH or its subsidiaries with respect to the
interest rate protection agreements relating to PGH and its subsidiaries.
"Consolidated Net Income" shall mean, for any period, net income or loss
of PGH and its consolidated subsidiaries for such period determined on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded (a) the income (or loss) of any person accrued prior to the date it
becomes a subsidiary of PGH or is merged into or consolidated with PGH or any
of its subsidiaries or the date that such person's assets are acquired by PGH
or any of its subsidiaries and (b) the income of any subsidiary of PGH to the
extent that the declaration or payment of dividends or similar distributions
by such subsidiary of that income is not at the time permitted by operation
of the terms of its charter or any agreement (other than a Credit Facility or
any facility refinancing a Credit Facility in accordance with Section 6.06),
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to PGH or such subsidiary.
"Consolidated Net Worth" shall mean, as at any date of determination, the
consolidated stockholders' equity of PGH and its subsidiaries, as determined
on a consolidated basis in accordance with GAAP plus Qualified Junior
Indebtedness; provided, however, that, for purposes of this definition,
Hybrid Preferred Securities (and any related Qualified Junior Indebtedness)
shall not be included in Consolidated Net Worth to the extent that they would
exceed 10% of Consolidated Net Worth.
"Consolidated Total Debt" shall mean, as of any date of determination,
without duplication, the aggregate principal amount of Indebtedness of PGH
and its subsidiaries outstanding as of such date, determined on a
consolidated basis (other than (a) Indebtedness of the type referred to in
clause (h) of the definition of the term "Indebtedness", except to the extent
of any unreimbursed drawings thereunder and (b) Qualified Junior Indebtedness
(except to the extent that such Qualified Junior Indebtedness exceeds 10% of
Consolidated Net Worth), minus (to the extent the Indebtedness so secured
would otherwise constitute Consolidated Total Debt) the amount of cash or
cash equivalents pledged to a holder or holders thereof (or a trustee or
representative of any such holder or holders) to secure Indebtedness owing to
the same.
"Control" shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a person,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "Controlling" and "Controlled" shall have meanings correlative
thereto.
"Credit Event" shall have the meaning assigned to such term in Section
4.02(a).
"Credit Facilities" shall mean the PA Facility Agreement, the PALLC Credit
Facility, the Powercoal Credit Agreement and the Eastern Facility Agreement.
"Default" shall mean any event or condition which upon notice, lapse of
time or both would constitute an Event of Default.
9
"Depositary Shares" shall mean the American Depositary Shares, evidenced
by American Depositary Receipts, each such American Depositary Share
representing four Shares.
"Director General" shall mean the person appointed from time to time by
the Secretary of State to hold office as the Director General of Electricity
Supply in the United Kingdom for the purpose of the Electricity Act.
"Dollar Borrowing" shall mean a Borrowing comprised of Dollar Loans.
"Dollar Equivalent" shall mean, on any date of determination, with
respect to any amount denominated in any currency other than Dollars, the
equivalent in Dollars of such amount, determined by the Paying Agent pursuant
to Section 1.03(a) using the applicable Exchange Rate with respect to such
currency at the time in effect.
"Dollar Loan" shall mean a Dollar Revolving Loan or a Dollar Term Loan.
"Dollar Revolving Loan" shall mean a Revolving Loan denominated in Dollars
and made pursuant to Section 2.01.
"Dollar Term Loan" shall mean a Term Loan denominated in Dollars. Each
Dollar Term Loan shall be either a Eurocurrency Term Loan or a Base Rate Term
Loan.
"Dollars" or "$" shall mean lawful money of the United States of America.
"Eastern" shall mean Eastern Electricity plc, which is on the date hereof
a public limited company incorporated in England and Wales.
"Eastern Facility Agreement" shall mean the multicurrency revolving loan
agreement, among Eastern, the Arranger, the Agent and the Banks named
therein, in the form attached to the Eastern Facility Letter.
"Eastern Facility Letter" shall mean the letter dated the date hereof from
the Initial Lenders to PA pursuant to which, among other things, the Initial
Lenders agree to provide or cause to be provided to Eastern the facilities
described in the Eastern Facility Agreement.
"Electricity Act" shall mean the United Kingdom Electricity Xxx 0000 and,
unless the context otherwise requires, all subordinate legislation made
pursuant thereto.
"EnergyCo Refinancing Indebtedness" shall have the meaning assigned to
such term in Section 6.01(h).
"environment" shall mean ambient air, surface water and groundwater
(including potable water, navigable water and wetlands), the land surface or
subsurface strata, the workplace or as otherwise defined in any Environmental
Law.
"Environmental Claim" shall mean any written accusation, allegation,
notice of violation, claim, demand, order, directive, cost recovery action or
other cause of action by, or on behalf of, any
10
Governmental Authority or any person for damages, injunctive or equitable
relief, personal injury (including sickness, disease or death), Remedial
Action costs, tangible or intangible property damage, natural resource
damages, nuisance, pollution, any adverse effect on the environment caused by
any Hazardous Material, or for fines, penalties or restrictions, resulting
from or based upon (a) the existence, or the continuation of the existence,
of a Release (including sudden or non-sudden, accidental or non-accidental
Releases), (b) exposure to any Hazardous Material, (c) the presence, use,
handling, transportation, storage, treatment or disposal of any Hazardous
Material or (d) the violation or alleged violation of any Environmental Law
or Environmental Permit.
"Environmental Law" shall mean any and all applicable present and future
treaties, laws, rules, regulations, codes, ordinances, orders, decrees,
judgments, injunctions, notices or binding agreements issued, promulgated or
entered into by any Governmental Authority, relating in any way to the
environment, preservation or reclamation of natural resources, the
management, Release or threatened Release of any Hazardous Material or to
health and safety matters.
"Environmental Permit" shall mean any permit, approval, authorization,
certificate, license, variance, filing or permission required by or from any
Governmental Authority pursuant to any Environmental Law.
"Equity Issuance" shall mean any issuance or sale by a Loan Party of any
shares of capital stock or other equity securities of a Loan Party or any
obligations convertible into or exchangeable for, or giving any person a
right, option or warrant to acquire such securities or such convertible or
exchangeable obligations, except in each case for (a) any issuance or sale to
PacifiCorp or PGH or any of their respective wholly owned subsidiaries, (b)
any issuance of directors' qualifying shares, (c) any issuance or sale to
officers and employees under employee benefit or compensation plans and (d)
any issuance or sale of an interest in a Single Purpose Entity.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single
employer under Section 414(b) or (c) of the Code, or solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
"ERISA Event" shall mean (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder, with respect to a Plan,
except a reportable event for which the requirement of notice to the PBGC has
been waived; (b) the adoption of any amendment to a Plan that would require
the provision of security pursuant to Section 401(a)(29) of the Code or
Section 307 of ERISA; (c) the existence with respect to any Plan of an
"accumulated funding deficiency" (as defined in Section 412 of the Code or
Section 302 of ERISA), whether or not waived; (d) the filing pursuant to
Section 412(d) of the Code or Section 303(d) of ERISA of an application for a
waiver of the minimum funding standard with respect to any Plan; (e) the
incurrence of any liability in excess of $1,000,000 under Title IV of ERISA
with respect to the termination of any Plan or the withdrawal or partial
withdrawal of PGH or any of its ERISA Affiliates from any Plan or
Multiemployer Plan; (f) the receipt by PGH or any ERISA Affiliate from the
PBGC or a plan administrator of a Multiemployer Plan of any notice relating
to the intention to terminate any Plan
11
or Plans or to appoint a trustee to administer any Plan; (g) the receipt by
PGH or any ERISA Affiliate of any notice concerning the imposition of
Withdrawal Liability in excess of $1,000,000 or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA; (h) the occurrence of a "prohibited
transaction" with respect to which PGH or any of its subsidiaries is a party
to the prohibited transaction and is a "disqualified person" (within the
meaning of Section 4975 of the Code) or with respect to which PGH or any such
subsidiary could otherwise be liable; (i) any other event or condition with
respect to a Plan or Multiemployer Plan that could reasonably be expected to
result in liability of PGH in excess of $1,000,000; and (j) any Foreign
Benefit Event.
"Eurocurrency Borrowing" shall mean a Borrowing comprised of Eurocurrency
Loans.
"Eurocurrency Loan" shall mean any Eurocurrency Revolving Loan or
Eurocurrency Term Loan.
"Eurocurrency Revolving Loan" shall mean any Revolving Loan bearing
interest at a rate determined by reference to the Adjusted LIBO Rate in
accordance with the provisions of Article II.
"Eurocurrency Spread" shall mean 2.75%; provided, however, that (a) the
Eurocurrency Spread shall be 2.25% if within 10 Business Days of the initial
Acquisition Borrowing the credit facilities under this Agreement shall have
received credit ratings from Standard & Poor's Ratings Services and Xxxxx'x
Investors Service, Inc. of BB+ and Ba1 or higher, respectively and (b) the
Eurocurrency Spread shall be increased by 0.75% during the Extension Period.
"Eurocurrency Term Borrowing" shall mean a Borrowing comprised of
Eurocurrency Term Loans.
"Eurocurrency Term Loan" shall mean any Term Loan bearing interest at a
rate determined by reference to the Adjusted LIBO Rate in accordance with the
provisions of Article II.
"Event of Default" shall have the meaning assigned to such term in Article
VII.
"Exchange Rate" shall mean, on any day, with respect to any currency other
than Dollars (for purposes of determining the Dollar Equivalent) or Sterling
(for purposes of determining the Sterling Equivalent), the rate at which such
currency may be exchanged into Dollars or Sterling, as the case may be, as
set forth at approximately 11:00 a.m., London time, on such date on the
applicable Reuters World Currency Page. In the event that any such rate does
not appear on any Reuters World Currency Page, the Exchange Rate shall be
determined by reference to such other publicly available service for
displaying exchange rates as may be agreed upon by the Paying Agent and the
Borrower, or, in the absence of such agreement, such Exchange Rate shall
instead be the arithmetic average of the spot rates of exchange of the Paying
Agent in the market where its foreign currency exchange operations in respect
of such currency are then being conducted, at or about 10:00 a.m., local
time, on such date for the purchase of Dollars or Sterling, as the case may
be, for delivery two Business Days later; provided that, if at the time of
any such determination, for any reason, no such spot rate is being quoted,
the Paying Agent may use any reasonable method it deems appropriate to
determine such rate, and such determination shall be presumed correct absent
manifest error.
12
"Exchange Rate Protection Agreement" shall mean any Hedging Agreement that
is designed to protect the Borrower against fluctuations in currency exchange
rates and not for speculation.
"Excluded Assets" shall mean the assets set forth on Schedule 1.01(b).
"Excluded Taxes" shall mean, with respect to the Paying Agent, any Lender,
the Issuing Bank or any other recipient of any payment to be made by or on
account of any obligation of a Loan Party hereunder, (a) income, corporation
or franchise Taxes imposed on (or measured by) such recipient's net income
(including branch profits or similar taxes) imposed as a result of a present
or former connection between such recipient and the jurisdiction of the
Governmental Authority imposing such tax (other than any such connection
arising solely from such recipient having executed, delivered or performed
its obligations or received a payment under, or enforced, this Agreement) and
(b) any withholding Tax other than U.S. withholding Tax that is imposed on
amounts payable to such Lender (i) to the extent it is in effect and would
apply as of the date such Lender becomes a party to this Agreement or (ii) to
the extent it relates to payments received by a new lending office designated
by such Lender (or its assignee) and is in effect and would apply at the time
such lending office is designated, except to the extent that such Lender (or
its assignor, if any) was entitled, at the time of designation of a new
lending office (or assignment), to receive additional amounts from the Loan
Party with respect to such withholding tax pursuant to Section 2.20(a) or
(iii) that is attributable to a Lender's failure to comply with Section
2.20(e).
"Extension Fees" shall have the meaning assigned to such term in Section
2.23.
"Extension Period" shall mean the period commencing on but excluding the
day that is 18 months after the date of the initial Acquisition Borrowing and
ending on and including the date that is 30 months after the date of the
initial Acquisition Borrowing.
"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 that is a Business Day, the
average of the quotations for the day for such transactions received by the
Paying Agent from three Federal funds brokers of recognized standing selected
by it.
"Fees" shall mean the Commitment Fees, the L/C Participation Fees, the
Issuing Bank Fees and the Extension Fees.
"Finance" shall mean PacifiCorp Finance (UK) Limited, a limited company
incorporated in England and Wales, all the outstanding share capital of which
on the date hereof is beneficially owned by Services.
"Financial Officer" of any person shall mean the chief financial officer,
principal accounting officer, Treasurer or Controller of such person.
"Fixed Charges" shall mean, for any period, the sum of (a) Cash Interest
Expense for such period, (b) scheduled principal payments of Indebtedness
made by the Loan Parties to any person
13
other than the Loan Parties during such period and (c) the amount of cash
dividends paid by PGH during such period.
"Foreign Benefit Event" shall mean, with respect to any Foreign Pension
Plan, (a) the existence of unfunded liabilities in excess of the amount
permitted under any applicable law, or in excess of the amount that would be
permitted absent a waiver from a Governmental Authority, (b) the failure to
make the required contributions or payments, under any applicable law, on or
before the due date for such contributions or payments, (c) the receipt of a
notice by a Governmental Authority relating to the intention to terminate any
such Foreign Pension Plan or to appoint a trustee or similar official to
administer any such Foreign Pension Plan, or alleging the insolvency of any
such Foreign Pension Plan and (d) the incurrence of any liability in excess
of $50,000,000 (or the Dollar Equivalent thereof in another currency) by PGH
or any subsidiary under applicable law on account of the complete or partial
termination of such Foreign Pension Plan or the complete or partial
withdrawal of any participating employer therein, (e) the occurrence of any
transaction that is prohibited under any applicable law and could result in
the incurrence of any liability by PGH or any subsidiary, or the imposition
on PGH or any subsidiary of any fine, excise tax or penalty resulting from
any noncompliance with any applicable law, in each case in excess of
$50,000,000 (or the Dollar Equivalent thereof in another currency) and (f)
any other event or condition that would reasonably be expected to result in
liability in excess of $50,000,000 (or the Dollar Equivalent thereof in
another currency) of PGH or any subsidiary.
"Foreign Pension Plan" shall mean any benefit plan which under applicable
law is required to be funded through a trust or other funding vehicle other
than a trust or funding vehicle maintained exclusively by a Governmental
Authority.
"FRNs" shall have the meaning assigned to such term in Section 6.01(i).
"FRN Purchase Agreement" shall mean a note purchase agreement governing
the terms of the FRNs and entered into by the Borrower, the Guarantor and one
or more purchasers of FRNs, which note purchase agreement, on the effective
date thereof, shall contain covenants and events of default substantially
identical to the covenants and events of default set forth in this Agreement
on such date.
"Funding Exchange Rate Protection Agreement" shall mean any Exchange Rate
Protection Agreement that is designed to ensure that the applicable
borrowings under this Agreement and the Powercoal Credit Agreement will
provide a sufficient amount in Sterling (together with borrowings under the
PA Facility Agreement and certain other sources of funds) to pay for the
Shares and for the other purposes specified in Clause 3.1(a)(i) of the PA
Facility Agreement.
"GAAP" shall mean (a) with respect to a person organized under the laws of
the United States or any state or political subdivision thereof, generally
accepted accounting principles in the United States, (b) with respect to a
person organized under the laws of any part of the United Kingdom, generally
accepted accounting principles in the United Kingdom and (c) with respect to
a person organized under the laws of, or treated for accounting purposes as a
resident of, Australia or any state or political subdivision thereof,
generally accepted accounting principles in Australia.
"Goldman" shall mean Xxxxxxx Xxxxx Credit Partners L.P., a Bermuda
limited partnership.
14
"Governmental Authority" shall mean the government of the United States of
America, the United Kingdom, any other nation or any political subdivision
thereof, whether state or local, and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government.
"Guarantee" of or by any person shall mean any obligation, contingent or
otherwise, of such person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other person (the "primary obligor") in
any manner, whether directly or indirectly, and including any obligation of
such person, direct or indirect, (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or to purchase (or to
advance or supply funds for the purchase of) any security for the payment of
such Indebtedness, (b) to purchase or lease property, securities or services
for the purpose of assuring the owner of such Indebtedness of the payment of
such Indebtedness or (c) to maintain working capital, equity capital or any
other financial statement condition or liquidity of the primary obligor so as
to enable the primary obligor to pay such Indebtedness; provided, however,
that the term "Guarantee" shall not include endorsements for collection or
deposit in the ordinary course of business.
"Guarantee Agreement" shall mean the Guarantee Agreement, substantially in
the form of Exhibit E, made by the Guarantor in favor of the Collateral Agent
for the benefit of the Secured Parties.
"Guarantor" shall mean PGH as a party to the Guarantee Agreement.
"Hazardous Materials" shall mean all explosive or radioactive substances
or wastes, hazardous or toxic substances or wastes, pollutants, solid, liquid
or gaseous wastes, including petroleum or petroleum distillates, asbestos or
asbestos containing materials, polychlorinated biphenyls ("PCBs") or
PCB-containing materials or equipment, radon gas, infectious or medical
wastes and all other substances or wastes of any nature regulated pursuant to
any Environmental Law.
"Hedging Agreement" shall mean any rate swap transaction, basis swap,
forward rate transaction, commodity swap, commodity option, equity or equity
index swap, equity or equity index option, bond option, interest rate option,
foreign exchange transaction, cap transaction, floor transaction, collar
transaction, currency swap transaction, cross-currency rate swap transaction,
currency option or any other similar transaction (including any option with
respect to any of the foregoing transactions and any transaction that
involves physical delivery of any commodity in connection with an energy or
energy-related trading business (other than coal)) or any combination of the
foregoing transactions.
"Hybrid Preferred Securities" shall mean any securities, permanent debt
obligations or similar instruments or arrangements (each in this definition
referred to as "preferred securities") issued by a Hybrid Preferred
Securities Subsidiary, where such preferred securities have the following
characteristics: (a) such Hybrid Preferred Securities Subsidiary lends
substantially all of the proceeds from the issuance of such preferred
securities to PGH or any of its subsidiaries in exchange for the applicable
Qualified Junior Indebtedness issued by PGH or any of its subsidiaries;
15
(b) such preferred securities contain terms providing for the deferral of
interest payments on such Qualified Junior Indebtedness; and (c) PGH or any
such subsidiary makes periodic interest payments on such Qualified Junior
Indebtedness, which interest payments are in turn used by the Hybrid
Preferred Securities Subsidiary to make corresponding payments to the holders
of the preferred securities.
"Hybrid Preferred Securities Subsidiary" shall mean any person (a) all of
the common equity interest of which is owned (either directly or indirectly)
through one or more wholly owned Subsidiaries at all times, (b) that has been
formed for the purpose of issuing Hybrid Preferred Securities and (c)
substantially all of the assets of which consist at all times of Qualified
Junior Indebtedness issued by PGH or any of its subsidiaries and payments
made from time to time on such Qualified Junior Indebtedness.
"Indebtedness" of any person shall mean, without duplication, (a) all
obligations of such person for borrowed money, (b) all obligations of such
person evidenced by bonds, debentures, notes or similar instruments (other
than surety and appeal bonds, performance bonds, reclamation bonds and other
obligations of a like nature incurred in the ordinary course of business and
not in respect of borrowed money), (c) all obligations of such person (other
than in the nature of trade accounts payable) under conditional sale or other
title retention agreements relating to property or assets purchased by such
person, (d) all obligations of such person issued or assumed as the deferred
purchase price of property or services (excluding trade accounts payable and
accrued obligations incurred in the ordinary course of business), (e) all
Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien on property owned or acquired by such person, whether or not the
obligations secured thereby have been assumed (provided that, for purposes
hereof, the amount of such Indebtedness shall be limited to the lesser of (x)
the principal amount thereof and (y) the fair market value of such property),
(f) all Guarantees by such person of Indebtedness of others, (g) all Capital
Lease Obligations of such person, (h) all obligations of such person as an
account party in respect of letters of credit and bankers' acceptances and
(i) all obligations of such person for Production Payments from property
operated by or on behalf of such person; provided that, for purposes of the
definition of "Consolidated Total Debt" as used in Section 6.11,
"Indebtedness" shall also include all obligations of such person in respect
of Hedging Agreements (other than any Interest Rate Protection Agreement and
any Exchange Rate Protection Agreement) to the extent the Net Termination
Value of such Hedging Agreements at any time exceeds $275,000,000. For
purposes of this Agreement, the amount of Non-Recourse Indebtedness of PGH
and its subsidiaries included in the calculation of consolidated Indebtedness
of PGH and its subsidiaries at any time shall equal the lesser of (a) the
aggregate principal amount of such Indebtedness and (b) the equity of PGH and
its subsidiaries in the asset or Single Purpose Entity, as the case may be,
relating to such Non-Recourse Indebtedness. For purposes of this Agreement,
the amount of Indebtedness (other than Non-Recourse Indebtedness) of any
partnership, limited liability company or similar pass-through entity (as
used in this definition, a "partnership") in which PGH or a subsidiary is a
general partner or other member or equity holder with unlimited liability (as
used in this definition, a "general partner") and in which there are one or
more Qualified General Partners shall only be included in the calculation of
Indebtedness of PGH and its subsidiaries at any time (a) to the extent of
PGH's or such subsidiary's pro rata share of the interest of the general
partners in the partnership at such time, or (b) if the applicable governing
or other relevant agreement specifies that PGH or any of its subsidiaries is
liable to the partnership or its creditors for a specific percentage of such
partnership's liabilities, to
16
the extent of such specified percentage. For purposes hereof, "Qualified
General Partner" shall mean a general partner of a partnership that (a) is a
person that was not created solely for the purpose of investing in such
partnership and (b) at the time of the investment in such partnership, PGH
reasonably believes that (i) such person has a credit quality (or credit
support) approximately equal to that of PGH or the applicable subsidiary and
(ii) such person will be able to perform its share of the obligations under
such Indebtedness when due.
"Indemnified Taxes" shall mean Taxes other than Excluded Taxes.
"Initial Lenders" shall mean Citibank, Goldman and Xxxxxx.
"Intercompany Loan Agreements" shall mean (a) the Umbrella Loan Agreement
dated as of April 4, 1983, between PacifiCorp and certain of its
subsidiaries, as in effect on the Closing Date, (b) the Intercompany
Borrowing Agreement dated as of April 1, 1991, between PGH and certain of its
subsidiaries and affiliates, as in effect on the Closing Date, and (c) any
additional or substitute intercompany lending agreement, or amendment
thereto, among substantially the same parties and on substantially the same
terms and conditions (other than rates of interest) as any agreement
described in clause (a) or (b) above.
"Interco Transactions" shall mean (a) the creation of a wholly owned
subsidiary of PGH which shall be incorporated under the laws of a state of
the United States ("Interco") and (b) the contribution to Interco by PGH of
PGH's interest in the Borrower and the corporations that are members of PALLC.
"Interest Payment Date" shall mean, with respect to any Loan, the last day
of the Interest Period applicable to the Borrowing of which such Loan is a
part and, in the case of a Eurocurrency Borrowing with an Interest Period of
more than three months' duration, each day that would have been an Interest
Payment Date had successive Interest Periods of three months' duration been
applicable to such Borrowing, and, in addition, the date of any prepayment of
such Borrowing or conversion of such Borrowing to a Borrowing of a different
Type.
"Interest Period" shall mean (a) with respect to any Eurocurrency
Borrowing, the period commencing on the date of such Borrowing and ending on
the numerically corresponding day (or, if there is no numerically
corresponding day, on the last day) in the calendar month that is 1, 2, 3 or
6 months thereafter (and, in the case of (i) a Sterling Revolving Borrowing
made pursuant to Section 2.02(g) three Business Days thereafter, (ii) a
Sterling Borrowing referred to in clause (vi) of Section 2.10, the date
thereafter requested by the Borrower and agreed to by the Paying Agent or
(iii) a Borrowing made or outstanding prior to the Syndication Date, such
shorter period as may be agreed by the Borrower and the Paying Agent in order
to facilitate the syndication of the Loans), as the Borrower may elect and
(b) with respect to any Base Rate Borrowing, the period commencing on the
date of such Borrowing and ending on the earliest of (i) the next succeeding
March 31, June 30, September 30 or December 31, (ii) the Revolving Credit
Maturity Date or the Term Loan Maturity Date, as applicable, and (iii) the
date such Borrowing is converted to a Borrowing of a different Type in
accordance with Section 2.10 or repaid or prepaid in accordance with Section
2.12 or 2.13; provided, however, that if any Interest Period would end on a
day other than a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless, in the case of a Eurocurrency Borrowing
only, such next succeeding Business Day would fall in the next calendar
month, in which case such Interest Period shall end on the next preceding
Business Day. Interest
17
shall accrue from and including the first day of an Interest Period to but
excluding the last day of such Interest Period.
"Interest Rate Protection Agreement" shall mean any Hedging Agreement that
is designed to protect the Borrower against fluctuations in interest rates
and not for speculation.
"Investment Grade Rating" shall mean that the credit rating of a person's
senior unsecured, non-credit-enhanced long-term debt is (a) BBB- or higher,
as determined by Standard & Poor's Ratings Services and (b) Baa3 or higher,
as determined by Xxxxx'x Investors Service, Inc.
"Issuing Bank Fees" shall have the meaning assigned to such term in
Section 2.05(b).
"Judgment Currency" shall have the meaning assigned to such term in
Section 9.16.
"L/C Commitment" shall mean the commitment of the Issuing Bank to issue
Letters of Credit pursuant to Section 2.22.
"L/C Disbursement" shall mean a payment or disbursement made by the
Issuing Bank pursuant to a Letter of Credit.
"L/C Exposure" shall mean at any time the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit denominated in Dollars at such
time, (b) the Dollar Equivalent of the aggregate undrawn amount of all
outstanding Letters of Credit denominated in Sterling at such time, (c) the
aggregate principal amount of all L/C Disbursements in respect of Letters of
Credit denominated in Dollars that have not yet been reimbursed at such time
and (d) the Dollar Equivalent of the aggregate principal amount of all L/C
Disbursements in respect of Letters of Credit denominated in Sterling that
have not yet been reimbursed at such time. The L/C Exposure of any Revolving
Credit Lender at any time shall mean its Pro Rata Percentage of the total L/C
Exposure at such time.
"L/C Participation Fee" shall have the meaning assigned to such term in
Section 2.05(b).
"Xxx Ranch Transfer" shall mean the transfer, directly or indirectly, to
Powercoal (or a subsidiary thereof) of all the equity ownership interests in
Xxx Ranch Coal Company or Gold Fields Mining Corporation or any of its
subsidiaries.
"Lenders" shall mean the Initial Lenders and any other financial
institution that has become a party hereto pursuant to an Assignment and
Acceptance (other than any such person that has ceased to be a party hereto
pursuant to an Assignment and Acceptance).
"Letter of Credit" shall mean any letter of credit issued pursuant to
Section 2.22. Letters of Credit may be denominated in Dollars or Sterling.
"Leverage Ratio" shall mean, as of the last day of any fiscal quarter, the
ratio of (a) Consolidated Total Debt as of such date to (b) Consolidated
EBITDA for the period of four consecutive fiscal quarters ended on such date.
18
"LIBO Rate" shall mean, with respect to any Eurocurrency Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Dow Xxxxx Service (or
on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the Paying
Agent from time to time for purposes of providing quotations of interest
rates applicable to Dollar or Sterling deposits, as applicable, in the London
interbank market) at approximately 11:00 a.m., London time, two Business Days
prior to (in the case of a Eurocurrency Loan denominated in Dollars) or on
the day of (in the case of a Eurocurrency Loan denominated in Sterling) the
commencement of such Interest Period, as the rate for Dollar or Sterling
deposits, as applicable, with a maturity comparable to such Interest Period.
In the event that such rate is not available at such time for any reason,
then the "LIBO Rate" with respect to such Eurocurrency Borrowing for such
Interest Period shall be the rate at which Dollar or Sterling deposits, as
applicable, of $5,000,000 or L5,000,000, respectively, and for a maturity
comparable to such Interest Period are offered by the principal London office
of the Paying Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to
(in the case of a Eurocurrency Loan denominated in Dollars) or on the day of
(in the case of a Eurocurrency Loan denominated in Sterling) the commencement
of such Interest Period.
"License" shall mean any Public Electricity Supply License and Electricity
Generation License issued pursuant to Section 6(l) of the Electricity Act, to
Services or any of its subsidiaries, as modified or supplemented from time to
time, and if any such License is split by or with the consent of the Director
General into more than one new license, each of such new licenses.
"Licenseholder" shall mean at any time Services or any of its subsidiaries
which then holds a License.
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement relating to such asset
and (c) any other preferential arrangement that has substantially the same
practical effect as a security interest.
"Loan Documents" shall mean this Agreement, the Guarantee Agreement and
the Security Documents.
"Loan Parties" shall mean the Borrower and the Guarantor.
"Loans" shall mean the Revolving Loans and the Term Loans.
"Margin Stock" shall have the meaning assigned to such term in Regulation
U.
"Material Adverse Effect" shall mean (a) a material adverse effect on the
business, assets, liabilities, operations or condition (financial or
otherwise) of the Loan Parties and their subsidiaries, taken as a whole, (b)
material impairment of the ability of either Loan Party to consummate the
Transactions or to perform its obligations under the Loan
19
Documents to which it is or will be a party or (c) material impairment of the
rights of or benefits available to the Lenders under the Loan Documents,
excluding, in each case, as a direct result of changes of price levels or
pricing in respect of the supply and/or distribution of electricity pursuant
to the terms of any of the Licenses.
