EXECUTION COPY
U.S.$865,500,000
CREDIT AGREEMENT
Dated as of March 9, 2000
Among
NORTHEAST GENERATION COMPANY
AS BORROWER
and
THE INITIAL LENDERS NAMED HEREIN
AS INITIAL LENDERS
and
CITIBANK, N.A.
AS ADMINISTRATIVE AGENT
and
CITIBANK, N.A.
AS COLLATERAL AGENT
and
CITIBANK, N.A.
AS DEPOSITORY BANK
TABLE OF CONTENTS
SECTION PAGE
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01. Certain Defined Terms 1
1.02. Computation of Time Period 27
1.03. Accounting Terms 27
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
2.01. The Advances 28
2.02. Making the Advances 28
2.03. Repayment of Advances 30
2.04. Adjustments of the Commitments 30
2.05. Prepayments 30
2.06. Interest 31
2.07. Fees 32
2.08. Conversion of Advances 32
2.09. Increased Costs, Etc. 33
2.10. Payments and Computations 35
2.11. Taxes 36
2.12. Sharing of Payments, Etc. 38
2.13. Use of Proceeds 39
2.14. Defaulting Lenders 39
2.15. Depository Trust Corporation Eligibility 42
ARTICLE III
CONDITIONS OF LENDING
3.01. Conditions Precedent to the Borrowing Date 42
3.02. Determinations Under Section 3.01 51
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ARTICLE IV
SPECIAL ACCOUNTS SYSTEM
4.01. Creation of the Collateral Accounts 51
4.02. Revenues Account 53
4.03. Casualty Account 55
4.04. Investment of Funds in Collateral Accounts 57
4.05. Interest 58
4.06. Reports to the Borrower and the Lenders 58
4.07. Books and Records 58
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01. Representations and Warranties of the Borrower 58
ARTICLE VI
COVENANTS OF THE BORROWER
6.01. Affirmative Covenants 65
6.02. Negative Covenants 71
6.03. Reporting Requirements 73
6.04. Financial Covenants 76
ARTICLE VII
EVENTS OF DEFAULT
7.01. Events of Default 77
ARTICLE VIII
THE AGENTS
8.01. Authorization and Action 81
8.02. Agent's Reliance, Etc. 81
8.03. Citibank and Affiliates 83
8.04. Lender Credit Decision 83
8.05. Indemnification 83
8.06. Successor Agents 84
8.07. Intercreditor Arrangements 85
8.08. Co-Arrangers 86
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ARTICLE IX
MISCELLANEOUS
9.01. Amendments, Etc. 86
9.02. Notices, Etc. 87
9.03. No Waiver; Remedies 87
9.04. Costs, Expenses, Indemnification 88
9.05. Right of Set-off 89
9.06. Binding Effect 90
9.07. Assignments and Participations 90
9.08. Execution in Counterparts 93
9.09. Confidentiality 93
9.10. Jurisdiction, Etc. 93
9.11. Governing Law 94
9.12. Waiver of Jury Trial 94
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SCHEDULES
Schedule I Commitments and Applicable Lending Offices
Schedule II Properties
Schedule 3.01(e) Information
Schedule 5.01(d)(A-1) CL&P Governmental Authorizations
Schedule 5.01(d)(A-2) WMECO Governmental Authorizations
Schedule 5.01(d)(B) Third Party Consents
Schedule 5.01(q) Plans, Multiemployer Plans and Welfare Plans
Schedule 5.01(dd) Liens
Schedule 5.01(ee) Material Contracts
Schedule 5 Insurance
EXHIBITS
Exhibit A-1 - Form of Tranche A Note
Exhibit A-2 - Form of Tranche B Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D-1 - Form of Tranche A Borrower Security Agreement
Exhibit D-2 - Form of Tranche B Borrower Security Agreement
Exhibit E-1 - Form of Tranche A Enterprises Pledge Agreement
Exhibit E-2 - Form of Tranche B Enterprises Pledge Agreement
Exhibit F-1 - Form of Tranche A Mortgage
Exhibit ▇-▇ - ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇ Mortgage
Exhibit G - Form of Flow of Funds Memorandum
Exhibit H - Form of Sponsor Agreement
Exhibit I - Form of Annual Operating Budget
Exhibit J - Form of Solvency Certificates
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EXECUTION COPY
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of March 9, 2000 among Northeast Generation
Company, a Connecticut corporation (the "BORROWER"), the banks, financial
institutions and other institutional lenders listed on the signature pages
hereof as the Tranche A Initial Lenders (the "TRANCHE A INITIAL LENDERS"), the
banks, financial institutions and other institutional lenders listed on the
signature pages hereof as the Tranche B Initial Lenders (the "TRANCHE B INITIAL
LENDERS"), Citibank, N.A. ("CITIBANK"), as administrative agent (together with
any successor appointed pursuant to Article VIII, the "ADMINISTRATIVE AGENT")
for the Lenders (as hereinafter defined), Citibank, as Collateral Agent
(together with any successor appointed pursuant to Article VIII, the "COLLATERAL
AGENT") for the Secured Parties (as hereinafter defined) and Citibank, as the
Depositary Bank (the "DEPOSITARY BANK").
PRELIMINARY STATEMENTS:
(1) The Borrower intends to acquire the generating assets owned by The
Connecticut Light and Power Company, a Connecticut corporation ("CL&P"), and
Western Massachusetts Electric Company, a Massachusetts corporation ("WMECO"),
that were awarded to the Borrower on July 2, 1999 (the "AWARD DATE") in the
auction conducted by The Connecticut Department of Public Utility Control and
its agent, ▇.▇. ▇▇▇▇▇▇, in accordance with Public Act 98-28 (of the State of
Connecticut), "An Act Concerning Electric Restructuring", on behalf of CL&P.
(2) The Borrower has requested that the Lenders make advances to the
Borrower in an aggregate amount of $865,500,000 for the purpose of paying the
purchase price of such generating assets and otherwise as outlined herein, and
the Lenders have indicated their willingness to agree to lend such amount for
such purpose and on the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"ACQUISITION" means, collectively, the CL&P Acquisition and
the WMECO Acquisition.
"ACQUISITION DATE" means the date on which the Acquisition is
consummated.
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"ACQUISITION DOCUMENTS" means the Purchase and Sale
Agreements, the Assumption Agreements, the Interconnection Agreements,
the Closing Agreement, the Assignment and Assumption Agreements and the
Asset Demarcation Agreements.
"ADMINISTRATIVE AGENT" has the meaning specified in the
recital of parties to this Agreement.
"ADMINISTRATIVE AGENT'S ACCOUNT" means the account of the
Administrative Agent maintained by the Administrative Agent at its
office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ Account No. ▇▇▇▇▇▇▇▇,
Reference: NAIB-Medium Term Finance.
"ADVANCE" means either a Tranche A Advance or a Tranche B
Advance by a Lender to the Borrower pursuant to Article II, and refers
to a Base Rate Advance or a Eurodollar Rate Advance (each of which
shall be a "Type" of Advance).
"AFFILIATE" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common
control with such Person or is a director or officer of such Person.
For purposes of this definition, the term "control" (including the
terms "controlling", "controlled by" and "under common control with")
of a Person means the possession, direct or indirect, of the power to
vote 5% or more of the Voting Stock of such Person or to direct or
cause the direction of the management and policies of such Person,
whether through the ownership of Voting Stock, by contract or
otherwise.
"AGENTS" means, collectively, the Administrative Agent and the
Collateral Agent.
"AGREEMENT" means this Agreement (including all schedules and
exhibits hereto).
"ANNUAL OPERATING BUDGET" means the annual budget of the
Borrower for Fiscal Year 2000, attached as Exhibit I hereto, which
includes all administrative, operating, debt service, Capital
Expenditures and other expenses and shall specify the aggregate amount
of such expenses of the Borrower that are projected to be required
during such Fiscal Year.
"APPLICABLE LENDING OFFICE" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a Base
Rate Advance and such Lender's Eurodollar Lending Office in the case of
a Eurodollar Rate Advance.
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"APPLICABLE MARGIN" means:
(a) with respect to the Tranche A Advances, 2.00% per
annum; and
(b) with respect to the Tranche B Advances, a rate
per annum equal to (x) for Eurodollar Advances, 2.00% per
annum, and (y) for Base Rate Advances, 1.00% per annum.
"ARRANGER" means Citibank.
"ASSET DEMARCATION AGREEMENTS" means the CL&P Asset
Demarcation Agreement and the WMECO Asset Demarcation Agreement.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by the
Administrative Agent, in accordance with Section 9.07 and in
substantially the form of Exhibit C hereto.
"ASSIGNMENT AND ASSUMPTION AGREEMENTS" means the CL&P
Assignment and Assumption Agreement and the WMECO Assignment and
Assumption Agreement.
"ASSUMPTION AGREEMENTS" means the CL&P Assumption Agreement
and the WMECO Assumption Agreement.
"AVAILABLE EXCESS CASH FLOW" means, for any Excess Cash Flow
Payment Date, an amount equal to the Excess Cash Flow for such date
MINUS the sum of (i) $4,000,000, (ii) an amount equal to all accrued
and unpaid interest on the Advances for each Interest Period then in
effect, and (iii) an amount equal to no more than 30 days interest
anticipated to accrue on the Advances prior to the expiration of each
Interest Period then in effect.
"AWARD DATE" has the meaning set forth in the Preliminary
Statements to this Agreement.
"BASE RATE" means a fluctuating interest rate per annum in
effect from time to time, which rate per annum shall at all times be
equal to the highest of:
(a) the rate of interest announced publicly by
Citibank in New York as its Base Rate;
(b) 2 of 1% per annum above the latest three-week
moving average of secondary market morning offering rates for
three-month certificates of deposit of major U.S. money market
banks, as determined weekly by Citibank and adjusted for the
cost of reserves and estimated insurance assessments from the
Federal Deposit Insurance Corporation; and
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(c) a rate equal to 2 of 1% per annum above the
weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as determined for any day
by Citibank.
"BASE RATE ADVANCE" means an Advance that bears interest as
provided in Section 2.06(a)(i).
"BORROWER" has the meaning specified in the recital of parties
to this Agreement.
"BORROWER SECURITY AGREEMENT" means, collectively, the Tranche
A Borrower Security Agreement and the Tranche B Borrower Security
Agreement.
"BORROWER'S ACCOUNT" means the account of the Borrower
maintained by the Borrower with Citibank at its office at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Account No. ▇▇▇▇▇▇▇▇.
"BORROWING" means a borrowing consisting of either Tranche A
Advances or Tranche B Advances of the same Type made on the same day by
the Lenders.
"BORROWING DATE" shall mean the date Advances are made to the
Borrower for the Acquisition.
"BUSINESS DAY" means a day of the year on which banks are not
required or authorized by law to close in New York City and, if the
applicable Business Day relates to any Eurodollar Rate Advances, on
which dealings are carried on in the London interbank market.
"CAPITAL EXPENDITURES" means, for any Person for any period,
the sum of all expenditures made, directly or indirectly, by such
Person during such period for equipment, fixed assets, real property or
improvements, or for replacements or substitutions therefor or
additions thereto, that have been or should be, in accordance with
GAAP, reflected as additions to property, plant or equipment on a
Consolidated balance sheet of such Person or have a useful life of more
than one year.
"CAPITALIZED LEASES" means all leases that have been or should
be, in accordance with GAAP, recorded as capitalized leases.
"CASUALTY ACCOUNT" means the casualty account of the Borrower
maintained pursuant to Article IV hereof by the Collateral Agent with
Citibank's office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Account
No.▇▇▇▇▇▇▇▇, ABA No. 02100008-9, FBO A/C 103561 Northeast, Attention:
▇▇▇▇▇▇ ▇▇▇▇▇.
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"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time.
"CERCLIS" means the Comprehensive Environmental Response,
Compensation and Liability Information System maintained by the U.S.
Environmental Protection Agency.
"CITIBANK" has the meaning specified in the recital of parties
to this Agreement.
"CL&P" has the meaning set forth in the Preliminary Statements
to this Agreement.
"CL&P ACQUISITION" means the acquisition by the Borrower of
the CL&P Generating Assets.
"CL&P ACQUISITION DOCUMENTS" means the CL&P Asset Demarcation
Agreement, the CL&P Assumption Agreement, the CL&P Interconnection
Agreement and the CL&P Purchase and Sale Agreement.
"CL&P ASSET DEMARCATION AGREEMENT" means the Asset Demarcation
Agreement dated as of the date of the Acquisition, between the Borrower
and CL&P.
"CL&P ASSIGNMENT AND ASSUMPTION AGREEMENT" means the
Assignment and Assumption Agreement, dated as of March 14, 2000,
between the Borrower and CL&P.
"CL&P ASSUMPTION AGREEMENT" means the Assumption Agreement
dated July 2, 1999, between Northeast Utilities and CL&P.
"CL&P GENERATING ASSETS" means the hydroelectric and pumped
storage generating assets and related assets acquired or to be
acquired, as the case may be, by the Borrower from CL&P pursuant to the
CL&P Purchase and Sale Agreement.
"CL&P INDENTURE" means the Indenture of Mortgage and Deed of
Trust dated as of May 1, 1921, as amended as of the date hereof,
between CL&P and Bankers Trust Company.
"CL&P INTERCONNECTION AGREEMENT" means the Interconnection
Agreement dated July 2, 1999, between the Borrower and CL&P.
"CL&P PURCHASE AND SALE AGREEMENT" means the Purchase and Sale
Agreement dated July 2, 1999, between the Borrower and CL&P.
"CL&P PURCHASE PRICE" means the amount payable by the Borrower
to CL&P for the CL&P Generating Assets pursuant to the CL&P Purchase
and Sale Agreements.
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"CLOSING AGREEMENT" means collectively, (a) the Closing
Agreement, dated as of the Acquisition Date between the Borrower and
CL&P and (b) the Closing Agreement, dated as of the Acquisition Date
between the Borrower and WMECO.
"CO-ARRANGERS" means Citibank, Barclays Bank PLC, CIBC Inc.
and TD Securities (USA) Inc.
"COLLATERAL" means all of the Borrower's present and future
property and assets, real and personal, tangible and intangible,
including, without limitation, owned real estate, leaseholds, fixtures,
accounts, license rights, patents, trademarks, tradenames, copyrights,
chattel paper, insurance proceeds, contract rights, cash, bank
accounts, tax refunds, documents, instruments, general intangibles,
inventory, equipment, vehicles and other goods and all present and
future contracts of the Borrower, including the Acquisition Documents,
the Project Documents and all service contracts, power purchase and
sale contracts, operating leases and labor contracts and all other
"Collateral" referred to in the Collateral Documents.
"COLLATERAL ACCOUNTS" means the Revenues Account and the
Casualty Account.
"COLLATERAL AGENT" has the meaning specified in the recital of
parties to this Agreement.
"COLLATERAL DOCUMENTS" means the Borrower Security Agreement,
the Enterprises Pledge Agreement, the Mortgages, the Consents to
Assignment and any other agreement that creates or purports to create a
Lien in favor of the Collateral Agent for the benefit of the Tranche A
Secured Parties or the Tranche B Secured Parties.
"COMMITMENT" means a Tranche A Commitment and a Tranche B
Commitment.
"CONFIDENTIAL INFORMATION" means information that the Borrower
furnishes to the Administrative Agent or any Lender in a writing
designated as confidential, but does not include any such information
that is or becomes generally available to the public or that is or
becomes available to the Administrative Agent or such Lender from a
source other than the Borrower or the Administrative Agent or any
Lender.
"CONSENTS TO ASSIGNMENT" means the Consents to Assignment in
the forms attached to either of the Borrower Security Agreements and
executed by the counterparties to the Assigned Agreements (as defined
in the Borrower Security Agreements).
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"CONSOLIDATED" refers to the consolidation of accounts in
accordance with GAAP.
"CONVERSION", "CONVERT" and "CONVERTED" each refer to a
conversion of Advances of one Type into Advances of the other Type
pursuant to Section 2.08 or 2.09.
"DEBT" of any Person means, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of
such Person for the purchase price of property or services (other than
trade or account payables incurred in the ordinary course of business),
(c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all obligations of such
Person created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person
(even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale
of such property), (e) all obligations of such Person as lessee under
leases that have been or should be, in accordance with the GAAP
applicable to such Person, recorded as capital leases, (f) all
obligations, contingent or otherwise, of such Person in respect of
acceptances, letters of credit or similar extensions of credit, (g) all
obligations of such Person to purchase, redeem, retire, defease or
otherwise make any payment in respect of any capital stock of or other
ownership or profit interest in such Person or any other Person or any
warrants, rights or options to acquire such capital stock, (h) net
amounts payable under hedge agreements, (i) all Debt of others referred
to in clauses (a) through (h) above or clause (j) below guaranteed
directly or indirectly in any manner by such Person, or in effect
guaranteed directly or indirectly by such Person through an agreement
(1) to pay or purchase such Debt or to advance or supply funds for the
payment or purchase of such Indebtedness, (2) to purchase, sell or
lease (as lessee or lessor) property, or to purchase or sell services,
primarily for the purpose of enabling the debtor to make payment of
such Debt or to assure the holder of such Debt against loss, (3) to
supply funds to or in any other manner invest in the debtor (including
any agreement to pay for property or services irrespective of whether
such property is received or such services are rendered) or (4)
otherwise to assure a creditor against loss, and (j) all Debt referred
to in clauses (a) through (i) above secured by (or for which the holder
of such Debt has an existing right, contingent or otherwise, to be
secured by) any lien or property (including, without limitation,
accounts and contract rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such
Indebtedness.
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"DEFAULT" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be
given (other than the notice specified in Section 7.01(a)) or time
elapse or both.
"DEFAULTED ADVANCE" means, with respect to any Lender at any
time, the portion of any Advance required to be made by such Lender to
the Borrower pursuant to Section 2.01 at or prior to such time which
has not been made by such Lender or by the Administrative Agent for the
account of such Lender pursuant to Section 2.02(d) as of such time. In
the event that a portion of a Defaulted Advance shall be deemed made
pursuant to Section 2.14(a), the remaining portion of such Defaulted
Advance shall be considered a Defaulted Advance originally required to
be made pursuant to Section 2.01 on the same date as the Defaulted
Advance so deemed made in part.
"DEFAULTED AMOUNT" means, with respect to any Lender at any
time, any amount required to be paid by such Lender to the
Administrative Agent, the Collateral Agent or any other Lender
hereunder or under any other Loan Document at or prior to such time
which has not been so paid as of such time, including, without
limitation, any amount required to be paid by such Lender to (a) the
Administrative Agent pursuant to Section 2.02(d) to reimburse the
Administrative Agent for the amount of any Advance made by the
Administrative Agent for the account of such Lender, (b) any other
Lender pursuant to Section 2.12 to purchase any participation in
Advances owing to such other Lender and (c) the Administrative Agent or
the Collateral Agent pursuant to Section 8.05 to reimburse the
Administrative Agent or the Collateral Agent for such Lender's ratable
share of any amount required to be paid by the Lenders to the
Administrative Agent or the Collateral Agent as provided therein. In
the event that a portion of a Defaulted Amount shall be deemed paid
pursuant to Section 2.14(b), the remaining portion of such Defaulted
Amount shall be considered a Defaulted Amount originally required to be
paid hereunder or under any other Loan Document on the same date as the
Defaulted Amount so deemed paid in part.
"DEFAULTING LENDER" means, at any time, any Lender that, at
such time, (a) owes a Defaulted Advance or a Defaulted Amount or (b)
shall take any action or be the subject of any action or proceeding of
a type described in Section 7.01(f).
"DEPOSITARY BANK" has the meaning specified in the recital of
parties to this Agreement or its successor as provided in Section
4.01(b).
"DISCLOSURE DOCUMENTS" means the Northeast Utilities 10-K for
the year ended 1998 and 10-Q's for
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the fiscal quarters ended March 30, 1999, June 30, 1999 and September
30, 1999 and Forms 8-K filed on October 19, 1999, October 29, 1999 and
January 21, 2000 and filed on and through February 29, 2000.
"DOMESTIC LENDING OFFICE" means, with respect to any Lender,
the office of such Lender specified as its "Domestic Lending Office"
opposite its name on Schedule I hereto or in the Assignment and
Acceptance pursuant to which it became a Lender, as the case may be, or
such other office of such Lender as such Lender may from time to time
specify to the Borrower and the Administrative Agent.
"ELIGIBLE ASSIGNEE" means (i) an Initial Lender; (ii) an
Affiliate of an Initial Lender; (iii) a commercial bank organized under
the laws of the United States, or any State thereof, and having total
assets in excess of US$10,000,000,000; (iv) a savings and loan
association or savings bank organized under the laws of the United
States, or any State thereof, and having total assets in excess of
US$10,000,000,000; (v) a commercial bank organized under the laws of
any other country that is a member of the OECD or has concluded special
lending arrangements with the International Monetary Fund associated
with its General Arrangements to borrow, or a political subdivision of
any such country, and having total assets in excess of
US$10,000,000,000, so long as such bank is acting through a branch or
agency located in the country in which it is organized or another
country that is described in this clause (v); (vi) a finance company,
insurance company or other financial institution or fund (whether a
corporation, partnership, trust or other entity) that is engaged in
making, purchasing or otherwise investing in commercial loans in the
ordinary course of its business and having total assets in excess of
US$10,000,000,000; and (vii) any other Person approved by the
Administrative Agent and the Borrower, such approval not to be
unreasonably withheld or delayed (and, in the case of the Borrower, not
to be required if an Event of Default exists); PROVIDED, HOWEVER, that
neither any Loan Party nor any Affiliate of any Loan Party shall
qualify as an Eligible Assignee hereunder.
"ENFORCEMENT ACTION" means any action by the Collateral Agent,
the Administrative Agent or any Lender that would have the effect of
(a) declaring the Notes, all interest thereon and all other amounts
payable under this Agreement and the other Loan Documents to be
forthwith due and payable in accordance with Section 7.01 of this
Agreement (b) exercising any right of set-off or counterclaim, (b)
initiating any judicial or non-judicial proceedings to enforce the
payment of any part of the outstanding Obligations or any other amounts
owed under any Loan Document, (c)
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commencing judicial or non-judicial enforcement of any of its rights or
remedies under any of the Collateral Documents, or (d) appointing or
consenting to the appointment of a receiver or other similar official
for the management of the Borrower or for the custody or control of any
assets or proceeds of assets of the Borrower.
"ENGAGEMENT LETTER" means the Engagement Letter dated June 11,
1999, and as amended on February 9, 2000, among Citibank, the Borrower
and Northeast Utilities.
"ENTERPRISES PLEDGE AGREEMENT" means, collectively, the
Tranche A Enterprises Pledge Agreement and the Tranche B Enterprises
Pledge Agreement.
"ENVIRONMENTAL ACTION" means any action, suit, demand, demand
letter, claim, notice of non-compliance or violation, notice of
liability or potential liability, investigation, proceeding, consent
order or consent agreement relating in any way to any Environmental
Law, any Environmental Permit or Hazardous Material or arising from
alleged injury or threat to health, safety or the environment,
including, without limitation, (a) by any governmental or regulatory
authority for enforcement, cleanup, removal, response, remedial or
other actions or damages and (b) by any governmental or regulatory
authority or third party for damages, contribution, indemnification,
cost recovery, compensation or injunctive relief.
"ENVIRONMENTAL LAW" means any federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, writ, judgment,
injunction, decree or judicial or agency interpretation, policy or
guidance relating to pollution or protection of the environment,
health, safety or natural resources, including, without limitation,
those relating to the use, handling, transportation, treatment,
storage, disposal, release or discharge of Hazardous Materials.
"ENVIRONMENTAL PERMIT" means any permit, approval,
identification number, license or other authorization required under
any Environmental Law.
"EQUITY" means, at any date for the Borrower, an amount equal
to the sum of the aggregate of the par value of, or stated capital
represented by, the outstanding common shares of the Borrower and the
surplus, paid-in, earned and other capital (excluding capital
redeemable at the option of the holder), if any, of the Borrower, as
determined in accordance with GAAP, as adjusted (without duplication)
to add the amount by which the purchase price paid by the Borrower
10
exceeds the book value of the Generating Assets immediately prior to
the Acquisition.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"ERISA AFFILIATE" means any Person that for purposes of Title
IV of ERISA is a member of the controlled group of any Loan Party, or
under common control with any Loan Party, within the meaning of Section
414 of the Internal Revenue Code.
"ERISA EVENT" means (a) (i) the occurrence of a reportable
event, within the meaning of Section 4043 of ERISA, with respect to any
Plan unless the 30-day notice requirement with respect to such event
has been waived by the PBGC, or (ii) the requirements of subsection (1)
of Section 4043(b) of ERISA (without regard to subsection (2) of such
Section) are met with respect to a contributing sponsor, as defined in
Section 4001(a)(13) of ERISA, of a Plan, and an event described in
paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is
reasonably expected to occur with respect to such Plan within the
following 30 days; (b) the application for a minimum funding waiver
with respect to a Plan; (c) the provision by the administrator of any
Plan of a notice of intent to terminate such Plan, pursuant to Section
4041(a)(2) of ERISA (including any such notice with respect to a plan
amendment referred to in Section 4041(e) of ERISA); (d) the cessation
of operations at a facility of any Loan Party or any ERISA Affiliate in
the circumstances described in Section 4062(e) of ERISA; (e) the
withdrawal by any Loan Party or any ERISA Affiliate from a Multiple
Employer Plan during a plan year for which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA; (f) the conditions
for imposition of a lien under Section 302(f) of ERISA shall have been
met with respect to any Plan; (g) the adoption of an amendment to a
Plan requiring the provision of security to such Plan pursuant to
Section 307 of ERISA; or (h) the institution by the PBGC of proceedings
to terminate a Plan pursuant to Section 4042 of ERISA, or the
occurrence of any event or condition described in Section 4042 of ERISA
that constitutes grounds for the termination of, or the appointment of
a trustee to administer, such Plan.
"EUROCURRENCY LIABILITIES" has the meaning specified in
Regulation D of the Board of Governors of the Federal Reserve System,
as in effect from time to time.
"EURODOLLAR LENDING OFFICE" means, with respect to any Lender,
the office of such Lender specified as its
11
"Eurodollar Lending Office" opposite its name on Schedule I hereto or
in the Assignment and Acceptance pursuant to which it became a Lender
(or, if no such office is specified, its Domestic Lending Office), or
such other office of such Lender as such Lender may from time to time
specify to the Borrower and the Administrative Agent.
"EURODOLLAR RATE" means, for any Interest Period for each
Eurodollar Rate Advance comprising part of the same Borrowing, an
interest rate per annum equal to the rate per annum obtained by
dividing (a) the rate that is set forth on Telerate Page Number 3750
(or any other page that may replace such page from time to time) as of
11:00 A.M. (London time) on the second Business Day prior to the first
day of any interest period for U.S. Dollar deposits having a tenor
equal to the applicable Interest Period or if none of such page 3750
nor any successor or similar service is available, relative to any
Eurodollar Rate Advance, the rate of interest per annum determined by
the Administrative Agent to be the arithmetic mean (rounded upward to
the next 0.01%) of the rates of interest per annum at which dollar
deposits in the approximate amount of the amount to be made or
continued as, or converted into, a Eurodollar Rate Advance by the
Administrative Agent and having a maturity comparable to such Interest
Period are offered in immediately available funds to the Administrative
Agent in the London interbank market at its request at approximately
11:00 a.m. (London time) two Business Days prior to the commencement of
such Interest Period by (b) a percentage equal to 100% minus the
Eurodollar Rate Reserve Percentage for such Interest Period.