"Material Hedging Obligations" shall mean payment obligations in respect
of one or more Hedging Agreements with a single counterparty (or its
Affiliates) that have Negative Termination Values exceeding $50,000,000 in
aggregate amount.
"Xxxxxx" shall mean Xxxxxx Guaranty Trust Company of New York, a New York
banking corporation.
"Multiemployer Plan" shall mean a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Negative Termination Value" shall mean, with respect to any Hedging
Agreement, the amount (if any) that would be required to be paid by PGH or
any subsidiary if such Hedging Agreement were terminated by reason of a
default by it or other termination event relating to PGH or any subsidiary.
The Negative Termination Value of any Hedging Agreement at any date shall be
determined (a) as of the end of the most recent fiscal quarter ended on or
prior to such date if such Hedging Agreement was then outstanding or (b) as
of the date such Hedging Agreement is entered into if it is entered into
after the end of such fiscal quarter; provided, however, that if an agreement
between PGH or any subsidiary and the relevant counterparty provides that,
upon any such termination by such counterparty, one or more other Hedging
Agreements (if any then exist) between PGH or any subsidiary and such
counterparty would also terminate and the amount (if any) payable by PGH or
any subsidiary would be a net amount reflecting the termination of all
Hedging Agreements so terminated, then the Negative Termination Value of all
the Hedging Agreements subject to such netting shall be, at any date, a
single amount equal to such net amount (if any) payable by PGH or any
subsidiary determined as of the later of (a) the end of the most recently
ended fiscal quarter or (b) the date on which the most recent Hedging
Agreement subject to such netting was entered into.
"Net Adjustment Amount" shall mean, for any period, the Adjustment Amount
less the aggregate Adjustment Amounts applied to reduce Consolidated EBITDA
in prior periods.
"Net Cash Proceeds" shall mean (a) with respect to any Asset Sale or a
sale permitted by Section 6.05(a)(D), the cash proceeds thereof received by
PGH, the Borrower or any of their respective subsidiaries (including cash and
cash equivalents and cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but only
as and when received), net of (i) costs of sale (including payment of the
outstanding principal amount of, premium or penalty, if any, interest and
other amounts on any Indebtedness (other than Loans) (x) secured by a Lien
permitted pursuant to Section 6.02 on such assets and required to be repaid
under the terms thereof as a result of such Asset Sale or (y) of a Single
Purpose Entity owning such assets), (ii) taxes paid or payable as a result
thereof, (iii) amounts provided as a reserve against any liabilities under
any indemnification obligations associated with such Asset Sale (except that,
to the extent and at the time any such amounts are released from such
reserve, such amounts shall constitute Net Cash Proceeds), (iv) amounts used
by subsidiaries of the Borrower to prepay Indebtedness under the applicable
Credit Facility or reinvested by subsidiaries of the Borrower as permitted or
not prohibited by the terms of the applicable Credit Facility and (v) amounts
required to be paid under applicable law, the constitutive documents of any
subsidiary of the Borrower or any agreement
20
entered into prior to such Asset Sale to holders of a minority interest in
the subsidiary that receives such cash proceeds or any direct or indirect
parent thereof; provided, however, that, in the event the Asset Sale is a
result of a Casualty Event or Condemnation Event, the cash proceeds thereof
for purposes of this definition shall not include proceeds thereof to the
extent they are used (or committed to be used) to replace or repair the
damaged or condemned property, as applicable, within 180 days of receipt of
such proceeds, in each case so long as no Default or Event of Default shall
have occurred and be continuing and (b) with respect to any Equity Issuance
or any issuance or other disposition of Indebtedness for borrowed money, the
cash proceeds thereof net of underwriting commissions or placement fees and
expenses directly incurred in connection therewith.
"Net Termination Value" shall mean (a) with respect to all Hedging
Agreements (other than any Interest Rate Protection Agreement and any
Exchange Rate Protection Agreement), the difference between (a) the aggregate
amounts (if any) that would be required to be paid by PGH or any of its
subsidiaries if such Hedging Agreements were terminated by reason of a
default relating to PGH or any subsidiary, and (b) the aggregate amounts (if
any) that PGH or any subsidiary would be entitled to receive if such Hedging
Agreements were terminated by reason of a default relating to PGH or any
subsidiary and (b) the NUG Contract Termination Value. The Net Termination
Value shall be determined (a) as of the end of the most recent fiscal quarter
ended on or prior to such date if such Hedging Agreement (or NUG Contract)
was then outstanding or (b) as of the date such Hedging Agreement (or NUG
Contract) is entered into if it is entered into after the end of such fiscal
quarter.
"Non-Recourse Indebtedness" of any person shall mean at any time
Indebtedness secured by a Lien in or upon one or more assets of such person
where the rights and remedies of the holder of such Indebtedness in respect
of such Indebtedness do not extend to any other assets of such person.
Notwithstanding the foregoing, Indebtedness of any person shall not fail to
constitute Non-Recourse Indebtedness by reason of the inclusion in any
document evidencing, governing, securing or otherwise relating to such
Indebtedness of provisions to the effect that such person shall be liable,
beyond the assets securing such Indebtedness, for (a) misapplied moneys,
including insurance and condemnation proceeds and security deposits, (b)
indemnification by such person in favor of holders of such Indebtedness and
their affiliates in respect of liabilities to third parties, including
environmental liabilities, (c) breaches of customary representations and
warranties given to the holders of such Indebtedness and (d) such other
similar obligations as are customarily excluded from the provisions that
otherwise limit the recourse of commercial lenders making so-called
"nonrecourse" loans to institutional borrowers. Indebtedness of a Single
Purpose Entity shall constitute Non-Recourse Indebtedness of such Single
Purpose Entity.
"NUG Contract" shall mean a contract of PGH or any of its subsidiaries to
supply power or energy to a Single Purpose Entity in connection with a NUG
Transaction, or otherwise to support the performance of a Single Purpose
Entity in a NUG Transaction.
"NUG Contract Termination Value" shall mean , with respect to all NUG
Contracts, (a) the net amount, if any, that would be required to be paid by
PGH or any of its subsidiaries (other than a Single Purpose Entity) if such
NUG Contracts (to the extent not covered by Qualified NUG Hedging Agreements)
21
were terminated by reason of a default relating to PGH or any of its
subsidiaries in excess of (b) the amount, if any, that PGH or any of its
subsidiaries would be entitled to receive if such NUG Contracts (to the
extent not covered by Qualified NUG Hedging Agreements) were terminated by
reason of a default relating to PGH or any of its subsidiaries; provided,
however, that for purposes of determining coverage by a Qualified NUG Hedging
Agreement, if the counterparty does not have Investment Grade Ratings (or
does not provide a guarantee from an entity with Investment Grade Ratings),
the Qualified NUG Hedging Agreement shall be deemed to provide one-half of
the coverage it nominally provides.
"NUG Transaction" shall mean a transaction entered into by a Single
Purpose Entity, the principal purpose of which is to restructure the
contracts relating to, or financing of, an existing independent power
project, excluding any such transactions that were consummated prior to
December 31, 1997.
"Obligations" shall mean all obligations defined as "Obligations" in the
Guarantee Agreement and the Security Documents.
"Offer" shall mean the offer by Xxxxxxx Sachs International on behalf of
PA to acquire all of the outstanding Shares (including the Shares represented
by Depositary Shares), substantially on the terms and conditions referred to
in the Press Release, as amended, supplemented or otherwise modified.
"Offer Account" shall mean the account in the name of PA opened with
Citibank, N.A. on or before the Unconditional Date for the purposes of
effecting the acquisition of the Shares.
"Offer Conditions Precedent" shall mean the conditions precedent set forth
on Schedule 1.01(c).
"Offer Document" shall mean the document to be delivered to the
shareholders of TEG containing the formal Offer.
"Offer Termination Date" shall mean the earliest date (as notified by the
Borrower to the Paying Agent in writing) on which all of the following have
occurred: (a) all payments in respect of acceptances of the cash alternative
in the Offer have been made in full; (b) no further such acceptances are
possible; and (c) all procedures pursuant to Section 428 et seq. of the U.K.
Companies Xxx 0000 that are capable of being implemented have been completed
and all payments pursuant thereto to shareholders in TEG have been made in
full.
"Open Market Shares" shall mean the Shares (including any such Shares
represented by Depositary Shares) purchased by PGH (or any Affiliate thereof)
in the open market prior to the Unconditional Date.
"Other Taxes" shall mean any and all present or future stamp or
documentary taxes arising from any payment made under any Loan Document or
from the execution, delivery or enforcement of, or otherwise with respect to,
any Loan Document imposed by any Governmental Authority in the United States,
the United Kingdom or the jurisdiction of any Payment Location.
"PA" shall mean PacifiCorp Acquisitions, an unlimited company incorporated
in England and Wales, all the outstanding share capital of which on the date
hereof is beneficially owned by Finance.
22
"PA Agent" shall mean Citibank International plc, in its capacity as
facility agent for the PA Lenders under the PA Facility Agreement, and any
successor or assign in such capacity.
"PA Facility Agreement" shall mean the facility agreement dated 3
February, 1998, among PA, Services, Finance, the PA Lenders, the PA Agent and
the Arrangers, the Security Agent and the L/C Bank named therein.
"PA Lenders" shall mean the financial institutions that are parties from
time to time to the PA Facility Agreement as lenders thereunder.
"PacifiCorp" shall mean PacifiCorp, a corporation organized under the laws
of Oregon.
"PALLC" shall mean PacifiCorp Australia L.L.C., an Oregon limited
liability company.
"PALLC Credit Facility" shall mean the Credit Facility dated as of
December 11, 1995, as amended by the First Amending Agreement dated as of
December 16, 1996, and as further amended by the Deed of Amendment and
Release dated on or about September 5, 1997, in each case, by and among
PALLC, as borrower, the lenders referred to therein and Citibank, as
administrative agent, as the same may be amended, extended, renewed,
restated, supplemented or otherwise modified, refinanced, refunded, replaced
or substituted (in each case, in whole or in part, and without limitation as
to amount, terms, conditions, covenants and other provisions) from time to
time. The term "PALLC Credit Facility" shall include all related or
ancillary documents, including, without limitation, any guarantee agreements
and security documents.
"Payment Location" shall mean an office, branch or other place of business
of the Borrower.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA.
"PCI" shall mean PacifiCorp Credit, Inc., a corporation organized under
the laws of Oregon, all the outstanding capital stock of which on the date
hereof is beneficially owned by PacifiCorp.
"Peabody Holding" shall mean Peabody Holding Company Inc., a corporation
organized under the laws of New York, all the outstanding capital stock of
which on the date hereof is directly owned by Peabody Investments.
"Peabody Investments" shall mean Peabody Investments, Inc., a corporation
organized under the laws of Delaware, all the outstanding capital stock of
which on the date hereof is indirectly owned by TEG.
"Peabody Transfer" shall mean the direct or indirect transfer by PA or any
of its subsidiaries to Powercoal of all the issued and outstanding capital
stock of Peabody Holding.
23
"Permitted Investments" shall mean:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America or the United Kingdom (or by any agency thereof to the extent
such obligations are backed by the full faith and credit of the United
States of America or the United Kingdom), in each case maturing within
one year from the date of acquisition thereof;
(b) investments in commercial paper (or money market funds
substantially all the assets of which are invested in such commercial
paper) maturing within 270 days from the date of acquisition thereof and
having, at such date of acquisition, one of the two highest credit
ratings obtainable from Standard & Poor's Ratings Services or from
Xxxxx'x Investors Service, Inc.;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within one year from the date of acquisition
thereof issued or guaranteed by or placed with, and money market deposit
accounts issued or offered by, any United States or United Kingdom
office of any commercial bank organized under the laws of the United
States of America or any State thereof or the United Kingdom that has a
combined capital and surplus and undivided profits of not less than
$250,000,000;
(d) obligations issued by any state or political subdivision thereof,
having a rating of A or better by Standard & Poor's Ratings Services, or
a similar rating by any other nationally recognized rating agency with
maturities of not more than one year;
(e) investments in "money market funds" within the meaning of Rule
2a-7 of the Investment Company Act of 1940, as amended (the "1940 Act");
provided, however, that neither PGH nor any of its subsidiaries shall
invest in any money market fund that invests in "Second Tier Securities"
and "Second Tier Conduit Securities" within the meaning of Rule
2a-7(a)(20) of the 1940 Act; provided, further, that investments of PGH
and its subsidiaries in any particular money market fund shall not
exceed 5% of the net assets of such fund; and
(f) repurchase agreements for securities of the types described above;
provided that such repurchase agreements are collateralized by
securities of the type referred to above.
"person" shall mean any natural person, corporation, limited liability
company, business trust, joint venture, association, company, partnership or
government, or any agency or political subdivision thereof.
"PFS" shall mean PacifiCorp Financial Services, Inc., a corporation
organized under the laws of Oregon.
"PGH Equity Contribution" shall have the meaning assigned to such term in
the preamble to this Agreement.
24
"Plan" shall mean any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 307 of ERISA, and in respect of which the Borrower
or any ERISA Affiliate is (or, if such plan were terminated, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section
3(5) of ERISA.
"Pledge Agreement" shall mean the Pledge Agreement, substantially in the
form of Exhibit F, among the Loan Parties, Pan-Pacific Global Corporation,
Eastern Investment Company and the Collateral Agent for the benefit of the
Secured Parties.
"Powercoal" shall mean PacifiCorp Powercoal LLC, an Oregon limited
liability company, all the membership interests of which on the date hereof
are directly owned by PGH.
"Powercoal Credit Agreement" shall mean the credit agreement dated as of
the Closing Date, among Powercoal, the lenders from time to time party
thereto and Citibank, as paying agent, collateral agent, issuing bank and
swingline lender. The term "Powercoal Credit Agreement" shall include all
related or ancillary documents, including, without limitation, any guarantee
agreements and security documents.
"Powercoal/PA Loans" shall have the meaning assigned to such term in the
Powercoal Credit Agreement.
"PPM" shall mean PacifiCorp Power Marketing, Inc., a corporation organized
under the laws of Oregon.
"PPM Contribution" shall mean the direct or indirect contribution of all
the capital stock of PPM by PGH to Powercoal.
"Prepayment Account" shall have the meaning assigned to such term in
Section 2.13(g).
"Press Release" shall mean the agreed form of press release issued on the
Closing Date by which the Offer is announced.
"Prime Rate" shall mean the rate of interest per annum publicly announced
from time to time by the Paying Agent as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective on the date such change is publicly announced as being effective.
"Pro Rata Percentage" shall mean, with respect to any Revolving Credit
Lender, the percentage of the Total Revolving Credit Commitments represented
by such Lender's Revolving Credit Commitment. If the Revolving Credit
Commitments have terminated or expired, the Pro Rata Percentages shall be
determined based upon the Revolving Credit Commitments most recently in
effect, giving effect to any assignments.
"Production Payments", with respect to any person, shall mean all
production payment obligations and other similar obligations with respect to
natural resources of such person that are recorded as a liability or deferred
revenue on the financial statements of such person in accordance with GAAP.
25
"Qualified Junior Indebtedness" shall mean (a) without duplication, any
Hybrid Preferred Securities (and any guarantee by PGH or any of its
subsidiaries of any Hybrid Preferred Securities) and any unsecured
subordinated debt issued by PGH or any of its subsidiaries to a Hybrid
Preferred Securities Subsidiary in connection with the issuance of Hybrid
Preferred Securities; provided that the terms of such subordinated debt (i)
require no principal payments due on a date that is earlier than 12 months
after the Term Loan Maturity Date; (ii) contain provisions permitting the
borrower thereof to defer the payment of interest in certain circumstances;
(iii) provide for a fixed interest rate which, in the good faith judgment of
a Financial Officer of PGH or such subsidiary, is consistent with the market
at the time of issuance for similar loans; and (iv) contain subordination
provisions that are reasonably satisfactory to the Initial Lenders; and (b)
loans made to any Loan Party by an Affiliate of such Loan Party (other than a
subsidiary); provided that (i) such loans do not require any payment in cash
(whether of principal, interest or otherwise) prior to a date that is earlier
than 12 months after the Term Loan Maturity Date and (ii) such loans are
subordinated to the prior payment in full of the Obligations pursuant to
subordination provisions reasonably acceptable to the Initial Lenders.
"Qualified NUG Hedging Agreement" shall mean a contract entered into by a
subsidiary of PGH to obtain power or energy to assure such Subsidiary's
ability to perform a NUG Contract which contract is with (a) a counterparty
with an Investment Grade Rating (or guaranteed by an entity with an
Investment Grade Rating), or (b) an entity which (i) owns facilities adequate
to generate and supply the power or energy, (ii) has a minimum consolidated
net worth of at least $200,000,000 and a maximum ratio of debt to
capitalization of 70%, and (iii) either (x) has a credit rating of BB/Ba2 or
higher and posts partial security for its counterparty obligations under such
Qualified NUG Hedging Agreement or (y) posts 100% security for its
counterparty obligations under such Qualified NUG Hedging Agreement.
"Refinanced Indebtedness" shall mean the Indebtedness of PGH listed on
Schedule 1.01(d).
"Refinancing Indebtedness" shall have the meaning assigned to such term in
Section 6.01(g).
"Register" shall have the meaning given to such term in Section 9.04(d).
"Regulation G" shall mean Regulation G of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.
"Regulation T" shall mean Regulation T of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.
"Regulation U" shall mean Regulation U of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.
"Regulation X" shall mean Regulation X of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.
"Release" shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing,
depositing, dispersing, emanating or migrating of any Hazardous Material in,
into, onto or through the environment.
26
"Remedial Action" shall mean (a) "remedial action" as such term is defined
in CERCLA, 42 U.S.C. Section 9601(24), or (b) all other actions required by
any Governmental Authority or voluntarily undertaken to: (i) cleanup,
remove, treat, xxxxx or in any other way address any Hazardous Material in
the environment; (ii) prevent the Release or threat of Release or minimize
the further Release of any Hazardous Material so it does not migrate or
endanger or threaten to endanger public health, welfare or the environment;
or (iii) perform studies and investigations in connection with, or as a
precondition to, clause (i) or (ii) above.
"Required Lenders" shall mean, at any time, Lenders having Loans, L/C
Exposure and unused Revolving Credit and Term Loan Commitments representing
at least a majority of the sum of all Loans outstanding, L/C Exposure and
unused Revolving Credit and Term Loan Commitments at such time; provided,
however, that, with respect to any waivers of the conditions set forth in
Section 4.02(a)(v), the term "Required Lenders" shall also include each
Initial Lender.
"Reset Date" shall have the meaning set forth in Section 1.03(a).
"Responsible Officer" of any person shall mean any executive officer or
Financial Officer of such person and any other officer or similar official
thereof responsible for the administration of the obligations of such person
in respect of this Agreement.
"Revolving Credit Borrowing" shall mean a Borrowing comprised of Revolving
Loans.
"Revolving Credit Commitment" shall mean, with respect to each Lender, the
commitment of such Lender to make Revolving Loans, as such commitment may be
(a) reduced from time to time pursuant to Section 2.09 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 9.04. The initial amount of each Lender's Revolving
Credit Commitment is set forth on Schedule 2.01 or in the Assignment and
Acceptance pursuant to which such Lender shall have assumed its Revolving
Credit Commitment, as applicable.
"Revolving Credit Exposure" shall mean, with respect to any Lender at any
time, the sum of (a) the aggregate principal amount of all outstanding Dollar
Revolving Loans of such Lender at such time, (b) the Dollar Equivalent of the
aggregate principal amount of all outstanding Sterling Revolving Loans of
such Lender at such time and (c) the aggregate amount of such Lender's L/C
Exposure at such time.
"Revolving Credit Lender" shall mean a Lender with a Revolving Credit
Commitment.
"Revolving Credit Maturity Date" shall mean the date that is 18 months
after the date of the initial Acquisition Borrowing, unless the Borrower
elects to extend such date in accordance with Section 2.23, in which case the
term "Revolving Credit Maturity Date" shall mean the date that is 30 months
after the date of the initial Acquisition Borrowing.
"Revolving Loans" shall mean the revolving loans made by the Lenders to
the Borrower pursuant to Section 2.01(b). Each Revolving Loan shall be a
Eurocurrency Revolving Loan or a Base Rate Revolving Loan and shall be a
Dollar Revolving Loan or a Sterling Revolving Loan.
"Secretary of State" shall mean the Secretary of State as referred to in
the Electricity Act.
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"Secured Parties" shall have the meaning assigned to such term in the
Pledge Agreement.
"Security Documents" shall mean the Pledge Agreement, the Collateral
Assignment and each of the security agreements and other instruments and
documents executed and delivered pursuant to any of the foregoing or pursuant
to Section 5.09.
"Services" shall mean PacifiCorp Services Limited, a limited company
incorporated in England and Wales, all of the outstanding share capital of
which on the date hereof is directly owned by the Borrower.
"Shares" shall mean the ordinary shares of TEG (par value 10 xxxxx per
share).
"Significant Subsidiary" shall mean, on any date, any subsidiary (other
than a Single Purpose Entity) that (a) has total assets, determined on a
consolidated basis with its subsidiaries, as of the end of the fiscal quarter
preceding such date equal to or greater than 2.5% of the total assets of the
Borrower and its subsidiaries on a consolidated basis as of the end of such
fiscal quarter, (b) has income from continuing operations before income
taxes, extraordinary items and the cumulative effect of a change in
accounting principles ("Adjusted Income"), determined on a consolidated basis
with its subsidiaries, for the four fiscal quarter period preceding such date
equal to or greater than 2.5% of the Adjusted Income of the Borrower and its
subsidiaries on a consolidated basis for such period, in all cases as
determined in accordance with GAAP or (c) is a "Significant Subsidiary" under
and as defined in any other Credit Facility.
"Single Purpose Entity" shall mean a person, other than an individual,
that (a) is organized solely for the purpose of holding, directly or
indirectly, an ownership interest in one entity or property or in a group of
related properties (real or personal, tangible or intangible) used for a
single project, that is acquired, purchased or constructed or in the case of
previously undeveloped, non-income generating property of the applicable Loan
Party or any of its subsidiaries, developed by the applicable Loan Party or
any of its subsidiaries, (b) does not engage in any business unrelated to
such entity or property or the financing thereof and (c) does not have any
assets or Indebtedness other than those related to its interest in such
entity or property or the financing thereof. For purposes of this Agreement,
the term "Single Purpose Entity" shall be deemed to include a Hybrid
Preferred Securities Subsidiary, any Receivables Subsidiary (as defined in
the Powercoal Facility) or a Subsidiary of PA that is a "Project Finance
Subsidiary" (as defined in the PA Facility Agreement).
"Spring Creek" shall mean Spring Creek Coal Company, a corporation
organized under the laws of Montana.
"Spring Creek Coal Supply Contract" shall mean the Coal Supply Agreement
dated June 2, 1978, between Spring Creek and Utility Fuels, Inc., as such
agreement may be amended from time to time.
"Spring Creek Loan Agreement" shall mean the Loan Commitment and Agreement
dated as of June 2, 1993, between Spring Creek and PGH (under which PGH
designated PCI as the affiliate to make the initial loan of $225,000,000 to
Spring Creek), as such agreement may be amended from time to time.
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"Spring Creek Loan Documents" shall mean the "Loan Documents" (as such
term is defined in Section 1.1 of the Spring Creek Loan Agreement as in
effect on the Closing Date), as such Loan Documents may be amended from time
to time.
"Spring Creek Note" shall mean the promissory note issued by Spring Creek
to PCI pursuant to the Spring Creek Loan Agreement, as such note may be
amended from time to time.
"Spring Creek Obligations" shall mean the obligations under the Spring
Creek Loan Documents of Spring Creek, Spring Creek's affiliates and each
issuer of a Letter of Credit (as defined in Section 1.1 of the Spring Creek
Loan Agreement as in effect on the Closing Date), in each case whether now
existing or hereafter issued or arising.
"Spring Creek Participation Agreement" shall mean the Amended and Restated
Participation Agreement dated as of June 2, 1993, between PCI and PGH (under
which PGH purchased its interest in the Spring Creek Obligations from PCI),
as such agreement may be amended from time to time.
"Statutory Reserves" shall mean, with respect to Dollars, a fraction
(expressed as a decimal), the numerator of which is the number one and the
denominator of which is the number one minus the aggregate of the maximum
reserve, liquid asset or similar percentages (including any marginal,
special, emergency or supplemental reserves) expressed as a decimal
established by any Governmental Authority of the United States to which banks
are subject for any category of deposits or liabilities customarily used to
fund loans in Dollars or by reference to which interest rates applicable to
Loans in Dollars are determined. Such reserve, liquid asset or similar
percentages shall include those imposed pursuant to Regulation D of the Board
(and for purposes of Regulation D, Eurocurrency Loans denominated in Dollars
shall be deemed to constitute Eurocurrency Liabilities) and, with respect to
the Base CD Rate, shall be the percentages applicable to new, negotiable
nonpersonal time deposits in Dollars of over $100,000 with maturities
approximately equal to three months. Loans shall be deemed to be subject to
such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under Regulation D or any other applicable law, rule or regulation. Statutory
Reserves shall be adjusted automatically on and as of the effective date of
any change in any reserve percentage.
"Sterling", "L" or "xxxxx" shall mean the lawful currency for the time
being of the United Kingdom.
"Sterling Borrowing" shall mean a Borrowing comprised of Sterling Loans.
"Sterling Equivalent" shall mean, on any date of determination, with
respect to any amount denominated in Dollars, the equivalent in Sterling of
such amount, determined by the Paying Agent pursuant to Section 1.03(a) using
the applicable Exchange Rate then in effect.
"Sterling Loan" shall mean a Sterling Revolving Loan or a Sterling Term
Loan.
"Sterling Revolving Loan" shall mean a Revolving Loan denominated in
Sterling.
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"Sterling Term Loan" shall mean a Term Loan denominated in Sterling. Each
Sterling Term Loan shall be a Eurocurrency Term Loan.
"subsidiary" shall mean, with respect to any person (herein referred to as
the "parent"), any corporation, partnership, association or other business
entity of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or more
than 50% of the general partnership interests are, at the time any
determination is being made, owned, controlled or held by the parent.
"Syndication Date" shall mean the earlier of (a) the date specified by the
Paying Agent as the date on which primary syndication of the Commitments and
the outstanding Loans is completed and (b) the date that is six months after
the Unconditional Date.
"Tax Sharing Agreements" shall mean the U.K. Tax Sharing Agreement and the
U.S. Tax Sharing Policy.
"Tax Sharing Payment" shall mean any payment made pursuant any Tax Sharing
Agreement.
"Tax" or "Taxes" shall mean any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any
Governmental Authority in the United States, the United Kingdom or the
jurisdiction of any Payment Location.
"TEG" shall mean The Energy Group PLC, which is on the date hereof a
public limited company incorporated in England and Wales.
"TEG Group" shall mean TEG and its subsidiaries.
"Term Borrowing" shall mean a Borrowing comprised of Term Loans.
"Term Loan Availability Period" shall mean the period from and including
the Closing Date to and including the Termination Date.
"Term Loan Commitment" shall mean, with respect to each Lender, the
commitment of such Lender to make Term Loans hereunder, as such commitment
may be (a) reduced from time to time pursuant to Section 2.09 and (b) reduced
or increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 9.04. The initial amount of each Lender's Term Loan
Commitment is set forth on Schedule 2.01 or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its Term Loan Commitment, as
applicable.
"Term Loan Maturity Date" shall mean the date that is 18 months after the
initial Acquisition Borrowing.
"Term Loans" shall mean the term loans made by the Lenders to the Borrower
pursuant to Section 2.01(a). Each Term Loan shall be a Dollar Term Loan or a
Sterling Term Loan.
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"Termination Date" shall mean the earliest of (a) the date that is 200
days after the Announcement Date, (b) the later of (i) the date that is three
months after the Unconditional Date and (ii) the date that is 49 days after
the first date on which PA acquires 90% of the outstanding Shares to which
the Offer relates and (c) the date that is 200 days after the date hereof.
"Three-Month Secondary CD Rate" shall mean, for any day, the secondary
market rate for three-month certificates of deposit reported as being in
effect on such day (or, if such day shall not be a Business Day, the next
preceding Business Day) by the Board through the public information telephone
line of the Federal Reserve Bank of New York (which rate will, under the
current practices of the Board, be published in Federal Reserve Statistical
Release H.15(519) during the week following such day), or, if such rate shall
not be so reported on such day or such next preceding Business Day, the
average of the secondary market quotations for three-month certificates of
deposit of major money center banks in New York City received at
approximately 10:00 a.m., New York City time, on such day (or, if such day
shall not be a Business Day, on the next preceding Business Day) by the
Paying Agent from three New York City negotiable certificate of deposit
dealers of recognized standing selected by it.
"Total Revolving Credit Commitment" shall mean, at any time, the aggregate
amount of the Revolving Credit Commitments, as in effect at such time.
"TPC" shall mean TPC Corporation, a corporation organized under the laws
of Delaware.
"TPC Contribution" shall mean the direct or indirect contribution of all
the capital stock of TPC by PGH to Powercoal.
"Transaction Documents" shall mean (a) the Offer Document, (b) the Loan
Documents, (c) the PA Facility Agreement, (d) the Powercoal Credit Agreement,
(e) the PALLC Credit Facility and (f) the Eastern Facility Agreement and, in
each case, the agreements, documents and instruments to be executed and
delivered in connection therewith.
"Transactions" shall mean the Offer, the transactions contemplated in
connection therewith and the transactions contemplated by the Transaction
Documents, including the TPC Contribution, the PPM Contribution, the Peabody
Transfer and the Citizens Transfer.
"Type", when used in reference to any Loan or Borrowing, shall refer to
the Rate by reference to which interest on such Loan, or on the Loans
comprising such Borrowing, is determined. For purposes hereof, the term
"Rate" shall include the Adjusted LIBO Rate and the Base Rate.
"U.K. Tax Sharing Agreement" shall mean the agreement to be entered into,
among the Borrower and certain of its subsidiaries (including TEG and certain
of its subsidiaries which are, directly or indirectly, at least 75% owned by
TEG), substantially in the form set forth as Exhibit G hereto.
"U.S. Tax Sharing Policy" shall mean the Income Tax Allocation Policy of
PacifiCorp and its subsidiaries attached as Exhibit H hereto, as in effect
from time to time.
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"Unconditional Date" shall have the meaning assigned to such term in the
PA Facility Agreement.
"wholly owned subsidiary" shall mean, with respect to any person (herein
referred to as the "parent"), a subsidiary which securities (except for
directors' qualifying shares) or other ownership interests representing 100%
of the equity or 100% of the ordinary voting power (other than directors'
qualifying shares) or 100% of the general partnership interests are, at the
time any determination is being made, owned, controlled or held by the parent
or one or more wholly owned subsidiaries of the parent or by the parent and
one or more wholly owned subsidiaries of the parent.
"Withdrawal Liability" shall mean liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Terms Generally. The definitions in Section 1.01 shall
apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without
limitation". All references herein to Articles, Sections, Exhibits and
Schedules shall be deemed references to Articles and Sections of, and
Exhibits and Schedules to, this Agreement unless the context shall otherwise
require. Except as otherwise expressly provided herein, (a) any reference in
this Agreement to (i) the Offer Document or any Loan Document shall mean such
document as amended, restated, supplemented or otherwise modified from time
to time, and (ii) any Credit Facility shall mean such Credit Facility as in
effect on the date hereof (or, in the case of the Eastern Facility Agreement,
in the form attached to the Eastern Facility Letter) and (b) all terms of an
accounting or financial nature shall be construed in accordance with GAAP, as
in effect from time to time; provided, however, that if the Loan Parties
notify the Paying Agent that they wish to amend any covenant in Article VI or
any related definition to eliminate the effect of any change in GAAP
occurring after the date of this Agreement on the operation of such covenant
(or if the Paying Agent notifies the Loan Parties that the Required Lenders
wish to amend Article VI or any related definition for such purpose), then
the Loan Parties' compliance with such covenant shall be determined on the
basis of GAAP in effect immediately before the relevant change in GAAP became
effective, until either such notice is withdrawn or such covenant or
definition is amended in a manner satisfactory to the Loan Parties and the
Required Lenders. For purposes of determining compliance under Sections
6.01, 6.02, 6.04, 6.05, 6.10, 6.11 and 6.12 with respect to any amount in a
currency other than Dollars, such amount shall be deemed to equal the Dollar
Equivalent thereof at the time such amount was incurred or expended, as the
case may be.
SECTION 1.03. Exchange Rates. (a) Not later than 1:00 p.m., New York
City time, on each Calculation Date, the Paying Agent shall (i) determine the
Exchange Rate as of such Calculation Date to be used for calculating relevant
Dollar Equivalent and Sterling Equivalent amounts and (ii) give notice
thereof to the Lenders and the Borrower. The Exchange Rates so determined
shall become effective on the first Business Day immediately following the
relevant Calculation Date (a "Reset Date"), shall remain effective until the
next succeeding Reset Date and shall for all purposes of this Agreement
(other than any provision expressly requiring the use of a current Exchange
Rate) be the Exchange Rates employed in converting any amounts between the
applicable currencies.
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(b) Not later than 5:00 p.m., New York City time, on each Reset Date and
the date of any Borrowing of Sterling Revolving Loans or Sterling Term Loans
or the issuance, extension or renewal of any Letter of Credit denominated in
Sterling, the Paying Agent shall (i) determine the Dollar Equivalent of the
aggregate principal amount of the Sterling Revolving Loans or Sterling Term
Loans and the L/C Exposure then outstanding (after giving effect to any
Sterling Revolving Loans made or repaid on such date) and (ii) notify the
Lenders and the Borrower of the results of such determination and of the
aggregate remaining Term Loan Commitments, if any, and the Aggregate
Revolving Credit Exposure.
ARTICLE II
The Credits
SECTION 2.01. Commitments. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, (a) each
Lender agrees, severally and not jointly, to make Term Loans to the Borrower
at any time and from time to time on or after the Closing Date and until the
earlier of the expiration of the Term Loan Availability Period and the
termination of the Term Loan Commitment of such Lender in accordance with the
terms hereof, in an aggregate principal amount not to exceed its Term Loan
Commitment and (b) each Revolving Credit Lender agrees, severally and not
jointly, to make Revolving Loans to the Borrower, at any time and from time
to time on or after the Closing Date, and until the earlier of the Revolving
Credit Maturity Date and the termination of the Revolving Credit Commitment
of such Revolving Credit Lender in accordance with the terms hereof, in an
aggregate principal amount at any time outstanding that will not result in
such Revolving Credit Lender's Revolving Credit Exposure exceeding such
Revolving Credit Lender's Revolving Credit Commitment. Within the limits set
forth in clause (b) of the preceding sentence and subject to the terms,
conditions and limitations set forth herein, the Borrower may borrow, pay or
prepay and reborrow Revolving Loans. Amounts paid or prepaid in respect of
Term Loans may not be reborrowed.
SECTION 2.02. Loans. (a) Each Loan shall be made as part of a Borrowing
consisting of Loans made by the applicable Lenders ratably in accordance with
their Term Loan Commitments or Revolving Credit Commitments, as applicable;
provided, however, that the failure of any Lender to make any Loan required
to be made by it shall not in itself relieve any other Lender of its
obligation to lend hereunder (it being understood, however, that no Lender
shall be responsible for the failure of any other Lender to make any Loan
required to be made by such other Lender). As provided in Section 2.03, each
request for a Borrowing shall state the amount requested in Dollars, even if
the Loans requested are to be Sterling Loans. To the extent any Term Loans
are made as Sterling Loans, such Loans shall continue to be Sterling Loans
for as long as they are outstanding under this Agreement and the amount of
the remaining Term Loan Commitments shall be reduced by the Dollar
Equivalent of the requested Term Borrowing.
(b) Subject to Sections 2.08 and 2.15, (i) each Dollar Borrowing shall
be comprised entirely of Eurocurrency Loans or Base Rate Loans as the
Borrower may request pursuant to Section 2.03 and (ii) each Sterling
Borrowing shall be comprised entirely of Eurocurrency Loans. Each Lender may
at its option make any Eurocurrency Loan by causing any domestic or foreign
branch or Affiliate of such Lender to make such Loan; provided that any
exercise of such option shall not
33
(i) affect the obligation of the Borrower to repay such Loan or (ii) increase
the costs of the Borrower that would otherwise be payable under Section 2.14
or 2.20 with respect thereto, in each case in accordance with the terms of
this Agreement. Borrowings of more than one Type and Class may be
outstanding at the same time; provided, however, that the Borrower shall not
be entitled to request any Borrowing that, if made, would result in more than
15 Eurocurrency Borrowings outstanding hereunder at any time. For purposes of
the foregoing, Borrowings in different currencies or having different
Interest Periods, regardless of whether they commence on the same date, shall
be considered separate Borrowings.
(c) At the commencement of each Interest Period for any Borrowing, such
Borrowing shall be in an aggregate amount which is at least $5,000,000 (or
the Sterling Equivalent thereof) and (except in the case of an Acquisition
Borrowing) an integral multiple of $1,000,000 (or the Sterling Equivalent
thereof); provided that a Revolving Borrowing may be in an aggregate amount
that is equal to the entire unused balance of the Total Revolving Credit
Commitments or that is required to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.22(e).
(d) Except with respect to Loans made or deemed made pursuant to Section
2.02(g), each Lender shall make each Dollar Loan to be made by it hereunder
on the proposed date thereof by wire transfer of immediately available funds
to such account in New York City as the Paying Agent may designate not later
than 11:00 a.m., New York City time, and the Paying Agent shall by 12:00
(noon), New York City time, credit the amounts so received (i) with respect
to any Acquisition Borrowing, to the Offer Account and (ii) with respect to
any other Borrowing, to an account in the name of the Borrower, maintained
with the Paying Agent and designated by the Borrower in the applicable
Borrowing Request or, if a Borrowing shall not occur on such date because any
condition precedent herein specified shall not have been met, return the
amounts so received to the respective Lenders. Each Lender shall make each
Sterling Loan to be made by it hereunder on the proposed date thereof by wire
transfer of immediately available funds to such account in London as the
Paying Agent may designate for such purposes not later than 11:00 a.m.,
London time, and the Paying Agent shall by 12:00 (noon), London time, credit
the amounts so received (i) with respect to any Acquisition Borrowing, to the
Offer Account and (ii) with respect to any other Borrowing, to an account in
the name of the Borrower, maintained with the Paying Agent in London and
designated by the Borrower in the applicable Borrowing Request or, if a
Borrowing shall not occur on such date because any condition precedent herein
specified shall not have been met, return the amounts so received to the
respective Lenders.
(e) Unless the Paying Agent shall have received notice from a Lender
prior to the date of any Borrowing that such Lender will not make available
to the Paying Agent such Lender's portion of such Borrowing, the Paying Agent
may assume that such Lender has made such portion available to the Paying
Agent on the date of such Borrowing in accordance with paragraph (d) above
and the Paying Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If the Paying Agent shall
have so made funds available then, to the extent that such Lender shall not
have made such portion available to the Paying Agent, such Lender and the
Borrower severally agree to repay to the Paying Agent forthwith on demand
such corresponding amount together with interest thereon, for each day from
and including the date such amount is made available to the Borrower to but
excluding the date such amount is repaid to the Paying Agent at (i) in the
case of the Borrower, the interest rate applicable at the time to the Loans
comprising such Borrowing and (ii) in the case of such Lender, a rate
determined by the Paying Agent to represent
34
its cost of overnight or short-term funds in the applicable currency (which
determination shall be conclusive absent manifest error). If such Lender
shall repay to the Paying Agent such corresponding amount, such amount shall
constitute such Lender's Loan as part of such Borrowing for purposes of this
Agreement.
(f) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request any Interest Period with respect to a
Eurocurrency Borrowing that would end after the Revolving Credit Maturity
Date or the Term Loan Maturity Date, as the case may be. In addition, until
the Syndication Date, the Borrower shall not be entitled to request any
Interest Period in respect of a Eurocurrency Borrowing in excess of one month.
(g) If the Issuing Bank shall not have received from the Borrower the
payment required to be made by Section 2.22(e) within the time specified in
such Section, the Issuing Bank will promptly notify the Paying Agent of the
L/C Disbursement and the Paying Agent will promptly notify each Revolving
Credit Lender of such L/C Disbursement and its Pro Rata Percentage thereof.
In the case of Letters of Credit denominated in Dollars, each Revolving
Credit Lender shall pay by wire transfer of immediately available funds to
the Paying Agent not later than 2:00 p.m., New York City time, on such date
(or, if such Revolving Credit Lender shall have received such notice later
than 12:00 (noon), New York City time, on any day, not later than 10:00 a.m.,
New York City time, on the immediately following Business Day), an amount in
Dollars equal to such Lender's Pro Rata Percentage of such L/C Disbursement
(it being understood that such amount shall be deemed to constitute a Base
Rate Revolving Loan of such Lender and such payment shall be deemed to have
reduced the L/C Exposure), and the Paying Agent will promptly pay to the
Issuing Bank amounts so received by it from the Revolving Credit Lenders. In
the case of Letters of Credit denominated in Sterling, each Revolving Credit
Lender shall pay by wire transfer of immediately available funds to the
Paying Agent not later than 2:00 p.m., London time, on such date (or, if such
Revolving Credit Lender shall have received such notice later than 12:00
(noon), London time, on any day, not later than 10:00 a.m., London time, on
the immediately following Business Day), an amount in Sterling equal to such
Lender's Pro Rata Percentage of such L/C Disbursement (it being understood
that such amount shall be deemed to constitute a Sterling Revolving Loan of
such Lender and such payment shall be deemed to have reduced the L/C
Exposure), and the Paying Agent will promptly pay to the Issuing Bank amounts
so received by it from the Revolving Credit Lenders. The Paying Agent will
promptly pay to the Issuing Bank any amounts received by it from the Borrower
pursuant to Section 2.22(e) prior to the time that any Revolving Credit
Lender makes any payment pursuant to this paragraph (g); any such amounts
received by the Paying Agent thereafter will be promptly remitted by the
Paying Agent to the Revolving Credit Lenders that shall have made such
payments and to the Issuing Bank, as their interests may appear. If any
Revolving Credit Lender shall not have made its Pro Rata Percentage of such
L/C Disbursement available to the Paying Agent as provided above, such Lender
and the Borrower severally agree to pay interest on such amount, for each day
from and including the date such amount is required to be paid in accordance
with this paragraph to but excluding the date such amount is paid, to the
Paying Agent for the account of the Issuing Bank at (i) in the case of the
Borrower, a rate per annum equal to the interest rate applicable to Revolving
Loans of such type pursuant to Section 2.06(a), and (ii) in the case of such
Lender, for the first such day, a rate determined by the Paying Agent to
represent its cost of overnight funds in the applicable currency, and for
each day thereafter, the Base Rate.
35
SECTION 2.03. Borrowing Procedure. In order to request a Borrowing, the
Borrower shall hand deliver or telecopy to the Paying Agent a duly completed
Borrowing Request (a) in the case of a Eurocurrency Borrowing (other than a
Sterling Borrowing), not later than 11:00 a.m., New York City time, three
Business Days before the date of the proposed Borrowing, (b) in the case of a
Sterling Borrowing, not later than 10:00 a.m., London time, one Business Day
before the date of the proposed Borrowing and (c) in the case of a Base Rate
Borrowing, not later than 11:00 a.m., New York City time, on the Business Day
of the proposed Borrowing. Each Borrowing Request shall be irrevocable,
shall be signed by or on behalf of the Borrower and shall specify the
following information: (i) whether such Borrowing is to be a Dollar Borrowing
or a Sterling Borrowing; (ii) whether the Borrowing then being requested is
to be a Term Borrowing or a Revolving Credit Borrowing; (iii) if such
Borrowing is to be denominated in Dollars, whether it is to be a Eurocurrency
Borrowing or a Base Rate Borrowing; (iv) the date of such Borrowing (which
shall be a Business Day); (v) the number and location of the account to which
funds are to be disbursed (which shall be an account that complies with the
requirements of Section 2.02(d)); (vi) the aggregate amount of such Borrowing
(which, in the case of a Sterling Borrowing, shall be stated in Dollars);
(vii) whether such Borrowing is to be an Acquisition Borrowing; and (viii) if
such Borrowing is to be a Eurocurrency Borrowing, the initial Interest Period
with respect thereto; provided, however, that, notwithstanding any contrary
specification in any Borrowing Request, each requested Borrowing shall comply
with the requirements set forth in Section 2.02. If no Type is specified
with respect to any Borrowing selected, then the Borrower shall be deemed to
have selected a Base Rate Borrowing. If no Interest Period is specified with
respect to any requested Eurocurrency Borrowing, then the Borrower shall be
deemed to have selected an Interest Period of one month's duration. The
Paying Agent shall promptly advise the applicable Lenders of any notice given
pursuant to this Section 2.03 (and the contents thereof), and of each
Lender's portion of the requested Borrowing.
SECTION 2.04. Evidence of Debt; Repayment of Loans. (a) The Borrower
hereby unconditionally promises to pay to the Paying Agent for the account of
each Lender the then unpaid principal amount of each Loan of such Lender on
the Revolving Credit Maturity Date or the Term Loan Maturity Date, as the
case may be.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such
Lender resulting from each Loan made by 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 Paying Agent shall maintain accounts in which it will record (i)
the amount of each Loan made hereunder, the Class and Type thereof and the
Interest Periods 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) the amount of any sum received by the Paying
Agent hereunder from the Borrower for the account of the Lenders and each
Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph (b)
or (c) above shall be prima facie evidence of the existence and amounts of
the obligations recorded therein; provided, however, that the failure of any
Lender or the Paying Agent to maintain such accounts or any error therein
shall not in any manner affect the obligation of the Borrower to repay the
Loans in accordance with the terms of this Agreement.
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(e) Notwithstanding any other provision of this Agreement, in the event
any Lender shall request and receive a promissory note payable to such Lender
and its registered assigns, the interests represented by such note shall at
all times (including after any assignment of all or part of such interests
pursuant to Section 9.04) be represented by one or more promissory notes
payable to the payee named therein or its registered assigns.
SECTION 2.05. Fees. (a) The Borrower agrees to pay to each Lender,
through the Paying Agent, on the last day of March, June, September and
December in each year and on each date on which any Commitment of such Lender
shall expire or be terminated as provided herein, a commitment fee (a
"Commitment Fee") of 0.50% per annum on the average daily unused amount of
the Commitments of such Lender during the preceding quarter (or other period
commencing with the Closing Date or ending with the Revolving Credit Maturity
Date or the date on which the Commitments of such Lender shall expire or be
terminated. All Commitment Fees shall be computed on the basis of the actual
number of days elapsed in a year of 360 days. The Commitment Fee due to each
Lender shall commence to accrue on the Closing Date and shall cease to accrue
on the date on which the Commitment of such Lender shall expire or be
terminated as provided herein. All Commitment Fees shall be payable in
Dollars.
(b) The Borrower agrees to pay (i) to each Revolving Credit Lender,
through the Paying Agent, on the last day of March, June, September and
December of each year and on the date on which the Revolving Credit
Commitment of such Lender shall be terminated as provided herein, a fee (an
"L/C Participation Fee") calculated on the average daily aggregate amount of
such Lender's L/C Exposure (excluding the portion thereof attributable to
unreimbursed L/C Disbursements) during the preceding quarter (or shorter
period commencing with the Closing Date or ending with the Revolving Credit
Maturity Date or the date on which all Letters of Credit have been canceled
or have expired and the Revolving Credit Commitments of all Lenders shall
have been terminated) at a per annum rate equal to the Eurocurrency Spread
and (ii) to the Issuing Bank with respect to each Letter of Credit the
standard fronting, issuance and drawing fees specified from time to time by
the Issuing Bank (the "Issuing Bank Fees"). All L/C Participation Fees and
Issuing Bank Fees shall be computed on the basis of the actual number of days
elapsed in a year of 360 days and shall be payable in Dollars (in the case
of Letters of Credit denominated in Dollars) or Sterling (in the case of
Letters of Credit denominated in Sterling).
(c) All Fees shall be paid on the dates due, in immediately available
funds, to the Paying Agent for distribution, if and as appropriate, among the
Lenders, except that the Issuing Bank Fees shall be paid directly to the
Issuing Bank. Once paid, none of the Fees shall be refundable under any
circumstances, absent manifest error.
SECTION 2.06. Interest on Loans. (a) Subject to the provisions of
Section 2.07, the Loans comprising each Base Rate Borrowing shall bear
interest (computed on the basis of the actual number of days elapsed over a
year of 365 or 366 days, as the case may be, when the Base Rate is determined
by reference to the Prime Rate and over a year of 360 days at all other
times) at a rate per annum equal to the Base Rate plus the Base Rate Spread.
(b) Subject to the provisions of Section 2.07, the Loans comprising each
Eurocurrency Borrowing shall bear interest (computed on the basis of the
actual number of days elapsed over a year of 360 days or, in the case of
Sterling Borrowings, 365 or 366 days, as applicable) at a rate per
37
annum equal to the Adjusted LIBO Rate for the Interest Period in effect for
such Borrowing plus the Eurocurrency Spread.
(c) Interest on each Loan shall be payable on the Interest Payment Dates
applicable to such Loan except as otherwise provided in this Agreement. The
applicable Base Rate or Adjusted LIBO Rate for each Interest Period or day
within an Interest Period, as the case may be, shall be determined by the
Paying Agent, and such determination shall be conclusive absent manifest
error.
SECTION 2.07. Default Interest. If the Borrower shall default in the
payment of the principal of or interest on any Loan or any other amount
becoming due hereunder, by acceleration or otherwise, or under any other Loan
Document, the Borrower shall on demand from time to time pay interest, to the
extent permitted by law, on such defaulted amount to but excluding the date
of actual payment (after as well as before judgment) (a) in the case of
overdue principal, at the rate otherwise applicable to such Loan pursuant to
Section 2.06 plus 2.00% per annum and (b) in all other cases, (i) if such
amount is denominated in Dollars at a rate per annum (computed on the basis
of the actual number of days elapsed over a year of 365 or 366 days, as the
case may be, when determined by reference to the Prime Rate and over a year
of 360 days at all other times) equal to the sum of the Base Rate plus 2.00%
and (ii) if such amount is denominated in Sterling, a rate per annum
(computed on the basis of the actual number of days elapsed over a year of
365 or 366 days, as the case may be, equal to the Adjusted LIBO Rate for an
Interest Period of one month plus 2.00%.
SECTION 2.08. Alternate Rate of Interest. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurocurrency Borrowing denominated in Dollars, the
Paying Agent shall have determined that (a) deposits in the principal amounts
of the Loans comprising such Borrowing in Dollars are not generally available
in the relevant market, (b) the rates at which such deposits are being
offered will not adequately and fairly reflect the cost to the Lender or
Lenders holding a majority of the Eurocurrency Loans comprising such
Eurocurrency Borrowing of making or maintaining such Eurocurrency Loans
during such Interest Period, or (c) reasonable means do not exist for
ascertaining the Adjusted LIBO Rate, the Paying Agent shall, as soon as
practicable thereafter, give written or telecopy notice of such determination
to the Borrower and the Lenders. In the event of any such determination,
until the Paying Agent shall have advised the Borrower and the Lenders that
the circumstances giving rise to such notice no longer exist, any request by
the Borrower for a Eurocurrency Borrowing denominated in Dollars pursuant to
Section 2.03 or 2.10 shall be deemed to be a request for a Base Rate
Borrowing. Each determination by the Paying Agent hereunder shall be
conclusive absent manifest error.
SECTION 2.09. Termination and Reduction of Commitments. (a) The Term
Loan Commitments shall automatically terminate at 5:00 p.m., London time, on
the Termination Date. The Revolving Credit Commitments and the L/C
Commitment shall automatically terminate on the Revolving Credit Maturity
Date. Notwithstanding the foregoing, (i) the Revolving Credit Commitments
and the L/C Commitment shall automatically terminate at 5:00 p.m., London
time, on the Termination Date if the initial Borrowing hereunder shall not
have occurred by such time and (ii) the Commitments shall automatically
terminate if the Offer lapses or is withdrawn.
(b) Upon at least three Business Days' prior (or, with respect to the
period commencing on the Closing Date and ending on the date of the initial
Acquisition Borrowing hereunder, same day)
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irrevocable written or telecopy notice to the Paying Agent, the Borrower may
at any time in whole permanently terminate, or from time to time in part
permanently reduce, the Commitments of any Class; provided, however, that (i)
each partial reduction of the Term Loan Commitments or the Revolving Credit
Commitments shall be in an integral multiple of $5,000,000, and (ii) the
Total Revolving Credit Commitment shall not be reduced to an amount that is
less than the Aggregate Revolving Credit Exposure at the time.
(c) The Borrower shall notify the Paying Agent of any election to
terminate or reduce the Term Loan Commitments or the Revolving Credit
Commitments under paragraph (b) of this Section at least three Business Days
(or, with respect to the period commencing on the Closing Date and ending on
the date of the initial Acquisition Borrowing hereunder, at least one
Business Day) prior to the effective date of such termination or reduction,
specifying such election and the effective date thereof. Promptly following
receipt of any such notice, the Paying Agent shall advise the Lenders of the
contents thereof. Each notice delivered by the Borrower pursuant to this
Section shall be irrevocable. Each reduction of the Term Loan Commitments or
the Revolving Credit Commitments shall be made ratably among the Lenders in
accordance with their respective Term Loan Commitments and Revolving Credit
Commitments. The Borrower shall pay to the Paying Agent for the account of
the applicable Lenders, on the date of each termination or reduction, the
Commitment Fees on the amount of the Commitments so terminated or reduced
accrued to but excluding the date of such termination or reduction.
SECTION 2.10. Conversion and Continuation of Borrowings. The Borrower
shall have the right at any time upon prior irrevocable notice to the Paying
Agent (a) not later than 12:00 (noon), New York City time, one Business Day
prior to conversion, to convert any Eurocurrency Borrowing denominated in
Dollars into a Base Rate Borrowing, (b) not later than 11:00 a.m., New York
City time, three Business Days prior to conversion or continuation, to
convert any Base Rate Borrowing into a Eurocurrency Borrowing denominated in
Dollars or to continue any Eurocurrency Borrowing as a Eurocurrency Borrowing
in the same currency for an additional Interest Period, and (c) not later
than 11:00 a.m., New York City time, three Business Days prior to conversion,
to convert the Interest Period with respect to any Eurocurrency Borrowing to
another permissible Interest Period, subject in each case to the following:
(i) each conversion or continuation shall be made pro rata among the
Lenders in accordance with the respective principal amounts of the Loans
comprising the converted or continued Borrowing;
(ii) if less than all the outstanding principal amount of any Borrowing
shall be converted or continued, then each resulting Borrowing shall
satisfy the limitations specified in Sections 2.02(a) and 2.02(b)
regarding the principal amount and maximum number of Borrowings of the
relevant Type;
(iii) each conversion shall be effected by each Lender and the Paying
Agent by recording for the account of such Lender the new Loan of such
Lender resulting from such conversion and reducing the Loan (or portion
thereof) of such Lender being converted by an equivalent principal
amount; accrued interest on any Eurocurrency Loan (or portion thereof)
being converted shall be paid by the Borrower at the time of conversion;
39
(iv) if any Eurocurrency Borrowing is converted at a time other than
the end of the Interest Period applicable thereto, the Borrower shall
pay, upon demand, any amounts due to the Lenders pursuant to Section
2.16;
(v) any portion of a Borrowing (other than a Sterling Borrowing)
maturing or required to be repaid in less than one month may not be
converted into or continued as a Eurocurrency Borrowing;
(vi) any portion of a Eurocurrency Borrowing denominated in Dollars
that cannot be converted into or continued as a Eurocurrency Borrowing
by reason of the immediately preceding clause shall be automatically
converted at the end of the Interest Period in effect for such Borrowing
into a Base Rate Borrowing, and any portion of a Sterling Borrowing
required to be repaid in less than one month may be converted, with the
consent of the Paying Agent (which shall not be unreasonably withheld),
to an Interest Period ending on the date that such Borrowing is required
to be repaid; and
(vii) upon notice to the Borrower from the Paying Agent given at the
request of the Required Lenders, after the occurrence and during the
continuance of a Default or an Event of Default, (A) no outstanding
Dollar Borrowing may be converted into, or continued as, a Eurocurrency
Borrowing, and (B) unless repaid, each Eurocurrency Borrowing
denominated in Dollars shall be converted to a Base Rate Borrowing at
the end of the Interest Period applicable thereto, and (C) no Interest
Period in excess of one month may be selected for any Sterling Borrowing.
Each notice pursuant to this Section 2.10 shall be irrevocable and shall
refer to this Agreement and specify (i) the identity, amount and currency of
the Borrowing that the Borrower requests be converted or continued, (ii)
whether such Borrowing is to be converted to or continued as a Eurocurrency
Borrowing or a Base Rate Borrowing, (iii) if such notice requests a
conversion, the date of such conversion (which shall be a Business Day) and
(iv) if such Borrowing is to be converted to or continued as a Eurocurrency
Borrowing, the Interest Period with respect thereto. If no Interest Period
is specified in any such notice with respect to any conversion to or
continuation as a Eurocurrency Borrowing, the Borrower shall be deemed to
have selected an Interest Period of one month's duration. The Paying Agent
shall advise the Lenders of any notice given pursuant to this Section 2.10
and of each Lender's portion of any converted or continued Borrowing. If the
Borrower shall not have given notice in accordance with this Section 2.10 to
continue any Borrowing into a subsequent Interest Period (and shall not
otherwise have given notice in accordance with this Section 2.10 to convert
such Borrowing), such Borrowing shall, at the end of the Interest Period
applicable thereto (unless repaid pursuant to the terms hereof), (i) in the
case of a Dollar Borrowing, automatically be continued into a new Interest
Period as a Base Rate Borrowing, and (ii) in the case of a Sterling
Borrowing, automatically be converted into a new Interest Period of one
month. Notwithstanding any contrary provisions herein, the currency of an
outstanding Borrowing may not be changed in connection with any conversion or
continuation of such Borrowing.
SECTION 2.11. [Intentionally Omitted]
SECTION 2.12. Optional Prepayments. (a) The Borrower shall have the
right at any time and from time to time to prepay any Borrowing, in whole or
in part, subject to prior notice in
40
accordance with paragraph (b) of this Section; provided, however, that each
partial prepayment shall be in an amount that is (i) in the case of Dollar
Loans, an integral multiple of $1,000,000 and not less than $5,000,000, and
(ii) in the case of Sterling Loans, an integral multiple of L1,000,000 and
not less than L5,000,000.