"EURODOLLAR RATE ADVANCE" means an Advance that bears interest
as provided in Section 2.06(a)(ii).
"EURODOLLAR RATE RESERVE PERCENTAGE" for any Interest Period
for all Eurodollar Rate Advances comprising part of the same Borrowing
means the reserve percentage applicable two Business Days before the
first day of such Interest Period under regulations issued from time to
time by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other marginal
reserve requirement) for a member bank of the Federal Reserve System in
New York City with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities (or with respect to any other
category of liabilities that includes deposits by reference to which
the interest rate on Eurodollar Rate Advances is determined) having a
term equal to such Interest Period.
"EVENTS OF DEFAULT" has the meaning specified in Section 7.01.
12
"EXCESS CASH FLOW" shall mean for any Excess Cash Flow Payment
Date, the excess of (a) all cash receipts of the Borrower (including,
but not limited to, Revenues, but excluding Net Cash Proceeds) actually
received by the Borrower during the period from the prior Excess Cash
Flow Payment Date (or the Borrowing Date with respect to the first
Excess Cash Flow Payment Date) to the date immediately prior to such
Excess Cash Flow Payment Date OVER (b) the sum (without duplication) of
(i) Operating Costs and Permitted Capital Expenditures paid during such
period and (ii) Obligations (other than mandatory prepayments pursuant
to Section 2.05(b) hereof and payments of interest in respect thereof
pursuant to Section 2.06 hereof) arising under the Loan Documents paid
during such period. For purposes of this definition, cash receipts
shall exclude, to the extent included, any insurance proceeds deposited
into the Casualty Account.
"EXCESS CASH FLOW PAYMENT DATE" shall mean May 1, 2000, August
1, 2000 and November 1, 2000.
"EXEMPT WHOLESALE GENERATOR" has the meaning specified in
Section 32(a)(1) of the Public Utility Holding Company Act of 1935.
"EXTRAORDINARY RECEIPT" means any cash received by or paid to
or for the account of any Person not in the ordinary course of
business, including, without limitation, tax refunds, pension plan
reversions, proceeds of insurance (other than proceeds of business
interruption insurance to the extent such proceeds constitute
compensation for lost earnings), condemnation awards (and payments in
lieu thereof) and indemnity payments; PROVIDED, HOWEVER, that an
Extraordinary Receipt shall not include cash receipts received from
proceeds of insurance, condemnation awards (or payments in lieu
thereof) or indemnity payments to the extent that such proceeds, awards
or payments (A) in respect of loss or damage to equipment, fixed assets
or real property are applied (or in respect of which expenditures were
previously incurred) to replace or repair the equipment, fixed assets
or real property in accordance with the terms of the Loan Documents, so
long as such application is made within six months after the receipt of
such proceeds or (B) are received by any Person in respect of any third
party claim against such Person and applied to pay (or to reimburse
such Person for its prior payment of) such claim and the costs and
expenses of such Person with respect thereto.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
13
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding 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 such day for such
transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by it.
"FEE LETTER" means the Fee Letter dated as of February 9,
2000, among the Borrower, Northeast Utilities and the Co-Arrangers.
"FERC" means the Federal Energy Regulatory Commission.
"FISCAL YEAR" means a fiscal year of the Borrower ending on
December 31 in any calendar year.
"FLOW OF FUNDS MEMORANDUM" means the memorandum regarding the
flow of funds and procedures on the Borrowing Date, attached as Exhibit
G hereto.
"GAAP" has the meaning specified in Section 1.03.
"GENERATING ASSETS" means the CL&P Generating Assets and the
WMECO Generating Assets.
"GOVERNMENTAL AUTHORITY" means any nation or government, any
state, province or other political subdivision thereof, and any
governmental, executive, legislative, judicial, administrative or
regulatory agency, department, authority, instrumentality, commission,
board or similar body, whether ▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
local or foreign.
"GOVERNMENTAL AUTHORIZATION" means any authorization,
approval, consent, franchise, license, covenant, order, ruling, permit,
certification, exemption or similar right or action of or by, or filing
or registration with or notice to, any Governmental Authority.
"HAZARDOUS MATERIALS" means (a) petroleum or petroleum
products, by-products or breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon gas
and (b) any other chemicals, materials or substances designated,
classified or regulated as hazardous or toxic or as a pollutant under
any Environmental Law.
"HOUSATONIC SYSTEM" means the six hydroelectric plants known
as Falls Village, Bulls Bridge, Shepaug, ▇▇▇▇▇▇▇▇▇, Robertsville and
Bantam and the one pump storage generating facility known as Rocky
River, and the other assets acquired or to be acquired by the
14
Borrower from CL&P pursuant to the CL&P Purchase and Sale Agreement.
"INDEMNIFIED PARTY" has the meaning specified in Section
9.04(b).
"INDENTURES" shall mean the CL&P Indenture and the WMECO
Indenture.
"INITIAL LENDERS" means, collectively, the Tranche A Initial
Lenders and the Tranche B Initial Lenders.
"INSUFFICIENCY" means, with respect to any Plan, the amount,
if any, of its unfunded benefit liabilities, as defined in Section
4001(a)(18) of ERISA.
"INSURANCE CONSULTANT" means Aon Risk Services or such other
insurance consultant selected by the Required Lenders and consented to
by the Borrower which shall not be unreasonably withheld or delayed.
"INTERCONNECTION AGREEMENTS" means the CL&P Interconnection
Agreement and the WMECO Interconnection Agreement.
"INTEREST PERIOD" means, for each Eurodollar Rate Advance
comprising part of the same Borrowing, the period commencing on the
date of such Eurodollar Rate Advance or the date of the Conversion of
any Base Rate Advance into such Eurodollar Rate Advance, and ending on
the last day of the period selected by the Borrower pursuant to the
provisions below and, thereafter, each subsequent period commencing on
the last day of the immediately preceding Interest Period and ending on
the last day of the period selected by the Borrower pursuant to the
provisions below. The duration of each such Interest Period shall be
one, two or three months, as the Borrower may, upon notice received by
the Administrative Agent not later than 11:00 A.M. (New York City time)
on the third Business Day prior to the first day of such Interest
Period, select; PROVIDED, HOWEVER, that:
(a) no more than five Interest Periods shall be
outstanding at any time;
(b) the Borrower may not select any Interest Period
with respect to any Tranche B Advance that ends after the
Tranche B Maturity Date;
(c) whenever the last day of any Interest Period
would otherwise occur on a day other than a Business Day, the
last day of such Interest Period shall be extended to occur on
the next succeeding Business Day, PROVIDED, HOWEVER, that, if
such
15
extension would cause the last day of such Interest Period to
occur in the next following calendar month, the last day of
such Interest Period shall occur on the next preceding
Business Day; and
(d) whenever the first day of any Interest Period
occurs on a day of an initial calendar month for which there
is no numerically corresponding day in the calendar month that
succeeds such initial calendar month by the number of months
equal to the number of months in such Interest Period, such
Interest Period shall end on the last Business Day of such
succeeding calendar month.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"INVESTMENT" in any Person means any loan or advance to such
Person, any purchase or other acquisition of any capital stock or other
ownership or profit interest, warrants, rights, options, obligations or
other securities of such Person, any capital contribution to such
Person or any other investment in such Person, including, without
limitation, any arrangement pursuant to which the investor incurs Debt
of the types referred to in clause (i) or (j) of the definition of
"DEBT" in respect of such Person.
"LEAD BANK LETTER" means the Lead Bank Letter dated as of June
11, 1999, among the Borrower, Northeast Utilities and the Co-Arrangers.
"LENDERS" means the Tranche A Lenders and the Tranche B
Lenders.
"LIEN" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance
on title to real property.
"LOAN DOCUMENTS" means this Agreement, the Notes, the
Collateral Documents, the Northeast Utilities Guaranties and the
Sponsor Agreement, in each case as amended or otherwise modified from
time to time.
"LOAN PARTIES" means the Borrower, NU Enterprises, Northeast
Utilities, Select and NGS.
"MARGIN STOCK" has the meaning specified in Regulation U.
16
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(i) the business, financial condition, operations, performance,
properties or prospects of any Loan Party, (ii) the rights and remedies
of the Administrative Agent, the Collateral Agent or the Lenders under
any Loan Document, (iii) the Liens in favor of the Collateral Agent for
benefit of the Secured Parties, (iv) the legality, validity or
enforceability of any Loan Document, any Project Document, any Material
Contract or any Acquisition Document or (v) the ability of the
Borrower, NU Enterprises or Northeast Utilities to perform its
obligations under any Loan Document to which it is a party.
"MATERIAL CONTRACT" means, collectively, the contracts set
forth on Schedule 5.01(ee) of this Agreement and each other contract of
the Borrower involving aggregate consideration payable to or by the
Borrower of $10,000,000 or more in any Fiscal Year or the absence of
which would result in a Material Adverse Effect to the Borrower or a
material adverse effect on the operations or performance of the
Generating Assets taken as a whole.
"MATURITY DATE" means the Tranche A Maturity Date and the
Tranche B Maturity Date.
"▇▇▇▇▇▇▇ & EDDY" means ▇▇▇▇▇▇▇ & ▇▇▇▇, Inc.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc. and any
successor thereto that is a nationally recognized rating agency.
"MORTGAGE POLICIES" has the meaning specified in Section
3.01(m)(ix)(B).
"MORTGAGES" means, collectively, the Tranche A Mortgage and
the Tranche B Mortgage.
"MULTIEMPLOYER PLAN" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA
Affiliate is making or accruing an obligation to make contributions, or
has within any of the preceding five plan years made or accrued an
obligation to make contributions.
"MULTIPLE EMPLOYER PLAN" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of any Loan Party or any ERISA Affiliate and at least one
Person other than the Loan Parties and the ERISA Affiliates or (b) was
so maintained and in respect of which any Loan Party or any ERISA
Affiliate could have liability under Section 4064 or 4069 of ERISA in
the event such plan has been or were to be terminated.
17
"NEIGHBORING LANDOWNER AGREEMENTS" means a lease, license or
other agreement between the Borrower (or a predecessor in interest of
the Borrower) and an owner of real property adjacent to one of the
impoundments located on the Borrower=s land, relating to recreational
access and/or use by third party users of such impoundment.
"NET CASH PROCEEDS" means, with respect to any sale, lease,
transfer or other disposition of any asset by the Borrower, or any
Extraordinary Receipt received by or paid to or for the account of the
Borrower, the aggregate amount of cash received from time to time
(whether as initial consideration or through payment or disposition of
deferred consideration) by or on behalf of the Borrower in connection
with such transaction after deducting therefrom only (without
duplication) (a) reasonable and customary brokerage commissions,
underwriting fees and discounts, legal fees, finder's fees and other
similar fees and commissions and (b) the amount of taxes payable in
connection with or as a result of such transaction, in each case to the
extent, but only to the extent, that the amounts so deducted are, at
the time of receipt of such cash, actually paid to a Person that is not
an Affiliate of such Person or any Loan Party and are properly
attributable to such transaction or to the asset that is the subject
thereof.
"NGS" means Northeast Generation Services Company, a
Connecticut corporation.
"NON-FIRM POINT TO POINT AGREEMENT" refers to the Non-Firm
Point to Point Transmission Service Agreement dated as of September 28,
1999, between NUSCO and the Borrower.
"NORTHEAST UTILITIES" means Northeast Utilities, a
Massachusetts business trust.
"NORTHEAST UTILITIES GUARANTIES" means the two guaranties,
issued by Northeast Utilities in favor of the Borrower, with respect to
the Select Power Purchase Agreement and the O&M Agreement,
respectively.
"NORTHFIELD MOUNTAIN PROJECT" means the Northfield Mountain
Pumped Storage Project that the Borrower is purchasing an 81% ownership
interest in from CL&P pursuant to the CL&P Purchase and Sale Agreement
and a 19% ownership interest in from WMECO pursuant to the WMECO
Purchase and Sale Agreement.
"NORTHFIELD OPERATING AGREEMENT" means the Northfield Mountain
Project Operating Agreement dated as of February 14, 1968 (as amended
by the March 1, 1974 amendment), among CL&P, WMECO and The Hartford
Electric Light Company.
18
"NOTE" means either a Tranche A Note or a Tranche B Note.
"NOTICE OF BORROWING" has the meaning specified in Section
2.02(a).
"NPL" means the National Priorities List under CERCLA.
"NU ENTERPRISES" means NU Enterprises, Inc., a Connecticut
corporation.
"NUSCO" means Northeast Utilities Services Company.
"NUSCO SERVICE AGREEMENT" means the Northeast Utilities
Service Company Service Contract, dated as of January 1, 1999, as
renewed on December 31, 1999, between the Borrower and NUSCO.
"OBLIGATION" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including,
without limitation, any liability of such Person on any claim, whether
or not the right of any creditor to payment in respect of such claim is
reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, disputed, undisputed, legal, equitable, secured or unsecured,
and whether or not such claim is discharged, stayed or otherwise
affected by any proceeding referred to in Section 7.01(f). Without
limiting the generality of the foregoing, the Obligations of the Loan
Parties under the Loan Documents include (a) the obligation to pay
principal, interest, charges, expenses, fees, attorneys' fees and
disbursements, indemnities and other amounts payable by any Loan Party
under any Loan Document and (b) the obligation of any Loan Party to
reimburse any amount in respect of any of the foregoing that any
Lender, in its sole discretion, may elect to pay or advance on behalf
of such Loan Party.
"OECD" means the Organization for Economic Cooperation and
Development.
"O&M AGREEMENT" means the Management and Operation Agreement
dated February 1, 2000, as amended on March 1, 2000, between NGS and
the Borrower.
"OPERATING ACCOUNT" means the operating account of the
Borrower maintained by the Borrower with Fleet National Bank at its
office at Providence, R.I., Account No. ▇▇▇▇▇▇▇▇▇▇, ABA No. ▇▇▇▇▇▇▇▇▇,
Ref: Northeast Generation Company, which is in the sole dominion and
control of the Borrower.
"OPERATING COSTS" shall mean, for any period, the sum,
computed without duplication, of all costs and
19
expenses paid by the Borrower during such period (or, in the case of
any future period, projected to be paid or payable during such period)
in connection with the operation, maintenance and administration of the
Generating Assets, including, without limiting the generality of the
foregoing, (a) costs of operating and administering the Generating
Assets and of maintaining them in good repair and operating condition
(including all amounts due and payable under the O&M Agreement), (b)
costs of insurance, (c) costs of supplies and other services acquired
in connection with the operation and maintenance of the Generating
Assets, (d) sales and excise taxes payable by the Borrower, (e) income
taxes payable by the Borrower, (f) costs and fees attendant to the
obtaining and maintaining in effect the Governmental Authorizations
relating to the Generating Assets, (g) legal, accounting and other
professional fees attendant to any of the foregoing and (h) payments in
respect of Debt permitted under Section 6.02(b)(ii) and Section
6.02(b)(iii); PROVIDED that all of the foregoing costs and expenses
shall be determined on a cash basis and shall not include the cost of
scheduled Capital Expenditures, depreciation, amortization and other
non-cash items.
"OTHER TAXES" has the meaning specified in Section 2.11(b).
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"PERMANENT FINANCING" means the Proposed Permanent Financing
or any other capital markets, private placement or other debt issuance
(including, without limitation, by entering into a bank credit
facility) by the Borrower, the purpose of which is to refinance some or
all of the Tranche B Advances.
"PERMITTED CAPITAL EXPENDITURES" means, with respect to the
Borrower, for any period, all Capital Expenditures contemplated for
such period in the Annual Operating Budget or which the Borrower is
otherwise permitted to incur pursuant to Section 6.02(n).
"PERMITTED ENCUMBRANCES" has the meaning specified in the
Mortgages.
"PERMITTED HEDGE PROVIDER" means any Lender or its Affiliate
providing a Permitted Hedge so long and only so long as such hedge
provider remains a Lender or an Affiliate of a Lender.
"PERMITTED ▇▇▇▇▇▇" means any anticipatory hedge product
purchased by the Borrower, or Northeast Utilities for the benefit of
the Borrower, such as a treasury rate lock, treasury collar or treasury
put, for the purpose of hedging the Borrower's anticipated
20
interest rate exposure with respect to the Proposed Permanent
Financing, PROVIDED, if the hedge product is provided by (a) a
financial institution other than any Permitted Hedge Provider, such
hedge provider shall not be entitled to have a lien on any properties
or assets of the Borrower as security in respect of the hedge product,
or (b) any Permitted Hedge Provider, such hedge provider shall be a
Tranche B Secured Party under the Tranche B Collateral Documents
entitled to the benefits of the Collateral under the Tranche B
Collateral Documents pari passu with the other Tranche B Secured
Parties, PROVIDED, FURTHER, HOWEVER, that such hedge provider shall
have no voting rights under the Tranche B Collateral Documents.
"PERMITTED INVESTMENTS" means any of (a) time deposits of
Citibank with such maturities as may be acceptable to the Collateral
Agent, (b) commercial paper that is rated at least P-1 by Moody's and
at least A-1+ by S&P (provided that the long-term unsecured debt
ratings issued by Moody's and S&P for the issuer or the guarantor
thereof are at least Aa3 and AA-, respectively), with such maturities
and other terms as may be acceptable to the Collateral Agent in its
sole discretion, (c) marketable obligations, maturing within 12 months
after acquisition thereof, issued or unconditionally guaranteed by the
United States of America or an instrumentality or agency thereof and
entitled to the full faith and credit of the United States of America,
(d) other than with respect to amounts in the Collateral Accounts, the
Temp Fund of the Provident Institutional Fund, (e) investments in the
▇▇▇▇▇▇▇ Sachs FS Prime Obligations Fund Administration Class (463) or
(f) such other investments as may be requested by the Borrower and
acceptable to the Collateral Agent in its reasonable discretion.
"PERMITTED LIENS" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding
shall have been commenced: (a) Liens for taxes, assessments and
governmental charges or levies to the extent not required to be paid
under Section 6.01(b) hereof; (b) Liens imposed by law, such as
materialmen's, mechanics', carriers', workmen's and repairmen's Liens
and other similar Liens arising in the ordinary course of business
securing obligations that are not overdue for a period of more than 30
days; (c) pledges or deposits to secure obligations under workers'
compensation laws or similar legislation or to secure public or
statutory obligations; and (d) easements, rights of way and other
encumbrances on title to real property that do not render title to the
property encumbered thereby unmarketable or materially adversely affect
the use of such property for its present purposes.
21
"PERSON" means an individual, partnership, corporation
(including a business trust), limited liability company, joint stock
company, trust, unincorporated association, joint venture or other
entity, or a government or any political subdivision or agency thereof.
"PLACEMENT AGENT" means the placement agent chosen by the
Borrower in connection with the Proposed Permanent Financing.
"PLAN" means a Single Employer Plan or a Multiple Employer
Plan.
"PLEDGED SHARES" has the meaning set forth in the Collateral
Documents.
"PROJECT DOCUMENTS" means the Select Power Purchase Agreement,
the O&M Agreement, the Northeast Utilities Guaranties, the NUSCO
Service Agreement, any other purchase and sale agreement with respect
to sales of the Product (as defined in the O&M Agreement) entered into
by the Borrower and any other third party, the Interconnection
Agreements, the Asset Demarcation Agreements, the Property Tax
Allocation Agreement and the Non-Firm Point to Point Agreement.
"PROPERTY TAX ALLOCATION AGREEMENT" means (a) the Real and
Personal Property Tax Allocation Agreement, dated as of the Acquisition
Date between the Borrower and CL&P and (b) the Real and Personal
Property Tax Allocation Agreement, dated as of the Acquisition Date
between the Borrower and WMECO.
"PROPOSED PERMANENT FINANCING" means the private placement, in
accordance with Rule 144A of the Securities Act of 1933, as amended
from time to time, of debt securities proposed to be issued by the
Borrower in an amount equal to at least the then outstanding amount of
the Tranche B Advances hereunder to repay such Advances.
"PURCHASE AND SALE AGREEMENTS" means the WMECO Purchase and
Sale Agreement and the CL&P Purchase and Sale Agreement.
"PURCHASE PRICE" means the aggregate amount payable by the
Borrower to CL&P and WMECO as the purchase price for the Generating
Assets pursuant to the Purchase and Sale Agreements.
"RATING AGENCIES" shall mean S&P and Moody's.
"REGISTER" has the meaning specified in Section 9.07(d).
22
"REGULATION U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"REPLACEMENT LENDER" has the meaning specified in Section
2.09(e).
"REQUIRED LENDERS" means at any time Lenders owed at least 66
2/3% of the then aggregate unpaid principal amount of the Advances
owing to Lenders, or, if no such principal amount is then outstanding,
Lenders having at least 66 2/3% of the Commitments.
"REQUIRED RATING" means a rating of at least BBB- (or the then
equivalent grade) from S&P and Baa3 (or the then equivalent grade) from
Moody's.
"REQUIRED TRANCHE A LENDERS" means at any time the Tranche A
Lenders owed at least 66 2/3% of the then aggregate unpaid principal
amount of the Tranche A Advances owing to the Tranche A Lenders, or, if
no such principal amount is then outstanding, Tranche A Lenders having
at least 66 2/3% of the Tranche A Commitments.
"REQUIRED TRANCHE B LENDERS" means at any time the Tranche B
Lenders owed at least 66 2/3% of the then aggregate unpaid principal
amount of the Tranche B Advances owing to the Tranche B Lenders, or, if
no such principal amount is then outstanding, Tranche B Lenders having
at least 66 2/3% of the Tranche B Commitments.
"RESPONSIBLE OFFICER" means any of the chief executive
officer, the president, the treasurer or any vice president of any Loan
Party or any of its Subsidiaries.
"REVENUES" shall mean, for any period, the sum, computed
without duplication, of all cash receipts received by the Borrower
during such period (or, in the case of any future period, projected to
be received during such period) pursuant to (a) the Project Documents,
including, without limitation, (x) amounts paid by third parties such
as guarantors and letter of credit banks, and (y) any and all damages,
arbitration awards or other monetary settlements payable to the
Borrower, (b) proceeds of any business interruption insurance and other
payments received for interruption of operations (excluding proceeds of
physical damage or liability insurance), and (c) investment earnings on
Permitted Investments held in the Revenues Account. Revenues shall
exclude, to the extent included, proceeds of insurance paid in respect
of loss or damage of any Generating Asset.
"REVENUES ACCOUNT" means the revenues account of the Borrower
maintained pursuant to Article IV hereof by the Collateral Agent with
Citibank's office at 111
▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Account No.3611-4325, ABA No.
▇▇▇▇-▇▇▇▇-▇, FBO A/C 103560 Attention: ▇▇▇▇▇▇ ▇▇▇▇▇.
"S&P" means Standard & Poor's Ratings Services, a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and any successor thereto that is a
nationally recognized rating agency.
"SECURED OBLIGATIONS" has the meaning specified in the
Collateral Documents.
"SECURED PARTIES" means the Tranche A Secured Parties and the
Tranche B Secured Parties.
"SELECT" means Select Energy, Inc., a Connecticut corporation.
"SELECT POWER PURCHASE AGREEMENT" means the Power Purchase and
Sale Agreement dated December 27, 1999, between Select and the
Borrower.
"SINGLE EMPLOYER PLAN" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of any Loan Party or any ERISA Affiliate and no Person other
than the Loan Parties and the ERISA Affiliates or (b) was so maintained
and in respect of which any Loan Party or any ERISA Affiliate could
have liability under Section 4069 of ERISA in the event such plan has
been or were to be terminated.
"SOLVENT" and "SOLVENCY" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property
of such Person is greater than the total amount of liabilities,
including, without limitation, contingent liabilities, of such Person,
(b) the present fair salable value of the assets of such Person is not
less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and
matured, (c) such Person does not intend to, and does not believe that
it will, incur debts or liabilities beyond such Person's ability to pay
such debts and liabilities as they mature and (d) such Person is not
engaged in business or a transaction, and is not about to engage in
business or a transaction, for which such Person's property would
constitute an unreasonably small capital. The amount of contingent
liabilities at any time shall be computed as the amount that, in the
light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an
actual or matured liability.
"SPONSOR AGREEMENT" means the sponsor agreement of Northeast
Utilities in favor of the Collateral Agent, substantially in the form
of Exhibit H attached hereto.
24
"STONE & ▇▇▇▇▇▇▇" means Stone & ▇▇▇▇▇▇▇ Management
Consultants, Inc.
"SUBSIDIARY" of any Person means any corporation, partnership,
joint venture, limited liability company, trust or estate of which (or
in which) more than 50% of (a) the issued and outstanding capital stock
having ordinary voting power to elect a majority of the Board of
Directors of such corporation (irrespective of whether at the time
capital stock of any other class or classes of such corporation shall
or might have voting power upon the occurrence of any contingency), (b)
the interest in the capital or profits of such partnership, joint
venture or limited liability company or (c) the beneficial interest in
such trust or estate is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more of its other
Subsidiaries or by one or more of such Person's other Subsidiaries.
"TAX CERTIFICATE" has the meaning specified in Section
6.03(m).
"TAX SHARING AGREEMENT" means the Amended and Restated Tax
Allocation Agreement, dated January 1, 1990 (as amended on October 26,
1998 and on March 1, 2000), to be entered into by the Borrower with NU
and various other Subsidiaries of NU (a copy of which was delivered to
the Lenders pursuant to Section 3.01(m)(xviii)), together with any
other tax sharing agreement entered into by the Borrower in accordance
with Section 6.02(o).
"TAXES" has the meaning specified in Section 2.11(a).
"TERMINATION DATE" means the earlier (x) December 29, 2000 or
(y) the date of termination in whole of the Commitments pursuant to
Section 2.04 or 7.01.
"THIRD PARTY CONSENTS" has the meaning specified in Section
5.01(d).
"TOTAL CAPITALIZATION" means, at any date, for the Borrower,
the sum of (i) the aggregate principal amount of all long-term and
short-term Debt of the Borrower, and (ii) the Equity.
"TRANCHE A ADVANCE" has the meaning specified in Section
2.01(a).
"TRANCHE A AMOUNTS" has the meaning specified in Section
2.03(a).
"TRANCHE A BORROWER SECURITY AGREEMENT" means the agreement by
the Borrower in favor of the Collateral
25
Agent for the benefit of the Tranche A Secured Parties, substantially
in the form of Exhibit D-1 attached hereto.
"TRANCHE A BORROWING" means a borrowing consisting of Tranche
A Advances of the same Type made on the same day by the Tranche A
Lenders.
"TRANCHE A COLLATERAL DOCUMENTS" means the Tranche A Borrower
Security Agreement, the Tranche A Enterprises Pledge Agreement, the
Tranche A Mortgage and the Tranche A Note.