(b) The Borrower shall notify the Paying Agent by telecopy or telephone
(promptly confirmed by telecopy) of any prepayment hereunder (i) in the case
of prepayment of a Eurocurrency Borrowing (denominated in Dollars), not later
than 11:00 a.m. , New York City time, three Business Days before the date of
prepayment, (ii) in the case of prepayment of a Sterling Borrowing, not later
than 11:00 a.m., London time, one Business Day before the date of prepayment,
or (iii) in the case of prepayment of a Base Rate Borrowing, not later than
11:00 a.m., New York City time, on the date of prepayment. Each such notice
shall be irrevocable and shall specify the prepayment date and the principal
amount of each Borrowing or portion thereof to be prepaid. Promptly
following receipt of any such notice relating to a Borrowing, the Paying
Agent shall advise the Lenders of the contents thereof. All prepayments
under this Section 2.12 shall be subject to Section 2.16 but otherwise
without premium or penalty. All prepayments under this Section 2.12 shall be
accompanied by accrued interest on the principal amount being prepaid to the
date of payment to the extent required by Section 2.06.
SECTION 2.13. Mandatory Prepayments. (a) In the event of any
termination of all the Revolving Credit Commitments, the Borrower shall repay
or prepay all its outstanding Revolving Credit Borrowings on the date of such
termination. In the event of any partial reduction of the Revolving Credit
Commitments, then at or prior to the effective date of such reduction, the
Paying Agent shall notify the Borrower and the Revolving Credit Lenders of
the Aggregate Revolving Credit Exposure after giving effect thereto. If at
any time, as a result of such a partial reduction or termination, as a result
of fluctuations in exchange rates or otherwise, the Aggregate Revolving
Credit Exposure would exceed the Total Revolving Credit Commitments, then the
Borrower shall (i) on the date of any such reduction or termination of
Revolving Credit Commitments or (ii) on the Business Day following any such
fluctuation in exchange rate or otherwise, repay or prepay Revolving Credit
Borrowings in an amount sufficient to eliminate such excess.
(b) Not later than the fourth Business Day following the receipt by any
Loan Party of Net Cash Proceeds from any Asset Sale, the Borrower shall apply
100% of such Net Cash Proceeds received by such Loan Party with respect
thereto to prepay outstanding Term Loans and FRNs in accordance with Section
2.13(e).
(c) In the event and on each occasion that an Equity Issuance occurs, the
Borrower shall, substantially simultaneously with (and in any event not later
than the fourth Business Day next following) the receipt of Net Cash Proceeds
by such Loan Party from any such Equity Issuance, apply 100% of such Net Cash
Proceeds to prepay outstanding Term Loans and FRNs in accordance with Section
2.13(e).
(d) In the event that any Loan Party shall receive Net Cash Proceeds from
the issuance or other disposition of Indebtedness for money borrowed (other
than Indebtedness permitted by Section 6.01 (other than Section 6.01(g) or
(h))), the Borrower shall, substantially simultaneously with (and in any
event not later than the fourth Business Day next following) the receipt of
such Net
41
Cash Proceeds by such Loan Party, apply an amount equal to 100% of such Net
Cash Proceeds to prepay outstanding Term Loans and FRNs in accordance with
Section 2.13(e).
(e) Mandatory prepayments of outstanding Term Loans and FRNs required
under this Agreement and any FRN Purchase Agreement shall be allocated pro
rata to the then outstanding Term Loans and FRNs based upon the then
outstanding aggregate principal amounts of the Term Loans and the FRNs;
provided, however, that (i) prepayments out of the proceeds of FRNs shall be
applied pro rata to the Term Loans of the Initial Lenders and (ii) if any
holder of an FRN declines to accept all or any portion of such prepayment in
accordance with the terms of its FRN Purchase Agreement, then the amount of a
rejected prepayment shall be allocated pro rata to the then outstanding Term
Loans.
(f) The Borrower shall deliver to the Paying Agent, at the time of each
prepayment required under this Section 2.13, (i) a certificate signed by a
Financial Officer of the Borrower setting forth in reasonable detail the
calculation of the amount of such prepayment and (ii) to the extent
practicable, at least four days' prior written notice of such prepayment.
Each notice of prepayment shall specify the prepayment date, the Type and
Class of each Loan being prepaid and the principal amount of each Loan (or
portion thereof) to be prepaid. All prepayments of Borrowings under this
Section 2.13 shall be subject to Section 2.16, but shall otherwise be without
premium or penalty.
(g) Amounts to be applied pursuant to this Section 2.13 to the prepayment
of Term Loans and Revolving Loans shall be applied, as applicable, first to
reduce outstanding Base Rate Term Loans and Base Rate Revolving Loans. Any
amounts remaining after each such application shall, at the option of the
Borrower, be applied to prepay Eurocurrency Term Loans or Eurocurrency
Revolving Loans, as the case may be, immediately and/or shall be deposited in
the Prepayment Account (as defined below). The Paying Agent shall apply any
cash deposited in the Prepayment Account (i) allocable to Term Loans to
prepay Eurocurrency Term Loans and (ii) allocable to Revolving Loans to
prepay Eurocurrency Revolving Loans, in each case on the last day of their
respective Interest Periods (or, at the direction of the Borrower, on any
earlier date) until all outstanding Term Loans or Revolving Loans, as the
case may be, have been prepaid or until all the allocable cash on deposit
with respect to such Loans has been exhausted. For purposes of this
Agreement, the term "Prepayment Account" shall mean an account established by
the Borrower with the Paying Agent and over which the Paying Agent shall have
exclusive dominion and control, including the exclusive right of withdrawal
for application in accordance with this paragraph (g). The Paying Agent
will, at the request of the Borrower, invest amounts on deposit in the
Prepayment Account in Permitted Investments that mature prior to the last day
of the applicable Interest Periods of the Eurocurrency Term Borrowings or
Eurocurrency Revolving Borrowings to be prepaid, as the case may be;
provided, however, that (i) the Paying Agent shall not be required to make
any investment that, in its sole judgment, would require or cause the Paying
Agent to be in, or would result in any, violation of any law, statute, rule
or regulation and (ii) the Paying Agent shall have no obligation to invest
amounts on deposit in the Prepayment Account if an Event of Default shall
have occurred and be continuing. The Borrower shall indemnify the Paying
Agent for any losses relating to the investments so that the amount available
to prepay Eurocurrency Borrowings on the last day of the applicable Interest
Period is not less than the amount that would have been available had no
investments been made pursuant thereto. Other than any interest earned on
such investments, the Prepayment Account shall not bear interest. Interest or
profits, if any, on such investments shall be deposited in the Prepayment
Account and reinvested and disbursed as specified above. If the
42
maturity of the Loans has been accelerated pursuant to Article VII, the
Paying Agent may, in its sole discretion, apply all amounts on deposit in the
Prepayment Account to satisfy any of the Obligations. The Borrower hereby
grants to the Paying Agent, for its benefit and the benefit of the Issuing
Bank and the Lenders, a security interest in the Prepayment Account to secure
the Obligations.
SECTION 2.14. Reserve Requirements; Change in Circumstances. (a)
Notwithstanding any other provision of this Agreement, if after the date of
this Agreement any change in applicable law or regulation or in the
interpretation or administration thereof by any Governmental Authority
charged with the interpretation or administration thereof (whether or not
having the force of law) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of, deposits with or
for the account of or credit extended by any Lender or the Issuing Bank
(except any such requirement which is reflected in the Adjusted LIBO Rate) or
shall impose on such Lender or the Issuing Bank or the London interbank
market any other condition affecting this Agreement or Eurocurrency Loans
made by such Lender or any Letter of Credit or participation therein, and the
result of any of the foregoing shall be to increase the cost to such Lender
or the Issuing Bank of making or maintaining any Eurocurrency Loan or
increase the cost to any Lender of issuing or maintaining any Letter of
Credit or purchasing or maintaining a participation therein or to reduce the
amount of any sum received or receivable by such Lender or the Issuing Bank
hereunder (whether of principal, interest or otherwise) by an amount deemed
by such Lender or the Issuing Bank to be material, then the Borrower will pay
to such Lender or the Issuing Bank, as the case may be, upon demand, such
additional amount or amounts as will compensate such Lender or the Issuing
Bank, as the case may be, for such additional costs incurred or reduction
suffered.
(b) If any Lender or the Issuing Bank shall have determined that the
adoption after the Closing Date of any law, rule, regulation, agreement or
guideline regarding capital adequacy, or any change after the Closing Date in
any such law, rule, regulation, agreement or guideline (whether or not having
the force of law) or in the interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration
thereof, or compliance by any Lender (or any lending office of such Lender)
or the Issuing Bank or any Lender's or the Issuing Bank's holding company
with any request or directive regarding capital adequacy (whether or not
having the force of law) of any Governmental Authority made or issued after
the Closing Date has or would have the effect of reducing the rate of return
on such Lender's or the Issuing Bank's capital or on the capital of such
Lender's or the Issuing Bank's holding company, if any, as a consequence of
this Agreement or the Loans made or participations in Letters of Credit
purchased by such Lender pursuant hereto or the Letters of Credit issued by
the Issuing Bank pursuant hereto to a level below that which such Lender or
the Issuing Bank or such Lender's or the Issuing Bank's holding company could
have achieved but for such applicability, adoption, change or compliance
(taking into consideration such Lender's or the Issuing Bank's policies and
the policies of such Lender's or the Issuing Bank's holding company 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 pay to
such Lender or the Issuing Bank, as the case may be, such additional amount
or amounts as will compensate such Lender or the Issuing Bank or such
Lender's or the Issuing Bank's holding company for any such reduction
suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or the Issuing Bank or
its respective holding company, as applicable, as specified in paragraph (a)
or (b) above shall be delivered to the Borrower and shall be
43
conclusive absent manifest error. The Borrower shall pay such Lender or the
Issuing Bank the amount shown as due on any such certificate delivered by it
within 10 days after its receipt of the same.
(d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation for any increased costs or reduction in amounts received
or receivable or reduction in return on capital shall not constitute a waiver
of such Lender's or the Issuing Bank's right to demand such compensation;
provided that neither any Lender nor the Issuing Bank shall be entitled to
compensation under this Section 2.14 for any increased costs or reductions
incurred or suffered with respect to any date unless such Lender or the
Issuing Bank, as the case may be, shall have notified the Borrower under
paragraph (c) above, not more than 90 days after the later of (i) such date
and (ii) the date on which such Lender or Issuing Bank, as applicable, shall
have become aware of such costs or reductions. The protection of this
Section shall be available to each Lender and the Issuing Bank regardless of
any possible contention of the invalidity or inapplicability of the law,
rule, regulation, agreement, guideline or other change or condition that
shall have occurred or been imposed.
SECTION 2.15. Change in Legality. (a) Notwithstanding any other
provision of this Agreement, if, after the Closing Date, any change in any
law or regulation or in the interpretation thereof by any Governmental
Authority charged with the administration or interpretation thereof shall
make it unlawful for any Lender to make or maintain any Eurocurrency Loan
denominated in Dollars or to give effect to its obligations as contemplated
hereby with respect to any such Eurocurrency Loan, then, by written notice to
the Borrower and to the Paying Agent:
(i) such Lender may declare that Eurocurrency Loans denominated in
Dollars will not thereafter (for the duration of such unlawfulness) be
made by such Lender hereunder (or be continued for additional Interest
Periods and Base Rate Loans will not thereafter (for such duration) be
converted into Eurocurrency Loans), whereupon any request for a
Eurocurrency Borrowing denominated in Dollars (or to convert a Base Rate
Borrowing to a Eurocurrency Borrowing or to continue a Eurocurrency
Borrowing denominated in Dollars for an additional Interest Period)
shall, as to such Lender only, be deemed a request for a Base Rate Loan
(or a request to continue a Base Rate Loan as such for an additional
Interest Period or to convert a Eurocurrency Loan into a Base Rate Loan,
as the case may be) unless such declaration shall be subsequently
withdrawn; and
(ii) such Lender may require that all outstanding Eurocurrency Loans
denominated in Dollars made by it be converted to Base Rate Loans, in
which event all such Eurocurrency Loans shall be automatically converted
to Base Rate Loans as of the effective date of such notice as provided
in paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above,
all payments and prepayments of principal that would otherwise have been
applied to repay the Eurocurrency Loans that would have been made by such
Lender or the converted Eurocurrency Loans of such Lender shall instead be
applied to repay the Base Rate Loans made by such Lender in lieu of, or
resulting from the conversion of, such Eurocurrency Loans.
44
(b) For purposes of this Section 2.15, a notice to the
Borrower by any Lender shall be effective as to each affected
Eurocurrency Loan made by such Lender, if lawful, on the last day
of the Interest Period currently applicable to such Eurocurrency
Loan; in all other cases such notice shall be effective on the
date of receipt by the Borrower.
SECTION 2.16. Indemnity. The Borrower shall indemnify each
Lender against any loss or expense, including any break-funding
cost or any loss sustained in converting between Sterling and
Dollars, as the case may be, that such Lender may sustain or
incur as a consequence of any event, other than a default by such
Lender in the performance of its obligations hereunder, which
results in (a) such Lender receiving or being deemed to receive
any amount on account of the principal of any Eurocurrency Loan
prior to the end of the Interest Period in effect therefor,
(b) the conversion of any Eurocurrency Loan to a Base Rate Loan,
or the conversion of the Interest Period with respect to any
Eurocurrency Loan, in each case other than on the last day of the
Interest Period in effect therefor, or (c) any Eurocurrency Loan
to be made by such Lender (including any Eurocurrency Loan to be
made pursuant to a conversion or continuation under Section 2.10)
not being made after notice of such Loan shall have been given by
the Borrower hereunder (any of the events referred to in this
sentence being called a "Breakage Event"). In the case of any
Breakage Event, such loss or expense shall include an amount
equal to the excess, if any, as reasonably determined by such
Lender, of (i) its cost of obtaining funds for the Eurocurrency
Loan (excluding loss of margin) that is the subject of such
Breakage Event for the period from the date of such Breakage
Event to the last day of the Interest Period in effect (or that
would have been in effect) for such Loan over (ii) the amount of
interest likely to be realized by such Lender in redeploying the
funds released or not utilized by reason of such Breakage Event
for such period. A certificate of any Lender setting forth any
amount or amounts which such Lender is entitled to receive
pursuant to this Section 2.16 shall be delivered to the Borrower
and shall be conclusive absent manifest error.
SECTION 2.17. Pro Rata Treatment. Except as required under
Sections 2.13(e) and 2.15, each Borrowing, each payment or
prepayment of principal of any Borrowing, each payment of
interest on the Loans, each payment of the Commitment Fees, each
reduction of the Term Loan Commitments or the Revolving Credit
Commitments and each conversion of any Borrowing to or
continuation of any Borrowing as a Borrowing of any Type shall be
allocated pro rata among the Lenders in accordance with their
respective applicable Commitments (or, if such Commitments shall
have expired or been terminated, in accordance with the
respective principal amounts of their outstanding Loans). Each
Lender agrees that in computing such Lender's portion of any
Borrowing to be made hereunder, the Paying Agent may, in its
discretion, round each Lender's percentage of such Borrowing to
the next higher or lower whole Dollar or Sterling amount.
SECTION 2.18. Sharing of Setoffs. Each Lender agrees that
if it shall, through the exercise of a right of banker's lien,
setoff or counterclaim against the Borrower, or pursuant to a
secured claim under Section 506 of Title 11 of the United States
Code or other security or interest arising from, or in lieu of,
such secured claim, received by such Lender under any applicable
bankruptcy, insolvency or other similar law or otherwise, or by
any other means, obtain payment (voluntary or involuntary) in
respect of any Loan or Loans or L/C Disbursement as a result of
which the unpaid principal portion of its Term Loans and
Revolving Loans and participations in L/C Disbursements shall be
proportionately less than the unpaid principal portion of the
Term Loans and Revolving Loans and participations in L/C
Disbursements of any other Lender, it shall be deemed
simultaneously to have purchased from such other Lender at face
value, and shall promptly pay to
45
such other Lender the purchase price for, a participation in the
Term Loans and Revolving Loans and L/C Exposure, as the case may
be, of such other Lender, so that the aggregate unpaid principal
amount of the Term Loans and Revolving Loans and L/C Exposure and
participations in Term Loans and Revolving Loans and L/C Exposure
held by each Lender shall be in the same proportion to the
aggregate unpaid principal amount of all Term Loans and Revolving
Loans and L/C Exposure then outstanding as the principal amount
of its Term Loans and Revolving Loans and L/C Exposure prior to
such exercise of banker's lien, setoff or counterclaim or other
event was to the principal amount of all Term Loans and Revolving
Loans and L/C Exposure outstanding prior to such exercise of
banker's lien, setoff or counterclaim or other event; provided,
however, that if any such purchase or purchases or adjustments
shall be made pursuant to this Section 2.18 and the payment
giving rise thereto shall thereafter be recovered, such purchase
or purchases or adjustments shall be rescinded to the extent of
such recovery and the purchase price or prices or adjustment
restored without interest. The Borrower expressly consents to
the foregoing arrangements and agrees that any Lender holding a
participation in a Term Loan or Revolving Loan or L/C
Disbursement deemed to have been so purchased may exercise any
and all rights of banker's lien, setoff or counterclaim with
respect to any and all moneys owing by the Borrower to such
Lender by reason thereof as fully as if such Lender had made a
Loan directly to the Borrower in the amount of such
participation.
SECTION 2.19. Payments. (a) Each Loan Party shall make
each payment (including principal of or interest on any Borrowing
or any L/C Disbursement or any Fees or other amounts) hereunder
and under any other Loan Document from a Payment Location in the
United States or the United Kingdom prior to (i) 12:00 (noon),
New York City time on the date when due, in the case of any
amount payable in Dollars, and (ii) 11:00 a.m., London time, on
the date when due, in the case of any amount payable in Sterling,
in each case, in immediately available funds, without setoff,
defense or counterclaim. All such payments shall be made to the
Paying Agent at its offices at (i) 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx, in the case of any amount payable in Dollars, and
(ii) [ ], London, in the case of any amount payable in
Sterling, except payments to be made directly to the Issuing Bank
as expressly provided herein and except that payments pursuant to
Sections 2.15, 2.16, 2.20 and 9.05 shall be made directly to the
persons entitled thereto. All Sterling Loans hereunder shall be
denominated and made, and all payments hereunder or under any
other Loan Document in respect thereof (whether of principal,
interest, fees or otherwise) shall be made, in Sterling. All
Dollar Loans hereunder shall be denominated and made, and all
payments of principal and interest, Fees or otherwise hereunder
or under any other Loan Document in respect thereof shall be
made, in Dollars, except as otherwise expressly provided herein.
(b) Whenever any payment (including principal of or
interest on any Borrowing or any Fees or other amounts) hereunder
or under any other Loan Document shall become due, or otherwise
would occur, on a day that is not a Business Day, such payment
may be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the
computation of interest or Fees, if applicable.
SECTION 2.20. Taxes. (a) Any and all payments hereunder
and under any other Loan Document shall be made, in accordance
with Section 2.19, free and clear of and without deduction for
any Indemnified Taxes or Other Taxes; provided that if any Loan
Party shall be required to deduct any Indemnified Taxes or Other
Taxes from or in respect of any such payments, then (i) the sum
payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to
additional sums payable under this Section 2.20(a)) the Paying
Agent,
46
Lender or the Issuing Bank as the case may be, shall receive an
amount equal to the sum it would have received had no such
deductions been made, (ii) the applicable Loan Party shall make
such deductions and (iii) such Loan Party shall pay the full
amount deducted to the relevant Governmental Authority in
accordance with applicable law.
(b) In addition, the Loan Parties shall pay any Other Taxes
(other than stamp or other documentary taxes in connection with
any Assignment and Acceptance) to the relevant Governmental
Authority in accordance with applicable law.
(c) The applicable Loan Party will indemnify the Paying
Agent, each Lender and the Issuing Bank for the full amount of
any Indemnified Taxes and Other Taxes paid by the Paying Agent,
such Lender or the Issuing Bank as the case may be, on or with
respect to any payment or on account of any obligation of such
Loan Party and any penalties, interest and expenses (including
reasonable attorney's fees and expenses) arising therefrom or
with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount
of such payment or liability prepared by the Paying Agent, a
Lender or the Issuing Bank or the Paying Agent on its behalf,
absent manifest error, shall be final, conclusive and binding for
all purposes. Such indemnification shall be made within 10 days
after the date the Paying Agent or any Lender or the Issuing Bank
(or Transferee), as the case may be, makes written demand
therefor.
(d) As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by any Loan Party to a Governmental
Authority, such Loan Party will deliver to the Paying Agent, at
its address referred to in Section 9.01 to the extent legally
available, the original or a certified copy of a receipt issued
by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such
payment reasonably satisfactory to the Paying Agent.
(e) Withholding. (i) General. Any Lender that is entitled
to an exemption from or reduction of withholding tax with respect
to payments under this Agreement pursuant to the laws of the
United States of America or the United Kingdom or any treaty
(including any protocol thereto or official exchange of notes by
applicable governmental authorities with respect thereto) to
which the United States or the United Kingdom is a party shall
deliver to the applicable Loan Party (with a copy to the Paying
Agent), an Internal Revenue Form W-9 or such other properly
completed and executed documentation reasonably requested by the
applicable Loan Party at the time or times reasonably requested
by such Loan Party as will permit such payments to be made
without withholding or with a reduced rate of withholding.
(ii) Non-U.S. Lenders. Without limiting the
generality of clause (i) above, each Lender that is organized
under the laws of a jurisdiction other than the United States,
any State thereof or the District of Columbia (a "Non-U.S.
Lender") that is legally entitled to do so shall deliver to the
applicable Loan Party and the Paying Agent two copies of either
United States Internal Revenue Service Form 1001 or Form 4224 (or
any subsequent versions thereof or successors thereto), or, in
the case of a Non-U.S. Lender claiming exemption from U.S.
Federal withholding tax under Section 871(h) or 881(c) of the
Code with respect to such payments of "portfolio interest", a
Form W-8, or any subsequent versions thereof or successors
thereto (and, if such Non-U.S. Lender delivers a Form W-8, a
certificate representing that such Non-U.S. Lender is not a bank
for purposes
47
of Section 881(c) of the Code, is not a 10-percent shareholder
(within the meaning of Section 871(h)(3) of the Code) of the
applicable Loan Party and is not a controlled foreign corporation
(within the meaning of Section 864(d)(4) of the Code)), properly
completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. Federal
withholding tax on payments by the applicable Loan Party under
this Agreement.
(iii)Time for Submitting Documentation. Each Lender
shall deliver to the applicable Loan Party the documentation
required to be provided under clause (ii) above on or before the
date such Lender becomes a party to this Agreement and on or
before the date, if any, such Lender changes its applicable
lending office by designating a different lending office. In
addition, each Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by
such Lender. Notwithstanding any other provision of this
Section, a Lender shall not be required to deliver any form
pursuant to this Section 2.20(e) that such Lender is not legally
able to deliver.
(iv) Notice of Change in Documentation. If any Lender
determines that it is unable to submit any documentation that it
is obligated to submit pursuant to this Section 2.20(e), or that
such Lender is required to withdraw or cancel any form or
certificate it previously submitted, the Lender shall promptly
notify the applicable Loan Party of that fact.
(f) Nothing contained in this Section 2.20 shall require
any Lender or the Issuing Bank or the Paying Agent to make
available any of its tax returns (or any other information that
it deems to be confidential or proprietary).
(g) Tax Saving. (i) If any Lender, the Issuing Bank or
the Paying Agent (each, a "Finance Party") receives a refund,
repayment, credit or relief in respect of Indemnified Taxes or
Other Taxes in respect of which it has received indemnity
payments or additional amounts pursuant to this Section 2.20 and,
in the case of a credit or relief, such credit or relief reduces
the Tax liability of the Finance Party in the jurisdiction in
which the Indemnified Taxes or Other Taxes were imposed (a "Tax
Saving") and such Tax Saving is, in the good faith opinion of the
relevant Finance Party, both identifiable and quantifiable by it
without requiring such Finance Party or its professional advisers
to expend a material amount of time or incur a material cost in
so identifying or quantifying, the Finance Party will pay over
the amount of such Tax Saving to the applicable Loan Party to the
extent it has received indemnity payments or additional amounts
pursuant to this Section 2.20, net of all out-of-pocket expenses
and without interest (other than interest paid by the relevant
Governmental Authority with respect to such refund); provided,
however, that the applicable Loan Party shall, upon request of
the Finance Party, repay such refund (plus penalties, interest or
other charges imposed by the relevant Governmental Authority) to
such Finance Party if the Tax Saving is subsequently disallowed
or cancelled.
(ii) Nothing contained in this Agreement shall
interfere with the rights of any Finance Party to arrange its Tax
and other affairs in whatever manner it thinks fit and, in
particular, no Finance Party shall be under any obligation to
claim relief from Tax on its corporate profits or from any
similar liability for Taxes in respect of the Indemnified Taxes
or Other Taxes, or to claim relief in priority to any other
claims, reliefs, credits or deductions available to it or to
disclose details of its Tax affairs.
48
SECTION 2.21. Assignment of Commitments Under Certain
Circumstances; Duty to Mitigate. (a) In the event (i) any
Lender or the Issuing Bank delivers a certificate requesting
compensation pursuant to Section 2.14, (ii) any Lender or the
Issuing Bank delivers a notice described in Section 2.15 or (iii)
any Loan Party is required to pay any additional amount to any
Lender or the Issuing Bank or any Governmental Authority on
account of any Lender or the Issuing Bank pursuant to Section
2.20, the Borrower may, at its sole expense and effort (including
with respect to the processing and recordation fee referred to in
Section 9.04(b)), upon notice to such Lender or the Issuing Bank
and the Paying Agent, require such Lender or the Issuing Bank to
transfer and assign, without recourse (in accordance with and
subject to the restrictions contained in Section 9.04), all of
its interests, rights and obligations under this Agreement to an
assignee that shall assume such assigned obligations (which
assignee may be another Lender, if a Lender accepts such
assignment); provided that (x) such assignment shall not conflict
with any law, rule or regulation or order of any court or other
Governmental Authority having jurisdiction, (y) the Borrower
shall have received the prior written consent of the Paying Agent
(and, if a Revolving Credit Commitment is being assigned, of the
Issuing Bank), which consent shall not unreasonably be withheld,
and (z) the Borrower or such assignee shall have paid to the
affected Lender or the Issuing Bank in immediately available
funds an amount equal to the sum of the principal of and interest
accrued to the date of such payment on the outstanding Loans or
L/C Disbursements of such Lender or the Issuing Bank,
respectively, plus all Fees and other amounts accrued for the
account of such Lender or the Issuing Bank hereunder (including
any amounts under Section 2.14 and Section 2.16); provided
further that, if prior to any such transfer and assignment the
circumstances or event that resulted in such Lender's or the
Issuing Bank's claim for compensation under Section 2.14 or
notice under Section 2.15 or the amounts paid pursuant to Section
2.20, as the case may be, cease to cause such Lender or the
Issuing Bank to suffer increased costs or reductions in amounts
received or receivable or reduction in return on capital, or
cease to have the consequences specified in Section 2.15 or cease
to result in amounts being payable under Section 2.20, as the
case may be (including as a result of any action taken by such
Lender or the Issuing Bank pursuant to paragraph (b) below), or
if such Lender or the Issuing Bank shall waive its right to claim
further compensation under Section 2.14 in respect of such
circumstances or event or shall withdraw its notice under
Section 2.15 or shall waive its right to further payments under
Section 2.20 in respect of such circumstances or event, as the
case may be, then such Lender or the Issuing Bank shall not
thereafter be required to make any such transfer and assignment
hereunder.
(b) If (i) any Lender or the Issuing Bank shall request
compensation under Section 2.14, (ii) any Lender or the Issuing
Bank delivers a notice described in Section 2.15 or (iii) the
Borrower is required to pay any additional amount to any Lender
or the Issuing Bank or any Governmental Authority on account of
any Lender or the Issuing Bank pursuant to Section 2.20, then
such Lender or the Issuing Bank shall use reasonable efforts
(which shall not require such Lender or the Issuing Bank to incur
an unreimbursed loss or unreimbursed cost or expense or otherwise
take any action inconsistent with its internal policies or legal
or regulatory restrictions or suffer any disadvantage or burden
deemed by it to be significant) (x) to file any certificate or
document reasonably requested in writing by the Borrower or
(y) to assign its rights and delegate and transfer its
obligations hereunder to another of its offices, branches or
affiliates, if such filing or assignment would reduce its claims
for compensation under Section 2.14 or enable it to withdraw its
notice pursuant to Section 2.15 or would reduce the amounts
payable pursuant to Section 2.20, as the case may be, in the
future. The Borrower hereby agrees to pay all reasonable costs
and expenses incurred by any Lender or the Issuing Bank in
connection with any such filing or assignment, delegation and
transfer.
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SECTION 2.22. Letters of Credit. (a) General. The
Borrower may request the issuance of a Letter of Credit for its
own account, for the account of PGH or for the account of any of
their respective subsidiaries (provided that the Borrower shall
be a co-applicant and co-obligor with respect to each Letter of
Credit issued for the account of or in favor of PGH or any of
their respective subsidiaries), in a form reasonably acceptable
to the Paying Agent and the Issuing Bank, at any time and from
time to time while the Revolving Credit Commitments remain in
effect. This Section shall not be construed to impose an
obligation upon the Issuing Bank to issue any Letter of Credit
that is inconsistent with the terms and conditions of this
Agreement.
(b) Notice of Issuance, Amendment, Renewal, Extension;
Certain Conditions. In order to request the issuance of a Letter
of Credit (or to amend, renew or extend an existing Letter of
Credit), the Borrower shall hand deliver or telecopy to the
Issuing Bank and the Paying Agent (reasonably in advance of the
requested date of issuance, amendment, renewal or extension) a
notice requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or
extended, the date of issuance, amendment, renewal or extension,
the date on which such Letter of Credit is to expire (which shall
comply with paragraph (c) below), the amount and currency of such
Letter of Credit, the name and address of the beneficiary thereof
and such other information as shall be necessary to prepare such
Letter of Credit. A Letter of Credit shall be issued, amended,
renewed or extended only if, and upon issuance, amendment,
renewal or extension of each Letter of Credit, the Borrower shall
be deemed to represent and warrant that, after giving effect to
such issuance, amendment, renewal or extension (A) the L/C
Exposure shall not exceed $350,000,000 and (B) the Aggregate
Revolving Credit Exposure shall not exceed the Total Revolving
Credit Commitment.
(c) Expiration Date. Each Letter of Credit shall expire at
the close of business on the earlier of the date one year after
the date of the issuance, renewal or extension, as applicable, of
such Letter of Credit and the date that is five Business Days
prior to the Revolving Credit Maturity Date, unless such Letter
of Credit expires by its terms on an earlier date. Each Letter
of Credit may, upon the request of the Borrower, include a
provision whereby such Letter of Credit shall be renewed
automatically for additional consecutive periods of 12 months or
less (but not beyond the date that is five Business Days prior to
the Revolving Credit Maturity Date) unless the Issuing Bank
notifies the beneficiary thereof at least 30 days prior to the
then-applicable expiration date that such Letter of Credit will
not be renewed.
(d) Participations. By the issuance of a Letter of Credit
and without any further action on the part of the Issuing Bank or
the Lenders, the Issuing Bank hereby grants to each Revolving
Credit Lender, and each such Lender hereby acquires from the
applicable Issuing Bank, a participation in such Letter of Credit
equal to such Lender's Pro Rata Percentage of the aggregate
amount available to be drawn under such Letter of Credit,
effective upon the issuance of such Letter of Credit. In
consideration and in furtherance of the foregoing, each Revolving
Credit Lender hereby absolutely and unconditionally agrees to pay
to the Paying Agent, for the account of the Issuing Bank, such
Lender's Pro Rata Percentage of each L/C Disbursement made by the
Issuing Bank and not reimbursed by the Borrower (or, if
applicable, another party pursuant to its obligations under any
other Loan Document) forthwith on the date due as provided in
Section 2.02(g). Each Revolving Credit Lender acknowledges and
agrees that its obligation to acquire participations pursuant to
this paragraph in respect of Letters of Credit is absolute and
unconditional and shall not be affected by any circumstance
whatsoever, including the occurrence and continuance of a Default
or an Event of
50
Default or the fact that, as a result of fluctuations in exchange
rates, such Revolving Credit Lender's Revolving Credit Exposure
at any time might exceed its Revolving Credit Commitment at such
time (in which case Section 2.13(a) would apply), and that each
such payment shall be made without any offset, abatement,
withholding or reduction whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any L/C
Disbursement in respect of a Letter of Credit denominated in
Dollars, the Borrower shall pay to the Paying Agent an amount
equal to such L/C Disbursement not later than 2:00 p.m., New York
City time, on the day that the Borrower shall have received
notice from the Issuing Bank of such L/C Disbursement, or, if the
Borrower shall have received such notice later than 10:00 a.m.,
New York City time, on any Business Day, not later than
10:00 a.m., New York City time, on the immediately following
Business Day. If the Issuing Bank shall make any L/C
Disbursement in respect of a Letter of Credit denominated in
Sterling, the Borrower shall pay to the Paying Agent an amount
equal to such L/C Disbursement not later than 2:00 p.m., London
time, on the day that the Borrower shall have received notice
from the Issuing Bank of such L/C Disbursement, or, if the
Borrower shall have received such notice later than 10:00 a.m.,
London time, on any Business Day, not later than 10:00 a.m.,
London time, on the immediately following Business Day.
(f) Obligations Absolute. The Borrower's obligations to
reimburse L/C Disbursements as provided in paragraph (e) above
shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this
Agreement, under any and all circumstances whatsoever, and
irrespective of:
(i) any lack of validity or enforceability of any
Letter of Credit or any Loan Document, or any term or
provision therein;
(ii) any amendment or waiver of or any consent to
departure from all or any of the provisions of any Letter of
Credit or any Loan Document;
(iii)the existence of any claim, setoff, defense or
other right that the Borrower, any other party guaranteeing,
or otherwise obligated with, the Borrower, any subsidiary or
other Affiliate thereof or any other person may at any time
have against the beneficiary under any Letter of Credit, the
Issuing Bank, the Paying Agent or any Lender or any other
person, whether in connection with this Agreement, any other
Loan Document or any other related or unrelated agreement or
transaction;
(iv) any draft or other document presented under a
Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect;
(v) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document
that does not comply with the terms of such Letter of
Credit; and
(vi) any other act or omission to act or delay of any
kind of the Issuing Bank, the Lenders, the Paying Agent or
any other person or any other event or circumstance
whatsoever, whether or not similar to any of the foregoing,
that might, but for the provisions
51
of this Section, constitute a legal or equitable discharge
of the Borrower's obligations hereunder.
Without limiting the generality of the foregoing, it is
expressly understood and agreed that the absolute and
unconditional obligation of the Borrower hereunder to reimburse
L/C Disbursements will not be excused by the gross negligence or
wilful misconduct of the Issuing Bank. However, the foregoing
shall not be construed to excuse the Issuing Bank from liability
to the Borrower to the extent of any direct damages (as opposed
to consequential damages, claims in respect of which are hereby
waived by the Borrower to the extent permitted by applicable law)
suffered by the Borrower that are caused by the Issuing Bank's
gross negligence or wilful misconduct in determining whether
drafts and other documents presented under a Letter of Credit
comply with the terms thereof; it is understood that the Issuing
Bank may accept documents that appear on their face to be in
order, without responsibility for further investigation,
regardless of any notice or information to the contrary and, in
making any payment under any Letter of Credit (i) the Issuing
Bank's exclusive reliance on the documents presented to it under
such Letter of Credit as to any and all matters set forth
therein, including reliance on the amount of any draft presented
under such Letter of Credit, whether or not the amount due to the
beneficiary thereunder equals the amount of such draft and
whether or not any document presented pursuant to such Letter of
Credit proves to be insufficient in any respect, if such document
on its face appears to be in order, and whether or not any other
statement or any other document presented pursuant to such Letter
of Credit proves to be forged or invalid or any statement therein
proves to be inaccurate or untrue in any respect whatsoever and
(ii) any noncompliance in any immaterial respect of the documents
presented under such Letter of Credit with the terms thereof
shall, in each case, be deemed not to constitute wilful
misconduct or gross negligence of the Issuing Bank.
(g) Disbursement Procedures. The Issuing Bank shall,
promptly following its receipt thereof, examine all documents
purporting to represent a demand for payment under a Letter of
Credit. The Issuing Bank shall as promptly as possible give
telephonic notification, confirmed by telecopy, to the Paying
Agent and the Borrower of such demand for payment and whether the
Issuing Bank has made or will make an L/C Disbursement
thereunder; provided that any failure to give or delay in giving
such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Bank and the Revolving Credit Lenders with
respect to any such L/C Disbursement in accordance with
paragraph (e) above. The Paying Agent shall promptly give each
Revolving Credit Lender notice thereof.
(h) Interim Interest. If the Issuing Bank shall make any
L/C Disbursement in respect of a Letter of Credit, then, unless
the Borrower shall reimburse such L/C Disbursement in full on
such date, the unpaid amount thereof shall bear interest for the
account of the Issuing Bank, for each day from and including the
date of such L/C Disbursement, to but excluding the earlier of
the date of payment by the Borrower or the date on which interest
shall commence to accrue thereon as provided in Section 2.02(g),
at the rate per annum that would apply to such amount if such
amount were (i) in the case of a Dollar Loan, a Base Rate Loan
and (ii) in the case of a Sterling Loan, a Eurocurrency Loan with
an Interest Period of one month's duration.
(i) Resignation or Removal of the Issuing Bank. The
Issuing Bank may resign at any time by giving 180 days' prior
written notice to the Paying Agent, the Lenders and the Borrower,
and may be removed at any time by the Borrower by notice to the
Issuing Bank, the Paying Agent and the
52
Lenders. Upon the acceptance of any appointment as the Issuing
Bank hereunder by a Lender that shall agree to serve as successor
Issuing Bank, such successor shall succeed to and become vested
with all the interests, rights and obligations of the retiring
Issuing Bank and the retiring Issuing Bank shall be discharged
from its obligations to issue additional Letters of Credit
hereunder. At the time such removal or resignation shall become
effective, the Borrower shall pay all accrued and unpaid fees
pursuant to Section 2.05(b)(ii). The acceptance of any
appointment as the Issuing Bank hereunder by a successor Lender
shall be evidenced by an agreement entered into by such
successor, in a form satisfactory to the Borrower and the Paying
Agent, and, from and after the effective date of such agreement,
(i) such successor Lender shall have all the rights and
obligations of the previous Issuing Bank under this Agreement and
the other Loan Documents and (ii) references herein and in the
other Loan Documents to the term "Issuing Bank" shall be deemed
to refer to such successor or to any previous Issuing Bank, or to
such successor and all previous Issuing Banks, as the context
shall require. After the resignation or removal of the Issuing
Bank hereunder, the retiring Issuing Bank shall remain a party
hereto and shall continue to have all the rights and obligations
of an Issuing Bank under this Agreement and the other Loan
Documents with respect to Letters of Credit issued by it prior to
such resignation or removal, but shall not be required to issue
additional Letters of Credit.
(j) Cash Collateralization. If (i) any Event of Default
shall occur and be continuing or (ii) to the extent and so long
as the L/C Exposure exceeds the Total Revolving Credit
Commitment, the Borrower shall, on the Business Day it receives
notice from the Paying Agent or the Required Lenders (or, if the
maturity of the Loans has been accelerated, Revolving Credit
Lenders holding participations in outstanding Letters of Credit
representing greater than 50% of the aggregate undrawn amount of
all outstanding Letters of Credit) thereof and of the amount to
be deposited, deposit in an account with the Collateral Agent,
for the benefit of the Revolving Credit Lenders, an amount in
cash equal to the L/C Exposure (or in the case of clause (ii) of
this sentence, the excess of the L/C Exposure over the Total
Revolving Credit Commitment) as of such date. Such deposit shall
be held by the Collateral Agent as collateral for the payment and
performance of the Obligations. The Collateral Agent shall have
exclusive dominion and control, including the exclusive right of
withdrawal, over such account. Other than any interest earned on
the investment of such deposits in Permitted Investments, which
investments shall be made as selected by the Collateral Agent,
such deposits shall not bear interest. Interest or profits, if
any, on such investments shall accumulate in such account.
Moneys in such account shall (i) automatically be applied by the
Paying Agent to reimburse the Issuing Bank for L/C Disbursements
for which it has not been reimbursed, (ii) be held for the
satisfaction of the reimbursement obligations of the Borrower for
the L/C Exposure at such time and (iii) if the maturity of the
Loans has been accelerated (but subject to the consent of
Revolving Credit Lenders holding participations in outstanding
Letters of Credit representing greater than 50% of the aggregate
undrawn amount of all outstanding Letters of Credit), be applied
to satisfy the Obligations. If the Borrower is required to
provide an amount of cash collateral pursuant to clause (i) of
the first sentence of this paragraph (j), such amount (to the
extent not applied as aforesaid) shall be returned to the
Borrower within three Business Days after all Events of Default
have been cured or waived. If the Borrower is required to
provide an amount of cash collateral pursuant to clause (ii) of
the first sentence of this paragraph (j), such amount shall be
returned to the Borrower from time to time to the extent that the
amount of such cash collateral held by the Collateral Agent
exceeds the excess, if any, of the L/C Exposure over the Total
Revolving Credit Commitment so long as no Event of Default shall
have occurred and be continuing.
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SECTION 2.23. Extension of Revolving Credit Commitments.
Upon prior written notice (an "Extension Notice") to the Paying
Agent delivered not less than 30 nor more than 60 days prior to
the date that is 18 months after the date of the initial
Acquisition Borrowing (the "Original Revolving Credit Maturity
Date"), the Borrower may elect to extend the Original Revolving
Credit Maturity Date to the date that is 30 months after the date
of the initial Acquisition Borrowing, without the consent of the
Paying Agent or any Lender, if all of the following conditions
are satisfied:
(a) No Default or Event of Default shall have occurred
and be continuing on the date of the Extension Notice or on
the Original Revolving Credit Maturity Date;
(b) All the Term Loans and FRNs shall have been paid
in full on or prior to the Original Revolving Credit
Maturity Date;
(c) Each of Standard & Poor's Ratings Services and
Xxxxx'x Investors Service, Inc. shall have in place a credit
rating for the facilities under this Agreement that shall be
at least as high as the rating such rating agency had for
such facilities on the date of the initial Acquisition
Borrowing; and
(d) The Borrower shall have paid to the Paying Agent
on the Original Revolving Credit Maturity Date, for the
account of each Revolving Credit Lender, a fee (an
"Extension Fee") equal to 0.50% of the Revolving Credit
Commitment of such Lender as in effect on the Original
Revolving Credit Maturity Date (after giving effect to any
reduction in such Revolving Credit Commitment effective on
the Original Revolving Credit Maturity Date).
ARTICLE III
Representations and Warranties
Each Loan Party represents and warrants to the Paying Agent,
the Collateral Agent, the Issuing Bank and each of the Lenders
that:
SECTION 3.01. Organization. Each of PGH and its
subsidiaries is duly incorporated or organized, validly existing
and in good standing under the laws of its jurisdiction of
incorporation or organization, as the case may be, and has all
organizational powers and all material governmental licenses,
authorizations, consents and approvals required to carry on its
business as now conducted, except, in each case, where the
failure to satisfy any of the above could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 3.02. Corporate and Governmental Authorization; No
Contravention. The execution and delivery by each Loan Party of
this Agreement and by each Loan Party of the Transaction
Documents to which it is or will be a party and the performance
by each Loan Party of its obligations hereunder and thereunder
are within such Loan Party's organizational powers and have been
duly authorized by all necessary organizational action. This
Agreement has been duly executed and delivered by each Loan Party
and each other Transaction Document has (as of the date of
execution thereof by the relevant Loan Party) been duly executed
and delivered by the Loan Parties party thereto. No
registration, recordation or filing with or consent, approval or
other action (other
54
than the registration of the charge created by the Collateral
Assignment pursuant to Section 395 of the U.K. Companies Act
1985) by any regulatory or other governmental body, agency or
official is required in connection with the execution or delivery
of this Agreement and the other Loan Documents by the Loan
Parties party thereto, except where the failure to register,
record or file could not reasonably be expected to result in a
Material Adverse Effect, or is necessary for the validity or
enforceability hereof or thereof, and the execution, delivery,
performance and enforcement of the Loan Documents by the Loan
Parties thereto do not and will not contravene, or constitute a
default under, any provision of applicable law or regulation, or
of the certificate or articles of incorporation or by-laws of the
Loan Parties, or any of their respective subsidiaries, except
where such contravention or default could not reasonably be
expected to result in a Material Adverse Effect, or of any
agreement, judgment, injunction, order, decree or other
instrument binding upon any Loan Party or result in the creation
or imposition of any material Lien upon any asset of any Loan
Party or any of their respective subsidiaries (other than any
Lien created under the Transaction Documents).
SECTION 3.03. Enforceability. Each of the Transaction
Documents that has been executed and delivered constitutes (and,
upon execution and delivery thereof as contemplated thereby, the
other Transaction Documents will constitute) a valid and binding
agreement of each Loan Party and each of its subsidiaries party
thereto, in each case enforceable against such person in
accordance with its terms, except as the foregoing may be limited
by bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium, or other similar laws affecting the rights of
creditors generally and by general principles of equity,
including those limiting the availability of specific
performance, injunctive relief, and other equitable remedies and
those providing for defenses based on fairness and
reasonableness, regardless of whether considered in a proceeding
in equity or at law.
SECTION 3.04. Financial Statements. (a) The Loan Parties
have heretofore furnished to the Lenders the consolidated balance
sheet and statements of income and retained earnings and (except
in the case of Peabody Holding for the period ended September 30,
1997) cash flows of each of (i) PGH and its subsidiaries,
(ii) PALLC and its subsidiaries, (iii) Peabody Holding and its
subsidiaries and (iv) TEG and its subsidiaries, as the case may
be, (A) as of and for the most recent fiscal year for which
audited financial statements are available, in each case audited
by and accompanied by the opinion of Deloitte & Touche LLP,
independent public accountants, or such other independent public
accountants of recognized standing in the United States, the
United Kingdom or Australia, as applicable, and (B) as of and for
the applicable interim period ended September 30, 1997, certified
(in the case of the financial statements of PGH and PALLC) by a
Financial Officer of each of PGH and PALLC, as the case may be.
Such financial statements present (or, in the case of persons not
under the control of PGH on the date hereof, present, to the
knowledge of the Loan Parties) fairly (in the case of persons
organized in the United States), or present a true and fair view
of (in the case of all other persons), in accordance with
applicable GAAP the financial position (in the case of persons
organized in the United States) or financial condition (in the
case of all other persons) and results of operations and cash
flows (except as noted above in the case of Peabody Holding) of
(w) PGH and its subsidiaries, (x) PALLC and its subsidiaries,
(y) Peabody Holding and its subsidiaries and (z) TEG and its
subsidiaries, in each case, as of such dates and for such
periods. Such balance sheets and the notes thereto (if any)
disclose (or, in the case of persons not under the control of PGH
on the date hereof, disclose to the knowledge of the Loan
Parties) all material liabilities, direct or contingent, of each
of (I) PGH and its subsidiaries, (II) PALLC and its
55
subsidiaries, (III) Peabody Holding and its subsidiaries and
(IV) TEG and its subsidiaries, in each case, as of the dates
thereof, as required in accordance with GAAP.
(b) The Loan Parties have heretofore delivered to the
Lenders unaudited pro forma consolidating balance sheets of each
of (i) PGH and its subsidiaries and (ii) the Borrower and its
subsidiaries as of December 31, 1996 and September 30, 1997 (the
"Pro Forma Financial Statements"), prepared to give effect to the
Transactions as if they had occurred on such dates and the Loan
Parties have delivered to the Lenders unaudited pro forma
consolidating statements of income of each of (A) PGH and its
subsidiaries and (B) the Borrower and its subsidiaries for the
fiscal year ended December 31, 1996 and for the twelve months
ended September 30, 1997, assuming the Transactions had actually
occurred on January 1, 1996 and October 1, 1996, respectively.
Such pro forma balance sheets and income statements have been
prepared in good faith by the Loan Parties based on reasonable
assumptions, are based on the best information available to the
Loan Parties as of the date of delivery thereof, accurately
reflect all material adjustments required to be made to give
effect to the Transactions and present fairly, or present a true
and fair view, as applicable, on a pro forma basis the estimated
consolidated financial position or financial condition, as
applicable, of (x) PGH and its subsidiaries and (y) the Borrower
and its subsidiaries as of December 31, 1996 and September 30,
1997, assuming that the Transactions had actually occurred on
such dates, and present fairly, or present a true and fair view,
as applicable, on a pro forma basis the estimated consolidated
results of operations of (I) PGH and its subsidiaries and (II)
the Borrower and its subsidiaries for the fiscal year ended
December 31, 1996 and the twelve months ended September 30, 1997,
assuming that the Transactions had actually occurred on
January 1, 1996 and October 1, 1996, respectively.
SECTION 3.05. No Material Adverse Change. There has been
no material adverse change in the business, assets, operations,
condition, financial or otherwise, or material agreements of PGH
and its subsidiaries, taken as a whole, from the position
reflected in the Pro Forma Financial Statements.
SECTION 3.06. Title to Properties; Possession Under Leases.
(a) PGH and its subsidiaries have good and marketable title to,
or valid leasehold interests on, all their material properties
and assets, except for defects that could not reasonably be
expected to result in a Material Adverse Effect. All such
material properties and assets are free and clear of Liens, other
than Liens permitted by Section 6.02.
(b) Except as set forth on Schedule 3.06(b), PGH and its
subsidiaries have complied with all obligations under all
material leases to which it is a party and all such leases are in
full force and effect, except where such noncompliance or failure
to be in full force and effect, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse
Effect. PGH and its subsidiaries enjoy peaceful and undisturbed
possession under all such leases, other than Liens permitted by
Section 6.02.
SECTION 3.07. Subsidiaries. (a) Except for changes with
respect to Excluded Assets permitted by this Agreement,
Schedule 3.07(a) sets forth as of the Closing Date a list of all
direct and indirect subsidiaries of PGH and the percentage
ownership interest of PGH therein. The shares of capital stock
or other ownership interests of PGH so indicated on
Schedule 3.07(a) are fully paid and
56
non-assessable and are owned by PGH, directly or indirectly, free
and clear of all Liens, other than Liens permitted by
Section 6.02.
(b) Except for changes with respect to Excluded Assets
permitted by this Agreement, Schedule 3.07(b) sets forth as of
the date of the initial Borrowing hereunder a list of all direct
and indirect subsidiaries of PGH and the percentage ownership
interest of PGH therein, after giving effect to the TPC
Contribution. On and after the date of the initial Borrowing
hereunder, the shares of capital stock or other ownership
interests so indicated on Schedule 3.07(b) will be fully paid and
non-assessable and will be owned by PGH, directly or indirectly,
free and clear of all Liens, other than Liens permitted by
Section 6.02.
SECTION 3.08. Litigation; Compliance with Laws.
(a) Except as set forth on Schedule 3.08, there are not any
actions, suits or proceedings at law or in equity or by or before
any Governmental Authority now pending or, to the knowledge of
any Loan Party, threatened against or affecting PGH or any of its
subsidiaries or any business, property or rights of any such
person (i) that expressly involve any Transaction Document or the
Transactions or (ii) as to which there is a reasonable
possibility of an adverse determination and that, in either case,
could reasonably be expected, individually or in the aggregate,
to result in a Material Adverse Effect.
(b) None of PGH or any of its subsidiaries or any of its
respective material properties or assets is in violation of, nor
will the continued operation of their material properties and
assets as currently conducted violate, any law, rule or
regulation, or is in default with respect to any judgment, writ,
injunction, decree or order of any Governmental Authority, where
such violation or default could reasonably be expected to result
in a Material Adverse Effect.
SECTION 3.09. Agreements. (a) Neither PGH nor any of its
subsidiaries is a party to any agreement or instrument or subject
to any corporate or other organizational restriction that has
resulted or could reasonably be expected to result in a Material
Adverse Effect.
(b) Neither PGH nor any of its subsidiaries is in default
in any manner under any provision of any indenture or other
agreement or instrument evidencing Indebtedness, or any other
material agreement or instrument to which it is a party or by
which it or any of its properties or assets are or may be bound,
where such default could reasonably be expected to result in a
Material Adverse Effect.
(c) Each of the Spring Creek Loan Agreement, the Spring
Creek Note and the Spring Creek Participation Agreement is a
valid and binding agreement or obligation of the parties thereto
and is in full force and effect. The execution, delivery and
performance of the Spring Creek Loan Agreement, the Spring Creek
Note and the Spring Creek Participation Agreement did not and
will not contravene, or constitute a default under, any provision
of the Spring Creek Coal Supply Contract.
SECTION 3.10. Federal Reserve Regulations. No part of the
proceeds of any Loan or any Letter of Credit will be used,
whether directly or indirectly, and whether immediately,
incidentally or ultimately, for any purpose that entails a
violation of, or that is inconsistent with, the provisions of the
Regulations of the Board, including Regulation G (as an effect
before April 1, 1998), T, U or X.
57
SECTION 3.11. Investment Company Act; Public Utility
Holding Company Act. Neither PGH nor any of its subsidiaries is
subject to regulation under the Public Utility Holding Company
Act of 1935, the Investment Company Act of 1940, the Interstate
Commerce Act or any other law or regulation which limits the
incurrence by PGH or the Borrower of Indebtedness, including laws
relating to common or contract carriers or the sale of
electricity, gas, steam, water or other public utility services.
SECTION 3.12. Tax Matters. (a) Each of PGH and its
subsidiaries, and any other affiliate with joint and several
liability for taxes, has filed or caused to be filed all Federal,
state, local and other tax returns or materials required to have
been filed by it and has paid or caused to be paid all taxes due
and payable by it pursuant thereto and all assessments received
by it, except where the failure to do any of the foregoing could
not reasonably be expected to result in a Material Adverse
Effect.
(b) The Borrower is not, and will not be during the period
the U.K. Tax Sharing Agreement is in effect, a dual resident
investing corporation within the meaning of Section 404 of the
Income and Corporation Taxes Xxx 0000.
SECTION 3.13. No Material Misstatements. None of (a) the
Confidential Information Memorandum or (b) any other information,
report, financial statement, exhibit or schedule furnished by or
on behalf of PGH or any of its subsidiaries to the Paying Agent
or any Lender in connection with the negotiation of any
Transaction Document or included therein or delivered pursuant
thereto, when taken as a whole, contained, contains or will
contain any material misstatement of fact or omitted, omits or
will omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which
they were, are or will be made, not misleading; provided that to
the extent any such information report, financial statement,
exhibit or schedule was based upon or constitutes a forecast or
projection, each of PGH or any its subsidiaries represents only
that it acted in good faith and utilized reasonable assumptions
and due care in the preparation of such information, report,
financial statement, exhibit or schedule.
SECTION 3.14. Employee Benefit Plans. (a) Each of PGH and
its ERISA Affiliates is in compliance in all material respects
with the applicable provisions of ERISA and the Code and the
regulations and published interpretations thereunder, except
where the failure to comply could not reasonably be expected to
result in a Material Adverse Effect. Neither PGH nor any ERISA
Affiliate has (a) sought a waiver of the minimum funding standard
under Section 412 of the Code in respect of any Plan, (b) failed
to make any contribution or payment to any Plan or Multiemployer
Plan or made any amendment to any Plan which has resulted or
could result in the imposition of a Lien or the posting of a bond
or other security under ERISA or the Code or (c) incurred any
material liability under Title IV of ERISA other than a liability
to the PBGC for premiums under Section 4007 of ERISA.
(b) Each Foreign Pension Plan is in compliance in all
material respects with all requirements of law applicable thereto
and the respective requirements of the governing documents for
such plan except to the extent such non-compliance could not
reasonably be expected to result in a Material Adverse Effect.
With respect to each Foreign Pension Plan, none of PGH, its
Affiliates or any of its directors, officers, employees or agents
has engaged in a transaction which would subject PGH or
58
any of its subsidiaries, directly or indirectly, to a material
tax or civil penalty. With respect to each Foreign Pension Plan,
adequate reserves have been established in the financial
statements furnished to Lenders in respect of any unfunded
liabilities in accordance with applicable law and prudent
business practice or, where required, in accordance with ordinary
accounting practices in the jurisdiction in which such Foreign
Pension Plan is maintained. The aggregate unfunded liabilities,
after giving effect to any such reserves for such liabilities,
with respect to such Foreign Pension Plans could not reasonably
be expected to result in a Material Adverse Effect. There are no
material actions, suits or claims (other than routine claims for
benefits) pending or threatened against PGH or any of its
Affiliates with respect to any Foreign Pension Plan which could
reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect.
SECTION 3.15. Environmental Matters. Except as set forth
on Schedule 3.15:
(a) The properties owned, leased or operated by PGH
and its subsidiaries (the "Properties") do not contain any
Hazardous Materials in amounts or concentrations which
(i) constitute a violation of, (ii) require Remedial Action
under, or (iii) could give rise to liability under,
Environmental Laws, which violations, Remedial Actions and
liabilities, in the aggregate, could reasonably be expected
to result in a Material Adverse Effect;
(b) The Properties and all operations of PGH and its
subsidiaries are in compliance with all Environmental Laws
and all Environmental Permits with respect to such
Properties and operations have been obtained and are in
effect, except to the extent that such non-compliance or
failure to obtain any such permits, in the aggregate, could
not reasonably be expected to result in a Material Adverse
Effect;
(c) There have been no Releases or threatened Releases
at, from or under the Properties or otherwise in connection
with the operations of PGH or any of its subsidiaries which
Releases or threatened Releases, in the aggregate, could
reasonably be expected to result in a Material Adverse
Effect;
(d) There are no existing or enacted but not yet
effective Environmental Laws that require expenditures in
connection with the Properties or operations of PGH or any
of its subsidiaries which, in the aggregate, could
reasonably be expected to result in a Material Adverse
Effect;
(e) Neither PGH nor any of its subsidiaries has
received any notice of an Environmental Claim in connection
with the Properties or the operations of PGH or such
subsidiaries or with regard to any person whose liabilities
for environmental, health or safety matters PGH or such
subsidiaries has retained or assumed, in whole or in part,
contractually, by operation of law or otherwise, which, in
the aggregate, could reasonably be expected to result in a
Material Adverse Effect, nor do PGH or such subsidiaries
have reason to believe that any such notice will be received
or is being threatened; and
(f) Hazardous Materials have not been transported from
the Properties, nor have Hazardous Materials been generated,
treated, stored or disposed of at, on or under any of the
Properties in a manner that could give rise to liability
under any Environmental Law, nor have PGH or such
subsidiaries retained or assumed any liability,
contractually, by operation
59
of law or otherwise, with respect to the generation,
treatment, storage or disposal of Hazardous Materials, which
transportation, generation, treatment, storage or disposal,
or retained or assumed liabilities, in the aggregate, could
reasonably be expected to result in a Material Adverse
Effect.