"TRANCHE A COMMITMENT" has the meaning specified in Section
2.01(a).
"TRANCHE A ENTERPRISES PLEDGE AGREEMENT" means the agreement
by NU Enterprises in favor of the Collateral Agent for the benefit of
the Tranche A Secured Parties, substantially in the form of Exhibit E-1
attached hereto.
"TRANCHE A INITIAL LENDERS" has the meaning specified in the
recital of parties to this Agreement.
"TRANCHE A LENDERS" means the Tranche A Initial Lenders and
each Person, other than natural persons, that have or shall become and
remain a party hereto as a "Tranche A Lender" pursuant to Section 9.07.
"TRANCHE A LIEN" has the meaning specified in Section 8.07.
"TRANCHE A MATURITY DATE" means the Borrowing Date.
"TRANCHE A MORTGAGE" means the mortgage with respect to the
Tranche A Advances, substantially in the form of Exhibit F-1.
"TRANCHE A NOTE" means a promissory note of the Borrower
payable to the order of any Tranche A Lender, in substantially the form
of Exhibit A-1 hereto, evidencing the indebtedness of the Borrower to
such Tranche A Lender resulting from the Tranche A Advances made by or
owed to such Tranche A Lender.
"TRANCHE A OBLIGATIONS" means all Tranche A Amounts owed by
the Borrower to the Tranche A Secured Parties under the Loan Documents.
"TRANCHE A SECURED PARTIES" means (a) the Tranche A Lenders
and (b) the Collateral Agent as party to the Tranche A Collateral
Documents.
"TRANCHE B ADVANCE" has the meaning specified in Section
2.01(b).
26
"TRANCHE B BORROWER SECURITY AGREEMENT" means the agreement by
the Borrower in favor of the Collateral Agent for the benefit of the
Tranche B Secured Parties, substantially in the form of Exhibit D-2
attached hereto.
"TRANCHE B BORROWING" means a borrowing consisting of Tranche
B Advances of the same Type made on the same day by the Tranche B
Lenders.
"TRANCHE B COLLATERAL DOCUMENTS" means the Tranche B Borrower
Security Agreement, the Tranche B Enterprises Pledge Agreement, the
Tranche B Mortgage and the Tranche B Note.
"TRANCHE B COMMITMENT" has the meaning specified in Section
2.01(b).
"TRANCHE B ENTERPRISES PLEDGE AGREEMENT" means the agreement
by NU Enterprises in favor of the Collateral Agent for the benefit of
the Tranche B Secured Parties, substantially in the form of Exhibit E-2
attached hereto.
"TRANCHE B INITIAL LENDERS" has the meaning specified in the
recital of parties to this Agreement.
"TRANCHE B LENDERS" means the Tranche B Initial Lenders and
each Person, other than natural persons, that have or shall become and
remain a party hereto as a "Tranche B Lender" pursuant to Section 9.07.
"TRANCHE B LIEN" has the meaning specified in Section 8.07.
"TRANCHE B MATURITY DATE" means December 29, 2000.
"TRANCHE B MORTGAGE" means the mortgage with respect to
Tranche B Advances, substantially in the form of Exhibit F-2.
"TRANCHE B NOTE" means a promissory note of the Borrower
payable to the order of any Tranche B Lender, in substantially the form
of Exhibit A-2 hereto, evidencing the indebtedness of the Borrower to
such Tranche B Lender resulting from the Tranche B Advances made by or
owed to such Tranche B Lender.
"TRANCHE B OBLIGATIONS" means all amounts owed by the Borrower
to the Tranche B Secured Parties under the Loan Documents other than
the Tranche A Amounts.
"TRANCHE B SECURED PARTIES" means (a) the Tranche B Lenders,
(b) each of the Collateral Agent and the Administrative Agent as
parties to the Tranche B Collateral Documents and the other Loan
Documents to
27
which each is a party, and (c) the Permitted Hedge Providers, if any.
"TYPE" has the meaning specified in the definition of
"Advance" in this Section 1.01.
"UCC" means the Uniform Commercial Code as in effect from time
to time in the State of New York.
"VOTING STOCK" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such
Person, even if the right so to vote has been suspended by the
happening of such a contingency.
"WELFARE PLAN" means a welfare plan, as defined in Section
3(1) of ERISA, that is maintained for employees of any Loan Party or in
respect of which any Loan Party could have liability.
"WITHDRAWAL LIABILITY" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
"WMECO" has the meaning set forth in the Preliminary
Statements to this Agreement.
"WMECO ACQUISITION" means the acquisition by the Borrower of
the WMECO Generating Assets.
"WMECO ACQUISITION DOCUMENTS" means the WMECO Asset
Demarcation Agreement, the WMECO Assumption Agreement, the WMECO
Interconnection Agreement and the WMECO Purchase and Sale Agreement.
"WMECO ASSIGNMENT AND ASSUMPTION AGREEMENT" means the
Assignment and Assumption Agreement, dated as of March 14, 2000,
between the Borrower and WMECO.
"WMECO ASSET DEMARCATION AGREEMENT" means the Asset
Demarcation Agreement dated as of the Acquisition Date, between WMECO
and the Borrower.
"WMECO ASSUMPTION AGREEMENT" means the Assumption Agreement
dated July 2, 1999, between Northeast Utilities and WMECO.
"WMECO GENERATING ASSETS" means the hydroelectric and pumped
storage generating assets and related assets acquired or to be
acquired, as the case may be, by the Borrower from WMECO pursuant to
the WMECO Purchase and Sale Agreement.
"WMECO INDENTURE" means the First Mortgage Indenture and Deed
of Trust dated as of August 1, 1954,
28
as amended as of the date hereof, between WMECO and State Street Bank
and Trust Company.
"WMECO INTERCONNECTION AGREEMENT" means the Interconnection
Agreement dated July 2, 1999, between the Borrower and WMECO.
"WMECO PURCHASE AND SALE AGREEMENT" means the Purchase and
Sale Agreement dated July 2, 1999, between the Borrower and WMECO.
"WMECO PURCHASE PRICE" means the aggregate amount payable by
the Borrower to WMECO for the WMECO Generating Assets pursuant to the
WMECO Purchase and Sale Agreements.
SECTION 1.02. COMPUTATION OF TIME PERIODS. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding".
SECTION 1.03. ACCOUNTING TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles consistent with those applied in the preparation of the
financial statements referred to in Section 5.01(f) ("GAAP").
SECTION 1.04. REFERENCES TO OTHER AGREEMENTS. Unless otherwise provided
herein, references to any other agreement or document shall refer to such
agreement or document as amended, supplemented or otherwise modified in
accordance with the terms hereof and thereof.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. THE ADVANCES. (a) Each Tranche A Lender severally agrees,
on the terms and conditions hereinafter set forth, to make one advance (the
"TRANCHE A ADVANCE") to the Borrower, on the Borrowing Date, which must occur on
a Business Day during the period from the date hereof until the Termination
Date, in an aggregate amount not to exceed the amount set forth opposite such
Tranche A Lender's name on Schedule I attached hereto under the heading "Tranche
A Commitment" or, if such Tranche A Lender has entered into any Assignment and
Acceptance, set forth for such Tranche A Lender in the Register (under the
heading "Tranche A Commitment") maintained by the Administrative Agent pursuant
to Section 9.07(d), as such amount may be decreased pursuant to Section 2.04
(such Tranche A Lender's "TRANCHE A COMMITMENT"), PROVIDED, HOWEVER, that (i)
each Tranche A Lender shall make no more than one Tranche A
29
Advance and (ii) the Tranche A Advances and the Tranche B Advances shall be made
on the same Borrowing Date. The Tranche A Borrowing shall be in an aggregate
amount of U.S.$5,000,000 or an integral multiple of U.S.$1,000,000 in excess
thereof and shall consist of Tranche A Advances made simultaneously by the
Tranche A Lenders ratably according to their respective Tranche A Commitments.
Amounts borrowed under this Section 2.01(a) and repaid or prepaid may not be
reborrowed.
(b) Each Tranche B Lender severally agrees, on the terms and conditions
hereinafter set forth, to make one advance (the "TRANCHE B ADVANCE") to the
Borrower, on the Borrowing Date, which must occur on a Business Day during the
period from the date hereof until the Termination Date, in an aggregate amount
not to exceed the amount set forth opposite such Tranche B Lender's name on
Schedule I attached hereto (under the heading "Tranche B Commitment") or, if
such Tranche B Lender has entered into any Assignment and Acceptance, set forth
for such Tranche B Lender in the Register under the heading "Tranche B
Commitment" maintained by the Administrative Agent pursuant to Section 9.07(d),
as such amount may be decreased pursuant to Section 2.04 (such Tranche B
Lender's "TRANCHE B COMMITMENT"), PROVIDED, HOWEVER, that (i) each Tranche B
Lender shall make no more than one Tranche B Advance and (ii) the Tranche B
Advances and the Tranche A Advances shall be made on the same Borrowing Date.
The Tranche B Borrowing shall be in an aggregate amount of U.S.$5,000,000 or an
integral multiple of U.S.$1,000,000 in excess thereof and shall consist of
Tranche B Advances made simultaneously by the Tranche B Lenders ratably
according to their respective Tranche B Commitments. Amounts borrowed under this
Section 2.01(b) and repaid or prepaid may not be reborrowed.
SECTION 2.02. MAKING THE ADVANCES. (a) The Borrowings of the Tranche A
Advances and the Tranche B Advances shall be made on notice, given not later
than 11:00 A.M. (New York City time) on the third Business Day prior to the date
of the proposed Borrowings by the Borrower to the Administrative Agent, which
shall give to each Lender prompt notice thereof by fax. The notice of Borrowings
(the "NOTICE OF BORROWING") shall be by telephone, confirmed immediately in a
writing, in substantially the form of Exhibit B hereto, sent by fax specifying
therein the requested (i) date of the Borrowings, (ii) aggregate amount of the
Borrowings, (iii) amount of the Tranche A Borrowing and of the Tranche B
Borrowing, (iv) Type of Tranche B Advances comprising the Tranche B Borrowing,
and (v) initial Interest Period for each Eurodollar Rate Advance. Each Lender
shall, before 10:00 A.M. (New York City time) on the date of the Borrowings,
make available for the account of its Applicable Lending Office to the
Administrative Agent at the Administrative Agent's Account, in immediately
available funds, such Lender's ratable portion of each of the Borrowings. After
the Administrative Agent's receipt of such funds and upon fulfillment of the
applicable conditions
30
set forth in Article III, the Administrative Agent will make such funds
available in accordance with the terms of the Flow of Funds Memorandum.
(b) Anything in subsection (a) above to the contrary notwithstanding,
the Borrower may not select Eurodollar Rate Advances for (x) any Tranche A
Advances or (y) any Borrowing if the obligation of the Lenders to make
Eurodollar Rate Advances shall then be suspended pursuant to Section 2.08 or
2.09.
(c) The Notice of Borrowing shall be irrevocable and binding on the
Borrower. The Borrower shall indemnify each Lender against any loss, cost or
expense incurred by such Lender as a result of any failure of the Borrower to
fulfill on or before the date specified in such Notice of Borrowing the
applicable conditions set forth in Article III, including, without limitation,
any loss (including loss of anticipated profits), cost or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
such Lender to fund any Advance to be made by such Lender as part of the
Borrowings when such Advance, as a result of such failure, is not made on such
date.
(d) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of the Borrowing that such Lender will not make
available to the Administrative Agent such Lender's ratable portion of each
Borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the date of the Borrowing in
accordance with subsection (a) of this Section 2.02 and the Administrative Agent
may, in reliance upon such assumption, make available to the Borrower on such
date a corresponding amount. If and to the extent that such Lender shall not
have so made such ratable portion available to the Administrative Agent, such
Lender agrees to pay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is paid
to the Administrative Agent, at the Federal Funds Rate. If such Lender shall pay
to the Administrative Agent such corresponding amount, such amount so paid shall
constitute such Lender's Advance as part of the applicable Borrowing for
purposes of this Agreement.
(e) The failure of any Lender to make the Advance to be made by it as
part of either Borrowing shall not relieve any other Lender of its obligation,
if any, hereunder to make its Advance(s) on the date of the Borrowings, but no
Lender shall be responsible for the failure of any other Lender to make the
Advance(s) to be made by such other Lender on the date of any Borrowings. The
rights and obligations of each of the Lenders under the Agreement are several.
31
SECTION 2.03. REPAYMENT OF ADVANCES. (a) TRANCHE A ADVANCES. On the
Tranche A Maturity Date, the Borrower shall repay to the Administrative Agent
for the ratable account of the Tranche A Secured Parties (i) the aggregate
outstanding principal amount of the Tranche A Advances on such date, together
with all accrued and unpaid interest on such Advances, and (ii) all fees,
expenses and other amounts owing hereunder and under the other Loan Documents in
respect of such Advances (all such amounts in clauses (i) and (ii) above, the
"TRANCHE A AMOUNTS"). If the Administrative Agent receives the repayment of the
Tranche A Amounts on the Tranche A Maturity Date but is unable to distribute the
aggregate outstanding Tranche A Amounts to the Tranche A Lenders on the Tranche
A Maturity Date, then the Administrative Agent will distribute to the Tranche A
Lenders such Tranche A Amounts plus interest thereon at a per annum rate equal
to the Federal Funds Rate on the next Business Day after the Tranche A Maturity
Date.
(b) TRANCHE B ADVANCES. On the Tranche B Maturity Date, the Borrower
shall repay to the Administrative Agent for the ratable account of the Tranche B
Lenders the aggregate principal amount of the Tranche B Advances outstanding on
such date, together with all accrued and unpaid interest on such principal
amount and all fees, expenses and other amounts owing hereunder and under the
other Loan Documents.
SECTION 2.04. ADJUSTMENTS OF THE COMMITMENTS. (a) On the Borrowing
Date, after giving effect to the Borrowings on such date, the aggregate
Commitments of the Lenders shall be automatically and permanently reduced to
zero.
(b) The Borrower may not otherwise reduce or terminate any of the
Commitments.
SECTION 2.05. PREPAYMENTS. (a) OPTIONAL. The Borrower may, upon at
least five Business Days' notice to the Administrative Agent stating the
proposed date and aggregate principal amount of the prepayment, and if such
notice is given the Borrower shall, prepay the outstanding aggregate principal
amount of the Tranche B Advances in whole or ratably among the Tranche B Lenders
in part, together with accrued interest to the date of such prepayment on the
principal amount prepaid; PROVIDED, HOWEVER, that (i) each partial prepayment
shall be in an aggregate principal amount of $10,000,000 or an integral multiple
of $1,000,000 in excess thereof and (ii) if any prepayment of a Eurodollar Rate
Advance is made on a date other than the last day of an Interest Period for such
Advance, the Borrower shall also pay any amounts owing pursuant to Section
9.04(c); PROVIDED FURTHER, HOWEVER, the Borrower may not optionally prepay any
Tranche B Advances until the Tranche A Advances have been repaid in full and all
Tranche A Commitments reduced to zero.
32
(b) MANDATORY. The Borrower shall:
(i) on the issuance date of any Permanent Financing, prepay
the aggregate outstanding principal amount of the Advances on such
date, together with all accrued and unpaid interest on such principal
amount and all fees, expenses and other amounts owing hereunder and
under the other Loan Documents;
(ii) within 30 days from the date of receipt by the Borrower
of any Net Cash Proceeds from the sale, lease, transfer or other
disposition of any assets of the Borrower (excluding sales of obsolete
and worn out equipment, sales of electricity and any other ordinary
course of business sales permitted in Section 6.02(e) and sales of any
assets, replacements for which are intended to be purchased with such
Net Cash Proceeds), prepay an aggregate principal amount of the
outstanding Advances together with the accrued and unpaid interest
thereon equal to the Net Cash Proceeds from such sale, lease, transfer
or other disposition;
(iii) within 30 days from the date of receipt by the Borrower
of any Net Cash Proceeds from any Extraordinary Receipt, prepay an
aggregate principal amount of the outstanding Advances together with
the accrued and unpaid interest thereon equal to the Net Cash Proceeds
from such Extraordinary Receipt; and
(iv) on each Excess Cash Flow Payment Date, prepay an
aggregate principal amount of the outstanding Advances together with
all accrued and unpaid interest thereon equal to 100% of the Available
Excess Cash Flow.
Prepayments received pursuant to clauses (ii), (iii) and (iv) of this Section
2.05(b) shall be first applied ratably to reduce the Tranche B Advances
outstanding until all such Tranche B Advances are reduced to zero, and then
ratably to the Tranche A Advances outstanding, if any.
SECTION 2.06. INTEREST. (a) SCHEDULED INTEREST. The Borrower shall pay
to the Administrative Agent for the ratable account of the Lenders interest on
the unpaid principal amount of each Advance from the date of such Advance until
such principal amount shall be paid in full, at the following rates per annum:
(i) BASE RATE ADVANCES. During such periods as such Advance is
a Base Rate Advance, a rate per annum equal at all times to the sum of
(A) the Base Rate in effect from time to time PLUS (B) the Applicable
Margin in effect from time to time, payable in arrears monthly on the
last day of each month during such periods and on the date such Base
Rate Advance shall be Converted or paid in full.
33
(ii) EURODOLLAR RATE ADVANCES. During such periods as such
Tranche B Advance is a Eurodollar Rate Advance, a rate per annum equal
at all times during each Interest Period for such Tranche B Advance to
the sum of (A) the Eurodollar Rate for such Interest Period for such
Tranche B Advance PLUS (B) the Applicable Margin in effect from time to
time, payable in arrears on the last day of such Interest Period and,
if such Interest Period has a duration of more than three months, on
each day that occurs during such Interest Period every three months
from the first day of such Interest Period and on the date such
Eurodollar Rate Advance shall be Converted or paid in full.
(b) DEFAULT INTEREST. Upon the occurrence and during the continuance of
an Event of Default, the Borrower shall pay to the Administrative Agent for the
ratable account of the Lenders interest on (i) the unpaid principal amount of
each Advance, payable in arrears on the dates referred to in clause (a)(i) or
(a)(ii) above and on demand, at a rate per annum equal at all times to 2% per
annum above the rate per annum required to be paid on such Advance pursuant to
clause (a)(i) or (a)(ii) above and (ii) to the fullest extent permitted by law,
the amount of any interest, fee or other amount payable hereunder that is not
paid when due, from the date such amount shall be due until such amount shall be
paid in full, payable in arrears on the date such amount shall be paid in full
and on demand, at a rate per annum equal at all times to 2% per annum above the
rate per annum required to be paid, in the case of interest, on the Type of
Advance on which such interest has accrued pursuant to clause (a)(i) or (a)(ii)
above, and, in all other cases, on Base Rate Advances pursuant to clause (a)(i)
above.
(c) NOTICE OF INTEREST RATE. Promptly after receipt of the Notice of
Borrowing pursuant to Section 2.02(a), the Administrative Agent shall give
notice to the Borrower and each Lender of the applicable interest rate
determined by the Administrative Agent for purposes of clause (a)(i) or (ii).
SECTION 2.07. FEES. (a) COMMITMENT FEE. The Borrower shall pay to the
Administrative Agent for the account of the Lenders a commitment fee, from the
date hereof to the Termination Date payable quarterly in arrears and on the
Borrowing Date, with the final payment due on the Termination Date, at the rate
of 2 of 1% per annum on the average daily unused portion of each Lender's
Commitment during such period; PROVIDED, HOWEVER, that no commitment fee shall
accrue on any of the Commitments of a Defaulting Lender so long as such Lender
shall be a Defaulting Lender. This Section 2.07(a) shall supersede the paragraph
entitled "Facility Fee" in the Fee Letter from and after the date hereof.
34
(b) ADMINISTRATIVE AGENT'S FEES. The Borrower shall pay to the
Administrative Agent for its own account such fees as may from time to time be
agreed between the Borrower and the Administrative Agent.
(c) COLLATERAL AGENT'S FEES. The Borrower shall pay to the Collateral
Agent for its own account such fees as may from time to time be agreed between
the Borrower and the Collateral Agent.
SECTION 2.08. CONVERSION OF ADVANCES. (a) OPTIONAL. The Borrower may on
any Business Day, upon notice given to the Administrative Agent not later than
11:00 A.M. (New York City time) on the third Business Day prior to the date of
the proposed Conversion and subject to the provisions of Sections 2.06 and 2.09,
Convert all or any portion of the Tranche B Advances of one Type comprising the
same Borrowing into Advances of the other Type; PROVIDED, HOWEVER, that any
Conversion of Eurodollar Rate Advances into Base Rate Advances shall be made
only on the last day of an Interest Period for such Eurodollar Rate Advances,
any Conversion of Base Rate Advances into Eurodollar Rate Advances shall be in
an amount not less than the minimum amount of $10,000,000, no Conversion of any
Advances shall result in more than five Interest Periods outstanding at any time
and each Conversion of Advances comprising part of the same Borrowing shall be
made ratably among the Lenders in accordance with their Tranche B Advances. Each
such notice of Conversion shall, within the restrictions specified above,
specify (i) the date of such Conversion, (ii) the Advances to be Converted and
(iii) if such Conversion is into Eurodollar Rate Advances, the duration of the
initial Interest Period for such Advances. Each notice of Conversion shall be
irrevocable and binding on the Borrower.
(b) MANDATORY. (i) On the date on which the aggregate unpaid principal
amount of Eurodollar Rate Advances comprising any Borrowing shall be reduced, by
payment or prepayment or otherwise, to less than $1,000,000, such Advances shall
automatically Convert into Base Rate Advances.
(ii) If the Borrower shall fail to select the duration of any Interest
Period for any Eurodollar Rate Advances in accordance with the provisions
contained in the definition of "Interest Period" in Section 1.01, the
Administrative Agent will forthwith so notify the Borrower and the Lenders,
whereupon each such Eurodollar Rate Advance will automatically, on the last day
of the then existing Interest Period therefor, Convert into a Base Rate Advance.
(iii) Upon the occurrence and during the continuance of any Event of
Default, (x) each Eurodollar Rate Advance will automatically, on the last day of
the then existing Interest Period therefor, Convert into a Base Rate Advance and
(y) the obligation of the Lenders to make, or to
35
Convert Advances into, Eurodollar Rate Advances shall be suspended.
SECTION 2.09. INCREASED COSTS, ETC. (a) If, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other Governmental Authority (whether or not having the force of law),
there shall be any increase in the cost to any Lender of agreeing to make or of
making, funding or maintaining Eurodollar Rate Advances (excluding for purposes
of this Section 2.09 any such increased costs resulting from (A) Taxes or Other
Taxes (as to which Section 2.11 shall govern) and (B) changes in the basis of
taxation of overall net income or overall gross income by the United States or
by the foreign jurisdiction or state under the laws of which such Lender is
organized or has its Applicable Lending Office or any political subdivision
thereof), then the Borrower shall from time to time, upon demand by such Lender
(with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender additional amounts
sufficient to compensate such Lender for such increased cost; PROVIDED, HOWEVER,
that a Lender claiming additional amounts under this Section 2.09(a) agrees to
use reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions) to designate a different Applicable Lending Office if
the making of such a designation would avoid the need for, or reduce the amount
of, such increased cost that may thereafter accrue and would not, in the
reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.
A certificate as to the amount of such increased cost, and the basis therefor,
submitted to the Borrower by such Lender, shall be conclusive and binding for
all purposes, absent manifest error.
(b) If any Lender determines that compliance with any law or regulation
or any guideline or request from any central bank or other Governmental
Authority (whether or not having the force of law) affects or would affect the
amount of capital required or expected to be maintained by such Lender or any
corporation controlling such Lender and that the amount of such capital is
increased by or based upon the existence of such Lender's commitment to lend
hereunder and other commitments of such type, then, upon demand by such Lender
(with a copy of such demand to the Administrative Agent), the Borrower shall pay
to the Administrative Agent for the account of such Lender, from time to time as
specified by such Lender, additional amounts sufficient to compensate such
Lender in the light of such circumstances, to the extent that such Lender
reasonably determines such increase in capital to be allocable to the existence
of such Lender's commitment to lend. A certificate as to such amounts, and the
basis therefor, submitted to the Borrower by such Lender shall be conclusive and
binding for all purposes, absent manifest error.
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(c) If, with respect to any Eurodollar Rate Advances the Required
Tranche B Lenders notify the Administrative Agent that the Eurodollar Rate for
any Interest Period for such Tranche B Advances will not adequately reflect the
cost to such Tranche B Lenders of making, funding or maintaining their
Eurodollar Rate Advances for such Interest Period, the Administrative Agent
shall forthwith so notify the Borrower and the Tranche B Lenders, whereupon (i)
each such Eurodollar Rate Advance will automatically, on the last day of the
then existing Interest Period therefor, Convert into a Base Rate Advance and
(ii) the obligation of the Tranche B Lenders to make, or to Convert Tranche B
Advances into, Eurodollar Rate Advances shall be suspended until the
Administrative Agent shall notify the Borrower that such Tranche B Lenders have
determined that the circumstances causing such suspension no longer exist.
(d) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other Governmental
Authority shall assert that it is unlawful, for any Tranche B Lender or its
Eurodollar Lending Office to perform its obligations hereunder to make
Eurodollar Rate Advances or to continue to fund or maintain Eurodollar Rate
Advances hereunder, then, on notice thereof and demand therefor by such Tranche
B Lender to the Borrower through the Administrative Agent, (i) each Eurodollar
Rate Advance will automatically, upon such demand, Convert into a Base Rate
Advance and (ii) the obligation of the Tranche B Lenders to make, or to Convert
Tranche B Advances into, Eurodollar Rate Advances shall be suspended until the
Administrative Agent shall notify the Borrower that such Tranche B Lender has
determined that the circumstances causing such suspension no longer exist;
PROVIDED, HOWEVER, that, before making any such demand, such Tranche B Lender
agrees to use reasonable efforts (consistent with its internal policy and legal
and regulatory restrictions) to designate a different Eurodollar Lending Office
if the making of such a designation would allow such Tranche B Lender or its
Eurodollar Lending Office to continue to perform its obligations to make
Eurodollar Rate Advances or to continue to fund or maintain Eurodollar Rate
Advances and would not, in the reasonable judgment of such Tranche B Lender, be
otherwise disadvantageous to such Tranche B Lender.
(e) If the Borrower becomes obligated to pay additional amounts to any
Lender pursuant to this Section 2.09 as a result of any condition which is not
generally applicable to all Lenders then, unless the Lender to which such
conditions apply has theretofore taken steps to remove or cure, and has removed
or cured, the conditions creating the cause for such obligation to pay such
additional amounts, the Borrower may, so long as no Event of Default shall have
occurred and be continuing, designate another lender which is willing to
purchase all rights and
37
obligations of such Lender and which is reasonably acceptable to the
Administrative Agent and the Required Lenders (such lender being herein called a
"REPLACEMENT LENDER") to purchase for cash all of the rights and obligations of
such Lender under this Agreement and all of such Lender=s rights hereunder,
without recourse to or warranty (other than title) by, or expense to, such
Lender in an amount equal to the outstanding principal amount of the Advances
payable to such Lender plus any accrued but unpaid interest on such Advances,
expense reimbursements and indemnities (including, without limitation, under
Section 9.04(b)) and other amounts in respect of that Lender=s Commitment and
Advances hereunder. Such Lender shall consummate such sale in accordance with
such terms as promptly as reasonably practicable, and thereafter such Lender
shall no longer be a party hereto or have any obligations or rights hereunder
(except rights which, pursuant to the provisions of this Agreement, survive the
termination of this Agreement and the repayment of the Notes or the Advances),
and the Replacement Lender shall succeed to such obligations and rights.