SECTION 3.16. Insurance. Schedule 3.16 sets forth a true,
complete and correct description of all material insurance
maintained by each Loan Party or by each Loan Party for its
subsidiaries as of the Closing Date and the date of the initial
Borrowing hereunder. As of each such date, such insurance is in
full force and effect and all premiums have been duly paid. PGH
and its subsidiaries (after giving effect to the Transactions)
have (or will have, as the case may be) insurance in such amounts
and covering such risks and liabilities as are in accordance with
normal industry practice.
SECTION 3.17. Security Documents. (a) The Pledge
Agreement is effective to create in favor of the Collateral
Agent, for the ratable benefit of the Secured Parties, a legal,
valid and enforceable security interest in the Collateral (as
defined in the Pledge Agreement) and, when such Collateral is
delivered to the Collateral Agent, the Pledge Agreement shall
constitute a duly perfected first priority Lien on, and security
interest in, all right, title and interest of the pledgors
thereunder in such Collateral, in each case prior and superior in
right to any other person, other than with respect to Liens
expressly permitted by Section 6.02.
(b) The Collateral Assignment is effective to create in
favor of the Collateral Agent, for the ratable benefit of the
Secured Parties, a legal, valid and enforceable security interest
in the Collateral (as defined in the Collateral Assignment) and,
when financing statements in appropriate form are filed in
appropriate filing offices, the Collateral Assignment shall
constitute (to the extent such security interest can be perfected
by filing under applicable uniform commercial codes) a duly
perfected first priority Lien on, and security interest in, all
right, title and interest of the Loan Parties in such Collateral,
in each case prior and superior in right to any other person,
other than with respect to Liens expressly permitted by
Section 6.02.
SECTION 3.18. Solvency. Immediately after the consummation
of the Transactions and immediately following the making of each
Loan and after giving effect to the application of the proceeds
of such Loans, (a) the fair value of the assets of each Loan
Party, at a fair valuation, will exceed its debts and
liabilities, subordinated, contingent or otherwise; (b) the
present fair saleable value of the property of each Loan Party
will be greater than the amount that will be required to pay the
probable liability of its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other
liabilities become absolute and matured; (c) each Loan Party will
be able to pay its debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become
absolute and matured; and (d) each Loan Party will not have
unreasonably small capital with which to conduct the business in
which it is engaged as such business is now conducted and is
proposed to be conducted following the Closing Date.
SECTION 3.19. Labor Matters. There are no strikes,
lockouts or slowdowns against PGH or any of its subsidiaries
pending or, to the knowledge of any Loan Party, threatened,
except where any such strike, lockout or slowdown could not
reasonably be expected to result in a Material Adverse Effect.
The hours worked by and payments made to employees of PGH and its
subsidiaries have not been in material violation of the Fair
Labor Standards Act or any other applicable Federal,
60
state, local or foreign law dealing with such matters. All
payments due from PGH or any such subsidiary, or for which any
claim may be made against PGH or any such subsidiary, on account
of wages and employee health and welfare insurance and other
benefits, have been paid or accrued as a liability on the books
of PGH or such subsidiary. The consummation of the Transactions
will not give rise to any right of termination or right of
renegotiation on the part of any union under any collective
bargaining agreement to which PGH or any such subsidiary is
bound.
ARTICLE IV
Conditions
SECTION 4.01. Effective Date. The effectiveness of this
Agreement shall be subject to the satisfaction of each of the
following conditions:
(a) The Paying Agent shall have received, on behalf of
itself and the Lenders and the Issuing Bank, a favorable
written opinion of each of (i) Stoel Rives LLP, special
United States counsel for the Loan Parties, substantially to
the effect set forth in Exhibit I-1, (ii) Xxxxx Xxxx &
Xxxxxxxx, special United States counsel for the Loan
Parties, substantially to the effect set forth in
Exhibit I-2, (iii) Linklaters & Paines, special United
Kingdom counsel for the Loan Parties, substantially to the
effect set forth in Exhibit I-3 and (iv) Xxxxxxxx Chance,
special United Kingdom counsel for the Initial Lenders,
substantially to the effect set forth in Exhibit I-4.
(b) The Paying Agent shall have received (i) a copy of
the certificate or articles of incorporation, including all
amendments thereto, of PGH, certified as of a recent date by
the Secretary of State of the State of Delaware, and a
certificate as to the good standing of PGH as of a recent
date, from such Secretary of State; (ii) a certificate of
the Secretary or Assistant Secretary of each Loan Party
dated the Closing Date and certifying (A) that attached
thereto is a true and complete copy of the articles or
certificate of incorporation, the by-laws or memorandum and
articles of association and other organizational documents
of such Loan Party as in effect on the Closing Date and at
all times since the date of the resolutions described in
clause (B) below, (B) that attached thereto is a true and
complete copy of resolutions duly adopted by the Board of
Directors and a Committee of the Board of Directors of such
Loan Party, as applicable, authorizing the execution,
delivery and performance of the Transaction Documents to
which such person is a party (including in the case of the
Borrower, the borrowings hereunder and in the case of PGH,
the Guarantee of the borrowings hereunder), and that such
resolutions have not been modified, rescinded or amended and
are in full force and effect, (C) that the certificate or
articles of incorporation of PGH have not been amended since
the date of the last amendment thereto shown on the
certificate of good standing furnished pursuant to
clause (i) above, and (D) as to the incumbency and specimen
signature of each officer authorized, to the extent
applicable, to act with respect to the Loan Documents and
each of the other Transaction Documents; and (iii) a
certificate of another officer as to the incumbency and
specimen signature of the Secretary or Assistant Secretary
executing the certificate pursuant to clause (ii) above.
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(c) The Paying Agent shall have received a
certificate, signed by a Financial Officer of each Loan
Party, dated the Closing Date and confirming that the
representations and warranties set forth in Article III
hereof are true and correct in all material respects, except
to the extent any such representation and warranty relates
to an earlier or later date.
(d) Each of the Guarantee Agreement and the Pledge
Agreement shall have been duly executed by the parties
thereto and delivered to the Collateral Agent and shall be
in full force and effect in accordance with their respective
terms.
SECTION 4.02. Borrowings. (a) The obligation of any Lender
to make a Loan or of the Issuing Bank to issue, extend, renew or
amend a Letter of Credit (each, a "Credit Event") on the occasion
of any Credit Event, the proceeds of which are to be used,
directly or indirectly, to finance the Offer or to pay costs and
expenses related thereto or for any other purpose set forth in
Clause 3.1(a)(i) of the PA Facility Agreement or to repay
Refinanced Indebtedness, is subject to the satisfaction of the
following conditions:
(i) The Paying Agent shall have received a notice of
such Credit Event as required by Section 2.03 or, in the
case of the issuance of a Letter of Credit, the Issuing Bank
and the Paying Agent shall have received a notice requesting
the issuance of such Letter of Credit as required by
Section 2.22(b).
(ii) At the time of and immediately after such Credit
Event, no Event of Default described in clause (g) or (h) of
Article VII shall have occurred and be continuing with
respect to any Loan Party.
(iii)The representations and warranties set forth in
Sections 3.01, 3.02 and 3.03, as they relate to the Loan
Parties, shall be true and correct in all material respects
on the date of any such Credit Event with the same effect as
though made on such date.
(iv) Each Loan Party shall have repaid in full (or
shall have made provision for the repayment in full of) the
principal of all loans outstanding, interest thereon and
other amounts due and payable in respect of the Refinanced
Indebtedness, and the Paying Agent shall have received
evidence thereof.
(v) Each of the Offer Conditions Precedent, unless
waived in writing by the Required Lenders (such waiver being
conclusively evidenced by written notice from the Paying
Agent to the Borrower and, in the case of paragraph 1 of
such Offer Conditions Precedent, not to be unreasonably
withheld or delayed), shall have been satisfied.
(vi) Each of the TPC Contribution and the PGH Equity
Contribution shall have been completed.
(vii)Each of the applicable conditions precedent with
respect to a borrowing to finance the Offer set forth in the
Powercoal Credit Agreement and the PA Facility Agreement
(other than any condition in any such agreement requiring
that borrowings shall have been made under this or any other
such agreement and/or the proceeds of such borrowings have
been made available directly or indirectly to PA) shall have
been satisfied
62
or waived in accordance with the terms thereof, and each of
such agreements and the Eastern Facility Letter shall be in
full force and effect.
Each Credit Event hereunder of the type described in this
Section 4.02(a) shall be deemed to be a representation and
warranty by each Loan Party on the date of such Credit Event as
to the facts specified in clauses (ii), (iii), (iv), (v), (vi),
and (vii) of this Section 4.02(a).
(b) The obligation of any Lender or of the Issuing Bank on
the occasion of any Credit Event other than (i) a Credit Event of
the type described in Section 4.02(a) or (ii) a continuation or
conversion of a Borrowing of the type described in Section 2.10,
is subject to the satisfaction of the following conditions:
(i) The Paying Agent shall have received a notice of
such Credit Event as required by Section 2.03 (or such
notice shall have been deemed given in accordance with
Section 2.03) or, in the case of the issuance of a Letter of
Credit, the Issuing Bank and the Paying Agent shall have
received a notice requesting the issuance of such Letter of
Credit as required by Section 2.22(b).
(ii) The representations and warranties set forth in
Article III hereof shall be true and correct in all material
respects on and as of the date of such Credit Event with the
same effect as though made on and as of such date, except to
the extent such representations and warranties expressly
relate to an earlier or later date.
(iii)At the time of and immediately after such Credit
Event, no Event of Default or Default shall have occurred
and be continuing.
Each Credit Event of the type described in this Section 4.02(b)
shall be deemed to constitute a representation and warranty by
each Loan Party on the date of such Credit Event as to the
matters specified in paragraphs (ii) and (iii) of this
Section 4.02(b).
ARTICLE V
Affirmative Covenants
Each Loan Party covenants and agrees with each Lender that
so long as this Agreement shall remain in effect and until the
Commitments have been terminated and the principal of and
interest on each Loan, all Fees and all other expenses or amounts
then due and payable under any Loan Document shall have been paid
in full and all Letters of Credit have been canceled or have
expired and all amounts drawn thereunder have been reimbursed in
full, unless the Required Lenders shall otherwise consent in
writing, each Loan Party will, and will cause each of its
subsidiaries to:
SECTION 5.01. Existence; Businesses and Properties.
(a) Do or cause to be done all things necessary to preserve,
renew and keep in full force and effect the legal existence of
each Loan Party, except as otherwise expressly permitted under
Section 6.05.
(b) (i) In the case of each Significant Subsidiary, do, or
cause to be done all things necessary to preserve, renew and keep
in full force and effect its legal existence, except as otherwise
expressly
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permitted under Section 6.05, and (ii) in the case of each Loan
Party and each Significant Subsidiary, do or cause to be done all
things necessary to obtain, preserve, renew, extend and keep in
full force and effect the rights, licenses, permits, franchises,
authorizations, patents, copyrights, trademarks and trade names
material to the conduct of its business; except as contemplated
by this Agreement, maintain and operate such business in
substantially the manner in which it is presently conducted and
operated; and at all times maintain and preserve all property
material to the conduct of such business and keep such property
in good repair, working order and condition and from time to time
make, or cause to be made, all needful and proper repairs,
renewals, additions, improvements and replacements thereto
necessary in order that the business carried on in connection
therewith may be properly conducted in all material respects at
all times, in each case, where the failure to do so could
reasonably be expected to have a Material Adverse Effect.
SECTION 5.02. Insurance. Keep its insurable properties
adequately insured at all times by financially sound and
reputable insurers; maintain such other insurance (including self
insurance), to such extent and against such risks, including fire
and other risks insured against by extended coverage, as is
customary with companies in the same or similar businesses
operating in the same or similar locations, including public
liability insurance against claims for personal injury or death
or property damage occurring upon, in, about or in connection
with the use of any properties owned, occupied or controlled by
it; and maintain such other insurance as may be required by law.
SECTION 5.03. Obligations and Taxes. Pay its Indebtedness
and other material obligations promptly and in accordance with
their terms and pay and discharge promptly when due all taxes,
assessments and governmental charges or levies imposed upon it or
upon its income or profits or in respect of its property, before
the same shall become delinquent or in default, as well as all
material lawful claims for labor, materials and supplies or
otherwise that, if unpaid, might give rise to a Lien upon such
properties or any part thereof; provided, however, that such
payment and discharge shall not be required with respect to any
such tax, assessment, charge, levy or claim so long as the
validity or amount thereof shall be contested in good faith by
appropriate proceedings and the applicable Loan Party shall have
set aside on its books adequate reserves with respect thereto in
accordance with GAAP and such contest operates to suspend
collection of the contested obligation, tax, assessment or charge
and enforcement of a Lien.
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SECTION 5.04. Financial Statements, Reports, etc. In the case of the
Loan Parties, furnish to the Paying Agent and each Lender:
(a) as soon as available and in any event within 120 days after the
end of each fiscal year, a consolidated balance sheet and related
statement of income and retained earnings and cash flows showing the
financial condition (in the case of persons organized in the United
States) or financial position (in the case of all other persons) of each
of (i) PGH and its subsidiaries, (ii) the Borrower and its subsidiaries,
(iii) Powercoal and its subsidiaries, (iv) prior to the Peabody Transfer,
Peabody Holding and its subsidiaries, (v) PALLC and its subsidiaries and
(vi) PA and its subsidiaries as of the close of and during such fiscal
year, in each case audited by Deloitte & Touche LLP or other independent
public accountants of recognized standing in the United States, the United
Kingdom or Australia, as applicable, and accompanied by an opinion of such
accountants (which shall not be qualified in any material respect) to the
effect that such consolidated financial statements fairly present (in the
case of persons organized in the United States), or present a true and
fair view of (in the case of all other persons), the financial condition
or financial position, as applicable, and results of operations of (A) PGH
and its subsidiaries, (B) the Borrower and its subsidiaries, (C) Powercoal
and its subsidiaries, (D) Peabody Holding and its subsidiaries, (E) PALLC
and its subsidiaries and (F) PA and its subsidiaries, as the case may be,
on a consolidated basis in accordance with GAAP consistently applied
(except as otherwise disclosed in the notes thereto);
(b) within 75 days after the end of the first fiscal quarter ending
after the initial Acquisition Borrowing and within 60 days after the end
of each of the first three fiscal quarters of each fiscal year thereafter
(provided that prior to such date, PGH and the Borrower shall furnish to
the Paying Agent and each Lender any information made publicly available
relating to PGH and its subsidiaries), a consolidated balance sheet and
related statement of income and retained earnings and cash flows showing
the financial condition or financial position, as applicable, of each of
(i) PGH and its subsidiaries, (ii) the Borrower and its subsidiaries,
(iii) Powercoal and its subsidiaries, (iv) prior to the Peabody Transfer,
Peabody Holding and its subsidiaries, (v) PALLC and its subsidiaries and
(vi) PA and its subsidiaries as of the close of and during such fiscal
quarter and the then elapsed portion of the fiscal year, in each case
certified by a Financial Officer of each such person as fairly presenting,
or presenting a true and fair view of, as applicable, the financial
condition or financial position, as applicable, and results of operations
of (A) PGH and its subsidiaries, (B) the Borrower and its subsidiaries,
(C) Powercoal and its subsidiaries, (D) Peabody Holding and its
subsidiaries, (E) PALLC and its subsidiaries and (F) PA and its
subsidiaries, as the case may be, on a consolidated basis in accordance
with GAAP consistently applied (except as otherwise disclosed in the
certificate of a Financial Officer and except for the absence of footnote
disclosure), subject to normal year-end audit adjustments;
(c) as soon as available and in any event within 120 days after the
end of each fiscal year, an unaudited consolidating balance sheet and
related statement of income for each of (i) PGH and its subsidiaries and
(ii) the Borrower and its subsidiaries for the four quarter period ending
as of the close of such fiscal year;
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(d) concurrently with any delivery of financial statements under
paragraph (a), (b) or (c) above, (i) a certificate of the Financial
Officer certifying such statements to the effect that no Event of Default
has occurred and that no Default has occurred and is continuing or, if
such an Event of Default has occurred or a Default has occurred and is
continuing, specifying the nature and extent thereof and any corrective
action taken or proposed to be taken with respect thereto and (ii) a
certificate of a Financial Officer of PGH setting forth the Net
Termination Value as of the date of such financial statements; provided
that, in addition to the certificate required by clause (i) above,
concurrently with the delivery of financial statements under paragraph (a)
above, the applicable accounting firm will deliver a certificate (which
certificate may be limited to accounting matters and disclaim
responsibility for legal interpretations) to the effect that no Event of
Default has occurred and that no Default has occurred and is continuing,
unless at such time it is the practice and policy of such accounting firm
not to deliver such certificates;
(e) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by
PGH, the Borrower, Powercoal, PA and PALLC or any of their respective
subsidiaries with the Securities and Exchange Commission, or any
Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or distributed to
its public shareholders, as the case may be; and
(f) promptly, from time to time, such other information regarding the
operations, business affairs and financial condition of PGH, the
Borrower, Powercoal, PA and PALLC or any of their respective subsidiaries,
or compliance with the terms of any Loan Document, as the Paying Agent or
any Lender may reasonably request.
SECTION 5.05. Litigation and Other Notices. Furnish to the Paying
Agent, the Issuing Bank and each Lender prompt written notice of the following:
(a) any Event of Default or Default of which a Responsible Officer of
such Loan Party is aware, specifying the nature and extent thereof and the
corrective action (if any) taken or proposed to be taken with respect
thereto;
(b) the filing or commencement of, or any threat or notice of
intention of any person to file or commence, any action, suit or
proceeding, whether at law or in equity or by or before any Governmental
Authority, against any Loan Party or any Affiliate thereof that could
reasonably be expected to result in a Material Adverse Effect; and
(c) any development of which a Responsible Officer is aware that has
resulted in, or which such Responsible Officer has reasonably concluded
will result in, a Material Adverse Effect.
SECTION 5.06. Maintaining Records; Access to Properties and Inspections.
Keep proper books of record and account in which full, true and correct
entries in conformity with GAAP and all requirements of law are made of all
dealings and transactions in relation to its business and activities. PGH
will, and will cause each of its subsidiaries to, permit any representatives
designated by the Paying Agent or any Lender to visit and inspect (at such
Lender's expense, except in the case of visits
66
and inspections made by the Paying Agent) the financial records and the
properties of PGH or any such subsidiary at reasonable times and as often as
reasonably requested and to make extracts from and copies of such financial
records, and permit any representatives designated by the Paying Agent or any
Lender to discuss (in the presence of PGH or such subsidiary, as applicable,
unless a Default or Event of Default shall have occurred and is continuing)
the affairs, finances and condition of PGH or any such subsidiary with the
officers thereof and independent accountants therefor.
SECTION 5.07. Use of Proceeds. Use the proceeds of the Loans and request
the issuance of Letters of Credit only for the purposes set forth in the
preamble to this Agreement.
SECTION 5.08. Compliance with Laws. Comply in all respects with all
applicable laws, ordinances, rules, regulations and requirements of
Governmental Authorities (including Environmental Laws and ERISA and the
rules and regulations thereunder), except where the necessity of compliance
therewith is contested in good faith by appropriate proceedings or where
non-compliance therewith could not reasonably be expected to have a Material
Adverse Effect.
SECTION 5.09. Further Assurances. As soon as practicable after the
execution by TEG and its subsidiaries of the U.K. Tax Sharing Agreement,
execute the Collateral Assignment and deliver it to the Collateral Agent,
together with legal opinions reasonably satisfactory to the Collateral Agent,
and give notice of the execution of such Collateral Assignment to the other
parties to the U.K. Tax Sharing Agreement in order to grant, preserve,
protect and perfect the validity and first priority of the security interests
created or intended to be created by such Collateral Assignment. Execute any
and all further documents, financing statements, agreements and instruments,
and take all further action (including filing Uniform Commercial Code and
other financing statements) that may reasonably be required under applicable
law, or that the Required Lenders, the Paying Agent or the Collateral Agent
may reasonably request, in order to effectuate the transactions contemplated
by the Loan Documents and in order to grant, preserve, protect and perfect
the validity and first priority of the security interests created or intended
to be created by the Security Documents. Each Loan Party agrees to provide
such evidence as the Collateral Agent shall reasonably request as to the
perfection and priority status of each such security interest and Lien.
SECTION 5.10. Interest Rate Protection Agreements. As promptly as
practicable after the Unconditional Date and in any event within 180 days
after the date of the initial Borrowing hereunder, enter into, and thereafter
maintain in full force and effect through the Term Loan Maturity Date, one or
more Interest Rate Protection Agreements in form reasonably satisfactory to
the Paying Agent, the effect of which shall be to limit or cap the interest
cost to PGH and its subsidiaries with respect to a notional amount at least
equal to 50% of the Consolidated Total Debt of PGH and its subsidiaries and
deliver evidence of the execution and delivery thereof to the Paying Agent.
SECTION 5.11. Tax Sharing Accounts. In the case of the Loan Parties,
cause each Tax Sharing Payment to be made to or by such Loan Party to be made
to or from an account maintained with Citibank.
SECTION 5.12. Tax Sharing Agreements. (a) As soon as practicable, but in
any event not later than 270 days after the initial Acquisition Borrowing,
cause TEG and certain of its subsidiaries resident in the United Kingdom for
purposes of United Kingdom tax to enter into the U.K. Tax Sharing Agreement
and (b) maintain the U.S. Tax Sharing Policy in full force and effect and
cause
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to be bound thereby each of their subsidiaries that is included in the
affiliated group for U.S. income tax purposes of which PacifiCorp is the
common parent.
SECTION 5.13. Peabody Transfer; PPM Contribution; Citizens Transfer. As
soon as practicable, but in any event not later than 270 days after the
initial Acquisition Borrowing, effect (a) the Peabody Transfer, (b) the PPM
Contribution and (c) the Citizens Transfer.
SECTION 5.14. Open Market Shares. On or prior to the date of the initial
Acquisition Borrowing pursuant to Section 4.02(a), transfer or cause to be
transferred all the Open Market Shares to PA.
ARTICLE VI
Negative Covenants
Each Loan Party covenants and agrees with each Lender that, so long as
this Agreement shall remain in effect and until the Commitments have been
terminated and the principal of and interest on each Loan, all Fees and all
other expenses or amounts then due and payable under any Loan Document have
been paid in full and all Letters of Credit have been canceled or have
expired and all amounts drawn thereunder have been reimbursed in full, unless
the Required Lenders shall otherwise consent in writing, none of the Loan
Parties will, or will cause or permit any of its subsidiaries to:
SECTION 6.01. Indebtedness. Incur, create, assume or permit to exist any
Indebtedness, except:
(a) Indebtedness outstanding on the Closing Date, or available under
debt instruments existing on the Closing Date, and set forth on Schedule
6.01(a);
(b) Indebtedness created hereunder and under the other Loan Documents;
(c) Indebtedness of Services, PA, Powercoal, PALLC, Eastern and their
respective subsidiaries created under or permitted (or not prohibited) by
the Credit Facilities;
(d) Indebtedness of PGH or any of its wholly owned subsidiaries to any
other wholly owned subsidiary of PGH or PGH;
(e) Indebtedness in respect of surety or appeal bonds, performance
bonds, reclamation bonds and other obligations of a like nature incurred
in the ordinary course of business;
(f) Indebtedness (including tax exempt financings and Capital Lease
Obligations) used to purchase, construct, develop or improve assets in the
ordinary course of business after the Closing Date or incurred in the
ordinary course of business after the Closing Date to finance capital
expenditures; provided that at no time shall the aggregate outstanding
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principal amount of any such Indebtedness incurred pursuant to this
paragraph (f) exceed $25,000,000;
(g) extensions, renewals or refinancings of Indebtedness under
paragraphs (a) and (c) so long as (i) such Indebtedness (the "Refinancing
Indebtedness") is in an aggregate principal amount not greater than the
aggregate principal amount of the Indebtedness being extended, renewed or
refinanced plus the amount of any interest or premiums required to be paid
thereon and fees and expenses associated therewith, (ii) such Refinancing
Indebtedness has a later or equal final maturity and a longer or equal
weighted average life than the Indebtedness being extended, renewed or
refinanced, (iii) the interest rate applicable to such Refinancing
Indebtedness shall be a market interest rate (as determined in good faith
by the Board of Directors of PGH or the Borrower) as of the time of such
extension, renewal or refinancing, (iv) if the Indebtedness being
extended, renewed or refinanced is subordinated to the Obligations, such
Refinancing Indebtedness is subordinated to the Obligations to the extent
of the Indebtedness being extended, renewed or refinanced, (v) the
covenants, events of default and other provisions thereof (including any
Guarantees thereof), taken as a whole, shall be no less favorable to the
Lenders than those contained in the Indebtedness being refinanced and (vi)
at the time of and after giving effect to such extension, renewal or
refinancing, no Default or Event of Default shall have occurred and be
continuing;
(h) extensions, renewals or refinancings of Indebtedness under
paragraph (b) so long as (i) such Indebtedness (the "EnergyCo Refinancing
Indebtedness") is in an aggregate principal amount not greater than the
aggregate principal amount of the Indebtedness being extended, renewed or
refinanced plus the amount of any interest required to be paid thereon and
fees and expenses associated therewith, (ii) such EnergyCo Refinancing
Indebtedness matures at least 24 months after the Term Loan Maturity
Date, (iii) the interest rate applicable to such EnergyCo Refinancing
Indebtedness shall be a market interest rate (as determined in good faith
by the Board of Directors of PGH or the Borrower) as of the time of such
extension, renewal or refinancing, (iv) such EnergyCo Refinancing
Indebtedness shall be either (x) unsecured or (y) secured by all of any
portion of the Collateral pursuant to the Collateral Trust and
Intercreditor Agreement, (v) such EnergyCo Refinancing Indebtedness shall
not require any scheduled payments of principal prior to the maturity
thereof, (vi) the agreements governing such EnergyCo Refinancing
Indebtedness shall not require the Loan Parties or their respective
subsidiaries to maintain any specified financial condition (other than as
a condition to the taking of specified actions by the Loan Parties or
their respective subsidiaries), (vii) the Net Cash Proceeds of such
EnergyCo Refinancing Indebtedness are used as required by Sections 2.13(d)
and (e) and (viii) at the time of and after giving effect to such
extension, renewal or refinancing, no Default or Event of Default shall
have occurred and be continuing;
(i) Indebtedness issued under an FRN Purchase Agreement so long as (i)
such Indebtedness (the "FRNs") matures no earlier than the Term Loan
Maturity Date, (ii) such FRNs shall be either (x) unsecured or (y) secured
by all or any portion of the Collateral pursuant to the Collateral Trust
and Intercreditor Agreement, (iii) such FRNs shall not require any
scheduled payments of principal prior to the maturity thereof and (iv) the
Net Cash Proceeds of such FRNs are used as required by Sections 2.13(d)
and (e);
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(j) Non-Recourse Indebtedness of any Single Purpose Entity; and
(k) unsecured Indebtedness of PGH or the Borrower in addition to that
permitted by paragraphs (a) through (j) above in an aggregate principal
amount outstanding not to exceed at any time $50,000,000.
SECTION 6.02. Liens. In the case of each Loan Party, create, incur,
assume or permit to exist any Lien on any property or assets (including stock or
other securities of any person) now owned or hereafter acquired by it or on any
income or revenues or rights in respect of any thereof, except:
(a) Liens on property or assets of the Loan Parties existing on the
Closing Date and set forth on Schedule 6.02(a); provided that such Liens
shall secure only those obligations which they secure on the Closing Date;
(b) any Lien created under the Loan Documents;
(c) any Lien existing on any property or asset prior to the
acquisition thereof by either Loan Party; provided that (i) such Lien is
not created in contemplation of or in connection with such acquisition and
(ii) such Lien does not apply to any other property or assets of either
Loan Party;
(d) Liens for taxes not yet due or which are being contested in
compliance with Section 5.03;
(e) carriers', warehousemen's, mechanics', materialmen's, repairmen's,
landlord's or other like Liens arising in the ordinary course of business
and securing obligations that are not due and payable or which are being
contested in compliance with Section 5.03;
(f) pledges and deposits made in the ordinary course of business in
compliance with workmen's compensation, unemployment insurance and other
social security laws or regulations;
(g) deposits to secure the performance of bids, trade contracts (other
than for Indebtedness), leases (other than Capital Lease Obligations),
statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature incurred in the ordinary course of
business;
(h) Liens created by or relating to any legal proceeding which at the
time is being contested in good faith by appropriate proceedings; provided
that, in the case of a Lien consisting of an attachment or judgment Lien,
the judgment it secures shall, within 60 days of entry thereof, have been
discharged or execution thereof stayed pending appeal, or discharged
within 60 days after the expiration of any such stay;
(i) any Lien on (i) the proceeds of sale of commercial paper issued by
a Loan Party or (ii) a Loan Party's right to receive such proceeds,
securing such Loan Party's obligation
70
to reimburse the issuer of a letter of credit for drawings to repay
commercial paper previously issued by such Loan Party;
(j) zoning restrictions, easements, rights-of-way, restrictions on use
of real property and other similar encumbrances incurred in the ordinary
course of business which, in the aggregate, are not substantial in amount
and do not materially detract from the value of the property subject
thereto or interfere with the ordinary conduct of the business of either
Loan Party;
(k) purchase money security interests in real property, improvements
thereto, equipment or other fixed assets hereafter acquired (or, in the
case of improvements, equipment or other fixed assets, constructed) by the
Borrower or any Subsidiary; provided that (i) such security interests
secure Indebtedness permitted by Section 6.01(f), (ii) such security
interests are incurred, and the Indebtedness secured thereby is created,
no later than 90 days after such acquisition (or completion of such
construction), (iii) the Indebtedness secured thereby does not exceed the
cost of such real property, improvements or equipment at the time of such
acquisition (or construction) and (iv) such security interests do not
apply to any other property or assets of the Borrower or any Subsidiary
(other than the proceeds of the real property, improvements, equipment or
other fixed assets subject to such Lien);
(l) Liens securing Refinancing Indebtedness, to the extent that the
Indebtedness being refinanced was originally secured in accordance with
this Section 6.02; provided that such Lien does not apply to any
additional property or assets of either Loan Party (other than the
proceeds of the property or asset subject to such Lien);
(m) Liens in the Collateral securing FRNs or EnergyCo Refinancing
Indebtedness, in each case subject to the terms of the Collateral Trust
and Intercreditor Agreement;
(n) Liens on cash and cash equivalents in an aggregate amount not to
exceed $10,000,000 at any time to secure obligations of the Loan Parties
under Hedging Agreements;
(o) Liens on cash and cash equivalents to secure obligations of the
Loan Parties in respect of Exchange Rate Protection Agreements entered
into with a Lender (or an Affiliate of a Lender) at the time of issuance
of any EnergyCo Refinancing Indebtedness; provided, however, that the
aggregate amount of cash and cash equivalents that may be subject to a
Lien pursuant to this clause (o) on any date shall not exceed an amount
equal to 10% of the aggregate amount by which the Term Loans and FRNs have
been prepaid on or prior to such date (excluding any prepayment of Term
Loans with the proceeds of FRNs);
(p) Liens on cash and cash equivalents to secure a Loan Party's
reimbursement obligations to the issuer of a letter of credit that is a
Lender (or an Affiliate of a Lender); and
(q) Liens in addition to those permitted by paragraphs (a) through
(p); provided, however, that the aggregate principal amount of
Indebtedness and amount of other liabilities of the Loan Parties that is
secured by such Liens do not exceed at any time $10,000,000.
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SECTION 6.03. Sale and Lease-Back Transactions. Enter into any
arrangement, directly or indirectly, with any person whereby it shall sell or
transfer any property, real or personal, used or useful in its business, whether
now owned or hereafter acquired, and thereafter rent or lease such property or
other property which it intends to use for substantially the same purpose or
purposes as the property being sold or transferred; provided that Services, PA,
Powercoal, PALLC, Eastern and their respective subsidiaries may enter into any
such transaction to the extent permitted or not prohibited by the applicable
Credit Facilities.
SECTION 6.04. Investments, Loans and Advances. Purchase, hold or acquire
any capital stock, evidences of indebtedness or other securities of, make or
permit to exist any loans or advances to, or make or permit to exist any
investment or any other interest in, any other person, except:
(a) existing investments by PGH or the Borrower in the capital stock,
share capital or other equity interests, as the case may be, of its
subsidiaries;
(b) investments, loans and advances of PGH and its subsidiaries
existing on the Closing Date and set forth on Schedule 6.04(b) or pursuant
to commitments set forth on Schedule 6.04(b);
(c) Permitted Investments;
(d) investments in Qualified NUG Hedging Agreements and Hedging
Agreements permitted under this Agreement, including Funding Exchange Rate
Protection Agreements;
(e) investments constituting non-cash consideration received in
connection with a sale of assets not prohibited by Section 6.05;
(f) investments, loans or advances made from the proceeds of equity
contributions made by PacifiCorp to PGH or the Borrower;
(g) investments that are sale and leaseback transactions permitted by
Section 6.03;
(h) investments, loans or advances permitted or not prohibited under
the applicable Credit Facilities, made by Services, PA, Powercoal, PALLC,
Eastern and their respective subsidiaries;
(i) the investment by PGH in Interco in connection with the Interco
Transactions; provided that Interco shall become a party to the Guarantee
Agreement as a guarantor and shall become a party to the Pledge Agreement
as a pledgor with respect to its interests in the Borrower and the
corporations that are members of PALLC; and
(j) investments in energy-related businesses; provided that it shall be
a condition to any such investment that (i) no Default or Event of Default
shall have occurred and be continuing, (ii) after giving effect to such
investment, including the proposed financing thereof, the Borrower shall
be in pro forma compliance with all the covenants contained in this
Agreement and (iii) if such investment is in an aggregate amount in excess
of $25,000,000, the Borrower shall have delivered to the Paying Agent a
certificate of a
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Financial Officer confirming compliance with clauses (i) and (ii) and
setting forth calculations, in form and substance reasonably satisfactory
to the Paying Agent, showing pro forma compliance with the covenants set
forth in Sections 6.10, 6.11 and 6.12.
SECTION 6.05. Mergers, Consolidations, Sales of Assets and Acquisitions.
(a) In the case of PGH and the Borrower, (i) merge into or consolidate with any
other person, or permit any other person to merge into or consolidate with it,
or sell, convey, transfer, lease, liquidate or otherwise dispose of (in one
transaction or in a series of related transactions) all or substantially all the
assets of any Loan Party, or assign any of its respective Obligations under the
Loan Documents to any other person; or (ii) permit PALLC, Powercoal, PA or
Services to sell, transfer, lease, liquidate or otherwise dispose of, directly
or indirectly, (by merger or otherwise) all or substantially all their
respective assets to any person other than a Loan Party or a wholly owned
subsidiary of a Loan Party, in each case except:
(A) PGH and any subsidiary may purchase and sell inventory in the
ordinary course of business;
(B) if at the time thereof and immediately after giving effect thereto
no Event of Default or Default shall have occurred and be continuing, any
wholly owned subsidiary of PGH (other than the Borrower) may merge into or
consolidate with or sell, convey, transfer, lease, liquidate or otherwise
dispose of all its assets to PGH or the Borrower or any other wholly owned
subsidiary in a transaction in which no person other than PGH, the
Borrower or a wholly owned subsidiary of PGH receives any consideration;
(C) PGH or any of its subsidiaries may effect the PPM Contribution, the
TPC Contribution, the Citizens Transfer, the Peabody Transfer, the Xxx
Ranch Transfer and the Interco Transactions;
(D) PGH may sell, transfer or otherwise dispose of all the capital
stock of PFS or the Spring Creek Note so long as (I) at the time thereof
and immediately after giving effect thereto, no Event of Default shall
have occurred and be continuing and (II) PGH complies with Section 2.13
with respect to the Net Cash Proceeds received from any such sale,
transfer or other disposition;
(E) acquisitions constituting investments permitted by Section 6.04; and
(F) PGH may sell, transfer or otherwise dispose of the Excluded Assets
to PacifiCorp or any subsidiary of PacifiCorp.
(b) Notwithstanding Section 6.05(a), no Asset Sale by PGH or the Borrower
shall be permitted under this Agreement unless (i) the consideration to be
received in connection therewith shall be at least equal to the fair market
value of the assets or property sold, transferred or otherwise disposed of
(as determined in good faith by the board of directors of PGH or the
Borrower, as the case may be), (ii) such Asset Sale shall be for
consideration at least 80% of which is cash (except to the extent that the
purchase price or payment thereof is contingent on performance of the assets
or property sold) and (iii) to the extent required, the Net Cash Proceeds
therefrom are applied in accordance with Section 2.13(b).
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(c) Notwithstanding Section 6.05(a), no Asset Sale by any of Powercoal,
PA, PALLC, Eastern or any of their respective subsidiaries shall be permitted
under this Agreement unless (i) such Asset Sale is permitted or not
prohibited by the terms of the relevant Credit Facility, and (ii) in each
case, any Net Cash Proceeds received by such person as consideration in
connection with such Asset Sale are retained or applied (A) in the manner
required by, permitted under or not otherwise prohibited by the relevant
Credit Facility or (B) to prepay Loans in accordance with Section 2.13 of
this Agreement.
SECTION 6.06. Dividends and Distributions; Restrictions on Ability of
Subsidiaries to Pay Dividends. (a) Declare or pay, directly or indirectly,
any dividend or make any other distribution (by reduction of capital or
otherwise), whether in cash, property, securities or a combination thereof,
with respect to any shares of its capital stock or directly or indirectly
redeem, purchase, retire or otherwise acquire for value (or permit any
subsidiary to purchase or acquire) any shares of any class of its capital
stock or set aside any amount for any such purpose; provided, however, that
(i) any subsidiary (including any Hybrid Preferred Securities Subsidiary) may
declare and pay dividends or make other distributions ratably to its
shareholders or redeem, purchase, retire or otherwise acquire for value any
shares of any class of its capital stock (including Hybrid Preferred
Securities) or set aside any amount for any such purpose and (ii) if no
Default or Event of Default shall have occurred and be continuing or would
occur as a consequence thereof, (A) PGH and its subsidiaries may make
payments required to be made under the Tax Sharing Agreements so long as the
payment thereunder by PGH and its subsidiaries shall not exceed the amount
PGH and its subsidiaries would be required to pay under such arrangement as
in effect on the Closing Date, (B) PGH may pay dividends to PacifiCorp to the
extent PGH receives a substantially contemporaneous cash equity contribution
from PacifiCorp at least equal in amount and (C) after the Term Loans and
FRNs have been paid in full, PGH may pay dividends to PacifiCorp in an
aggregate amount not to exceed $25,000,000.
(b) Permit the subsidiaries of PGH to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any subsidiary of PGH to (i) (A) pay any
dividends or make any other distributions to PGH or any of its subsidiaries
on its capital stock or any other interest or (ii) make or repay any loans or
advances to PGH or the parent of such subsidiary (subclauses (i) and (ii) are
collectively referred to as an "Upstream Payment"); provided, however, that
the foregoing shall not restrict any encumbrances or restrictions:
(i) existing on the Closing Date under Indebtedness permitted by
Sections 6.01(a) and (c);
(ii) contained in any debt or preferred stock instrument relating to a
person acquired after the Closing Date; provided that (A) such encumbrances
and restrictions are not applicable to any person other than such person or
property or assets acquired, (B) such instrument was in existence at the
time of such acquisition and was not created in contemplation of or in
connection with such acquisition, and (C) the Borrower reasonably believes
at the time of such acquisition that the terms of such instrument will not
encumber or restrict the ability of such acquired person to make an
Upstream Payment in a manner that would adversely affect the Borrower's
ability to perform its obligations under the Loan Documents when due;
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(iii) incurred in connection with any Indebtedness permitted pursuant
to Section 6.01 (including any extension, refinancing, renewal or
replacement of Indebtedness contemplated by clauses (i) and (ii) above);
provided that (A) the Borrower reasonably believes at the time such
Indebtedness is incurred that the terms of such Indebtedness will not
restrict the ability of the person incurring such Indebtedness to make an
Upstream Payment in a manner that would adversely affect the Borrower's
ability to perform its obligations under the Loan Documents when due, and
(B) such Indebtedness contains no express encumbrances or restrictions on
the ability of such person to make an Upstream Payment; provided that any
Indebtedness that extends, refinances, renews or replaces Indebtedness
permitted hereunder may contain express encumbrances or restrictions on
Upstream Payments that are not materially more onerous than those contained
in the Indebtedness being extended, refinanced, renewed or replaced;
(iv) imposed on any Single Purpose Entity;
(v) existing under, or by reason of, applicable law, or as required by
or pursuant to agreements with any Governmental Authority; and
(vi) any encumbrance or restriction on the transfer of any property or
asset in an agreement relating to the acquisition or creation or
disposition of such property or asset or any Lien on such property or asset
that is otherwise permitted by the terms of this Agreement.
SECTION 6.07. Transactions with Affiliates. Make any material payment to,
or sell, lease, transfer or otherwise dispose of any material properties or
assets to, or purchase any material property or assets from, or enter into or
make or amend any material transaction, contract, agreement, understanding,
loan, advance or guarantee with, or for the benefit of, any Affiliate of any
such person (each of the foregoing, an "Affiliate Transaction"), unless such
Affiliate Transaction is on terms that are no less favorable to PGH, the
Borrower or the relevant subsidiary than those that would have been obtained in
a comparable transaction by PGH, the Borrower or such subsidiary with an
unrelated person; provided that (a) any payments or transfers that are permitted
by Section 6.01, 6.04, 6.05(a)(C), 6.05(a)(F) or 6.06(a) shall not be deemed to
be Affiliate Transactions and (b) the foregoing restriction shall not apply to
(i) transactions among the Loan Parties, (ii) transactions between or among
subsidiaries of the Borrower and (iii) transactions pursuant to agreements
entered into or in effect on the Closing Date (including the Tax Sharing
Agreements).
SECTION 6.08. Business of PGH and Subsidiaries. Engage to any material
extent in any business or business activity other than the energy business and
business activities reasonably incidental thereto.
SECTION 6.09. Other Indebtedness and Agreements. (a) In the case of the
Loan Parties, permit any waiver, supplement, modification, amendment,
termination (other than in connection with a refinancing permitted by Section
6.01(h)) or release of any indenture, note or any other instrument or
agreement evidencing Indebtedness for money borrowed (other than the
Intercompany Loan Agreements) or preferred or preference stock or pursuant to
which any Indebtedness for money borrowed or such stock was issued or issue
any securities in exchange for any Indebtedness for money borrowed or any
preferred or preference stock; provided, however, that such person may
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amend, modify or grant a waiver with respect to any such indenture, note or
other instrument or agreement if such amendment, modification or waiver does
not have the effect of (i) increasing the amounts due in respect of any such
indenture, note or other instrument or agreement or any interest rate
thereunder, (ii) subjecting any property of PGH or the Borrower to any Lien
to which it was not so subject immediately prior to any such amendment,
modification or waiver, (iii) shortening the maturity or average life of any
such Indebtedness for borrowed money (provided that the maturity of any such
Indebtedness for borrowed money may be shortened to a date that is not less
than six months later than the latest final maturity date of any outstanding
Term Loans) or (iv) creating or changing any covenant or similar restriction
or event of default having application to such person to make any such
covenant or similar restriction more restrictive on such person than the
covenants contained in this Agreement.
(b) In the case of the Loan Parties, make any payment or distribution,
whether in cash, property, securities or a combination thereof, other than
scheduled payments of principal and interest as and when due (to the extent
not prohibited by applicable subordination provisions), in respect of, or
pay, or offer or commit to pay, or directly or indirectly redeem, repurchase,
retire or otherwise acquire for consideration (or set apart any funds for the
aforesaid purposes) any Indebtedness for borrowed money, except for (i) the
Loans and (ii) Indebtedness that is refinanced by Refinancing Indebtedness.
(c) In the case of the Loan Parties, cause or suffer to exist any
amendment or modification to or supplement of the charter or by-laws of a
Loan Party or any other agreement (including the Tax Sharing Agreements) that
is material to the conduct of the operations of a Loan Party without the
prior written consent of the Required Lenders, unless such amendment,
modification or supplement is not adverse to the interests of the Lenders.
SECTION 6.10. Fixed Charge Coverage Ratio. Permit the ratio of (a) Cash
Available for Fixed Charges to (b) Fixed Charges for any four fiscal quarter
period ending after the Unconditional Date to be less than 1.10 to 1.00.
SECTION 6.11. Leverage Ratio. Permit the Leverage Ratio as at the end of
any fiscal quarter listed below to be in excess of the ratio set forth below
for such quarter:
Quarter Ending Ratio
-------------- -----
December 31, 1998 7.000 to 1.00
March 31, 1999 6.875 to 1.00
June 30, 1999 6.750 to 1.00
September 30, 1999 6.625 to 1.00
December 31, 1999 6.500 to 1.00
March 31, 2000 6.375 to 1.00
June 30, 2000 6.250 to 1.00
September 30, 2000 6.125 to 1.00
December 31, 2000 6.000 to 1.00
and thereafter
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SECTION 6.12. Consolidated EBITDA. Permit Consolidated EBITDA for
(a) each full quarter ending after the Unconditional Date and on or prior to
December 31, 1999, to be less than $325,000,000 and (b) any four fiscal quarter
period ending on any date or during any period set forth below to be less than
the amount set forth below opposite such period:
Date or Period Amount
-------------- ------
From and including March 31, $1,300,000,000
1999 to and including
December 31, 1999
March 31, 2000 1,325,000,000
June 30, 2000 1,350,000,000
September 30, 2000 1,375,000,000
December 31, 2000 and 1,400,000,000
thereafter
SECTION 6.13. Fiscal Year. In the case of each Loan Party, change the end
of its fiscal year from December 31 to any other date.
ARTICLE VII
Events of Default
In case of the happening of any of the following events ("Events of
Default"):
(a) any representation or warranty made or deemed made in or in
connection with any Loan Document or the borrowings or issuances of Letters
of Credit hereunder, or any representation, warranty, statement or
information contained in any report, certificate, financial statement or
other instrument furnished in connection with or pursuant to any Loan
Document, shall prove to have been false or misleading in any material
respect when so made, deemed made or furnished;
(b) default shall be made in the payment of any principal of any Loan
when and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or by acceleration
thereof or otherwise;
(c) default shall be made in the payment of any interest on any Loan
or any Fee or any other amount (other than an amount referred to in
paragraph (b) of this Article) due under any Loan Document, when and as the
same shall become due and payable, and such default shall continue
unremedied for a period of three Business Days;
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(d) default shall be made in the due observance or performance by PGH
or any of its subsidiaries of any covenant, condition or agreement
contained in Section 5.01(a), 5.05(a) or 5.07 or in Article VI;
(e) default shall be made in the due observance or performance by PGH
or any of its subsidiaries (to the extent applicable) of any covenant,
condition or agreement contained in any Loan Document (other than those
specified in paragraph (b), (c) or (d) of this Article) and such default
shall continue unremedied for a period of 30 days after notice thereof from
the Paying Agent or any Lender to the Borrower;
(f) PGH or any subsidiary shall (i) fail to pay any principal or
interest, regardless of amount, due in respect of any Indebtedness (other
than Non-Recourse Indebtedness) in a principal amount in excess of
$50,000,000, when and as the same shall become due and payable, (ii) fail
to observe or perform any other term, covenant, condition or agreement
contained in any agreement or instrument evidencing or governing any such
Indebtedness if the effect of any failure referred to in this
clause (ii) is to cause, or to permit the holder or holders of such
Indebtedness or a trustee on its or their behalf to cause, such
Indebtedness to become due prior to its stated maturity or (iii) fail to
make any payment in respect of any Material Hedging Obligations when due;
provided that this paragraph (f) shall not apply with respect to any
Indebtedness owed by PGH or any of its subsidiaries to PGH or any of its
subsidiaries, except to the extent that such Indebtedness has been
accelerated by the holder thereof;
(g) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking
(i) relief in respect of PGH, the Borrower or any Significant Subsidiary
(or any group of subsidiaries of PGH, which, if considered in the aggregate
as a single subsidiary, would constitute a Significant Subsidiary), or of a
substantial part of the property or assets of PGH, the Borrower, such
Significant Subsidiary or such group of subsidiaries of PGH, under Title 11
of the United States Code, as now constituted or hereafter amended, or any
other Federal, state or foreign bankruptcy, insolvency, receivership or
similar law, (ii) the appointment of an administrator (as such term is
defined in the U.K. Insolvency Act of 1986), a liquidator, provisional
liquidator, receiver, administrative receiver, trustee, custodian,
sequestrator, conservator or similar official for PGH, the Borrower or any
Significant Subsidiary (or any group of subsidiaries of PGH which, if
considered in the aggregate as a single subsidiary, would constitute a
Significant Subsidiary) or for a substantial part of the property or assets
of PGH, the Borrower, a Significant Subsidiary or any such group of
subsidiaries of PGH or (iii) the winding-up or liquidation of PGH, the
Borrower or any Significant Subsidiary (or any group of subsidiaries of PGH
which, if considered in the aggregate as a single subsidiary, would
constitute a Significant Subsidiary); and such proceeding or petition shall
continue undismissed for 60 days or an order or decree approving or
ordering any of the foregoing shall be entered;
(h) PGH, the Borrower or any Significant Subsidiary (or any group of
subsidiaries of PGH which, if considered in the aggregate as a single
subsidiary, would constitute a Significant Subsidiary) shall
(i) voluntarily commence any proceeding or file any petition seeking relief
under Title 11 of the United States Code, as now constituted or hereafter
amended, or any other Federal, state or foreign bankruptcy, insolvency,
receivership or
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similar law, (ii) consent to the institution of, or fail to contest
in a timely and appropriate manner, any proceeding or the filing of
any petition described in paragraph (g) above, (iii) apply for or consent
to the appointment of an administrator (as such term is defined in the U.K.
Insolvency Act of 1986), a liquidator, provisional liquidator, receiver,
administrative receiver, trustee, custodian, sequestrator, conservator or
similar official for PGH, the Borrower, any Significant Subsidiary or any
such group of subsidiaries of PGH or for a substantial part of the property
or assets of PGH, the Borrower, any Significant Subsidiary or any such
group of subsidiaries of PGH, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make
a general assignment for the benefit of creditors, (vi) become unable,
admit in writing its inability or fail generally to pay its debts as they
become due or (vii) take any action for the purpose of effecting any of the
foregoing;
(i) one or more judgments for the payment of money in an aggregate
amount in excess of $50,000,000 shall be rendered against PGH, any
subsidiary (other than a Single Purpose Entity) or any combination thereof
and the same shall remain undischarged for a period of 30 consecutive days
during which execution shall not be effectively stayed, or any action shall
be legally taken by a judgment creditor to levy upon assets or properties
of PGH, or any subsidiary (other than a Single Purpose Entity) to enforce
any such judgment;
(j) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other such ERISA Events,
could reasonably be expected to have a Material Adverse Effect;
(k) prior to a Collateral Release Event, any security interest
purported to be created by any Security Document shall cease to be, or
shall be asserted by any Loan Party not to be, a valid, perfected, first
priority (except as otherwise expressly provided in this Agreement or such
Security Document) security interest in the securities or properties
covered thereby with respect to a material portion of the Collateral,
except to the extent that any such loss of perfection or priority results
from an act or failure to act by the Collateral Agent to maintain
possession of certificates representing securities pledged under the Pledge
Agreement;
(l) any Loan Document shall not for any reason be, or shall be
asserted by any Loan Party not to be, in full force and effect and
enforceable in all material respects accordance with its terms;
(m) all or any material part of the assets of PGH or the Borrower, or
all or substantially all of the assets of any of their respective
Significant Subsidiaries, is seized, nationalized, expropriated or
compulsorily acquired by, or by the order of, any Governmental Authority;
(n) (i) the Secretary of State gives notice in writing of the
revocation of a License for any reason or a Licence ceases to be in full
force and effect in any material respect, in each case except where a
similar license(s) is/are granted to PA and/or any of its subsidiaries in
its place or where such License is no longer required (by law or
regulation) to be held by
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any Licenseholder in order that it may carry on any business carried on by
such Licenseholder on the date hereof;
(ii) without prejudice to clause (i) of this paragraph (n), any
legislation (whether primary or subordinate) removing, reducing or
qualifying the duties of the Secretary of State and/or the
Director General with regard to the creditors or the ability of
the Licenseholder to raise finance under a Licence or of
generators of electricity or public electricity suppliers
generally is enacted and the enactment has a Material Adverse
Effect with respect to PA and its subsidiaries;
(iii) any amendment is made to the terms and conditions of a
License and the amendment has a Material Adverse Effect with
respect to PA and its subsidiaries and, if the amendment is
required pursuant to a law or regulation applying to the United
Kingdom electricity distribution, supply or generation industry as
a whole, within 30 days Services and the PA Agent have not agreed
new terms for the PA Facility Agreement acceptable to the Majority
Banks (as defined in the PA Facility Agreement); or
(iv) PA or any of its subsidiaries fails to comply with a final
order (within the meaning of Section 25 of the Electricity Act) or
with a provisional order (within the meaning of such Section)
which has been confirmed under such Section (and not since been
revoked) or any provisions of the Electricity Act detailing the
rights, powers, authorities, obligations and duties of the
Secretary of State or the Director General or the manner in or
time at which they are to be exercised, are repealed or amended in
a manner which has (or is likely to have) a Material Adverse
Effect; or
(o) there shall have occurred a Change in Control;
then, at any time during the continuance of such event (other than an event
described in paragraph (g) or (h) above with respect to PGH or the Borrower),
the Paying Agent may, and at the request of the Required Lenders shall, by
notice to the Borrower, take either or both of the following actions, at the
same or different times: (i) terminate forthwith the Commitments and
(ii) declare the Loans then outstanding to be forthwith due and payable in whole
or in part, whereupon the principal of the Loans so declared to be due and
payable, together with accrued interest thereon and any unpaid accrued Fees and
all other liabilities of the Borrower accrued hereunder and under any other Loan
Document, shall become forthwith due and payable, without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived by the Borrower, anything contained herein or in any other Loan Document
to the contrary notwithstanding; provided that (A) in any event described in
paragraph (g) or (h) above with respect to PGH or the Borrower, the Commitments
shall automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and any unpaid accrued Fees and all other
liabilities of the Borrower accrued hereunder and under any other Loan Document,
shall automatically become due and payable, without presentment, demand, protest
or any other notice of any kind, all of which are hereby expressly waived by the
Borrower, anything contained herein or in any other Loan Document to the
contrary notwithstanding and (B) except as described in the immediately
preceding clause (A), during the period commencing with the Closing Date and
ending on the Offer Termination Date, the Paying Agent and the Lenders shall not
be entitled to terminate the Commitments, rescind this Agreement
80
or prevent any funding of the Offer nor to declare the Loans due and payable
in whole or in part or exercise any other right or remedy under any Loan
Document or exercise any set off or similar right arising on the basis of
misrepresentation or Event of Default or otherwise if to do so would prevent
the funding of the Offer in accordance with Section 4.02(a) unless (i) an
Event of Default described in clause (g) or (h) of Article VII shall have
occurred and be continuing; (ii) any of the representations and warranties
set forth in Section 3.01, 3.02 and 3.03, as they relate to the Loan Parties,
shall not be true and correct in all material respects on the date of any
Credit Event of the type described in Section 4.02 with the same effect as
though made on such date or (iii) any of the Offer Conditions Precedent,
unless waived in writing by the Required Lenders (such waiver being
conclusively evidenced by written notice from the Paying Agent to the
Borrower and, in the case of paragraph 1 of such Offer Conditions Precedent,
not to be unreasonably withheld or delayed) shall not have been satisfied on
the date of any such Credit Event.
Notwithstanding anything to the contrary in the preceding paragraph, during
the Clean-up Period, none of the Paying Agent, the Collateral Agent or any
Lender may declare that an Event of Default has occurred, or terminate the
Commitments or declare the Loans to be due and payable as a result solely of one
or more Defaults described in paragraph (a), (d) (except for a Default in
respect of Section 5.07, 6.10, 6.11 or 6.12) or (e) of this Article VII, or
paragraph (f)(ii) of this Article VII insofar as it involves Indebtedness of TEG
or any of its subsidiaries to the extent such Indebtedness is repaid or
refinanced before the end of the Clean-up Period and the lenders thereunder have
not accelerated the obligations thereunder and commenced proceedings to enforce
the same; provided that the event or circumstance giving rise to such Default,
or the result of such Default, (i) directly relates to TEG or any of its
subsidiaries (or any of their businesses, assets or liabilities), (ii) is
capable of being cured or remedied during the Clean-up Period and (iii) except
to the extent it involves Indebtedness of TEG or any of its subsidiaries is
repaid or refinanced before the end of the Clean-up Period, was not known by a
Responsible Officer of PGH or the Borrower prior to the Closing Date; provided,
further, that the Paying Agent, the Collateral Agent and the Lenders shall be
entitled to exercise any and all rights and remedies granted to them hereunder
and under the Loan Documents with respect to an occurrence or continuation of
any such Default or Event of Default after the expiration of the Clean-up
Period.
ARTICLE VIII
The Paying Agent and the Collateral Agent
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In order to expedite the transactions contemplated by this Agreement,
Citibank is hereby appointed to act as Paying Agent on behalf of the Lenders and
as the Issuing Bank, and Citicorp USA is hereby appointed to act as Collateral
Agent on behalf of the Lenders (for purposes of this Article VIII, the Paying
Agent and the Collateral Agent are referred to collectively as the "Agents").
Each of the Lenders and each assignee of any such Lender and the Issuing Bank,
hereby irrevocably authorizes the Agents to take such actions on behalf of such
Lender or assignee or the Issuing Bank and to exercise such powers as are
specifically delegated to the Agents by the terms and provisions hereof and of
the other Loan Documents, together with such actions and powers as are
reasonably incidental thereto. The Paying Agent is hereby expressly authorized
by the Lenders and the Issuing Bank, without hereby limiting any implied
authority, (a) to receive on behalf of the Lenders and the Issuing Bank all
payments of principal of and interest on the Loans, all payments in respect of
L/C Disbursements and all other amounts due to the Lenders hereunder, and
promptly to distribute to each Lender or the Issuing Bank its proper share of
each payment so received; (b) to give notice on behalf of each of the Lenders to
the Loan Parties of any Event of Default specified in this Agreement of which
the Paying Agent has actual knowledge acquired in connection with its agency
hereunder; and (c) to distribute to each Lender copies of all notices, financial
statements and other materials delivered by each Loan Party pursuant to this
Agreement or the other Loan Documents as received by the Paying Agent. Without
limiting the generality of the foregoing, the Agents are hereby expressly
authorized to execute any and all documents (including releases) with respect to
the Collateral and the rights of the Secured Parties with respect thereto, as
contemplated by and in accordance with the provisions of this Agreement and the
Security Documents.