SECTION 2.10. PAYMENTS AND COMPUTATIONS. (a) The Borrower shall make
each payment hereunder and under the Notes, irrespective of any right of
counterclaim or set-off (except as otherwise provided in Section 2.14), not
later than 5:00 P.M. (New York City time) for principal on the Tranche A
Advances and not later than 11:00 A.M. (New York City time) for all other
amounts due hereunder on the day when due in U.S. dollars to the Administrative
Agent at the Administrative Agent's Account in immediately available funds. The
Administrative Agent will promptly thereafter cause like funds to be distributed
(i) if such payment by the Borrower is in respect of principal, interest,
commitment fees or any other Obligation then payable hereunder and under the
Notes to more than one Lender, to such Lenders for the account of their
respective Applicable Lending Offices ratably in accordance with the amounts of
such respective Obligations then payable to such Lenders and (ii) if such
payment by the Borrower is in respect of any Obligation then payable hereunder
to one Lender, to such Lender for the account of its Applicable Lending Office,
in each case to be applied in accordance with the terms of this Agreement. Upon
its acceptance of an Assignment and Acceptance and recording of the information
contained therein in the Register pursuant to Section 9.07(d), from and after
the effective date of such Assignment and Acceptance, the Administrative Agent
shall make all payments hereunder and under the Notes in respect of the interest
assigned thereby to the Lender assignee thereunder, and the parties to such
Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves.
(b) The Borrower hereby authorizes each Lender, if and to the extent
payment owed to such Lender is not made to the Administrative Agent when due
hereunder or
38
under the Note held by such Lender, to charge from time to time against any or
all of the Borrower's accounts with such Lender (other than the Collateral
Accounts, access to which shall be governed by the Loan Documents) any amount so
due.
(c) All computations of interest and fees shall be made by the
Administrative Agent on the basis of a year of 360 days, in each case for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest, fees or commissions are
payable. Each determination by the Administrative Agent of an interest rate, fee
or commission hereunder shall be conclusive and binding for all purposes, absent
manifest error.
(d) Whenever any payment hereunder or under the Notes shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or commitment fee, as the
case may be; PROVIDED, HOWEVER, that, if such extension would cause payment of
interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
(e) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to any Lender hereunder
that the Borrower will not make such payment in full, the Administrative Agent
may assume that the Borrower has made such payment in full to the Administrative
Agent on such date and the Administrative Agent may, in reliance upon such
assumption, cause to be distributed to each such Lender on such due date an
amount equal to the amount then due such Lender. If and to the extent the
Borrower shall not have so made such payment in full to the Administrative
Agent, each such Lender shall repay to the Administrative Agent forthwith on
demand such amount distributed to such Lender together with interest thereon,
for each day from the date such amount is distributed to such Lender until the
date such Lender repays such amount to the Administrative Agent, at the Federal
Funds Rate.
SECTION 2.11. TAXES. (a) Any and all payments by the Borrower hereunder
or under the Notes shall be made, in accordance with Section 2.10, free and
clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, EXCLUDING, in the case of each Lender and the Administrative Agent,
taxes that are imposed on its overall net income by the United States and taxes
that are imposed on its overall net income (and franchise taxes imposed in lieu
thereof) by the state or foreign jurisdiction under the laws of which such
Lender or the Administrative Agent (as the case may be) is organized or any
political subdivision thereof and, in the case of
39
each Lender, taxes that are imposed on its overall net income (and franchise
taxes imposed in lieu thereof) by the state or foreign jurisdiction of such
Lender's Applicable Lending Office or any political subdivision thereof (all
such non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities in respect of payments hereunder or under the Notes being
hereinafter referred to as "TAXES"). If the Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder or under any
Note to any Lender or the Administrative Agent, (i) the sum payable shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.11) such Lender or the Administrative Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions and (iii) the Borrower shall pay
the full amount deducted to the relevant taxation authority or other authority
in accordance with applicable law.
(b) In addition, the Borrower shall pay any present or future stamp,
documentary, excise, property or similar taxes, charges or levies that arise
from any payment made hereunder or under the Notes or from the execution,
delivery or registration of, performing under, or otherwise with respect to,
this Agreement or the Notes (hereinafter referred to as "OTHER TAXES").
(c) The Borrower shall indemnify each Lender and the Administrative
Agent for and hold it harmless against the full amount of Taxes and Other Taxes,
and for the full amount of Taxes of any kind imposed by any jurisdiction on
amounts payable under this Section 2.11, imposed on or paid by such Lender or
the Administrative Agent (as the case may be) and any liability (including
penalties, additions to tax, interest and expenses) arising therefrom or with
respect thereto. This indemnification shall be made within 30 days from the date
such Lender or the Administrative Agent (as the case may be) makes written
demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the Borrower
shall furnish to the Administrative Agent, at its address referred to in Section
9.02, the original or a certified copy of a receipt evidencing such payment. In
the case of any payment hereunder or under the Notes by or on behalf of the
Borrower through an account or branch outside the United States or by or on
behalf of the Borrower by a payor that is not a United States person, if the
Borrower determines that no Taxes are payable in respect thereof, the Borrower
shall furnish, or shall cause such payor to furnish, to the Administrative
Agent, at such address, an opinion of counsel acceptable to the Administrative
Agent stating that such payment is exempt from Taxes. For purposes of this
subsection (d) and subsection (e), the terms "UNITED STATES" and "UNITED STATES
40
PERSON" shall have the meanings specified in Section 7701 of the Internal
Revenue Code.
(e) Each Lender organized under the laws of a jurisdiction outside the
United States shall, on or prior to the date of its execution and delivery of
this Agreement in the case of each Initial Lender and on the date of the
Assignment and Acceptance pursuant to which it becomes a Lender in the case of
each other Lender, and from time to time thereafter as requested in writing by
the Borrower (but only so long thereafter as such Lender remains lawfully able
to do so), provide each of the Administrative Agent and the Borrower with two
original Internal Revenue Service forms W-8 ECI or W-8 BEN, as appropriate, or
any successor or other form prescribed by the Internal Revenue Service,
certifying that such Lender is exempt from or entitled to a reduced rate of
United States withholding tax on payments pursuant to this Agreement or the
Notes. If the forms provided by a Lender at the time such Lender first becomes a
party to this Agreement indicates a United States interest withholding tax rate
in excess of zero, withholding tax at such rate shall be considered excluded
from Taxes unless and until such Lender provides the appropriate form certifying
that a lesser rate applies, whereupon withholding tax at such lesser rate only
shall be considered excluded from Taxes for periods governed by such form;
PROVIDED, HOWEVER, that, if at the date of the Assignment and Acceptance
pursuant to which a Lender becomes a party to this Agreement, the Lender
assignor was entitled to payments under subsection (a) in respect of United
States withholding tax with respect to interest paid at such date, then, to such
extent, the term Taxes shall include (in addition to withholding taxes that may
be imposed in the future or other amounts otherwise includable in Taxes) United
States withholding tax, if any, applicable with respect to the Lender assignee
on such date. If any form or document referred to in this subsection (e)
requires the disclosure of information, other than information necessary to
compute the tax payable and information required on the date hereof by Internal
Revenue Service form W-8 ECI or W-8 BEN, that the Lender reasonably considers to
be confidential, the Lender shall give notice thereof to the Borrower and shall
not be obligated to include in such form or document such confidential
information.
(f) For any period with respect to which a Lender has failed to provide
the Borrower with the appropriate form described in subsection (e) above (OTHER
THAN if such failure is due to a change in law occurring after the date on which
a form originally was required to be provided or if such form otherwise is not
required under subsection (e) above), such Lender shall not be entitled to
indemnification under subsection (a) or (c) with respect to Taxes imposed by the
United States by reason of such failure; PROVIDED, HOWEVER, that should a Lender
become subject to Taxes because of its failure to deliver a form required
hereunder, the Borrower shall take such steps as
41
such Lender shall reasonably request to assist such Lender to recover such
Taxes.
SECTION 2.12. SHARING OF PAYMENTS, ETC. If any Lender shall obtain at
any time any payment (whether voluntary, involuntary, through the exercise of
any right of set-off, or otherwise) (a) on account of Obligations due and
payable to such Lender hereunder and under the Notes at such time in excess of
its ratable share (according to the proportion of (i) the amount of such
Obligations due and payable to such Lender at such time to (ii) the aggregate
amount of the Obligations due and payable to all Lenders hereunder and under the
Notes at such time) of payments on account of the Obligations due and payable to
all Lenders hereunder and under the Notes at such time obtained by all the
Lenders at such time or (b) on account of Obligations owing (but not due and
payable) to such Lender hereunder and under the Notes at such time in excess of
its ratable share (according to the proportion of (i) the amount of such
Obligations owing to such Lender at such time to (ii) the aggregate amount of
the Obligations owing (but not due and payable) to all Lenders hereunder and
under the Notes at such time) of payments on account of the Obligations owing
(but not due and payable) to all Lenders hereunder and under the Notes at such
time obtained by all of the Lenders at such time, such Lender shall forthwith
purchase from the other Lenders such participations in the Obligations due and
payable or owing to them, as the case may be, as shall be necessary to cause
such purchasing Lender to share the excess payment ratably with each of them;
PROVIDED, HOWEVER, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each other
Lender shall be rescinded and such other Lender shall repay to the purchasing
Lender the purchase price to the extent of such Lender's ratable share
(according to the proportion of (i) the purchase price paid to such Lender to
(ii) the aggregate purchase price paid to all Lenders) of such recovery together
with an amount equal to such Lender's ratable share (according to the proportion
of (i) the amount of such other Lender's required repayment to (ii) the total
amount so recovered from the purchasing Lender) of any interest or other amount
paid or payable by the purchasing Lender in respect of the total amount so
recovered. The Borrower agrees that any Lender so purchasing a participation
from another Lender pursuant to this Section 2.12 may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off) with respect to such participation as fully as if such Lender were the
direct creditor of the Borrower in the amount of such participation.
SECTION 2.13. USE OF PROCEEDS. The proceeds of the Advances shall be
available (and the Borrower agrees that it shall use such proceeds) solely to
pay the Purchase Price for the Generating Assets and for fees, costs and
expenses incurred in connection with the Loan Documents and
42
related to the preparation, execution and delivery of the Loan Documents.
SECTION 2.14. DEFAULTING LENDERS. (a) In the event that, at any one
time, (i) any Lender shall be a Defaulting Lender, (ii) such Defaulting Lender
shall owe a Defaulted Advance to the Borrower and (iii) the Borrower shall be
required to make any payment hereunder or under any other Loan Document to or
for the account of such Defaulting Lender, then the Borrower may, so long as no
Default shall occur or be continuing at such time and to the fullest extent
permitted by applicable law, set off and otherwise apply the Obligation of the
Borrower to make such payment to or for the account of such Defaulting Lender
against the Obligation of such Defaulting Lender to make such Defaulted Advance.
In the event that, on any date, the Borrower shall so set off and otherwise
apply its obligation to make any such payment against the Obligation of such
Defaulting Lender to make any such Defaulted Advance on or prior to such date,
the amount so set off and otherwise applied by the Borrower shall constitute for
all purposes of this Agreement and the other Loan Documents an Advance by such
Defaulting Lender made on the date pursuant to which such Defaulted Advance was
originally required to have been made pursuant to Section 2.01. Such Advance
shall be a Base Rate Advance and shall be considered, for all purposes of this
Agreement, to comprise part of the Borrowing in connection with which such
Defaulted Advance was originally required to have been made pursuant to Section
2.01, even if the other Advances comprising such Borrowing shall be Eurodollar
Rate Advances on the date such Advance is deemed to be made pursuant to this
subsection (a). The Borrower shall notify the Administrative Agent at any time
the Borrower exercises its right of set-off pursuant to this subsection (a) and
shall set forth in such notice (A) the name of the Defaulting Lender and the
Defaulted Advance required to be made by such Defaulting Lender and (B) the
amount set off and otherwise applied in respect of such Defaulted Advance
pursuant to this subsection (a). Any portion of such payment otherwise required
to be made by the Borrower to or for the account of such Defaulting Lender which
is paid by the Borrower, after giving effect to the amount set off and otherwise
applied by the Borrower pursuant to this subsection (a), shall be applied by the
Administrative Agent as specified in subsection (b) or (c) of this Section 2.14.
(b) In the event that, at any one time, (i) any Lender shall be a
Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Amount to
the Administrative Agent or any of the other Lenders and (iii) the Borrower
shall make any payment hereunder or under any other Loan Document to the
Administrative Agent for the account of such Defaulting Lender, then the
Administrative Agent may, on its behalf or on behalf of such other Lenders and
to the fullest extent permitted by applicable law, apply at such time the amount
so paid by the Borrower to or for the account of such Defaulting Lender to the
payment of each
43
such Defaulted Amount to the extent required to pay such Defaulted Amount. In
the event that the Administrative Agent shall so apply any such amount to the
payment of any such Defaulted Amount on any date, the amount so applied by the
Administrative Agent shall constitute for all purposes of this Agreement and the
other Loan Documents payment, to such extent, of such Defaulted Amount on such
date. Any such amount so applied by the Administrative Agent shall be retained
by the Administrative Agent or distributed by the Administrative Agent to such
other Lenders, ratably in accordance with the respective portions of such
Defaulted Amounts payable at such time to the Administrative Agent and such
other Lenders and, if the amount of such payment made by the Borrower shall at
such time be insufficient to pay all Defaulted Amounts owing at such time to the
Administrative Agent and the other Lenders, in the following order of priority:
(i) FIRST, to the Administrative Agent for any Defaulted
Amount then owing to the Administrative Agent; and
(ii) SECOND, to any other Lenders for any Defaulted Amounts
then owing to such other Lenders, ratably in accordance with such
respective Defaulted Amounts then owing to such other Lenders.
Any portion of such amount paid by the Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Administrative Agent pursuant to this subsection (b), shall be applied by the
Administrative Agent as specified in subsection (c) of this Section 2.14.
(c) In the event that, at any one time, (i) any Lender shall be a
Defaulting Lender, (ii) such Defaulting Lender shall not owe a Defaulted Advance
or a Defaulted Amount and (iii) the Borrower, the Administrative Agent or any
other Lender shall be required to pay or distribute any amount hereunder or
under any other Loan Document to or for the account of such Defaulting Lender,
then the Borrower or such other Lender shall pay such amount to the
Administrative Agent to be held by the Administrative Agent, to the fullest
extent permitted by applicable law, in escrow or the Administrative Agent shall,
to the fullest extent permitted by applicable law, hold in escrow such amount
otherwise held by it. Any funds held by the Administrative Agent in escrow under
this subsection (c) shall be deposited by the Administrative Agent in an account
with Citibank, in the name and under the control of the Administrative Agent,
but subject to the provisions of this subsection (c). The terms applicable to
such account, including the rate of interest payable with respect to the credit
balance of such account from time to time, shall be Citibank's standard terms
applicable to escrow accounts maintained with it. Any interest credited to such
account from time to time shall be held by the Administrative Agent
44
in escrow under, and applied by the Administrative Agent from time to time in
accordance with the provisions of, this subsection (c). The Administrative Agent
shall, to the fullest extent permitted by applicable law, apply all funds so
held in escrow from time to time to the extent necessary to make any Advances
required to be made by such Defaulting Lender and to pay any amount payable by
such Defaulting Lender hereunder and under the other Loan Documents to the
Administrative Agent or any other Lender, as and when such Advances or amounts
are required to be made or paid and, if the amount so held in escrow shall at
any time be insufficient to make and pay all such Advances and amounts required
to be made or paid at such time, in the following order of priority:
(i) FIRST, to the Administrative Agent for any amount then due
and payable by such Defaulting Lender to the Administrative Agent
hereunder;
(ii) SECOND, to any other Lenders for any amount then due and
payable by such Defaulting Lender to such other Lenders hereunder,
ratably in accordance with such respective amounts then due and payable
to such other Lenders; and
(iii) THIRD, to the Borrower for any Advance then required to
be made by such Defaulting Lender pursuant to a Commitment of such
Defaulting Lender.
In the event that any Lender that is a Defaulting Lender shall, at any time,
cease to be a Defaulting Lender, any funds held by the Administrative Agent in
escrow at such time with respect to such Lender shall be distributed by the
Administrative Agent to such Lender and applied by such Lender to the
Obligations owing to such Lender at such time under this Agreement and the other
Loan Documents ratably in accordance with the respective amounts of such
Obligations outstanding at such time.
(d) The rights and remedies against a Defaulting Lender under this
Section 2.14 are in addition to other rights and remedies that the Borrower may
have against such Defaulting Lender with respect to any Defaulted Advance and
that the Administrative Agent or any Lender may have against such Defaulting
Lender with respect to any Defaulted Amount.
SECTION 2.15. DEPOSITORY TRUST CORPORATION ELIGIBILITY. The Borrower
agrees to use its reasonable best efforts to cause the Tranche B Notes to be
Depository Trust Company eligible promptly after the request of the Required
Tranche B Lenders.
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ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. CONDITIONS PRECEDENT TO THE BORROWING DATE. The
obligation of each Lender to make any Advance on the occasion of the Borrowing
Date is subject to the satisfaction of the following conditions precedent before
or concurrently with such Advance:
(a) The Acquisition shall be consummated strictly in
accordance with the terms of the Purchase and Sale Agreements and in
compliance with all applicable laws, without any waiver or amendment
not consented to by the Lenders or that would be reasonably likely to
have a Material Adverse Effect.
(b) The Acquisition Documents shall have been executed by all
parties thereto in form and substance satisfactory to the Lenders and
no default by any party to any thereof shall have occurred and be
continuing that would be reasonably likely to have a Material Adverse
Effect.
(c) There shall have occurred and be continuing no event which
(i) could reasonably be expected to result in a material adverse change
in the business, financial condition, operations, performance,
properties or prospects of the Borrower, Northeast Utilities or NU
Enterprises, individually or taken together as a whole, since December
31, 1999 or (ii) in the reasonable opinion of the Lenders, could
reasonably be expected to have a Material Adverse Effect since
September 30, 1999 for Northeast Utilities, the Borrower or NU
Enterprises.
(d) All governmental, shareholder, creditor and other third
party consents, approvals and authorizations and all notices to or
other such filings with any such entities and all other regulatory
requirements applicable to (i) the transfer to the Borrower of the
Generating Assets, (ii) the ongoing operation of such assets by the
Borrower, (iii) the entry into and performance of the Loan Documents,
the Acquisition Documents, the existing Material Contracts and the
Project Documents by the Borrower, NU Enterprises, Northeast Utilities,
CL&P, WMECO, NGS and Select, (iv) the granting of the Liens
contemplated thereby and (v) the other transactions contemplated herein
or therein, shall have been satisfied, obtained or made (without the
imposition of any conditions that are not customary or otherwise
reasonably acceptable to the Lenders) and shall be in full force and
effect and all matters relating to such consents, authorizations and
approvals including, without limitation, the status thereof shall be
reasonably satisfactory to the Lenders and no law or regulation shall
be applicable in the reasonable judgment of the Lenders that restrains,
prevents or imposes materially adverse conditions on the Generating
Assets, the Borrower, NU Enterprises,
46
Northeast Utilities, NGS or Select or the transactions contemplated
herein or therein.
(e) The written information prepared by or on behalf of the
Borrower or Northeast Utilities and delivered to the Lenders listed on
Schedule 3.01(e) attached hereto, taken as a whole, shall continue to
be true and correct in all material respects, except with respect to
forecasts and projections (including, without limitation, the forecasts
and projections contained in business plans so updated) which shall
have been prepared in good faith and based on reasonable assumptions,
which assumptions continue to be fair and reasonable, and such updated
information (including, without limitation, such updated forecasts and
projections) shall be in form and substance reasonably satisfactory to
the Lenders.
(f) There shall exist no action, suit, investigation,
litigation or proceeding pending or threatened in any court or before
any arbitrator or governmental instrumentality that would be reasonably
likely to have a Material Adverse Effect other than as set forth in the
Disclosure Documents or purports to materially adversely affect the
Acquisition, the Acquisition Documents, this Agreement, the existing
Material Contracts, the Project Documents or any of the other
transactions contemplated hereby or thereby.
(g) The Lenders shall have received evidence reasonably
satisfactory to them that (x) an amount at least equal to
US$45,500,233.35 shall have been deposited in an account to be
designated by the Administrative Agent on the date prior to the
Borrowing, which shall remain on deposit in such account on the
Borrowing Date, and the Administrative Agent shall have received
irrevocable instructions to use such funds as provided in the Flow of
Funds Memorandum and (y) an amount at least equal to $389,999,766.65
will be available to be released from the lien of the Indentures to be
dividended by each of CL&P and WMECO, respectively, to Northeast
Utilities or to be used by CL&P or WMECO, respectively, to repurchase
stock from Northeast Utilities and that each of CL&P and WMECO shall be
capable of satisfying the conditions to such release upon the funding
and no limitations (which have not been waived or are not otherwise
capable of being satisfied by each of CL&P and WMECO upon the funding)
shall exist under the Indentures and the other applicable indentures,
credit agreements and other agreements of CL&P and WMECO and no other
restrictions shall exist (statutory, corporate, contractual or
otherwise) on the declaration and payment of such dividend or such
repurchase of stock and on the investment of an amount equal to the
Tranche A Borrowing, by Northeast Utilities into NU Enterprises and by
NU Enterprises into the Borrower,
47
respectively, and that the mechanics of executing such release,
dividend, repurchase of stock and investment are such that the Borrower
should be able to repay an amount equal to the Tranche A Borrowing to
the Administrative Agent on behalf of the Lenders on the Borrowing
Date.
(h) Each of CL&P and WMECO shall have taken all necessary
corporate action and obtained all necessary governmental, creditor and
other third party consents, approvals and authorizations to repurchase
stock or dividend an amount equal to US$390,000,000 on such date, from
or to Northeast Utilities, and Northeast Utilities and NU Enterprises
each shall have taken all necessary corporate action and obtained all
necessary governmental and third party consents, approvals and
authorizations to invest an amount equal to the Tranche A Borrowing on
such date in NU Enterprises (in the case of Northeast Utilities) and in
the Borrower (in the case of NU Enterprises) and all such other
consents, approvals and authorizations shall be in full force and
effect, all matters relating to such consents, approvals and
authorizations including, without limitation, the status thereof shall
be satisfactory to the Lenders in their sole discretion and no law or
regulation shall be applicable in the reasonable judgment of the
Lenders that restrains, prevents or imposes materially adverse
conditions upon the transactions contemplated thereby. The
Administrative Agent shall have received certified copies of all
governmental approvals and consents referenced in this clause (h) and
any evidence of corporate action requested.
(i) To the extent the amount equal to the sum of (1) the
Purchase Price, (2) all amounts payable to the Administrative Agent,
the Collateral Agent, the Co-Arrangers and the Lenders under the Loan
Documents, the Fee Letter, the Lead Bank Letter and the Engagement
Letter, and (3) all transaction costs relating to the Loan Documents
and the Acquisition, exceeds the Commitments under this Agreement and
available on the Borrowing Date, the Borrower shall have received cash
capital contributions in an amount sufficient to fund such excess
amount prior to the making of the Advances and shall apply such funds
to such excess amounts designated above as agreed with the Lenders.
(j) The Lenders shall be reasonably satisfied with (i) the
Borrower's plan of remediation if required under the Connecticut
Transfer Act or, if such plan is required but has not been finalized,
with the results of their diligence regarding the anticipated terms of
such plan, (ii) the results of their diligence regarding the conditions
anticipated to be imposed as part of the FERC re-licensing of the
Generating Assets in the Housatonic System, (iii) the conditions
48
disclosed in all Phase II environmental site assessment reports from
▇▇▇▇▇▇▇ & ▇▇▇▇ with respect to the Generating Assets, (iv) the
information disclosed in the final report of Stone & ▇▇▇▇▇▇▇, (v) the
results of the final report of the Insurance Consultant with respect to
the Generating Assets, and (vi) the results of such other diligence
they reasonably determine to undertake in connection with the
Acquisition with respect to the Generating Assets.
(k) An amount equal to all accrued fees and reasonable
expenses of the Administrative Agent, the Collateral Agent, the
Co-Arrangers and the Lenders (including the accrued reasonable fees and
expenses of counsel to the Administrative Agent, the Collateral Agent
and the Depositary Bank) due and payable in accordance with the Loan
Documents, the Fee Letter, the Engagement Letter and the Lead Bank
Letter shall have been deposited in an account to be designated by the
Administrative Agent on the date prior to the Borrowing, which shall
remain on deposit in such account on the Borrowing Date, and the
Administrative Agent shall have received irrevocable instructions to
use such funds to pay such amounts in full.
(l) The Lenders shall have received a letter from the Borrower
certifying as to the NEPOOL capability rating for each of the
Generating Assets.
(m) The Administrative Agent shall have received on or before
the Borrowing Date the following, each dated such day (unless otherwise
specified), in form and substance reasonably satisfactory to the
Lenders (unless otherwise specified) and (except for the Notes) in
sufficient copies for each Lender:
(i) The Notes payable to the order of the
Lenders.
(ii) Certified copies of the resolutions of the Board
of Directors of each Loan Party approving this Agreement, the
Notes, each other Loan Document, each Acquisition Document and
each Project Document to which it is or is to be a party, and
of all documents evidencing other necessary corporate action
and governmental and other third party approvals and consents,
if any, with respect to this Agreement, the Notes, each other
Loan Document, each Acquisition Document and each Project
Document.
(iii) A copy of the charter of each Loan Party and
each amendment thereto, certified (as of a date reasonably
near the date of the Borrowing Date) by the Secretary of State
of the jurisdiction of its incorporation as being a true and
correct copy thereof.
49
(iv) A copy of a certificate of the Secretary of
State of the jurisdiction of each Loan Party's organization,
dated reasonably near the date of the Borrowing Date, listing
the charter of such Loan Party and each amendment thereto on
file in his office and certifying that (A) such amendments are
the only amendments to such Loan Party's charter on file in
his office, (B) each Loan Party has paid all franchise taxes
to the date of such certificate and (C) such Loan Party is
duly organized and in good standing under the laws of the
state of the jurisdiction of its organization.
(v) A certificate of each of the Loan Parties, signed
on behalf of such Loan Party by a Responsible Officer thereof,
dated the Borrowing Date (the statements made in which
certificate shall be true on and as of the date of the
Borrowing), certifying as to (A) the absence of any amendments
to the charter (or the equivalent organizational or
constitutive documents) of such Loan Party since the date of
the certification referred to in Section 3.01(m)(iv), a copy
of which shall be attached to such certificate, (B) a true and
correct copy of the bylaws (or the equivalent organizational
documents) of such Loan Party as in effect on the Borrowing
Date, a copy of which shall be attached to such certificate,
and (C) the due organization and good standing of such Loan
Party, and the absence of any proceeding for the dissolution,
winding-up or liquidation (or any equivalent thereof) of such
Loan Party.
(vi) A certificate of each of the Loan Parties,
signed on behalf of such Loan Party by a Responsible Officer
thereof, dated the Borrowing Date (the statements made in such
certificate shall be true on and as of the date of the
Borrowing), certifying that:
(A) all of the representations and
warranties of such Loan Party contained in each Loan
Document, Acquisition Document or Project Document to
which such Loan Party is or is to be a party, or
which are contained in any certificate, document or
financial or other statement furnished thereunder or
in connection therewith, shall be true and correct in
all material respects on and as of the Borrowing
Date, before and after giving effect to the Borrowing
and to the application of the proceeds therefrom, as
though made on and as of such date (other than any
such representations or warranties that, by their
terms, refer to a specific
50
date other than the date of the Borrowing, in which
case as of such specific date); and
(B) no event has occurred and is continuing,
or would result from the Borrowing or from the
application of the proceeds therefrom, that
constitutes a Default or an Event of Default.
(vii) A certificate of the Secretary or an Assistant
Secretary of each Loan Party certifying the names and true
signatures of the officers of such Loan Party authorized to
sign this Agreement, the Notes, the Loan Documents, each
Acquisition Document and each Project Document to which they
are or are to be parties and the other documents to be
delivered hereunder and thereunder.
(viii) The Tranche A Borrower Security Agreement, the
Tranche B Borrower Security Agreement, the Tranche A
Enterprises Pledge Agreement and the Tranche B Enterprises
Pledge Agreement, each duly executed by each of the parties
thereto, together with:
(A) certificates representing the Pledged
Shares referred to therein accompanied by undated
stock powers executed in blank.
(B) acknowledgment copies of proper
financing statements, duly filed on or before the
Borrowing Date under the Uniform Commercial Code of
all jurisdictions that the Collateral Agent may deem
necessary or desirable in order to perfect and
protect the first priority liens and security
interests created under such Collateral Documents,
covering the Collateral described in such Collateral
Documents.
(C) completed requests for information,
dated on or before the Borrowing Date, listing the
financing statements referred to in clause (B) above
and all other effective financing statements filed in
the jurisdictions referred to in clause (B) above
that name the Borrower or NU Enterprises as debtor,
together with copies of such other financing
statements.
(D) evidence of the completion of all other
recordings and filings of or with respect to such
Collateral Documents that the Collateral Agent may
deem necessary or desirable in order to perfect and
protect the Liens created thereby.
51
(E) evidence that all other action that the
Collateral Agent may deem necessary or desirable in
order to perfect and protect the first priority liens
and security interests created under such Collateral
Documents has been taken.
(ix) The Tranche A Mortgage and the Tranche B
Mortgage in respect of the properties listed on Schedule II
(in each case as amended, supplemented or otherwise modified
from time to time in accordance with their terms, the
"MORTGAGES"), duly executed by the Borrower, together with:
(A) evidence that (i) counterparts of the
Mortgages have been duly recorded on or before the
Borrowing Date in all filing or recording offices
that the Collateral Agent may deem necessary or
desirable in order to create a valid first and
subsisting Lien on the property described therein in
favor of the Secured Parties and that all filing and
recording taxes and fees have been paid, or (ii) the
Title Companies (as defined below) have provided gap
insurance in respect to the recording of the
Mortgages acceptable to the Collateral Agent;
(B) fully paid American Land Title
Association Lender's Extended Coverage title
insurance policies (the "MORTGAGE POLICIES") in form
and substance, with endorsements and in amount
acceptable to the Collateral Agent, issued, coinsured
and reinsured by title insurers acceptable to the
Collateral Agent (the "TITLE COMPANIES"), insuring
the Tranche B Mortgage to be a valid first and
subsisting Lien on the property described therein,
free and clear of all defects (including, but not
limited to, mechanics' and materialmen's Liens) and
encumbrances, excepting only Permitted Encumbrances,
and providing for such other affirmative insurance
(including endorsements for mechanics' and
materialmen's Liens);
(C) American Land Title Association form
surveys for designated portions of certain properties
listed on Schedule II and other site drawings,
certified to the Collateral Agent and the issuers of
the Mortgage Policy in a manner reasonably
satisfactory to the Collateral Agent by a land
surveyor duly registered and licensed in the states
in which the property described in
52
such surveys is located and acceptable to the
Collateral Agent;
(D) INTENTIONALLY OMITTED;
(E) engineering, soils and other reports as
to the properties described in the Mortgages, in form
and substance and from professional firms acceptable
to the Collateral Agent;
(F) such consents and agreements of lessors
and other third parties, and such estoppel letters
and other confirmations, as the Collateral Agent may
reasonably deem necessary;
(G) evidence of the insurance required
hereunder;
(H) evidence that all other action that the
Collateral Agent may deem necessary in order to
create valid first and subsisting Liens on the
property described in the Mortgages has been taken;
(I) deeds transferring title to each
applicable property described in the Mortgages;
(J) evidence of recording of each deed and
payment of any recording fees in respect thereof;
(K) release of existing mortgages, if any,
together with applicable ancillary documentation,
including, without limitation, UCC-3 forms;
(L) release of other existing encumbrances
(other than Permitted Encumbrances) if any, together
with applicable ancillary documentation;
(M) applicable transfer tax forms;
(N) bills of sale related to the transfer of
personal property;
(O) certified copy of the Northfield
Operating Agreement;
(P) certified copies of all existing
Material Contracts, Project Documents and material
operating or regulatory licenses to be assigned; and
53
(Q) assignments of service contracts,
permits and warranties.
(x) The Sponsor Agreement, duly executed by
Northeast Utilities.
(xi) Certified copies of the Governmental
Authorizations listed on Schedules 5.01(d)(A)(1)-(2) hereof.
(xii) Certified copies of each of the Third Party
Consents listed on Schedule 5.01(d)(B) hereof, each in form
and substance satisfactory to the Lenders.
(xiii) Evidence that the Borrower is an Exempt
Wholesale Generator.
(xiv) A solvency certificate from the chief financial
officer of each of CL&P and WMECO, substantially in
the form of Exhibit J hereto.
(xv) A certified copy of the Annual Operating Budget
of the Borrower for the year 2000.
(xvi) A copy of the Administrative Agent Fee Letter
and the Collateral Agent Fee Letter, each duly executed by
each of the parties thereto.
(xvii) (a) Written confirmation from Stone & ▇▇▇▇▇▇▇
that no material adverse change shall have occurred with
respect to the Generating Assets from that indicated in the
draft final report of Stone & ▇▇▇▇▇▇▇ dated May 28, 1999, (b)
written confirmation from the Insurance Consultant that the
Borrower's insurance arrangements satisfy the requirements set
forth in the Loan Documents and (c) a market study from P.H.B.
▇▇▇▇▇▇ Bailly ("▇▇▇▇▇▇") which is reasonably satisfactory in
form and substance to the Lenders.
(xviii) Certified copies of the Acquisition
Documents, the O&M Agreement, the Select Power Purchase
Agreement, the Northeast Utilities Guaranties and the Tax
Sharing Agreement, each of which shall be in form and
substance satisfactory to the Lenders.
(xix) A favorable opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP,
special counsel for the Borrower, Northeast Utilities, NU
Enterprises, CL&P, WMECO, NGS and Select, in form and
substance reasonably satisfactory to the Agents and the
Initial Lenders.
54
(xx) A favorable opinion of Steptoe and ▇▇▇▇▇▇▇,
special FERC counsel to the Borrower, Northeast Utilities, NU
Enterprises, Select, NGS, CL&P and WMECO, in form and
substance reasonably satisfactory to the Agents and the
Initial Lenders.
(xxi) A favorable opinion of Day, ▇▇▇▇▇ & ▇▇▇▇▇▇,
special Massachusetts and Connecticut energy regulatory
counsel and special Securities and Exchange Commission counsel
to the Borrower, Northeast Utilities, NU Enterprises, Select,
NGS, CL&P and WMECO, in form and substance reasonably
satisfactory to the Agents and the Initial Lenders.
(xxii) A favorable opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇, general
counsel to NUSCO in New Hampshire, in form and substance
reasonably satisfactory to the Agents and the Initial Lenders.
(xxiii) A favorable opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP,
special Massachusetts and Connecticut real estate counsel to
the Borrower, Northeast Utilities, NU Enterprises, Select,
NGS, CL&P and WMECO, in form and substance reasonably
satisfactory to the Agents and the Initial Lenders.
(xxiv) A favorable opinion of ▇▇▇▇▇ Peabody special
New Hampshire real estate counsel to the Borrower, Northeast
Utilities, NU Enterprises, Select, NGS, CL&P and WMECO, in
form and substance reasonably satisfactory to the Agents and
the Initial Lenders.
(xxv) A favorable opinion of Kristensen, Cummings,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, special Vermont real estate counsel to the
Borrower, Northeast Utilities, Select, NGS, NU Enterprises,
CL&P and WMECO, in form and substance reasonably satisfactory
to the Agents and the Initial Lenders.
(xxvi) A favorable opinion of Shearman & Sterling,
counsel for the Administrative Agent, in form and substance
reasonably satisfactory to the Lenders.
(xxvii) Such other approvals, opinions or documents
as any Lender through the Administrative Agent may reasonably
request.
Section 3.02. DETERMINATIONS UNDER SECTION 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, each
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied
55
with each document or other matter required thereunder to be consented to or
approved by or acceptable or satisfactory to the Lenders unless an officer of
the Administrative Agent responsible for the transactions contemplated by the
Loan Documents and the Borrower shall have received written notice of such
objection from such Lender prior to the Borrowing specifying its objection
thereto, and, in the case of the Borrowing, such Lender shall not have made
available to the Administrative Agent such Lender's ratable portion of the
Borrowing.
ARTICLE IV
SPECIAL ACCOUNTS SYSTEM
SECTION 4.01. CREATION OF THE COLLATERAL ACCOUNTS. (a) The Collateral
Agent and the Borrower shall establish and maintain the Collateral Accounts.
(b) THE DEPOSITARY BANK. (i) The Depositary Bank hereby agrees to act
as securities intermediary (as defined in the UCC) in respect of the Collateral
Accounts established with the Depositary Bank under this Agreement. The Borrower
hereby acknowledges that the Depositary Bank shall act as securities
intermediary in respect of the Collateral Accounts under this Agreement. The
Collateral Agent may, with the consent of the Borrower (which consent shall not
be unreasonably withheld), select another financial institution to act as
Depositary Bank under this Agreement, subject to the written agreement of the
replacement Depositary Bank to be bound by the terms and conditions of this
Agreement.
(ii) The Depositary Bank acknowledges, confirms and agrees that (A) the
Collateral Accounts have been established as set forth in Section 4.01(a), (B)
each Collateral Account is a "securities account" (as defined in the UCC), (C)
the Borrower is the "entitlement holder" (as defined in the UCC) of the
Collateral Accounts, (D) all property delivered to the Depositary Bank pursuant
to this Agreement or the Collateral Documents will be promptly credited to a
Collateral Account (as specified herein), (E) all "financial assets" (as defined
in the UCC) in registered form or payable to or to order and credited to any
Collateral Account shall be registered in the name of, payable to or to the
order of, or specially endorsed to, the Depositary Bank or in blank, or credited
to another securities account maintained in the name of the Depositary Bank, and
in no case will any financial asset credited to either Collateral Account be
registered in the name of, payable to or to the order of, or specially endorsed
to, the Borrower except to the extent the foregoing have been specially endorsed
by the Borrower to the Depositary Bank or in blank, (F) the Depositary Bank
shall promptly comply with all instructions of the Collateral Agent and, to the
limited extent set forth below in this Article IV, the Borrower in
56
connection with the transfer or withdrawal of amounts in the Cash Collateral
Accounts and (g) the Depositary Bank shall not change the name or account number
of either Collateral Account without the prior written consent of the Collateral
Agent.
(iii) The Depositary Bank agrees that each item of property (whether
cash, a security, an instrument or obligation, share, participation, interest or
other property whatsoever) credited to either Collateral Account shall be
treated as a "financial asset" under and as defined in Article 8 of the UCC.
(iv) The Borrower agrees that the Depositary Bank may, and the
Depositary Bank agrees that it shall, comply with "entitlement orders" (as
defined in the UCC) originated by the Collateral Agent and relating to either
Collateral Account and any "security entitlement" (as defined in the UCC)
credited thereto without further consent by the Borrower or any other Person.
(v) In the event that the Depositary Bank has obtained or subsequently
obtains by agreement, operation of law or otherwise a Lien or security interest
in either Collateral Account or any "security entitlement" (as defined in the
UCC) credited thereto, the Depositary Bank agrees that such Lien or security
interest shall be subordinate to the Lien and security interest of the Secured
Parties. The financial assets standing to the credit of the Collateral Accounts
will not be subject to deduction, set-off, banker's Lien, or any other right in
favor of any Person other than the rights of the Collateral Agent and the other
Secured Parties set forth in this Agreement and the other Collateral Documents
(except that the face amount of any checks which have been credited to either
Collateral Account but are subsequently returned unpaid because of uncollected
or insufficient funds). The Depositary Bank hereby waives any right of banker's
lien, set-off or counterclaim in respect of any assets contained in either
Collateral Account or otherwise that are held by the Depositary Bank hereunder.
(vi) The Depositary Bank and the Borrower have not entered into any
agreement with respect to the Collateral Accounts or any financial assets
credited to either Collateral Account other than this Agreement and the
Collateral Documents. The Depositary Bank has not entered into any agreement
with the Borrower or any other Person purporting to limit or condition the
obligation of the Depositary Bank to comply with entitlement orders originated
by the Collateral Agent in accordance with Section 4.01(b)(iv). In the event of
any conflict between this Agreement (or any portion thereof) or any other
Collateral Document or any other agreement now existing or hereafter entered
into, the terms of this Agreement shall prevail.
(vii) Except for the claims and interest of the Collateral Agent and
the Borrower in each of the Collateral
57
Accounts, the Depositary Bank does not know of any claim to, or interest in,
either Collateral Account or in any financial asset credited thereto. If any
Person asserts any Lien, encumbrance or adverse claim (including any writ,
garnishment, judgment, warrant of attachment, execution or similar process)
against either Collateral Account or in any financial asset credited thereto,
the Depositary Bank will promptly notify the Collateral Agent and the Borrower
thereof.
(viii) The rights and powers granted to the Collateral Agent by the
Borrower and the Depositary Bank have been granted in order to perfect the Lien
and security interests of the Secured Parties in the Collateral Accounts, are
powers coupled with an interest and will neither be affected by the bankruptcy
of the Borrower nor the lapse of time.
(ix) For purposes of the UCC, the Depositary Bank confirms and agrees
that the "securities intermediary's jurisdiction" (as defined in the UCC) with
respect to the Collateral Accounts is the State of New York. If the "securities
intermediary's jurisdiction" shall change from that jurisdiction specified in
the previous sentence, the Borrower shall promptly notify the Agent of such
change and of such new jurisdiction.
(c) LIMITED BORROWER RIGHTS. The Borrower shall not have any rights
against or to monies held in the Collateral Accounts, as third party beneficiary
or otherwise, except the right to receive or make requisitions of monies held in
the Collateral Accounts, as permitted by this Agreement and to direct the
investment of monies held in the Collateral Accounts as permitted by Section
4.04. In no event shall any amounts or Permitted Investments be deposited in or
credited to either Collateral Account registered in the name of the Borrower,
payable to the order of the Borrower or specially endorsed to the Borrower
except to the extent that the foregoing have been specially endorsed to the
Depositary Bank or in blank.
SECTION 4.02. REVENUES ACCOUNT. (a) DEPOSITS INTO THE REVENUES ACCOUNT.
The Borrower agrees and confirms that it has irrevocably instructed each party
to a Project Document in effect as of the date hereof (and shall instruct each
party to any additional Project Documents) and each other Person from whom the
Borrower is entitled to receive any:
(i) Revenues payable under the Project Documents;
(ii) proceeds of any sale (net of the costs and expenses of
such sale and any taxes, assessments or prior Liens) of any of the
Generating Assets (other than such proceeds constituting Revenues); and
58
(iii) any other cash revenues (other than amounts to be
deposited in the Casualty Account pursuant to Section 4.03)
to pay the same directly to the Collateral Agent for the account of the Borrower
for deposit into the Revenues Account. If, notwithstanding such instructions,
the Borrower should receive any such payment, the Borrower shall hold such
payment in trust for the Collateral Agent and shall promptly deliver such
payment to the Collateral Agent for deposit into the Revenues Account in the
exact form received with any necessary endorsement.
(b) TRANSFERS FROM THE REVENUES ACCOUNT PRIOR TO AN EVENT OF DEFAULT
AND AN ENFORCEMENT ACTION IS COMMENCED. Unless an Event of Default shall have
occurred and be continuing, an Enforcement Action shall have been initiated and
the Collateral Agent shall have received notice thereof from any Lender, the
Collateral Agent shall transfer (or cause to be transferred) from the collected
credit balance of the Revenues Account, the following amounts in the following
order of priority (and no transfer at any such priority level shall be made on
any day if any transfer remains to be made on such day at any higher priority
level):
FIRST, on the first Business Day of each calender month, for
deposit into the Operating Account, an amount equal to (x) the
Operating Costs for such month PLUS Capital Expenditures for such
month, each as scheduled in the Annual Operating Budget for such month,
PLUS an amount equal to any Capital Expenditures, taxes, FERC fees or
insurance, each as scheduled in the Annual Operating Budget for future
months that the Borrower plans to perform or pay in such month, and
that the Borrower certifies in writing to the Collateral Agent that
such amount is necessary to perform or pay such Capital Expenditure,
taxes, FERC fees or insurance, as the case may be, in such month,
(PROVIDED, that an amount equal to any such amount transferred from the
Revenues Account to the Operating Account earlier than scheduled in the
Annual Operating Budget as provided above shall be subtracted from the
aggregate amount to be transferred from the Revenues Account to the
Operating Account in the month that such expenditure was scheduled
under the Annual Operating Budget so as to avoid duplication of amounts
transferred from the Revenues Account to the Operating Account) PLUS
(y) an amount not to exceed 10% of such months' scheduled Operating
Costs and Capital Expenditures as set forth in the Annual Operating
Budget if certified in writing by the Borrower to the Collateral Agent
to be necessary; PROVIDED, HOWEVER the Collateral Agent shall not remit
funds in excess of the monthly amounts listed in the Annual Operating
Budget as requested by the Borrower in accordance with
59
the foregoing more than three times without the prior written consent
of the Required Lenders;
SECOND, to the Agents and the Depositary Bank, an amount equal
to all fees, costs, expenses (including, without limitation, legal fees
and expenses), indemnification payments, taxes and other amounts then
due and payable by the Borrower to any Agent or the Depositary Bank
from time to time as certified to the Collateral Agent by the Agents or
the Depositary Bank;
THIRD, to the Lenders, an amount equal to the Obligations owed
by the Borrower to the Lenders under the Loan Documents then due and
payable (excluding mandatory prepayments pursuant to Section 2.05) as
certified to the Collateral Agent by the Administrative Agent;
FOURTH, to the Lenders, the aggregate amount of any mandatory
prepayments then due and payable pursuant to Section 2.05 as certified
to the Collateral Agent by the Administrative Agent.
(c) TRANSFERS FROM REVENUES ACCOUNT WHEN AN EVENT OF DEFAULT IS
CONTINUING AND AN ENFORCEMENT ACTION HAS COMMENCED. At any time that an Event of
Default shall have occurred and be continuing and an Enforcement Action has been
initiated, upon its receipt of notice thereof from any Lender or the
Administrative Agent, the Collateral Agent shall transfer (or caused to be
transferred) from the collected credit balance of the Revenues Account only
those amounts as directed in writing by the Required Lenders.
SECTION 4.03. CASUALTY ACCOUNT. (a) DEPOSITS INTO THE CASUALTY ACCOUNT.
The Borrower agrees and confirms that it has irrevocably instructed each insurer
from whom the Borrower is entitled to receive any proceeds from any property or
casualty insurance policy to pay the same directly to the Collateral Agent for
the account of the Borrower for deposit into the Casualty Account. If,
notwithstanding such instructions, the Borrower should receive any such payment,
the Borrower shall hold such payment in trust for the Collateral Agent and shall
promptly deliver such payment to the Collateral Agent for deposit into the
Casualty Account in the exact form received with any necessary endorsement.
(b) TRANSFERS FROM THE CASUALTY ACCOUNT PRIOR TO AN EVENT OF DEFAULT
AND AN ENFORCEMENT ACTION IS COMMENCED. Unless an Event of Default shall have
occurred and be continuing and an Enforcement Action shall have been initiated
and the Collateral Agent shall have received notice thereof from the
Administrative Agent or any Lender, the Collateral Agent shall transfer (or
cause to be transferred), from the collected credit balance of the Casualty
Account, the following amounts in the following order:
60
(i) if the net proceeds received by the Collateral Agent are
less than U.S. $17,500,000 for any single loss or series of losses in
the aggregate, the Collateral Agent shall transfer portions of such sum
from the Casualty Account to the Operating Account from time to time
upon written request from the Borrower for the purpose of making
payments required to finance the repair, reconstruction or replacement
of the damaged Generating Asset(s) or to reimburse the Borrower for
such repair, reconstruction or replacement expenses actually paid by
it, against repair, reconstruction or replacement expenses actually
paid by it, upon delivery to the Collateral Agent of the Borrower's
certification that the funds requested will be applied as provided in
this clause 4.03(b)(i);
(ii) if the net proceeds received by the Collateral Agent is
greater than $17,500,000 for any single loss or series of losses in the
aggregate but less than $35,000,000 (and in the case of a series of
losses, each additional loss over $17,500,000 shall be a material loss
in the reasonable judgment of the Required Lenders), then at any time
after such loss or losses and after such time as may be required by the
Borrower to assess the extent of such loss or losses and estimate the
insurance proceeds to be received in connection therewith, but no later
than 45 days after receipt of such proceeds, the Borrower shall deliver
to Stone & ▇▇▇▇▇▇▇ or another independent engineer reasonably
acceptable to the Lenders a plan for the application of such proceeds
to repair or replace the damaged property. If, within 30 days from the
receipt by the independent engineer of such plan, such independent
engineer notifies the Borrower and the Administrative Agent (who shall
notify the Lenders in order to vote as provided in this clause (b)(ii))
that, in their reasonable judgment, in light of the nature of the loss
or losses and the reasonableness of the plan of the Borrower, it is
likely that, after implementation of the Borrower's plan, that (x) such
Generating Asset(s) could be repaired in a timely manner and that the
insurance proceeds are sufficient to cover the costs of such repair,
the amounts on deposit in the Casualty Account shall be transferred to
the Operating Account as and when needed for the Borrower to repair,
reconstruct or
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replace the damaged Generating Asset(s), or (y) such Generating
Asset(s) could not be repaired or the insurance proceeds are
insufficient to cover the costs of such repair, the Required Lenders
shall vote within 30 days from such notification from the independent
engineer to determine if the amounts on deposit in the Casualty Account
shall be applied by the Collateral Agent to prepay the Borrower's
Obligations hereunder or if such amounts should be transferred to the
Operating Account as and when needed for the Borrower to repair,
reconstruct or replace the damaged Generating Asset(s); PROVIDED, if
the Required Lenders do not vote to apply the amounts on deposit in the
Casualty Account to prepay the Borrower's obligations within such 30
day period, such amounts on deposit in the Casualty Account shall be
transferred by the Collateral Agent to the Operating Account as and
when needed for the Borrower to repair, reconstruct or replace the
damaged Generating Asset(s). If any funds shall be transferred from the
Casualty Account to the Operating Account under this subsection (ii),
the Borrower must certify to the Lenders that the amounts requested
will be applied as provided in this clause 4.03(b)(ii), and that at
such time as such repair, reconstruction or replacement is complete,
any balance of such sum remaining in the Casualty Account shall be
transferred to the Revenues Account at the direction of the
Administrative Agent or, if required under the relevant insurance
policy or policies, shall, at the direction of the Borrower (with the
consent of the Administrative Agent which shall not be unreasonably
denied), be paid over to the insurer(s).
(iii) if the net proceeds received by the Collateral Agent is
greater than or equal to $35,000,000 for any single loss or series of
losses in the aggregate, the Collateral Agent shall notify the Lenders
thereof, and the Required Lenders shall vote to determine if the
amounts on deposit in the Casualty Account shall be applied by the
Collateral Agent to prepay the Borrower's Obligations hereunder or if
such amounts shall be transferred to the Operating Account for the
Borrower to repair, reconstruct or replace the damaged Generating
Asset(s); PROVIDED, if the Required Lenders do not vote to apply the
amounts on deposit in the Casualty Account to prepay the Borrower's
obligations within such 30 day period, such amounts on deposit in the
Casualty Account shall be transferred by the Collateral Agent to the
Operating Account as and when needed for the Borrower to repair,
reconstruct or replace the damaged Generating Asset(s); PROVIDED,
FURTHER, that if any funds shall be transferred to the Operating
Account under this subsection (iii), the Borrower must certify to the
Lenders that the amounts to be transferred from the Casualty Account
will be applied as provided in this clause 4.03(b)(iii); and PROVIDED,
FURTHER, HOWEVER, that at such time as such repair, reconstruction or
replacement is complete, any balance of such sum remaining in the
Casualty Account shall be transferred to the Revenues Account at the
direction of the Administrative Agent or, if required under the
relevant insurance policy or policies, shall, at the direction of the
Borrower (with the consent of the Administrative Agent which shall not
be unreasonably denied), be paid over to the insurer(s).
(c) TRANSFERS FROM CASUALTY ACCOUNT WHEN AN EVENT OF DEFAULT IS
CONTINUING AND AN ENFORCEMENT ACTION HAS
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COMMENCED. At any time that an Event of Default shall have occurred and be
continuing and an Enforcement Action has been initiated, upon its receipt of
notice thereof from any Lender, the Collateral Agent shall transfer (or caused
to be transferred) from the collected credit balance of the Casualty Account
only those amounts as directed in writing by the Required Lenders.
SECTION 4.04. INVESTMENT OF FUNDS IN COLLATERAL ACCOUNTS. (a) Unless an
Event of Default shall have occurred and be continuing, the Collateral Agent
shall invest funds (and vary and redeem such investments) in the Collateral
Accounts, in the name of the Collateral Agent, as directed by the Borrower,
PROVIDED in each case that the designated investment is a Permitted Investment.
After the occurrence and during the continuance of an Event of Default,
investments in Permitted Investments shall be made as directed by the
Administrative Agent.
(b) Whenever the Collateral Agent is directed or authorized in
accordance with the terms hereof to make a transfer of funds from the Collateral
Accounts, if, after application of all other available funds, liquidation of a
Permitted Investment is necessary to make any such transfer, the Collateral
Agent is authorized to liquidate such Permitted Investment. The Collateral Agent
shall liquidate all those Permitted Investments which can be liquidated without
interest costs or penalty before it shall liquidate any Permitted Investment the
liquidation of which would involve an interest cost or penalty. The Collateral
Agent shall have no liability with respect to any interest cost or penalty on
the liquidation of any Permitted Investment pursuant to this Section 4.04(b).
(c) The Collateral Agent shall have no liability with respect to
Permitted Investments (or any losses resulting therefrom) made at the direction
of the Borrower or as otherwise provided in Section 4.04(a).
(d) All references in this Agreement to the Collateral Accounts and to
cash, moneys or funds therein or balances thereof shall include the investments
in which such moneys are then invested. All investments shall be under the sole
dominion and control of the Collateral Agent, subject to the terms and
conditions of this Agreement and the Collateral Documents.
SECTION 4.05. INTEREST. Any interest or other earnings accrued on any
balances in the Revenues Account, or on any investment thereof, shall be
credited to and accumulated in the Revenues Account and thereafter be applied
without differentiation from other funds in the Revenues Account. Any interest
or other earnings accrued on any balances in the Casualty Account, or on any
investment thereof, shall be credited to and accumulated in the Casualty Account
and thereafter be applied without differentiation from other funds in the
Casualty Account.
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SECTION 4.06. REPORTS TO THE BORROWER AND THE LENDERS. The Collateral
Agent shall deliver, or cause the Depositary Bank to deliver, to the Borrower
and each Lender within 15 Business Days after the end of the calendar month in
which the first deposit is made into either Collateral Account and each calendar
month thereafter, a report with respect to the Collateral Account, setting forth
in reasonable detail all deposits to and disbursements from such Collateral
Account during such month, including the date on which made, and the balances of
and any investments in such Collateral Account at the end of such month. The
Collateral Agent shall provide any additional information or reports relating to
the Collateral Accounts and the transactions therein reasonably requested from
time to time by the Borrower or any Lender.
SECTION 4.07. BOOKS AND RECORDS. The Collateral Agent shall, or cause
the Depositary Bank to, maintain all books and records with respect to the
Collateral Accounts as may be necessary properly to record all transactions
carried out by it under this Agreement. The Collateral Agent shall permit the
Borrower and each Lender to examine such books and records with respect to the
Collateral Accounts, PROVIDED that any such examination shall occur upon
reasonable notice and during normal business hours.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The
Borrower represents and warrants as follows:
(a) The Borrower (i) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases
property or in which the conduct of its business requires it to so
qualify or be licensed and (iii) has all requisite corporate power and
authority (including, without limitation, all Governmental
Authorizations, licenses, permits and other approvals) to own or lease
and operate its properties and to carry on its business as now
conducted and as proposed to be conducted, except as noted in Section
5.01(d) and except where the failure to so qualify or be licensed would
not have a Material Adverse Effect. All of the outstanding capital
stock of the Borrower has been validly issued, is fully paid and
non-assessable and is owned by NU Enterprises free and clear of all
Liens, except those created under the Collateral Documents.
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(b) The Borrower has no Subsidiaries.
(c) The execution, delivery and performance by the Borrower of
this Agreement, the Notes, each other Loan Document and the Acquisition
Documents to which it is or is to be a party, and the other
transactions contemplated hereby and thereby, are within the Borrower's
corporate powers, have been duly authorized by all necessary corporate
action, and do not (i) contravene the Borrower's charter or bylaws,
(ii) violate any law (including, without limitation, the Securities
Exchange Act of 1934 and the Racketeer Influenced and Corrupt
Organizations Chapter of the Organized Crime Control Act of 1970),
rule, regulation (including, without limitation, Regulation X of the
Board of Governors of the Federal Reserve System), order, writ,
judgment, injunction, decree, determination or award, (iii) conflict
with or result in the breach of, or constitute a default under, any
Acquisition Document, existing Material Contract, Project Document,
loan agreement, indenture, mortgage, deed of trust, material lease or
other material instrument binding on or affecting the Borrower or any
of its properties or (iv) except for the Liens created under the
Collateral Documents, result in or require the creation or imposition
of any Lien upon or with respect to any of the properties of the
Borrower. The Borrower is not in violation of any such law, rule,
regulation, order, writ, judgment, injunction, decree, determination or
award or in breach of any such contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument, the violation or
breach of which could have a Material Adverse Effect.
(d) No authorization or approval or other action by, and no
notice to or filing with, any Governmental Authority or any third party
is required for (i) the due execution, delivery, recordation, filing or
performance by the Borrower of this Agreement, the Notes, any other
Loan Document or the Acquisition Documents or the existing Material
Contracts or the Project Documents to which it is or is to be a party
or the other transactions contemplated hereby or thereby, (ii) the
grant by the Borrower of the Liens granted by it pursuant to the
Collateral Documents to which it is a party, (iii) the perfection or
maintenance of the Liens created by the Collateral Documents to which
it is a party (including the first priority nature thereof), (iv) the
ongoing operation of the Generating Assets by the Borrower, except to
the extent the absence thereof would not be reasonably likely to have a
Material Adverse Effect or (v) the exercise by the Administrative Agent
or any Lender of its rights under the Loan Documents or the remedies in
respect of the Collateral pursuant to the Collateral Documents to which
it is a party except for (A) the Governmental Authorizations listed on
Part A-1 of
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Schedule 5.01(d) hereto with respect to the CL&P Acquisition and the
Governmental Authorizations listed on Part A-2 of Schedule 5.01(d)
hereto with respect to the WMECO Acquisition and (B) the amendments,
waivers and consents listed on Part B of Schedule 5.01(d) hereto with
respect to the Acquisition, all of which relating to the Acquisition
shall have been duly obtained, taken, given or made and shall be in
full force and effect on the Borrowing Date.
(e) This Agreement has been, and each of the Notes, each other
Loan Document, each Acquisition Document, each existing Material
Contract and each Project Document to which it is a party when
delivered hereunder will have been, duly executed and delivered by the
Borrower. This Agreement is, and each of the Notes, each other Loan
Document, each Acquisition Document, each existing Material Document
and each other Project Document to which it is a party when delivered
hereunder will be, the legal, valid and binding obligation of the
Borrower, enforceable against the Borrower in accordance with its
terms.
(f) The unaudited financial statements of the Borrower for the
fiscal year ended December 31, 1999 fairly present the financial
condition of the Borrower on such date, in accordance with GAAP, and
since December 31, 1999, there has been no material adverse change in
the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Borrower.
(g) (i) All written information that has been or will
hereafter be made available by the Borrower or any of its
representatives in connection with the transactions contemplated hereby
to the Co-Arrangers, to any Lender or to any potential Lender, is and
will be true and correct in all material respects and does not and will
not contain any misstatement of a material fact or omit to state a
material fact necessary in order to make the statements contained
therein not misleading in light of the circumstances under which such
statements were or are made, and (ii) all financial projections, if
any, that have been or will be prepared by the Borrower or any of its
representatives in connection with the transactions contemplated hereby
have been or will be prepared in good faith based upon reasonable
assumptions at the time made.
(h) Other than as set forth in the Disclosure Documents, there
is no action, suit, investigation, litigation or proceeding affecting
the Borrower, including any Environmental Action, pending or, to the
best of the Borrower's knowledge, threatened before any court,
governmental agency or arbitrator that individually or in the aggregate
(i) could have a
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Material Adverse Effect or (ii) purports to affect the legality,
validity or enforceability of this Agreement, any Note, any other Loan
Document, any Acquisition Document or any Project Document or the
transactions contemplated thereby.
(i) Other than as set forth in the Disclosure Documents, the
operations and properties of the Borrower, the CL&P Generating Assets
and the WMECO Generating Assets comply in all material respects with
all applicable Environmental Laws and Environmental Permits (except for
any such noncompliance that has been consented to by the appropriate
authority), all past material noncompliance with such Environmental
Laws and Environmental Permits has been resolved without material
ongoing obligations or costs to the Loan Parties, and no circumstances
exist that could reasonably be expected to (i) form the basis of an
Environmental Action against the Borrower or any of their respective
properties or any of the Generating Assets, or (ii) cause any such
property to be subject to any restrictions on ownership, occupancy, use
or transferability under any Environmental Law that, in the case of
either clause (i) or (ii), could reasonably be expected to have a
Material Adverse Effect.
(j) The execution and delivery of the Loan Documents, the
Acquisition Documents and the Project Documents to which the Borrower
is a party and the performance by the Borrower of its obligations
thereunder are exempt from taxes (other than income taxes), levies,
imposts, deductions, charges and withholdings imposed by any
Governmental Authority in the United States or any political
subdivision or taxing authority thereof or therein, as applicable,
except for such transfer or conveyance or mortgage recording taxes as
shall have been paid on the Borrowing Date or as otherwise due and such
taxes, nominal recording fees, levies, imposts, deductions, charges and
withholdings which may have been paid or shall be paid in due course by
the Borrower and have been disclosed to the Lenders.
(k) The Borrower is an Exempt Wholesale Generator. As an
Exempt Wholesale Generator, the Borrower is (a) not subject to or
exempt from regulation under the Public Utility Holding Company Act of
1935 and Part II of the Federal Power Act (other than the minimum
statutory requirements that apply to Exempt Wholesale Generators
generally), (b) not subject to or exempt from any statute or regulation
which prohibits or restricts the incurrence of the obligations under
the Loan Documents or the granting of the liens contemplated thereby,
including, without limitation, statutes or regulations relative to
common or contract carriers or to the sale of electricity, gas, steam,
water, telephone, telegraph or other public
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utility services, and (c) not subject to or exempt from regulation as
an electric distribution company, a public utility, an electric
corporation or any similar type of entity under Connecticut law or
Massachusetts law.
(l) The Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying Margin Stock, and no
proceeds of any Advance will be used to purchase or carry any Margin
Stock or to extend credit to others for the purpose of purchasing or
carrying any Margin Stock.
(m) The Borrower's obligations under the Loan Documents to
which it is a party constitute direct, unconditional and unsubordinated
obligations of the Borrower.
(n) Both before and after the Acquisition is consummated,
except for the liens created or permitted pursuant to the Loan
Documents, the Borrower has valid and uncontested legal title to its
material properties free and clear of all liens and competing claims.
(o) The Borrower is in compliance in all material respects
with all applicable laws, ordinances, rules, regulations, and
requirements of all Governmental Authorities (including, without
limitation, certificates, permits, franchises and other Governmental
Authorizations necessary to the ownership of its respective properties
or to the conduct of its respective business, environmental laws, and
laws with respect to social security and pension fund obligations)
except in each case to the extent where such failure to comply could
not reasonably be expected to have a Material Adverse Effect.
(p) The Borrower is not an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for,
an "investment company", as such terms are defined in the Investment
Company Act of 1940, as amended.
(q) Set forth on Schedule 5.01(q) hereto is a complete and
accurate list of all Plans, Multiemployer Plans and Welfare Plans.
(r) No ERISA Event has occurred or is reasonably expected to
occur with respect to any Plan.
(s) Schedule B (Actuarial Information) to the most recent
annual report (Form 5500 Series) for each Plan, copies of which have
been filed with the Internal Revenue Service and furnished to each
Lender, is complete and accurate and fairly presents the funding status
of such Plan, and since the date of such
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Schedule B there has been no material adverse change in such funding
status.
(t) Neither any Loan Party nor any ERISA Affiliate has
incurred or is reasonably expected to incur any Withdrawal Liability to
any Multiemployer Plan.
(u) Neither the Borrower nor any ERISA Affiliate has been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or has been terminated, within the meaning of
Title IV of ERISA, and no such Multiemployer Plan is reasonably
expected to be in reorganization or to be terminated, within the
meaning of Title IV of ERISA.
(v) Since December 31, 1999, neither the business nor the
properties of the Borrower, the CL&P Generating Assets nor the WMECO
Generating Assets are, or have been, affected by any fire, explosion,
accident, strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other
casualty (whether or not covered by insurance) that could reasonably
have a Material Adverse Effect.
(w) The Borrower is not a party to any indenture, loan or
credit agreement or any lease or other agreement or instrument or
subject to any charter or corporate restriction that, in each case,
could reasonably be expected to have a Material Adverse Effect.
(x) The Collateral Documents create a valid and perfected
first priority security interest in the Collateral, securing the
payment of the Secured Obligations, and all filings and other actions
deemed necessary to perfect and protect such security interest have
been taken or will be taken as of the Borrowing Date.
(y) The Borrower has filed, has caused to be filed or has been
included in all tax returns (national, departmental, local, municipal
and foreign) required to be filed or has received appropriate filing
extensions therefor and has paid or shall pay in due course or caused
to be paid all taxes, assessments, fees and other charges shown thereon
to be due, together with applicable interest and penalties, other than
the payment of any taxes, assessment, fees or other charges (i) the
nonpayment of which could not reasonably be expected to have a Material
Adverse Effect or (ii) that are being contested in good faith and by
proper proceedings and as to which appropriate reserves are being
maintained.
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(z) The Borrower is, and after the consummation of each
Acquisition and the transactions contemplated hereby will be, Solvent.
(aa) The Borrower has not conducted or engaged in any
activities other than (i) the business of, and activities related to,
electric power generation and (ii) businesses and activities otherwise
permitted under the terms of the Loan Documents, the Acquisition
Documents and the Project Documents.
(bb) No default or event of default has occurred and is
continuing under, and as defined in, any Loan Document, Acquisition
Document, Project Document or existing Material Contract to which the
Borrower is a party.
(cc) For tax purposes, the Borrower's initial basis in the
Generating Assets will be equal to the purchase price paid for the
Generating Assets. The Borrower is not a party to, and is not bound by,
any tax sharing agreement other that the Tax Sharing Agreement.
(dd) Set forth on Schedule 5.01(dd) hereto is a complete and
accurate list of all Liens on the property or assets of the Borrower
(including, without limitation, the Generating Assets), showing as of
the date hereof the lienholder thereof, the principal amount of the
obligations secured thereby and the property or assets of the Borrower
subject thereto.
(ee) Set forth on Schedule 5.01(ee) hereto is a complete and
accurate list of all existing Material Contracts of the Borrower,
showing as of the date hereof the parties, subject matter and term
thereof. Each such Material Contract has been duly authorized, executed
and delivered by all parties thereto, has not been amended or otherwise
modified, is in full force and effect and is binding upon and
enforceable against all parties thereto in accordance with its terms,
and there exists no event of default under any Material Contract by the
Borrower or to the Borrower's knowledge by any other party thereto.
(ff) There are no lease or license agreements relating to
recreational access and/or use by third party users of the impoundments
that either are not terminable for any reason by the owner of the real
property in question or are fully subordinated to any mortgage lien
(regardless of the date of recording of such mortgage) placed on the
real property in question, except for such lease or license agreements
that would not materially adversely affect the operation of the
Generating Assets.
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(gg) To the Borrower's knowledge there have been no breaches
of the use restrictions encumbering the real property listed in the
title commitments provided by the title company and the Borrower has no
knowledge that there are any material use restrictions in addition to
those listed in the title commitments provided by the title company.
(hh) Upon the transfer of the Generating Assets to the
Borrower, the Borrower will own outright or be granted the right to
access or otherwise use all facilities, improvements and rights to real
property it will need to generate electricity as contemplated and as
permitted by the applicable FERC licenses.
(ii) To the best of the Borrower=s knowledge, there are no
Neighboring Landowner Agreements currently in effect that, if the third
party holder of such agreement defaulted in its obligations under such
Neighboring Landowner Agreement, such default would have a Material
Adverse Effect.
(jj) To the best of the Borrowers knowledge, there have been
no breaches of the use restrictions encumbering the real property
listed in the Mortgage Policies and the Borrower has no knowledge that
there are any material use restrictions in addition to those listed in
the Mortgage Policies.
(kk) The Borrower is not aware of any problems relating to the
Year 2000 date change that might materially affect its business.
ARTICLE VI
COVENANTS OF THE BORROWER
SECTION 6.01. AFFIRMATIVE COVENANTS. So long as any Advance shall
remain unpaid or any Lender shall have any Commitment hereunder, the Borrower
will:
(a) COMPLIANCE WITH LAWS, ETC. Comply in all material respects
with all applicable laws, rules, regulations and orders, such
compliance to include, without limitation, compliance with ERISA and
the Racketeer Influenced and Corrupt Organizations Chapter of the
Organized Crime Control Act of 1970, except when contested in good
faith by appropriate proceedings and for which an adequate reserve has
been established or where noncompliance could not reasonably be
expected to have a Material Adverse Effect.
(b) PAYMENT OF TAXES, ETC. Pay and discharge before the same
shall become delinquent, (i) all taxes,
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assessments and governmental charges or levies imposed upon it or upon
its property and (ii) all lawful claims that, if unpaid, might by law
become a Lien upon its property; PROVIDED, HOWEVER, that the Borrower
shall not be required to pay or discharge any such tax, assessment,
charge or claim that is being contested in good faith and by proper
proceedings and as to which appropriate reserves are being maintained,
unless and until any Lien resulting therefrom (other than Liens for
unpaid municipal real property taxes not in excess of $300,000 in the
aggregate which have attached solely by operation of law and as to
which no Enforcement Action has been taken) attaches to its property
and becomes enforceable against its other creditors or where nonpayment
could not reasonably be expected to have a Material Adverse Effect.
(c) COMPLIANCE WITH ENVIRONMENTAL LAWS. Comply, and cause all
lessees and other Persons operating or occupying its properties to
comply, with all applicable Environmental Laws and Environmental
Permits; obtain and renew all Environmental Permits necessary for its
operations and properties; and conduct any investigation, study,
sampling and testing, and undertake any cleanup, removal, remedial or
other action necessary to remove and clean up all Hazardous Materials
from any of its properties, in accordance with the requirements of all
Environmental Laws; except where noncompliance could not reasonably be
expected to have a Material Adverse Effect; PROVIDED, HOWEVER, that the
Borrower shall not be required to undertake any such cleanup, removal,
remedial or other action to the extent that its obligation to do so is
being contested in good faith and by proper proceedings and appropriate
reserves are being maintained with respect to such circumstances.
(d) OPERATION OF THE GENERATING ASSETS. Cause the Generating
Assets to be operated and maintained and its business to be conducted,
(i) in a prudent manner, based on industry standards for comparable
facilities or businesses in comparable locations, and (ii) in
accordance with applicable laws (including Environmental Laws), except
when contested in good faith by appropriate proceedings and for which
an adequate reserve has been established or where noncompliance could
not reasonably be expected to have a Material Adverse Effect.
(e) MAINTENANCE OF INSURANCE. Maintain insurance with
responsible and reputable insurance companies or associations of the
type indicated on, and in such amounts and covering such risks as is
required by law and as set forth on, Schedule 5.
(f) PRESERVATION OF CORPORATE EXISTENCE, ETC. Preserve and
maintain its existence, legal structure,
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legal name, rights (charter and statutory), permits, licenses,
approvals, privileges and franchises, except for such rights,
franchises, permits, licenses and approvals the failure of which to
maintain could not reasonably be expected to have a Material Adverse
Effect.
(g) VISITATION RIGHTS. Subject to Section 9.09, upon
reasonable prior notice and during customary business hours, permit the
Administrative Agent, the Collateral Agent or any Lender or any agents
or representatives thereof, to examine and make copies of and abstracts
from the records and books of account of, and visit the properties of
the Borrower, and to discuss the affairs, finances and accounts of the
Borrower with any of its officers or directors and with its independent
certified public accountants.
(h) MAINTENANCE OF APPROVALS AND LICENSES. Obtain and maintain
in full force and effect all Governmental Authorizations and licenses
that may be required for the validity or enforceability of the Loan
Documents, the Material Contracts, the Acquisition Documents and the
Project Documents and the ongoing operations of the Generating Assets
except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect.
(i) KEEPING OF BOOKS. Keep proper books of record and account,
in which full and correct entries shall be made of all financial
transactions and the assets and business of the Borrower in accordance
with GAAP.
(j) MAINTENANCE OF PROPERTIES, ETC. Keep all property useful
and necessary to its respective businesses in good working order and
condition, wear and tear excepted, and not commit or suffer to exist
any waste with respect to any of its properties except where the
failure to do so could not reasonably be expected to have a Material
Adverse Effect.
(k) PERFORMANCE OF MATERIAL CONTRACTS, ACQUISITION DOCUMENTS
AND PROJECT Documents. Perform and observe all the material terms and
provisions of each Material Contract, each Acquisition Document and
each Project Document to be performed or observed by it, enforce each
such Material Contract and each such Project Document in accordance
with its terms, take all such action to such end and exercise all
rights under the Material Contracts, the Acquisition Documents and the
Project Documents as may be from time to time requested by the
Administrative Agent and, upon request of the Administrative Agent,
make to each other party to each such Material Contract, each such
Acquisition Document and each such Project Document such demands and
requests for information and reports or for action
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as the Borrower is entitled to make under such Material Contract, such
Acquisition Document or such Project Document.
(l) TRANSACTIONS WITH AFFILIATES. Conduct all transactions
otherwise permitted under the Loan Documents with any of its Affiliates
on terms that are fair and reasonable and no less favorable to the
Borrower than it would obtain in a comparable arm's-length transaction
with a Person not an Affiliate.
(m) COVENANT TO GIVE SECURITY. Promptly upon the reasonable
request of the Administrative Agent or the Collateral Agent, at the
Borrower's expense, execute and deliver, or cause the execution and
delivery of, and thereafter register, file or record in each
appropriate governmental office, any document or instrument
supplemental to or confirmatory of the applicable Loan Documents
relating to the Collateral or otherwise reasonably deemed by the
Administrative Agent or the Collateral Agent to be necessary for the
creation or perfection or priority or continuation of the Liens and
security interests purported to be created by any such document; and
protect and defend its and the Lenders' interest in the Collateral
against Liens (other than Permitted Liens) and immediately discharge
any such lien so asserted.
(n) MAINTENANCE OF PRIORITY. Take all necessary action so as
to ensure that all Obligations of the Loan Parties under the Loan
Documents continue to rank senior in right of payment and collateral
security to all unsecured or unsubordinated Obligations of the Loan
Parties.
(o) REGULATORY STATUS. Take all necessary action within its
control, and otherwise use its best efforts, to ensure that (i) the
Borrower remains exempt from all or is not subject to any regulation as
a public utility under the Public Utility Holding Company Act of 1935
and any other applicable federal, state and local laws or regulations
regulating public utilities, public utility companies, public utility
holding companies, electric utilities, electric companies, electric
utility companies, or any similar entity, (ii) the Borrower maintains
its status as an Exempt Wholesale Generator and (iii) the
Administrative Agent, the Collateral Agent and each Lender will not (i)
be subject to regulation as a "public utility" under the Federal Power
Act, an electric distribution company, a public utility, an electric
corporation or any similar type of entity under Connecticut law or
Massachusetts law, or (ii) be subject to regulation by the Securities
and Exchange Commission as a "gas utility company," "electric utility
company," "public utility company," "holding company," an "affiliate"
of a "holding company," a "subsidiary company" of a "holding
74
company," or an "affiliate" of a "subsidiary company" of a "holding
company" under the Public Utility Holding Company Act of 1935, or (iii)
otherwise be deemed by any federal, state or local Governmental
Authority to be a public utility, public utility company, public
utility holding company, electric utility, electric company, electric
utility company or similar entity or otherwise subject to any
regulation relating to any such type of entity (or affiliate thereof).
In the event that FERC denies Exempt Wholesale Generator status to the
Borrower, the Borrower shall take all necessary actions within its
control and without delay, and otherwise use its reasonable best
efforts, to comply with the Public Utility Holding Company Act of 1935,
including, but not limited to, (y) making any changes necessary to
eliminate the basis for denial of the original application for Exempt
Wholesale Generator status and preparing and filing a new application
in good faith with FERC for a determination of Exempt Wholesale
Generator status, or (z) filing an application under the relevant
provisions of the Public Utility Holding Company Act of 1935 to qualify
Borrower as an operating "public utility company" of Northeast
Utilities.
(p) USE OF PROCEEDS. Use the proceeds of the Advances solely
as provided in Section 2.13.
(q) REQUIRED RATING. Actively assist the Placement Agent in
obtaining a final rating letter equal to or higher than the Required
Rating from each of the Rating Agencies for the Permanent Financing,
such assistance to include, without limitation: (A) providing, and
causing its respective advisors to provide, the Placement Agent and
each of the Rating Agencies upon request with all information
reasonably deemed necessary by either of the Rating Agencies or the
Placement Agent to acquire the rating letter equal to or higher than
the Required Rating, (B) assisting the Placement Agent, upon its
reasonable request, in the preparation of all materials presented to
the Rating Agencies to be used in connection with obtaining the rating
letter equal to or higher than the Required Rating and (C) otherwise
assisting the Placement Agent in obtaining a rating equal to or higher
than the Required Rating, including by making available officers and
advisors of the Borrower and its respective Affiliates from time to
time to attend and make presentations regarding the business and
prospects of the Borrower, its Affiliates and the Generating Assets, as
appropriate, at a meeting or meetings with each of the Rating Agencies.
(r) SEPARATE AND DISTINCT. Comply with the following
undertakings:
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(i) It will maintain its books, financial records and
accounts, including checking and other bank accounts and
custodian and other securities safekeeping accounts, separate
and distinct from those of Northeast Utilities and each of the
other Subsidiaries of Northeast Utilities.
(ii) It will maintain its books, financial records
and accounts (including inter-entity transaction accounts) in
a manner so that it will not be difficult or costly to
segregate, ascertain or otherwise identify its assets and
liabilities separate and distinct from the assets and
liabilities of Northeast Utilities and each of the other
Subsidiaries of Northeast Utilities.
(iii) It will not commingle any of its assets, funds,
liabilities or business functions with the assets, funds,
liabilities or business functions of Northeast Utilities or
any of the other Subsidiaries of Northeast Utilities.
(iv) It will maintain corporate governance and
operating procedures designed to ensure its separate corporate
existence from Northeast Utilities and each of the other
Subsidiaries of Northeast Utilities, including the holding of
periodic and special meetings of shareholders and boards of
directors (or other governing body), the recordation and
maintenance of minutes of such meetings, and the recordation
and maintenance of resolutions adopted at such meetings.
(v) It will not be consensually merged or
consolidated with Northeast Utilities or any of the other
Subsidiaries of Northeast Utilities (other than, with respect
to other Subsidiaries of Northeast Utilities, for financial
reporting purposes).
(vi) It will cause all material transactions,
agreements and dealings between it and Northeast Utilities and
any of the other Subsidiaries of Northeast Utilities
(including transactions, agreements and dealings pursuant to
which the assets or property of one is used or to be used by
the other) to reflect the separate identity and legal
existence of each such entity, to be entered into in the names
of the persons that are parties to the transaction or
agreement and to be formally documented in writing.
(vii) It will ensure that transactions between itself
and any third parties will be conducted in its name as an
entity separate and distinct from Northeast Utilities and each
of the other Subsidiaries of Northeast Utilities.
76
(viii) It will compensate all consultants,
independent contractors and agents from its own funds for
services provided to it by such consultants, independent
contractors and agents.
(ix) It will ensure that to the extent that it, on
the one hand, and Northeast Utilities or any of the other
Subsidiaries of Northeast Utilities, on the other hand,
jointly contract or do business with vendors or service
providers or share overhead expenses, the costs and expenses
incurred in so doing will be fairly and non-arbitrarily
allocated between or among such entities, with the result that
each such entity bears its fair share of all such costs and
expenses. It will ensure that to the extent that it, on the
one hand, and Northeast Utilities or any of the other
Subsidiaries of Northeast Utilities, on the other hand,
contracts or does business with vendors or service providers
where the goods or services are wholly or partially for the
benefit of the other, then the costs incurred in so doing will
be fairly and non-arbitrarily allocated to the entity for
whose benefit the goods or services are provided, with the
result that each such entity bears its fair share of all such
costs.
(x) It will have annual financial statements prepared
in accordance with GAAP, separate from Northeast Utilities and
any of the other Subsidiaries of Northeast Utilities.
(xi) It will not make any inter-entity loans,
advances, guarantees, extensions of credit or contributions of
capital to, from or for the benefit of Northeast Utilities or
any of the other Subsidiaries of Northeast Utilities without
proper documentation and accounting in accordance with GAAP.
(xii) It will cause to be prepared and maintained all
legally required tax returns for itself (including federal and
state income tax returns) separately from the tax returns of
Northeast Utilities and any of the other Subsidiaries of
Northeast Utilities, except as otherwise required or permitted
by law, and it will cause such tax returns to be prepared in
accordance with the Tax Sharing Agreement whether or not it
has been entered into by the parties proposed to be party
thereto.
(xiii) It will identify itself as a separate
Connecticut corporation and not as a division or department of
Northeast Utilities, any of Northeast Utilities' other
Subsidiaries or any
77
other Person and identify Northeast Utilities and its other
Subsidiaries as separate entities and not as divisions or
departments of Northeast Utilities or any of its other
Subsidiaries.
(xiv) It will cause its representatives and agents to
hold themselves out to third parties as being representatives
or agents of the Borrower.
(s) It will cause the Incentive Payment (as defined in the
Select Power Purchase Agreement) or the equivalent term used therein,
if any, to be the identical dollar amount to the Incentive Payment (as
defined in the O&M Agreement) or the equivalent term used therein, if
any.
SECTION 6.02. NEGATIVE COVENANTS. So long as any Advance shall remain
unpaid or any Lender shall have any Commitment hereunder, the Borrower will not,
at any time:
(a) LIENS, ETC. Create, incur, assume or suffer to exist any
Lien on or with respect to any of its properties of any character
(including, without limitation, accounts) whether now owned or
hereafter acquired, or sign or file or suffer to exist, under the
Uniform Commercial Code as in effect from time to time of any
jurisdiction, a financing statement that names the Borrower as debtor,
or sign or suffer to exist, any security agreement authorizing any
secured party thereunder to file such financing statement, or assign
any accounts or other right to receive income, EXCLUDING, HOWEVER, from
the operation of the foregoing restrictions the Permitted Encumbrances
under the Mortgages.
(b) DEBT. Create, incur, assume or suffer to exist any Debt
other than:
(i) Debt under the Loan Documents;
(ii) Permitted ▇▇▇▇▇▇; and
(iii) Bonds for the conduct of its business in the
ordinary course not to exceed $250,000 in the aggregate
outstanding at any time.
(c) LEASE OBLIGATIONS. Create, incur, assume or suffer to
exist any obligations as lessee for the rental or hire of real or
personal property of any kind under leases or agreements to lease
including Capitalized Leases having an original term of one year or
more that would cause the direct and contingent liabilities of the
Borrower, in respect of all such obligations to exceed $100,000 payable
in any period of 12 consecutive months.
78
(d) MERGERS, ETC. Merge into or consolidate with any Person
or permit any Person to merge into it.
(e) SALES, ETC., OF ASSETS. Sell, lease, transfer or
otherwise dispose of any of its property or assets, or grant any option
or other right to purchase, lease or otherwise acquire any of its
property or assets, except (i) sales of power in the ordinary course of
its business and (ii) sales of damaged, worn-out or obsolete or other
property that is not necessary for the proper conduct of the business
of the Borrower or the operation of the Generating Assets for fair
value in the ordinary course of business.
(f) INVESTMENTS IN OTHER PERSONS. Make or hold any Investment
in any Person other than Permitted Investments.
(g) DIVIDENDS, ETC. Declare or pay any dividends, purchase,
redeem, retire, defease or otherwise acquire for value any of its
capital stock or any warrants, rights or options to acquire such
capital stock, now or hereafter outstanding, return any capital to its
stockholders as such, make any distribution of assets, capital stock,
warrants, rights, options, obligations or securities to its
stockholders as such or issue or sell any capital stock or any
warrants, rights or options to acquire such capital stock.
(h) CHANGE IN NATURE OF BUSINESS. Engage in any business
other than the business of, and activities related and incidental to,
electric power generation.
(i) CHARTER AMENDMENTS. Amend its certificate of
incorporation or bylaws or change its corporate structure if such
amendment or change would have a Material Adverse Effect.
(j) ACCOUNTING CHANGES. Make or permit any change in (i)
accounting policies or reporting practices, except as required by GAAP
or (ii) its Fiscal Year.
(k) AMENDMENT, ETC., OF PROJECT DOCUMENTS, ACQUISITION
DOCUMENTS AND MATERIAL CONTRACTS. With respect to any Material
Contract, Acquisition Document or any Project Document to which it is a
party, not to cancel or terminate, or accept any cancellation or
termination of, or amend, modify or change in any manner (which would
result in a Material Adverse Effect) any such Material Contract,
Acquisition Document or any Project Document without the prior written
approval of the Lenders.
(l) NEGATIVE PLEDGE. Enter into or suffer to exist any
agreement prohibiting or conditioning the creation or assumption of any
Lien upon any of its
79
property or assets other than (i) in favor of the Secured Parties or
(ii) in connection with any other Debt permitted by Section 6.02
hereof.
(m) PARTNERSHIPS, ETC. Become a general partner in any
general or limited partnership or joint venture or similar type of
entity.
(n) CAPITAL EXPENDITURES. Make any Capital Expenditures in
excess of the Capital Expenditures included in the Annual Operating
Budget delivered in connection with Section 3.01(m)(xv), other than
Capital Expenditures required by a change in law or the order of a
competent Governmental Authority, issued after the date hereof or
Capital Expenditures requested by Select provided that Select funds the
costs for such Capital Expenditures and that (i) if the Capital
Expenditure costs less than $500,000 and is not expected to interfere
with the operation of any Generating Asset, the Borrower shall deliver
a certificate to the Lenders stating that such Capital Expenditure
shall not result in a Material Adverse Effect to such Generating Asset
or a Material Adverse Effect on the Borrower, and (ii) if the cost of
the Capital Expenditure is in excess of $500,000 or would interfere
with the operation of a Generating Asset, Stone & ▇▇▇▇▇▇▇ or another
independent engineer reasonably acceptable to the Lenders shall confirm
to the Lenders that such Capital Expenditure would not result in a
Material Adverse Effect to such Generating Asset or a Material Adverse
Effect to the Borrower; PROVIDED, that Select shall have no claim
against the Borrower for the funds advanced for any such Capital
Expenditures, that Select shall have no Liens against the Borrower or
the Generating Assets arising from such Capital Expenditure and that
the title to the assets acquired or financed by such Capital
Expenditure shall be in the name of the Borrower.
(o) TAX ARRANGEMENTS. Cancel or terminate, or accept any
cancellation or termination of, or amend, modify or change in any
manner the Tax Sharing Agreement, or enter into any new tax sharing
agreement, without the prior written approval of the Lenders; provided,
HOWEVER, that no such approval shall be required to the extent that
such action or such new tax sharing agreement, as the case may be, can
reasonably be expected not to have a Material Adverse Effect.
SECTION 6.03. REPORTING REQUIREMENTS. So long as any Advance shall
remain unpaid or any Lender shall have any Commitment hereunder, the Borrower
will furnish to the Lenders:
(a) DEFAULT NOTICE. As soon as possible and in any event
within five Business Days after the occurrence of each Default or any
event which would
80
reasonably likely have a Material Adverse Effect continuing on the date
of such statement, a statement of the chief financial officer of the
Borrower setting forth details of such Default and the action that the
Borrower has taken and proposes to take with respect thereto.
(b) QUARTERLY FINANCIALS. As soon as available and in any
event within 60 days after the end of each of the first three quarters
of each Fiscal Year, a balance sheet of the Borrower as of the end of
such quarter and statement of income and a statement of cash flows of
the Borrower for the period commencing at the end of the previous
fiscal quarter and ending with the end of such fiscal quarter and a
statement of income and a statement of cash flows of the Borrower for
the period commencing at the end of the previous Fiscal Year and ending
with the end of such quarter, setting forth in each case in comparative
form the corresponding figures for the corresponding period of the
preceding Fiscal Year, all in reasonable detail and duly certified
(subject to year-end audit adjustments) by the chief financial officer
of the Borrower as having been prepared in accordance with GAAP,
together with (i) a certificate of said officer stating that no Default
has occurred and is continuing or, if a Default has occurred and is
continuing, a statement as to the nature thereof and the action that
the Borrower has taken and proposes to take with respect thereto, (ii)
a certificate of said officer specifically confirming compliance by the
Borrower with Section 6.01(r) and (iii) a schedule in form satisfactory
to the Administrative Agent of the computations used by the Borrower in
determining compliance with the covenant contained in Section 6.04,
PROVIDED that in the event of any change in GAAP used in the
preparation of such financial statements, the Borrower shall also
provide, if necessary for the determination of compliance with Section
6.04, a statement of reconciliation conforming such financial
statements to GAAP.
(c) ANNUAL FINANCIALS. As soon as available and in any event
within 120 days after the end of each Fiscal Year, a copy of the annual
audit report for such year for the Borrower, including therein a
balance sheet of the Borrower as of the end of such Fiscal Year and a
statement of income and a statement of cash flows of the Borrower for
such Fiscal Year, in each case accompanied by an opinion reasonably
acceptable to the Required Lenders of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP or other
independent public accountants of recognized standing acceptable to the
Required Lenders, together with (i) a certificate of such accounting
firm to the Lenders stating that in the course of the regular audit of
the business of the Borrower, which audit was conducted by such
accounting firm in accordance with generally accepted auditing
standards, such accounting firm has
81
obtained no knowledge that a Default has occurred and is continuing, or
if, in the opinion of such accounting firm, a Default has occurred and
is continuing, a statement as to the nature thereof, (ii) a schedule in
form satisfactory to the Administrative Agent of the computations used
by such accountants in determining, as of the end of such Fiscal Year,
compliance with the covenant contained in Section 6.04, PROVIDED that
in the event of any change in GAAP used in the preparation of such
financial statements, the Borrower shall also provide, if necessary for
the determination of compliance with Section 6.04, a statement of
reconciliation conforming such financial statements to GAAP, (iii) a
certificate of the chief financial officer of the Borrower (or the
individual performing such functions) stating that no Default has
occurred and is continuing or, if a default has occurred and is
continuing, a statement as to the nature thereof and the action that
the Borrower has taken and proposes to take with respect thereto and
(iv) a certificate of said officer specifically confirming compliance
by the Borrower with Section 6.01(r).
(d) ERISA EVENTS AND ERISA REPORTS. Promptly and in any event
within 10 days after any Loan Party or any ERISA Affiliate knows or has
reason to know that any ERISA Event has occurred, a statement of the
chief financial officer of the Borrower describing such ERISA Event and
the action, if any, that such Loan Party or such ERISA Affiliate has
taken and proposes to take with respect thereto and (ii) on the date
any records, documents or other information must be furnished to the
PBGC with respect to any Plan pursuant to Section 4010 of ERISA, a copy
of such records, documents and information.
(e) PLAN TERMINATIONS. Promptly and in any event within ten
Business Days after receipt thereof by any Loan Party or any ERISA
Affiliate, copies of each notice from the PBGC stating its intention to
terminate any Plan or to have a trustee appointed to administer any
Plan.
(f) ACTUARIAL REPORTS. Promptly upon receipt thereof by any
Loan Party or any ERISA Affiliate, a copy of the annual actuarial
valuation report for each Plan the funded current liability percentage
(as defined in Section 302(d)(8) of ERISA) of which is less than 90% or
the unfunded current liability of which exceeds $5,000,000.
(g) PLAN ANNUAL REPORTS. Promptly and in any event within 30
days after the filing thereof with the Internal Revenue Service, copies
of each Schedule B (Actuarial Information) to the annual report (Form
5500 Series) with respect to each Plan.
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(h) MULTIEMPLOYER PLAN NOTICES. Promptly and in any event
within five Business Days after receipt thereof by any Loan Party or
any ERISA Affiliate from the sponsor of a Multiemployer Plan, copies of
each notice concerning (i) the imposition of Withdrawal Liability by
any such Multiemployer Plan, (ii) the reorganization or termination,
within the meaning of Title IV of ERISA, of any such Multiemployer Plan
or (iii) the amount of liability incurred, or that may be incurred, by
such Loan Party or any ERISA Affiliate in connection with any event
described in clause (i) or (ii).
(i) LITIGATION. Promptly after the commencement thereof,
notice of all actions, suits, investigations, litigation and
proceedings before any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign,
affecting the Borrower of the type described in Section 5.01(h), other
than any actions, suits, investigations, litigation and proceedings
that could not reasonably be expected to have a Material Adverse
Effect.
(j) SECURITIES REPORTS. Promptly after the sending or filing
thereof, copies of all proxy statements, financial statements and
reports that any Loan Party sends to its stockholders, and copies of
all regular, periodic and special reports, and all registration
statements, that any Loan Party files with the Securities and Exchange
Commission or any Governmental Authority that may be substituted
therefor, or with any national securities exchange.
(k) AGREEMENT NOTICES. (i) Promptly upon receipt thereof,
copies of all material notices, requests and other documents received
by the Borrower under or pursuant to any Material Contract, Project
Document, Acquisition Document or indenture, loan or credit or similar
agreement and, from time to time upon request by the Administrative
Agent, such information and reports regarding the Material Contracts,
the Project Documents and the Acquisition Documents as the
Administrative Agent may reasonably request.
(ii) Within 30 days from the execution thereof, deliver to the
Administrative Agent a certified copy of any modification or amendment
to any of the Material Contracts, Project Documents or Acquisition
Documents.
(l) REVENUE AGENT REPORTS. Within 10 days after receipt,
copies of all Revenue Agent Reports (Internal Revenue Service Form
886), or other written proposals of the Internal Revenue Service, that
propose, determine or otherwise set forth positive and negative
adjustments to the Federal income tax liability of the
83
affiliated group (within the meaning of Section 1504(a)(1) of the
Internal Revenue Code) that apply to the Borrower, of which the
Borrower is a member aggregating $1,000,000 or more.
(m) TAX CERTIFICATES. Promptly, and in any event within five
Business Days after the due date (with extensions) for filing the final
Federal income tax return in respect of each taxable year, a
certificate (a "TAX CERTIFICATE"), signed by the President or the chief
financial officer of the Borrower, stating that (i) it has filed, or
has had filed on its behalf, all tax returns required to be filed by
it, (ii) it, and each other party to the Tax Sharing Agreement, has
paid to the Internal Revenue Service or other taxing authority the full
amount that it and each such other party is required to pay in respect
of Federal income tax for such year and (iii) it has received any
amounts payable to it, and has not paid amounts in respect of taxes
(Federal, state, local or foreign) in excess of the amount it is
required to pay, under any Tax Sharing Agreement in respect of such
taxable year.
(n) ENVIRONMENTAL CONDITIONS. Promptly after the assertion or
occurrence thereof, notice of any Environmental Action against or of
any noncompliance by any Loan Party with any Environmental Law or
Environmental Permit that (i) could reasonably be expected to have a
Material Adverse Effect or (ii) cause any property described in the
Mortgages to be subject to any restrictions on ownership, occupancy,
use or transferability under any Environmental Law, except to the
extent that such restriction could not reasonably be expected to have a
Material Adverse Effect.
(o) YEAR 2000 COMPLIANCE. Promptly after discovery or
determination thereof, notice (in reasonable detail) that any computer
application (including those of its suppliers, vendors and customers)
that is material to the business and operations of the Borrower will
have a problem relating to the Year 2000 date change, except to the
extent that such failure could not reasonably be expected to have a
Material Adverse Effect.
(p) OTHER INFORMATION. Such other information respecting the
business, condition (financial or otherwise), operations, performance,
properties or prospects of any Loan Party or any of its Subsidiaries as
any Lender (through the Administrative Agent) may from time to time
reasonably request.
SECTION 6.04. FINANCIAL COVENANTS. So long as any Advance shall remain
unpaid or any Lender shall have any Commitment hereunder, the Borrower will
maintain an Equity to Total Capitalization ratio of not less than 45%.
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ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.01. EVENTS OF DEFAULT. If any of the following events
("EVENTS OF Default") shall occur and be continuing:
(a) (i) the Borrower shall fail to pay any principal of or any
interest on any Advance when the same shall become due and payable
(and, in the case of a non-payment of principal of the Tranche A
Advance only, notice of such failure to pay shall have been issued by
the Administrative Agent to the Borrower) or (ii) the Borrower or
Northeast Utilities shall fail to make any other payment under any Loan
Document or any Project Document in each case when the same becomes due
and payable and such failure shall continue for 10 days; or
(b) any representation or warranty made by any Loan Party (or
any of its officers) under or in connection with any Loan Document, any
Material Contract or any Project Document shall prove to have been
incorrect in any material respect when made or deemed made; or
(c) the Borrower shall fail to perform or observe any term,
covenant or agreement contained in ▇▇▇▇▇▇▇ ▇.▇▇, ▇.▇▇(▇), (▇), (▇), (▇)
or (p), 6.02, 6.03 or 6.04; or
(d) any Loan Party shall fail to perform any other term,
covenant or agreement contained in any Loan Document or any Material
Contract or any Project Document on its part to be performed or
observed if such failure shall remain unremedied for (i) 15 days with
respect to the Loan Documents, the Select Power Purchase Agreement and
the Northeast Utilities Guaranties, and (ii) 30 days with respect to
any Material Contract or any Project Document (other than the Select
Power Purchase Agreement and the Northeast Utilities Guaranties), each
after the earlier of the date on which (A) a Responsible Officer of any
Loan Party becomes aware of such failure or (B) written notice thereof
shall have been given to the Borrower by the Administrative Agent or
any Lender; or
(e) the Borrower, Northeast Utilities or NU Enterprises shall
fail to pay any principal of, premium or interest on or any other
amount payable in respect of any Debt that is outstanding in a
principal amount of at least $10,000,000 either individually or in the
aggregate (but excluding Debt outstanding hereunder) of the Borrower,
Northeast Utilities or NU Enterprises (as the case may be), when the
same becomes due and payable (whether by scheduled maturity, required
prepayment,
85
acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement
or instrument relating to such Debt; or any other event shall occur or
condition shall exist under any agreement or instrument relating to any
such Debt and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such event
or condition is to accelerate, or to permit the acceleration of, the
maturity of such Debt or otherwise to cause, or to permit the holder
thereof to cause, such Debt to mature; or any such Debt shall be
declared to be due and payable or required to be prepaid or redeemed
(other than by a regularly scheduled required prepayment or
redemption), purchased or defeased, or an offer to prepay, redeem,
purchase or defease such Debt shall be required to be made, in each
case prior to the stated maturity thereof; or
(f) the Borrower, Northeast Utilities or NU Enterprises shall
generally not pay its debts as such debts become due, shall admit in
writing its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors; or any proceeding
shall be instituted by or against the Borrower or Northeast Utilities
or NU Enterprises seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under
any law relating to bankruptcy, insolvency or reorganization or relief
of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, or other similar official for it or
for any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it) that is
being diligently contested by it in good faith, either such proceeding
shall remain undismissed or unstayed for a period of 30 days or any of
the actions sought in such proceeding (including, without limitation,
the entry of an order for relief against, or the appointment of a
receiver, trustee, custodian or other similar official for, it or any
substantial part of its property) shall occur; or the Borrower,
Northeast Utilities or NU Enterprises shall take any corporate action
to authorize any of the actions set forth above in this subsection (f);
or
(g) any judgment or order for the payment of money in excess
of $10,000,000 either individually or in the aggregate shall be
rendered against the Borrower, Northeast Utilities or NU Enterprises
and either (i) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order or (ii) there shall be any period
of 10 consecutive
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days during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect; or
(h) any non-monetary judgment or order shall be rendered
against the Borrower, Northeast Utilities or NU Enterprises that could
reasonably be expected to have a Material Adverse Effect on the
Borrower, Northeast Utilities or NU Enterprises, as the case may be,
and either (i) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order or (ii) there shall be any period
of 10 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall
not be in effect; or
(i) any provision of any Loan Document, Material Contract or
Project Document after delivery thereof pursuant to Section 3.01 or
6.01(n) shall for any reason cease to be valid and binding on or
enforceable against any Loan Party which is party to it, or any such
Loan Party shall so state in writing; or
(j) any Collateral Document after delivery thereof pursuant to
Section 3.01 or 6.01(n) shall for any reason (other than pursuant to
the terms thereof) cease to create a valid and perfected first priority
lien on and security interest in the Collateral purported to be covered
thereby; or
(k) any material provision of any of the Loan Documents or the
Material Contracts or the Project Documents shall be canceled,
terminated (other than as contemplated by its terms and the Loan
Documents), declared by a competent court having jurisdiction to be
null and void or shall otherwise cease to be valid and binding, or any
material provision thereof shall be amended or modified in a manner
that could reasonably be expected to have a Material Adverse Effect, or
any party thereto shall deny any further liability or obligation
thereunder; or
(l) Northeast Utilities shall cease to own and control
directly or indirectly 100% of the capital stock of each of the
Borrower, NGS, Select and NU Enterprises, and 80% of the common stock
of each of CL&P, WMECO and Public Service Company of New Hampshire, in
each case free and clear of all Liens other than Liens in favor of the
Secured Parties under the Collateral Documents; or
(m) (i) any Person or two or more Persons acting in concert
shall have acquired beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934), directly or indirectly, of Voting Stock of
Northeast Utilities (or other securities convertible
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into such Voting Stock) representing 15% or more of the combined voting
power of all Voting Stock of Northeast Utilities, other than upon the
consummation of the proposed acquisition by Consolidated Edison Inc.
(directly or through one of its Subsidiaries) of 100% of the capital
stock of Northeast Utilities or (ii) during any period of up to 24
consecutive months, commencing on June 17, 1999, individuals who at the
beginning of such 24-month period were directors of Northeast Utilities
shall cease for any reason to constitute a majority of the board of
directors of Northeast Utilities, other than a change in the board of
directors of Northeast Utilities in connection with the proposed
acquisition directly or indirectly by Consolidated Edison Inc. of 100%
of the capital stock of Northeast Utilities; or (iii) any Person or two
or more Persons acting in concert shall have acquired by contract or
otherwise, or shall have entered into a contract or arrangement that,
upon consummation, will result in its or their acquisition of the power
to exercise, directly or indirectly, a controlling influence over the
management or policies of Northeast Utilities; or
(n) any ERISA Event shall have occurred with respect to a Plan
and the sum (determined as of the date of occurrence of such ERISA
Event) of the Insufficiency of such Plan and the Insufficiency of any
and all other Plans with respect to which an ERISA Event shall have
occurred and then exist (or the liability of the Loan Parties and the
ERISA Affiliates related to such ERISA Event) exceeds $10,000,000; or
(o) any Loan Party or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that it has incurred
Withdrawal Liability to such Multiemployer Plan in an amount that, when
aggregated with all other amounts required to be paid to Multiemployer
Plans by the Loan Parties and the ERISA Affiliates as Withdrawal
Liability (determined as of the date of such notification), exceeds
$10,000,000 or requires payments exceeding $2,500,000 per annum; or
(p) any Loan Party or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or is being terminated, within the meaning of
Title IV of ERISA, and as a result of such reorganization or
termination the aggregate annual contributions of the Loan Parties and
the ERISA Affiliates to all Multiemployer Plans that are then in
reorganization or being terminated have been or will be increased over
the amounts contributed to such Multiemployer Plans for the plan years
of such Multiemployer Plans immediately preceding the plan year in
which such reorganization or termination occurs by an amount exceeding
$10,000,000; or
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(q) the Borrower shall cease to be an Exempt Wholesale
Generator;
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrower,
declare the obligation of each Lender to make Advances to be terminated,
whereupon the same shall forthwith terminate, and (ii) shall at the request, or
may with the consent, of the Required Lenders, by notice to the Borrower,
declare the Notes, all interest thereon and all other amounts payable under this
Agreement and the other Loan Documents to be forthwith due and payable,
whereupon the Notes, all such interest and all such amounts shall become and be
forthwith due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Borrower;
PROVIDED, HOWEVER, that in the event of an actual or deemed entry of an order
for relief with respect to the Borrower or NU Enterprises under the Federal
Bankruptcy Code, (x) the obligation of each Lender to make Advances shall
automatically be terminated and (y) the Notes, all such interest and all such
amounts shall automatically become and be due and payable, without presentment,
demand, protest or any notice of any kind, all of which are hereby expressly
waived by the Borrower.
ARTICLE VIII
THE AGENTS
SECTION 8.01. AUTHORIZATION AND ACTION. (a) Each Lender hereby appoints
and authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers and discretion under this Agreement and the
other Loan Documents as are delegated to the Administrative Agent by the terms
hereof and thereof, together with such powers and discretion as are reasonably
incidental thereto. As to any matters not expressly provided for by the Loan
Documents (including, without limitation, enforcement or collection of the
Notes), the Administrative Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Required Lenders, and such instructions shall be
binding upon all Lenders and all holders of Notes; PROVIDED, HOWEVER, that the
Administrative Agent shall not be required to take any action that exposes the
Administrative Agent to personal liability or that is contrary to this
Agreement, any other Loan Document or applicable law. The Administrative Agent
agrees to give to each Lender prompt notice of each notice given to it by the
Borrower pursuant to the terms of this Agreement.
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(b) Each Lender hereby appoints and authorizes the Collateral Agent to
take such action as agent on its behalf and to exercise such powers and
discretion under this Agreement and the other Loan Documents as are delegated to
the Collateral Agent by the terms hereof and thereof, together with such powers
and discretion as are reasonably incidental thereto. As to any matters not
expressly provided for by the Loan Documents (including, without limitation,
enforcement of any security interest or enforcement or collection of the Notes,
giving of any consents, curing of any defaults, requesting any estoppel letters
or the determination of any Material Adverse Effect), the Collateral Agent shall
not be required to exercise any discretion or take any action, but shall be
required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Required Lenders,
and such instructions shall be binding upon all Lenders and all holders of
Notes; PROVIDED, HOWEVER, that the Collateral Agent shall not be required to
take any action that exposes the Collateral Agent to personal liability or that
is contrary to this Agreement, any other Loan Document or applicable law. The
Collateral Agent agrees to give to each Lender prompt notice of each notice
given to it by the Borrower pursuant to the terms of this Agreement. The
Collateral Agent is hereby directed to execute and deliver the Borrower Security
Agreement, the Enterprises Pledge Agreement, the Mortgages and the Consents to
Assignment. For purposes of the exculpatory and protective provisions of this
Article VIII references to the Collateral Agent shall be deemed to include the
Depositary Bank.
SECTION 8.02. AGENT'S RELIANCE, ETC. (a) Neither the Administrative
Agent nor any of its directors, officers, agents or employees shall be liable
for any action taken or omitted to be taken by it or them under or in connection
with the Loan Documents, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, the
Administrative Agent: (i) may treat the payee of any Note as the holder thereof
until the Administrative Agent receives and accepts an Assignment and Acceptance
entered into by the Lender that is the payee of such Note, as assignor, and an
Eligible Assignee, as assignee, as provided in Section 9.07; (ii) may consult
with legal counsel (including counsel for any Loan Party), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (iii) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations (whether written or oral) made in or
in connection with the Loan Documents; (iv) shall not have any duty to ascertain
or to inquire as to the performance or observance of any of the terms, covenants
or conditions of any Loan Document on the part of any Loan Party or to inspect
the property (including the books and records) of any Loan Party; (v) shall not
be responsible to any Lender for the due execution, legality,
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validity, enforceability, genuineness, sufficiency or value of, or the
perfection or priority of any lien or security interest created or purported to
be created under or in connection with, any Loan Document or any other
instrument or document furnished pursuant thereto; (vi) shall incur no liability
under or in respect of any Loan Document by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telegram, telecopy
or telex) believed by it to be genuine and signed or sent by the proper party or
parties; and (vii) except with respect to Section 7.01(a), shall not be deemed
to have notice of any Default or Event of Default unless and until it shall have
received notice thereof from a Lender. The Administrative Agent may fully rely
on an incumbency certificate from the Borrower and any other party as to the
persons authorized to give directions or otherwise act on behalf of the Borrower
or such other party, as the case may be.
(b) Neither the Collateral Agent nor any of its directors, officers,
agents or employees shall be liable for any action taken or omitted to be taken
by it or them under or in connection with the Loan Documents, except for its or
their own gross negligence or willful misconduct. Without limitation of the
generality of the foregoing, the Collateral Agent: (i) may treat the payee of
any Note as the holder thereof until the Collateral Agent receives and accepts
an Assignment and Acceptance entered into by the Lender that is the payee of
such Note, as assignor, and an Eligible Assignee, as assignee, as provided in
Section 9.07; (ii) may consult with legal counsel (including counsel for any
Loan Party), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (iii)
makes no warranty or representation to any Lender and shall not be responsible
to any Lender for any statements, warranties or representations (whether written
or oral) made in or in connection with the Loan Documents; (iv) shall not have
any duty to ascertain or to inquire as to the performance or observance of any
of the terms, covenants or conditions of any Loan Document on the part of any
Loan Party or to inspect the property (including the books and records) of any
Loan Party; (v) shall not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of, or the
perfection or priority of any lien or security interest created or purported to
be created under or in connection with, any Loan Document or any other
instrument or document furnished pursuant thereto; (vi) shall incur no liability
under or in respect of any Loan Document by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telegram, telecopy
or telex) believed by it to be genuine and signed or sent by the proper party or
parties, and (vii) shall not be deemed to have notice of any Default or Event of
Default unless and until it shall have received notice thereof from a Lender.
The Collateral Agent may fully rely on an incumbency
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certificate from the Borrower and any other party as to the persons authorized
to give directions or otherwise act on behalf of the Borrower or such other
party, as the case may be.
SECTION 8.03. CITIBANK AND AFFILIATES. With respect to its Commitments,
the Advances made by it and the Notes issued to it, Citibank shall have the same
rights and powers under the Loan Documents as any other Lender and may exercise
the same as though it were not the Administrative Agent or the Collateral Agent;
and the term "Lender" shall, unless otherwise expressly indicated, include
Citibank in its individual capacity. Citibank and its affiliates may accept
deposits from, lend money to, act as trustee under indentures of, accept
investment banking engagements from and generally engage in any kind of business
with, any Loan Party, any of such Loan Party=s Subsidiaries and any Person who
may do business with or own securities of any Loan Party or any such Subsidiary,
all as if Citibank were not the Administrative Agent or the Collateral Agent and
without any duty to account therefor to the Lenders.
SECTION 8.04. LENDER CREDIT DECISION. Each Lender acknowledges that it
has, independently and without reliance upon the Administrative Agent, the
Collateral Agent or any other Lender and based on the financial statements
referred to in Section 5.01 and such other 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 Administrative Agent, the Collateral Agent 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.
SECTION 8.05. INDEMNIFICATION. Each Lender severally agrees to
indemnify the Administrative Agent and the Collateral Agent (in each case to the
extent not promptly reimbursed by the Borrower) from and against such Lender's
ratable share (determined as provided below) of any and all liabilities,
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 the Administrative Agent or the Collateral
Agent in any way relating to or arising out of the Loan Documents or any action
taken or omitted by the Administrative Agent, the Collateral Agent or the
Depositary Bank under the Loan Documents; PROVIDED, HOWEVER, that no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Administrative Agent's or the Collateral Agent's gross
negligence or willful misconduct. Without limitation of the foregoing,
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each Lender agrees to reimburse the Administrative Agent and the Collateral
Agent, as the case may be, promptly upon demand for its ratable share of any
costs and expenses (including, without limitation, fees and expenses of counsel)
payable by the Borrower under Section 9.04, to the extent that the
Administrative Agent or the Collateral Agent is not promptly reimbursed for such
costs and expenses by the Borrower. For purposes of this Section 8.05, the
Lenders' respective ratable shares of any amount shall be determined, at any
time, according to the sum of (a) the aggregate principal amount of the Advances
outstanding at such time and owing to the respective Lenders, and (b) the
aggregate unused portions of their respective Commitments at such time. In the
event that any Defaulted Advance shall be owing by any Defaulting Lender at any
time, such Lender's Commitment with respect to the Defaulted Advance shall be
considered to be unused for purposes of this Section 8.05 to the extent of the
amount of such Defaulted Advance. The failure of any Lender to reimburse the
Administrative Agent or the Collateral Agent, as the case may be, promptly upon
demand for its ratable share of any amount required to be paid by the Lender to
the Administrative Agent or the Collateral Agent, as the case may be, as
provided herein shall not relieve any other Lender of its obligation hereunder
to reimburse the Administrative Agent or the Collateral Agent, as the case may
be, for its ratable share of such amount, but no Lender shall be responsible for
the failure of any other Lender to reimburse the Administrative Agent or the
Collateral Agent, as the case may be, for such other Lender's ratable share of
such amount. Without prejudice to the survival of any other agreement of any
Lender hereunder, the agreement and obligations of each Lender contained in this
Section 8.05 shall survive the payment in full of principal, interest and all
other amounts payable hereunder and under the other Loan Documents.
SECTION 8.06. SUCCESSOR AGENTS. (a) The Administrative Agent may resign
at any time by giving written notice thereof to the Lenders and the Borrower and
may be removed at any time with or without cause by the Required Lenders. Upon
any such resignation or removal, the Required Lenders shall have the right to
appoint a successor Administrative Agent. If no successor Administrative Agent
shall have been so appointed by the Required Lenders, and shall have accepted
such appointment, within 30 days after the retiring Administrative Agent's
giving of notice of resignation or the Required Lenders' removal of the retiring
Administrative Agent, then the retiring Administrative Agent may, on behalf of
the Lenders, appoint a successor Administrative Agent, which shall be a
commercial bank organized under the laws of the United States or of any State
thereof and having a combined capital and surplus of at least $1,000,000,000.
Upon the acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent such successor Administrative Agent shall succeed
to and become vested with all the rights, powers, discretion, privileges and
duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations under
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the Loan Documents. After any retiring Administrative Agent's resignation or
removal hereunder as Administrative Agent, the provisions of this Article VII
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement.
(b) The Collateral Agent may resign at any time by giving written
notice thereof to the Lenders and the Borrower and may be removed at any time
with or without cause by the Required Lenders. Upon any such resignation or
removal, the Required Lenders shall have the right to appoint a successor
Collateral Agent. If no successor Collateral Agent shall have been so appointed
by the Required Lenders, and shall have accepted such appointment, within 30
days after the retiring Collateral Agent's giving of notice of resignation or
the Required Lenders' removal of the retiring Collateral Agent, then the
retiring Collateral Agent may, on behalf of the Lenders, appoint a successor
Collateral Agent, which shall be a commercial bank organized under the laws of
the United States or of any State thereof and having a combined capital and
surplus of at least $1,000,000,000. Upon the acceptance of any appointment as
Collateral Agent hereunder by a successor Collateral Agent such successor
Collateral Agent shall succeed to and become vested with all the rights, powers,
discretion, privileges and duties of the retiring Collateral Agent, and the
retiring Collateral Agent shall be discharged from its duties and obligations
under the Loan Documents. After any retiring Collateral Agent's resignation or
removal hereunder as Collateral Agent, the provisions of this Article VIII shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Collateral Agent under this Agreement.
SECTION 8.07. INTERCREDITOR ARRANGEMENTS. (a) The Tranche A Secured
Parties and the Tranche B Secured Parties agree that the Collateral shall be
held by the Collateral Agent, in its capacity as such, on behalf of the Secured
Parties. The Lien of the Tranche A Mortgage, the Liens created under the Tranche
A Borrower Security Agreement, the Liens created under the Tranche A Enterprises
Pledge Agreement) and all liens and security interests created or evidenced
thereby (collectively, the "TRANCHE A LIEN") are hereby made and shall continue
to be junior, subject, and subordinate in all respects to, respectively, the
Lien of the Tranche B Mortgage, the Liens created under the Tranche B Borrower
Security Agreement, the Liens created under the Tranche B Enterprises Pledge
Agreement and all Liens and security interests created or evidenced thereby
(collectively, the "TRANCHE B LIEN") including, without limitation, after the
occurrence and during the continuance of a Default or an Event of Default. So
long as any Tranche B Obligations remain outstanding, the Tranche B Secured
Parties shall have the right to vote and instruct the Collateral Agent to act
with respect to the Collateral secured by the Tranche B Lien and the Tranche A
Lien. Once the Tranche B Obligations have been repaid in full in cash,
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the Tranche A Secured Parties shall have the right to so vote and instruct. Any
proceeds received as a result of any sale, lease, transfer or other disposition
in respect of the Collateral first shall be applied to repay the Tranche B
Obligations in full in cash, and thereafter, shall be applied to repay any
outstanding Tranche A Obligations. Each Tranche A Secured Party agrees not to
enforce or exercise any right or remedy in respect of the Collateral, or take or
receive from the Borrower or the Collateral Agent, directly or indirectly, in
cash or other property or by set-off or in any other manner, whether pursuant to
any judicial or non-judicial enforcement, collection, execution, levy or
foreclosure proceedings or otherwise, including by deed in lieu of foreclosure,
any Collateral or any part or proceeds thereof or interest therein, in each case
unless and until all Tranche B Obligations have been paid in full in cash.
(b) The provisions of Section 8.07(a) shall apply, notwithstanding the
availability of other Collateral to the Agents or Lenders or the actual date and
time of execution, delivery, recordation, filing or perfection of the Loan
Documents, or the Liens created thereby, and notwithstanding the fact that the
Tranche B Obligations are or any claim for the Tranche B Obligations is
subordinated, avoided, disallowed or otherwise deemed unenforceable, in whole or
in part, under the Federal Bankruptcy Code or other applicable federal, state or
local law. In the event of a proceeding, whether voluntary or involuntary, for
insolvency, liquidation, reorganization, dissolution, bankruptcy or other
similar proceeding pursuant to the Federal Bankruptcy Code or other applicable
federal or state law, the amounts due under the Tranche B Obligations shall be
deemed to include all interest and breakage costs accrued on the Tranche B
Obligations, in accordance with and at the rates specified in the Loan
Documents, both for periods before and for periods after the commencement of any
such proceedings, even if the claim for such interest is not allowed pursuant to
applicable law.
SECTION 8.08. CO-ARRANGERS. The Co-Arrangers, in their capacity as
Co-Arrangers, assume no responsibility or obligation hereunder for servicing,
syndication, enforcement or collection of the Debt resulting from the Advances,
nor any duties as agent hereunder for the Lenders. The title of "Co-Arranger" is
solely honorific and implies no fiduciary responsibility on the part of any
Co-Arranger, in its capacity as such, to the Agents or any Lender and the use of
such title does not impose on any Co-Arranger any duties or obligations greater
than those of any other Lender or entitle any Co-Arranger to any rights other
than those to which any other Lender is entitled.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.01. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement, the Notes or any other Loan Document, nor consent to any
departure by the Borrower or any other Loan Party therefrom, shall in any event
be effective unless the same shall be in writing and signed (or, in the case of
the Collateral Documents, consented to) by (x) with respect to this Agreement,
the Sponsor Agreement the Select Power Purchase Agreement and the NU Guaranties,
the Required Lenders, (y) with respect to the Tranche A Collateral Documents,
the Tranche A Required Lenders, and (z) with respect to the Tranche B Collateral
Documents, the Tranche B Required Lenders, and then such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given; PROVIDED, HOWEVER, that (a) no amendment, waiver or consent shall,
unless in writing and signed by all of the Lenders, do any of the following at
any time: (i) waive any of the conditions specified in Section 3.01 or 3.02,
(ii) change the number of Lenders or the percentage of (x) the Commitments, or
(y) the aggregate unpaid principal amount of the Advances, in each case,
required for the Lenders or any of them to take any action hereunder, (iii)
limit Northeast Utilities' liability with respect to its Obligations under the
Sponsor Agreement or the NU Guaranties or NU Enterprises' liability under the
Enterprises Pledge Agreement, (iv) release any material portion of the
Collateral in any transaction or series of related transactions or permit the
creation, incurrence, assumption or existence of any Lien on any item of
Collateral in any transaction or series of related transactions to secure any
Obligations other than Obligations owing to the Secured Parties under the Loan
Documents, (v) amend this Section 9.01, (vi) increase the Tranche A Commitments
of the Tranche A Lenders or the Tranche B Commitments of the Tranche B Lenders,
or increase the aggregate Commitments of the Lenders or subject the Lenders to
any additional Obligations, (vii) reduce the principal of, or interest on, the
Notes or any fees or other amounts payable hereunder, (viii) postpone any date
fixed for any payment of principal of, or interest on, the Notes or any fees or
other amounts payable hereunder, (ix) reduce the Commitments, (x) limit the
liability of any Loan Party under any of the Loan Documents, (xi) modify the
second priority status of the Tranche A Collateral Documents or the
intercreditor arrangements set forth in Section 9.07 or (xi) modify or extend
the payment terms of the Select Power Purchase Agreement; and PROVIDED FURTHER
that no amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above to take such
action, affect the rights or duties of the Administrative Agent under this
Agreement and that no amendment, waiver or consent shall, unless in writing and
signed by the Collateral Agent in addition to the Lenders required above to take
such action, affect the rights or duties of the Collateral Agent under this
Agreement and that no amendment, waiver or consent shall, unless in writing and
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signed by the Depositary Bank in addition to the Lenders required above to take
such action, affect the rights or duties of the Depositary Bank under this
Agreement.
SECTION 9.02. NOTICES, ETC. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy or
telex communication) and mailed, telegraphed, telecopied, telexed or delivered,
if to the Borrower, at its address at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇,
Attention: Treasurer, and with respect to all communications under Article 4
hereof, with copies to (i) Supervisor, Cash Management, and (ii) ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, Corporate Accounting, in both cases at the same address; if to any
Initial Lender, at its Domestic Lending Office specified opposite its name on
Schedule I hereto; if to any other Lender, at its Domestic Lending Office
specified in the Assignment and Acceptance pursuant to which it became a Lender;
if to the Administrative Agent, at its address at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ with a copy to ▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇; and if to the Collateral Agent and the
Depositary Bank, at its address at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇; or, as to each party, at such other address as shall
be designated by such party in a written notice to the other parties. All such
notices and communications shall, when mailed, telegraphed, telecopied or
telexed, be effective when deposited in the mails, delivered to the telegraph
company, transmitted by telecopier or confirmed by telex answerback,
respectively, except that notices and communications to the Administrative Agent
pursuant to Article II, III or VII shall not be effective until received by the
Administrative Agent. Delivery by telecopier of an executed counterpart of any
amendment or waiver of any provision of this Agreement or the Notes or of any
Exhibit hereto to be executed and delivered hereunder shall be effective as
delivery of a manually executed counterpart thereof.
SECTION 9.03. NO WAIVER; REMEDIES. No failure on the part of any
Lender, the Administrative Agent, the Collateral Agent or the Depositary Bank to
exercise, and no delay in exercising, any right hereunder, under any Note or
under any other Loan Document shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 9.04. COSTS, EXPENSES, INDEMNIFICATION. (a) The Borrower agrees
to pay on demand (i) all reasonable costs and expenses of the Administrative
Agent, the Collateral Agent and the Depositary Bank in connection with the
preparation, execution, delivery, modification and amendment of the Loan
Documents (including, without limitation, (A) all due diligence, collateral
review,
97
transportation, computer, duplication, appraisal, audit, insurance, consultant,
search, filing and recording fees and expenses and (B) the reasonable fees and
expenses of counsel for the Administrative Agent, the Collateral Agent and the
Depositary Bank with respect thereto, with respect to advising each of the
Administrative Agent, the Collateral Agent or the Depositary Bank, as the case
may be, as to its rights and responsibilities, or the perfection, protection or
preservation of rights or interests, under the Loan Documents, with respect to
negotiations with any Loan Party or with other creditors of any Loan Party,
arising out of any Default and with respect to presenting claims in or otherwise
participating in or monitoring any bankruptcy, insolvency or other similar
proceeding involving creditors' rights generally and any proceeding ancillary
thereto) and (ii) all reasonable costs and expenses of the Administrative Agent,
the Collateral Agent, the Depositary Bank and the Lenders in connection with the
enforcement of the Loan Documents, whether in any action, suit or litigation,
any bankruptcy, insolvency or other similar proceeding affecting creditors'
rights generally (including, without limitation, the reasonable fees and
expenses of counsel for the Administrative Agent, the Collateral Agent, the
Depositary Bank and each Lender with respect thereto).
(b) The Borrower agrees to indemnify and hold harmless the
Administrative Agent, the Collateral Agent, the Depositary Bank, each Lender and
each of their Affiliates and their officers, directors, employees, agents and
advisors (each, an "INDEMNIFIED PARTY") from and against any and all claims,
damages, losses, liabilities and expenses (including, without limitation,
reasonable fees and expenses of counsel) that may be incurred by or asserted or
awarded against any Indemnified Party, in each case arising out of or in
connection with or by reason of (including, without limitation, in connection
with any investigation, litigation or proceeding or preparation of a defense in
connection therewith) (i) the Notes, this Agreement, the other Loan Documents or
any of the transactions contemplated hereby or thereby or (ii) the actual or
alleged presence of Hazardous Materials on any property described in the
Mortgages or any Environmental Action relating in any way to any Loan Party or
any of its Subsidiaries, except to the extent such claim, damage, loss,
liability or expense is found in a final, non-appealable judgment by a court of
competent jurisdiction to have resulted directly or indirectly from such
Indemnified Party's gross negligence or willful misconduct. In the case of an
investigation, litigation or other proceeding to which the indemnity in this
Section 9.04(b) applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by any Loan Party, its
directors, shareholders or creditors or an Indemnified Party or any Indemnified
Party is otherwise a party thereto and whether or not the transactions
contemplated hereby are consummated. The Borrower also agrees not to assert any
claim against the Administrative Agent, the Collateral Agent, the Depositary
Bank, any Lender
98
or any of their Affiliates, or any of their respective officers, directors,
employees, attorneys and agents, on any theory of liability, for special,
indirect, consequential or punitive damages arising out of or otherwise relating
to this Agreement, the actual or proposed use of the proceeds of the Advances,
the other Loan Documents or any of the transactions contemplated hereby or
thereby.
(c) If any payment of principal of, or Conversion of, any Eurodollar
Rate Advance is made by the Borrower to or for the account of a Lender other
than on the last day of the Interest Period for such Advance, as a result of a
payment or Conversion pursuant to Section 2.05, 2.08(b)(i) or 2.09(d),
acceleration of the maturity of the Notes pursuant to Section 9.01 or for any
other reason, the Borrower shall, upon demand by such Lender (with a copy of
such demand to the Administrative Agent), pay to the Administrative Agent for
the account of such Lender any amounts required to compensate such Lender for
any additional losses, costs or expenses that it may reasonably incur as a
result of such payment, including, without limitation, any loss (including loss
of anticipated profits), cost or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by any Lender to fund or
maintain such Advance.
(d) If any Loan Party fails to pay when due any costs, expenses or
other amounts payable by it under any Loan Document, including, without
limitation, fees and expenses of counsel and indemnities, such amount may be
paid on behalf of such Loan Party by the Administrative Agent, the Collateral
Agent, the Depositary Bank or any Lender, in its sole discretion; PROVIDED,
HOWEVER, that such Loan Party's Obligations to pay such amounts remain unchanged
and such payment by any such Lender, the Collateral Agent, the Depositary Bank
or the Administrative Agent in no way excuses such Loan Party from such
Obligations.
(e) Without prejudice to the survival of any other agreement of any
Loan Party hereunder or under any other Loan Document, the agreements and
obligations of the Borrower contained in Sections 2.09, 2.11 and 9.05 and this
Section 9.04 shall survive the payment in full of principal, interest and all
other amounts payable hereunder and under any of the other Loan Documents.
SECTION 9.05. RIGHT OF SET-OFF. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 7.01 to authorize the
Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 7.01, each Lender and each of its respective Affiliates is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and otherwise apply any and all deposits (general
or special, time or demand, provisional or
99
final) at any time held and other indebtedness at any time owing by such Lender
or such Affiliate to or for the credit or the account of the Borrower against
any and all of the Obligations of the Borrower now or hereafter existing under
this Agreement and the Note or Notes (if any) held by such Lender, irrespective
of whether such Lender shall have made any demand under this Agreement or such
Note or Notes and although such obligations may be unmatured. Each Lender agrees
promptly to notify the Borrower after any such set-off and application;
PROVIDED, HOWEVER, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender and its
respective Affiliates under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off) that such
Lender and its respective Affiliates may have.
SECTION 9.06. BINDING EFFECT. This Agreement shall become effective
when it shall have been executed by the Borrower, the Administrative Agent, the
Collateral Agent and the Depositary Bank and when the Administrative Agent shall
have been notified by each Initial Lender that such Initial Lender has executed
it and thereafter shall be binding upon and inure to the benefit of the
Borrower, the Administrative Agent, the Collateral Agent, the Depositary Bank
and each Lender and their respective successors and assigns, except that the
Borrower shall not have the right to assign its rights hereunder or any interest
herein without the prior written consent of the Lenders.
SECTION 9.07. ASSIGNMENTS AND PARTICIPATIONS. (a) Each Lender may
assign to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitment or Commitments, the Advances owing to it and the Note
or Notes held by it); PROVIDED, HOWEVER, that (i) each such assignment shall be
of a uniform, and not a varying, percentage of all rights and obligations under
and in respect of the Tranche A Commitment or the Tranche B Commitment, as the
case may be, (ii) except in the case of an assignment to a Person that,
immediately prior to such assignment, was a Lender or all of a Lender's rights
and obligations under this Agreement, the aggregate amount of the Tranche A
Commitment and outstanding Tranche A Advances or Tranche B Commitment and
outstanding Tranche B Advances of the assigning Lender being assigned pursuant
to each such assignment (determined as of the date of the Assignment and
Acceptance with respect to such assignment) shall in no event be less than
$10,000,000 with respect to such Tranche A Commitment and $10,000,000 with
respect to such Tranche B Commitment, (iii) each such assignment shall be to an
Eligible Assignee, and (iv) the parties to each such assignment shall execute
and deliver to the Administrative Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with any Note or Notes subject
to such assignment and a processing and recordation fee of $4,000 payable by the
Eligible Assignee.
100
(b) Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in such Assignment and Acceptance, (i) the
assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (ii) the
Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights, except such rights as survive termination of this
Agreement, and 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).
(c) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, 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
any other Loan Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of, or the perfection or priority of any lien
or security interest created or purported to be created under or in connection
with, this Agreement or any other Loan Document or any other instrument or
document furnished pursuant hereto or thereto; (ii) such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or any other Loan Party or the performance
or observance by any Loan Party of any of its obligations under any Loan
Document or any other instrument or document furnished pursuant thereto; (iii)
such assignee confirms that it has received a copy of this Agreement, together
with copies of the financial statements referred to in Section 5.01 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; (iv)
such assignee will, independently and without reliance upon the Administrative
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; (v) such assignee confirms that it is an Eligible Assignee; (vi)
such assignee appoints and authorizes the Administrative Agent and the
Collateral Agent, as the case may be, to take such action as agent on its behalf
and to exercise such powers and discretion under the Loan Documents as are
delegated to the Administrative
101
Agent and the Collateral Agent, as the case may be, by the terms hereof,
together with such powers and discretion as are reasonably incidental thereto;
and (vii) such assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of this Agreement are required
to be performed by it as a Lender.
(d) The Administrative Agent shall maintain at its address referred to
in Section 9.02 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lenders and the Commitment of, and principal amount of the Advances owing
to, each Lender from time to time (the "REGISTER"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Administrative Agent, the Collateral Agent and the Lenders may
treat each Person whose name is recorded in the Register as a Lender hereunder
for all purposes of this Agreement. The Register shall be available for
inspection by the Collateral Agent, the Borrower or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee, together with any Note or Notes subject to
such assignment, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit C
hereto, (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
Borrower. In the case of any assignment by a Lender, within five Business Days
after its receipt of such notice, the Borrower, at its own expense, shall
execute and deliver to the Administrative Agent in exchange for the surrendered
Note or Notes a new Note or Notes to the order of such Eligible Assignee in an
amount equal to the Commitment assumed by it pursuant to such Assignment and
Acceptance and, if the assigning Lender has retained a Commitment hereunder, a
new Note or Notes to the order of the assigning Lender in an amount equal to the
Commitment retained by it hereunder. Such new Tranche A Note or Tranche A Notes
shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Tranche A Note or Tranche A Notes, shall be dated the
effective date of such Assignment and Acceptance and shall otherwise be in
substantially the form of Exhibit A-1 hereto. Such new Tranche B Note or Tranche
B Notes shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Tranche B Note or Tranche B Notes, shall be
dated the effective date of such Assignment and Acceptance and shall otherwise
be in substantially the form of Exhibit A-2 hereto.
(f) Each Lender may sell participations to one or more Persons (other
than any Loan Party or any of its Affiliates) in or to all or a portion of its
rights and obligations under this Agreement (including, without limitation, all
or a portion of its Commitments, the Advances owing to it and the Note or Notes
(if any) held by
102
it); PROVIDED, HOWEVER, that (i) such Lender's obligations under this Agreement
(including, without limitation, its Commitments) shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) such Lender shall remain the holder of
any such Note for all purposes of this Agreement, (iv) the Borrower, the
Administrative Agent, the Collateral