Neither the Agents nor any of their respective directors, officers,
employees or agents shall be liable as such for any action taken or omitted by
any of them except for its or his own gross negligence or wilful misconduct, or
be responsible for any statement, warranty or representation herein or the
contents of any document delivered in connection herewith, or be required to
ascertain or to make any inquiry concerning the performance or observance by any
Loan Party of any of the terms, conditions, covenants or agreements contained in
any Loan Document. The Agents shall not be responsible to the Lenders for the
due execution, genuineness, validity, enforceability or effectiveness of this
Agreement or any other Loan Documents, instruments or agreements. The Agents
shall in all cases be fully protected in acting, or refraining from acting, in
accordance with written instructions signed by the Required Lenders and, except
as otherwise specifically provided herein, such instructions and any action or
inaction pursuant thereto shall be binding on all the Lenders. Each Agent
shall, in the absence of knowledge to the contrary, be entitled to rely on any
instrument or document believed by it in good faith to be genuine and correct
and to have been signed or sent by the proper person or persons. Neither the
Agents nor any of their respective directors, officers, employees or agents
shall have any responsibility to any Loan Party on account of the failure of or
delay in performance or breach by any Lender or the Issuing Bank of any of their
respective obligations hereunder or to any Lender or the Issuing Bank on account
of the failure of or delay in performance or breach by any other Lender or the
Issuing Bank or any Loan Party of any of their respective obligations hereunder
or under any other Loan Document or in connection herewith or therewith. Each
of the Agents may execute any and all duties hereunder by or through agents or
employees and shall be entitled to rely upon the advice of legal counsel
selected by it with respect to all matters arising hereunder and shall not be
liable for any action taken or suffered in good faith by it in accordance with
the advice of such counsel.
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The Lenders hereby acknowledge that neither Agent shall be under any duty
to take any discretionary action permitted to be taken by it pursuant to the
provisions of this Agreement unless it shall be requested in writing to do so by
the Required Lenders.
Subject to the appointment and acceptance of a successor Agent as provided
below, either Agent may resign at any time by notifying the Lenders and the
Borrower. Upon any such resignation, the Required Lenders shall have the right
to appoint a successor, subject to the prior consent of the Borrower (not to be
unreasonably withheld). If no successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after
the retiring Agent gives notice of its resignation, then the retiring Agent may,
on behalf of the Lenders, appoint a successor Agent, subject to the prior
consent of the Borrower (not to be unreasonably withheld), which shall be a bank
with an office in New York, New York, having a combined capital and surplus of
at least $500,000,000 or an Affiliate of any such bank. Upon the acceptance of
any appointment as Agent hereunder by a successor bank, such successor shall
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent and the retiring Agent shall be discharged from its duties
and obligations hereunder. After the Agent's resignation hereunder, the
provisions of this Article and Section 9.05 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Agent.
With respect to the Loans made by it hereunder, each Agent in its
individual capacity and not as Agent shall have the same rights and powers as
any other Lender and may exercise the same as though it were not an Agent, and
the Agents and their Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with PGH or any subsidiary or other
Affiliate thereof as if it were not an Agent.
Each Lender agrees (a) to reimburse the Agents, on demand, in the amount of
its pro rata share (based on its Commitments hereunder) of any expenses incurred
for the benefit of the Lenders by the Agents, including counsel fees and
compensation of agents and employees paid for services rendered on behalf of the
Lenders, that shall not have been reimbursed by the Borrower and (b) to
indemnify and hold harmless each Agent and any of its directors, officers,
employees or agents, on demand, in the amount of such pro rata share, from and
against any and all liabilities, taxes, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever that may be imposed on, incurred by or asserted against it in
its capacity as Agent or any of them in any way relating to or arising out of
this Agreement or any other Loan Document or any action taken or omitted by it
or any of them under this Agreement or any other Loan Document, to the extent
the same shall not have been reimbursed by the Loan Party; provided that no
Lender shall be liable to an Agent or any such other indemnified person for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or wilful misconduct of such Agent or any of its directors,
officers, employees or agents. Each Revolving Credit Lender agrees to reimburse
the Issuing Bank and its directors, employees and agents to the same extent and
subject to the same limitations as provided above for the Agents.
Each Lender acknowledges that it has, independently and without reliance
upon the Agents or any other Lender and based on such documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Lender also acknowledges that it will, independently
and without reliance upon the Agents or any other Lender
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and based on such documents and information as it shall from time to time
deem appropriate, continue to make its own decisions in taking or not taking
action under or based upon this Agreement or any other Loan Document, any
related agreement or any document furnished hereunder or thereunder.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopy, as follows:
(a) if to any Loan Party, to it at 000 XX Xxxxxxxxx, Xxxxx 0000,
Xxxxxxxx, Xxxxxx 00000, Attention of Xxxxxxx X. Xxxxxxxxx-Vice President
and Treasurer (Telecopy No. (000) 000-0000), with a copy to Stoel Rives
LLP at 000 XX Xxxxxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxx 00000, Attention of
Xxxx X. Xxxxxxxxxx, Esq. (Telecopy No. (000) 000-0000);
(b) if to the Paying Agent at its offices in New York, to Citibank,
N.A., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of Xxxxxx Xxx
(Telecopy No. (000) 000-0000);
(c) if to the Paying Agent at its offices in London, to Citibank
International plc, Cottons Center, 0xx Xxxxx, Xxxx Xxxx, Xxxxxx XX0 0XX,
Xxxxxxx, Attention of Xxxxx Xxxx (Telecopy No. (00-000) 000-0000); and
(d) if to a Lender, to it at its address (or telecopy number) set
forth on Schedule 2.01 or in the Assignment and Acceptance pursuant to
which such Lender shall have become a party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy or on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 9.01 or in accordance with
the latest unrevoked direction from such party given in accordance with this
Section 9.01.
SECTION 9.02. Survival of Agreement. All covenants, agreements,
representations and warranties made by each Loan Party herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and the Issuing Bank and shall survive the
making by the Lenders of the Loans and the issuance of Letters of Credit by the
Issuing Bank, regardless of any investigation made by the Lenders or the Issuing
Bank or on their behalf, and shall continue in full force and effect as long as
the principal of or any accrued interest on any Loan or any Fee or any other
amount payable under this Agreement or any other Loan Document is outstanding
and unpaid or any Letter of Credit is outstanding and so long as the Commitments
have not been
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terminated. The provisions of Sections 2.14, 2.16, 2.20 and 9.05 shall
remain operative and in full force and effect regardless of the expiration of
the term of this Agreement, the consummation of the transactions contemplated
hereby, the repayment of any of the Loans, the expiration of the Commitments,
the expiration of any Letter of Credit, the invalidity or unenforceability of
any term or provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of the Paying Agent, the Collateral Agent
or any Lender or the Issuing Bank.
SECTION 9.03. Binding Effect. This Agreement shall become effective
(a) when it shall have been executed by each Loan Party and the Paying Agent and
when the Paying Agent shall have received counterparts hereof which, when taken
together, bear the signatures of each of the other parties hereto, and (b) when
each of the conditions set forth in Section 4.01 shall have been satisfied or
waived in writing, and thereafter shall be binding upon and inure to the benefit
of the parties hereto and their respective permitted successors and assigns.
SECTION 9.04. Successors and Assigns. (a) Whenever in this Agreement any
of the parties hereto is referred to, such reference shall be deemed to include
the permitted successors and assigns of such party; and all covenants, promises
and agreements by or on behalf of the Loan Parties, the Paying Agent, the
Issuing Bank or the Lenders that are contained in this Agreement shall bind and
inure to the benefit of their respective successors and assigns.
(b) Each Lender may assign to one or more assignees all or a portion of
its interests, rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); provided,
however, that (i) except in the case of an assignment to a Lender or an
Affiliate of such Lender, (x) the Borrower (unless an Event of Default shall
have occurred and is continuing) and the Paying Agent (and, in the case of any
assignment of a Revolving Credit Commitment, the Issuing Bank) must give their
prior written consent to such assignment (which consent shall not be
unreasonably withheld and, in the case of the Borrower, the Issuing Bank and the
Swingline Lender, shall be deemed given by such person if the assigning Lender
does not receive notice to the contrary within five Business Days after receipt
by such person of an executed Assignment and Acceptance) and (y) the amount of
the Commitment of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Paying Agent) shall not be less than $5,000,000
(or, if less, the entire remaining amount of such Lender's Commitment), (ii) the
parties to each such assignment shall execute and deliver to the Paying Agent an
Assignment and Acceptance, together with a processing and recordation fee of
$3,500 (except for assignments by any Initial Lender or as otherwise agreed to
by the Paying Agent) and (iii) the assignee, if it shall not be a Lender, shall
deliver to the Paying Agent an Administrative Questionnaire. Upon acceptance
and recording pursuant to paragraph (e) of this Section 9.04, from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five Business Days after the execution thereof, (A) the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of a
Lender under this Agreement and (B) the assigning Lender thereunder shall, to
the extent of the interest assigned by 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 Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of
Sections 2.14, 2.16, 2.20 and 9.05, as well as to any Fees accrued for its
account and not yet paid).
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(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as
follows: (i) such assigning Lender warrants that it is the legal and beneficial
owner of the interest being assigned thereby free and clear of any adverse claim
and that its Term Loan Commitment and Revolving Credit Commitment, and the
outstanding balances of its Term Loans and Revolving Loans, in each case without
giving effect to assignments thereof which have not become effective, are as set
forth in such Assignment and Acceptance, (ii) except as set forth in (i) above,
such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement,
any other Loan Document or any other instrument or document furnished pursuant
hereto, or the financial condition of PGH or any subsidiary or the performance
or observance by PGH or any subsidiary of any of its obligations under this
Agreement, any other Loan Document or any other instrument or document furnished
pursuant hereto; (iii) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; (iv) such assignee
confirms that it has received a copy of this Agreement, together with copies of
the most recent financial statements referred to in Section 3.04 or delivered
pursuant to Section 5.04 and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (v) such assignee will independently and without
reliance upon the Paying Agent, the Collateral Agent, such assigning Lender or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (vi) such assignee appoints and
authorizes the Paying Agent and the Collateral Agent to take such action as
agent on its behalf and to exercise such powers under this Agreement as are
delegated to the Paying Agent and the Collateral Agent, respectively, by the
terms hereof, together with such powers as are reasonably incidental thereto;
and (vii) such assignee agrees that it will perform in accordance with their
terms all the obligations which by the terms of this Agreement are required to
be performed by it as a Lender.
(d) The Paying Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices in The City of New York and in
London a copy of each Assignment and Acceptance delivered to it and a
register for the recordation of the names and addresses of the Lenders, and
the Commitment of, and principal amount of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries
in the Register shall be conclusive and the Borrower, the Paying Agent, the
Issuing Bank, the Collateral Agent and the Lenders may treat each person
whose name is recorded in the Register pursuant to the terms hereof as a
Lender hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary. The Register shall be available for inspection by the
Borrower, the Issuing Bank, the Collateral Agent and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, an Administrative Questionnaire
completed in respect of the assignee (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in
paragraph (b) above and, if required, the written consent of the Borrower, the
Paying Agent and the Issuing Bank to such assignment, the Paying Agent shall
(i) accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register and
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(iii) give prompt notice thereof to the Lenders and the Issuing Bank. No
assignment shall be effective unless it has been recorded in the Register as
provided in this paragraph (e).
(f) Each Lender may without the consent of the Borrower, the Issuing Bank
or the Paying Agent sell participations to one or more banks or other entities
in all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided, however, that (i) such Lender's obligations under this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the participating
banks or other entities shall be entitled to the benefit of the cost protection
provisions contained in Sections 2.14, 2.16 and 2.20 to the same extent as if
they were Lenders (provided that a participant shall not be entitled to receive
any greater payment under Sections 2.14, 2.16 and 2.20 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such participant, unless the sale of such participation is made with the
Borrower's prior written consent) and (iv) the Borrower, the Paying Agent, the
Issuing Bank and the Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Agreement, and such Lender shall retain the sole right to enforce the
obligations of Loan Parties relating to the Loans or L/C Disbursements and to
approve any amendment, modification or waiver of any provision of this Agreement
(other than amendments, modifications or waivers decreasing any fees payable
hereunder or the amount of principal of or the rate at which interest is payable
on the Loans, extending any scheduled principal payment date or date fixed for
the payment of interest on the Loans or increasing or extending the
Commitments).
(g) Any Lender or participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section 9.04, disclose to the assignee or participant or proposed assignee or
participant any information relating to any Loan Party furnished to such Lender
by or on behalf of such Loan Party; provided that, prior to any such disclosure
of information designated by such Loan Party as confidential, each such assignee
or participant or proposed assignee or participant shall execute an agreement
whereby such assignee or participant shall agree (subject to customary
exceptions) to preserve the confidentiality of such confidential information on
terms no less restrictive than those applicable to the Lenders pursuant to
Section 9.16.
(h) Any Lender may at any time assign all or any portion of its rights
under this Agreement to a Federal Reserve Bank to secure extensions of credit by
such Federal Reserve Bank to such Lender; provided that no such assignment shall
release a Lender from any of its obligations hereunder or substitute any such
Bank for such Lender as a party hereto. In order to facilitate such an
assignment to a Federal Reserve Bank, the Borrower shall, at the request of the
assigning Lender, duly execute and deliver to the assigning Lender a promissory
note or notes evidencing the Loans made to the Borrower by the assigning Lender
hereunder.
(i) None of the Loan Parties shall assign or delegate any of its rights
or duties hereunder without the prior written consent of the Paying Agent, the
Issuing Bank and each Lender, and any attempted assignment without such consent
shall be null and void.
SECTION 9.05. Expenses; Indemnity. (a) PGH and the Borrower agree,
jointly and severally, to pay all reasonable out-of-pocket expenses incurred by
the Initial Lenders, the Paying Agent, the Collateral Agent and the Issuing Bank
in connection with the arrangement of the credit
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facilities provided for herein and the preparation and administration of this
Agreement and the other Loan Documents and in connection with any amendments,
modifications or waivers of the provisions hereof or thereof (whether or not
the transactions hereby or thereby contemplated shall be consummated) or
incurred by the Initial Lenders, the Paying Agent, the Collateral Agent or
(after the occurrence and during the continuance of an Event of Default) any
other Lender in connection with the enforcement of its rights in connection
with this Agreement and the other Loan Documents or in connection with the
Loans made or Letters of Credit issued hereunder, including the reasonable
fees, charges and disbursements of Cravath, Swaine & Xxxxx, counsel for the
Paying Agent and the Collateral Agent, and, in connection with any such
enforcement, the reasonable fees, charges and disbursements of any other
counsel for the Paying Agent, the Collateral Agent or any Lender.
(b) PGH and the Borrower agree, jointly and severally, to indemnify the
Initial Lenders, the Paying Agent, the Collateral Agent, each other Lender and
the Issuing Bank, each Affiliate of any of the foregoing persons and each of
their respective directors, officers, partners, employees and agents (each such
person being called an "Indemnitee") against, and to hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including reasonable counsel fees, charges and disbursements, incurred
by or asserted against any Indemnitee arising out of, in any way connected with,
or as a result of any claim, litigation, investigation or proceeding (whether or
not an Indemnitee is a party thereto) relating to (i) the execution or delivery
of this Agreement or any other Loan Document or any agreement or instrument
contemplated thereby, the performance by the parties thereto of their respective
obligations thereunder or the consummation of the Transactions and the other
transactions contemplated thereby, the use of the proceeds of the Loans or
issuance of Letters of Credit, whether or not any Indemnitee is a party thereto,
or (ii) any actual or alleged presence or Release of Hazardous Materials on any
property owned or operated by PGH or any of its subsidiaries, or any
Environmental Claim related in any way to PGH or its subsidiaries; provided that
such indemnity shall not, as to any Indemnitee, be available (x) to the extent
that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or wilful misconduct of such
Indemnitee and (y) in respect of stamp or other documentary taxes in connection
with any Assignment and Acceptance.
(c) The provisions of this Section 9.05 shall remain operative and in
full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the expiration of the Commitments, the
expiration of any Letter of Credit, the invalidity or unenforceability of any
term or provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of the Paying Agent, the Collateral Agent,
any Lender or the Issuing Bank. All amounts due under this Section 9.05
shall be payable upon written demand therefor.
SECTION 9.06. Right of Setoff. If an Event of Default shall have occurred
and be continuing, each Lender is hereby authorized at any time and from time to
time, except to the extent prohibited by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender to or for the
credit or the account of PGH or the Borrower against any of and all the
obligations of PGH or the Borrower now or hereafter existing under this
Agreement and other Loan Documents held by such Lender, irrespective of whether
or not such Lender shall have made any demand under this Agreement or such other
Loan Document and although such obligations may be unmatured.
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Promptly after exercising its rights under this Section 9.06, the applicable
Lender shall notify the Paying Agent, PGH and the Borrower of the exercise of
such rights. The rights of each Lender under this Section 9.06 are in
addition to other rights and remedies (including other rights of setoff)
which such Lender may have.
SECTION 9.07. APPLICABLE LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(OTHER THAN LETTERS OF CREDIT AND AS EXPRESSLY SET FORTH IN OTHER LOAN
DOCUMENTS) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK. EACH LETTER OF CREDIT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF
CREDIT, OR IF NO SUCH LAWS OR RULES ARE DESIGNATED, THE UNIFORM CUSTOMS AND
PRACTICE FOR DOCUMENTARY CREDITS (1993 REVISION), INTERNATIONAL CHAMBER OF
COMMERCE, PUBLICATION NO. 500 (THE "UNIFORM CUSTOMS") AND, AS TO MATTERS NOT
GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF THE STATE OF NEW YORK.
SECTION 9.08. Waivers; Amendment. (a) No failure or delay of the Paying
Agent, the Collateral Agent, any Lender or the Issuing Bank in exercising any
power or right hereunder or under any other Loan Document shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Paying Agent, the
Collateral Agent, the Issuing Bank and the Lenders hereunder and under the other
Loan Documents are cumulative and are not exclusive of any rights or remedies
that they would otherwise have. No waiver of any provision of this Agreement or
any other Loan Document or consent to any departure by any Loan Party therefrom
shall in any event be effective unless the same shall be permitted by
paragraph (b) below, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. No notice or demand
on any Loan Party in any case shall entitle any Loan Party to any other or
further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by PGH, the Borrower and the Required Lenders; provided,
however, that no such agreement shall (i) decrease the principal amount of,
or extend the maturity of or any scheduled principal payment date or date for
the payment of any interest on any Loan or any date for reimbursement of an
L/C Disbursement, or waive or excuse any such payment or any part thereof, or
decrease the rate of interest on any Loan or L/C Disbursement, without the
prior written consent of each Lender affected thereby, (ii) change or extend
the Commitment or decrease or extend the date for payment of the Commitment
Fees of any Lender without the prior written consent of such Lender, (iii)
amend or modify the pro rata requirements of the provisions of Section 2.17,
amend or modify the provisions of Section 9.04(i), the provisions of this
Section, the definition of the term "Required Lenders" or release the
Guarantor or all or any substantial part of the Collateral (except for any
release expressly permitted by the Loan Documents), without the prior written
consent of each Lender or (iv) change any provisions of any Loan Document in
a manner that by its terms adversely affects the rights in respect of
payments due to Lenders holding Loans of any Class differently than those
holding Loans of any other Class, without the written consent of Lenders
holding a majority in interest of the outstanding Loans and
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unused Commitments of each affected Class; provided further that no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Paying Agent, the Collateral Agent or the Issuing Bank hereunder or under any
other Loan Document without the prior written consent of the Paying Agent,
the Collateral Agent or the Issuing Bank, as the case may be.
SECTION 9.09. Interest Rate Limitation. Notwithstanding anything herein
to the contrary, if at any time the interest rate applicable to any Loan or
participation in any L/C Disbursement, together with all Fees, charges and other
amounts which are treated as interest on such Loan or participation in such L/C
Disbursement under applicable law (collectively the "Charges"), shall exceed the
maximum lawful rate (the "Maximum Rate") which may be contracted for, charged,
taken, received or reserved by the Lender holding such Loan or participation in
accordance with applicable law, the rate of interest payable in respect of such
Loan or participation hereunder, together with all Charges payable in respect
thereof, shall be limited to the Maximum Rate and, to the extent lawful, the
interest and Charges that would have been payable in respect of such Loan or
participation but were not payable as a result of the operation of this
Section 9.09 shall be cumulated and the interest and Charges payable to such
Lender in respect of other Loans or participation or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.
SECTION 9.10. Entire Agreement. This Agreement and the other Loan
Documents constitute the entire contract between the parties relative to the
subject matter hereof. Any other previous agreement among the parties with
respect to the subject matter hereof is superseded by this Agreement and the
other Loan Documents. Nothing in this Agreement or in the other Loan Documents,
expressed or implied, is intended to confer upon any party other than the
parties hereto and thereto any rights, remedies, obligations or liabilities
under or by reason of this Agreement or the other Loan Documents.
SECTION 9.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.
EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.
SECTION 9.12. Severability. In the event any one or more of the
provisions contained in this Agreement or in any other Loan Document should be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby (it being understood that
the invalidity of a particular provision in a particular jurisdiction shall not
in and of itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good-faith negotiations to replace
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the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 9.13. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original but all of which when taken together shall
constitute a single contract, and shall become effective as provided in
Section 9.03. Delivery of an executed signature page to this Agreement by
facsimile transmission shall be as effective as delivery of a manually signed
counterpart of this Agreement.
SECTION 9.14. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 9.15. Jurisdiction; Consent to Service of Process. (a) Each Loan
Party hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceedings shall be conclusive and may
be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement shall affect any right that
the Paying Agent, the Collateral Agent, the Issuing Bank or any Lender may
otherwise have to bring any action or proceeding relating to this Agreement or
the other Loan Documents against any Loan Party or any of its properties in the
courts of any jurisdiction.
(b) Each Loan Party hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the other Loan Documents in any
New York State or Federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 9.16. Conversion of Currencies. (a) If, for the purpose of
obtaining judgment in any court, it is necessary to convert a sum owing
hereunder in one currency into another currency, each party hereto agrees, to
the fullest extent that it may effectively do so, that the rate of exchange used
shall be that at which in accordance with normal banking procedures in the
relevant jurisdiction the first currency could be purchased with such other
currency on the Business Day immediately preceding the day on which final
judgment is given.
(b) The obligations of each party in respect of any sum due to any other
party hereto or any holder of the obligations owing hereunder (the "Applicable
Creditor") shall, notwithstanding any
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judgment in a currency (the "Judgment Currency") other than the currency in
which such sum is stated to be due hereunder (the "Agreement Currency"), be
discharged only to the extent that, on the Business Day following receipt by
the Applicable Creditor of any sum adjudged to be so due in the Judgment
Currency, the Applicable Creditor may in accordance with normal banking
procedures in the relevant jurisdiction purchase the Agreement Currency with
the Judgment Currency; if the amount of the Agreement Currency so purchased
is less than the sum originally due to the Applicable Creditor in the
Agreement Currency, such party agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Applicable Creditor
against such loss. The obligations of the Loan Parties contained in this
Section 9.16 shall survive the termination of this Agreement and the payment
of all other amounts owing hereunder.
SECTION 9.17. Confidentiality. The Paying Agent, the Collateral Agent,
the Issuing Bank and each of the Lenders agrees to keep confidential (and to use
its best efforts to cause its respective agents and representatives to keep
confidential) the Information (as defined below) and all copies thereof,
extracts therefrom and analyses or other materials based thereon, except that
the Paying Agent, the Collateral Agent, the Issuing Bank or any Lender shall be
permitted to disclose Information (a) to such of its respective officers,
directors, employees, agents, affiliates and representatives as need to know
such Information, (b) to the extent requested by any regulatory authority,
(c) to the extent otherwise required by applicable laws and regulations or by
any subpoena or similar legal process (and, in the case of any such subpoena or
legal process after notice to the Borrower, if permitted by applicable law or
process), (d) in connection with any suit, action or proceeding relating to the
enforcement of its rights hereunder or under the other Loan Documents or (e) to
the extent such Information (i) becomes publicly available other than as a
result of a breach of this Section 9.17 or (ii) becomes available to the Paying
Agent, any Lender, the Issuing Bank or the Collateral Agent on a nonconfidential
basis from a source other than PGH or the Borrower. For the purposes of this
Section, "Information" shall mean all financial statements, certificates,
reports, agreements and information (including all analyses, compilations and
studies prepared by the Paying Agent, the Collateral Agent, the Issuing Bank or
any Lender based on any of the foregoing) that are received from PGH or the
Borrower and related to PGH or the Borrower, any shareholder of PGH or the
Borrower or any employee, customer or supplier of PGH or the Borrower other
than any of the foregoing that were available to the Paying Agent, the
Collateral Agent, the Issuing Bank or any Lender on a nonconfidential basis
prior to its disclosure thereto by PGH or the Borrower, and which are in the
case of Information provided after the Closing Date, clearly identified at the
time of delivery as confidential. The provisions of this Section 9.17 shall
remain operative and in full force and effect regardless of the expiration of
this Agreement.
SECTION 9.18. Margin Regulations. Notwithstanding any other provision
contained in this Agreement or the other Loan Documents, including
Section 2.13(b), Section 6.02 and Section 6.05, the pledge or sale of the Shares
by PA shall be permitted hereunder until the Depositary Shares have been
delisted from the New York Stock Exchange (and the Shares shall not otherwise be
"margin stock" as defined in Regulations G and U of the Board); provided that
until such time PGH shall use its reasonable efforts to cause PA not to:
(i) incur any Indebtedness other than (A) its obligations under the
Offer, (B) its obligations under the Powercoal/PA Loans, (C) its
obligations under or permitted under the PA Facility Agreement and
(D) intercompany loans between or among PGH and its subsidiaries, in each
case to the extent permitted hereby;
92
(ii) engage in any business other than (A) acquiring and holding the
Shares and (B) engaging in activities reasonably related to the Offer; or
(iii) sell or otherwise dispose of the Shares, unless (A) such Shares
are sold for cash, (B) fair value is received for such Shares and (C) the
proceeds of such sale are either held as cash or invested in certificates
of deposit, U.S. government securities, commercial paper, other money
market instruments that are exempted securities under the United States
federal securities laws or Cash Equivalent Investments (as defined in the
PA Facility Agreement).
SECTION 9.19. European Monetary Union. If, as a result of the
implementation of European monetary union, (a) any currency ceases to be lawful
currency of the nation issuing the same and is replaced by a European common
currency, then any amount payable hereunder by any party hereto in such currency
shall instead be payable in the European common currency and the amount so
payable shall be determined by translating the amount payable in such currency
to such European common currency at the exchange rate recognized by the European
Central Bank for the purpose of implementing European monetary union, or (b) any
currency and a European common currency are at the same time recognized by the
central bank or comparable authority of the nation issuing such currency as
lawful currency of such nation, then (i) any Loan made at such time shall be
made in such European common currency and (ii) any other amount payable by any
party hereto in such currency shall be payable in such currency or in such
European common currency (in an amount determined as set forth in clause (a)),
at the election of the obligor. Prior to the occurrence of the event or events
described in clause (a) or (b) of the preceding sentence, each amount payable
hereunder in any currency will continue to be payable only in that currency.
The Borrower agrees, at the request of the Required Lenders, at the time of or
at any time following the implementation of European monetary union, to enter
into an agreement amending this Agreement in such manner as the Required Lenders
shall reasonably request in order to avoid any unfair burden or disadvantage
resulting from the implementation of such monetary union and to place the
parties hereto in the position they would have been in had such monetary union
not been implemented, the intent being that neither party will be adversely
affected economically as a result of such implementation and that reasonable
provisions may be adopted to govern the borrowing, maintenance and repayment of
Loans denominated in Sterling or a European common currency after the occurrence
of the event or events described in clause (a) or (b) of the preceding sentence.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
PACIFICORP GROUP HOLDINGS COMPANY,
by
/s/ Xxxxxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Treasurer
93
PACIFICORP ENERGYCO,
by
/s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Director and Deputy
Chief Financial
Officer
CITIBANK, N.A., individually as an
Initial Lender and as Paying Agent,
by
/s/ Xxxxxx X. Xx
---------------------------------
Name: Xxxxxx X. Xx
Title: Attorney-in-Fact
CITICORP USA, INC., as Collateral Agent,
by
/s/ Xxxxxx X. Xx
---------------------------------
Name: Xxxxxx X. Xx
Title: Attorney-in-Fact
XXXXXXX XXXXX CREDIT PARTNERS L.P.,
individually as an Initial Lender,
by
/s/ Xxxx Xxxxxxxxxx
---------------------------------
Name: Xxxx Xxxxxxxxxx
Title: Authorized Signatory
XXXXXX GUARANTY TRUST COMPANY OF
NEW YORK, individually as an
Initial Lender,
by
/s/ Xxxxxxx Xxxxx-Xxxxx
---------------------------------
Name: Xxxxxxx Xxxxx-Xxxxx
Title: Vice President
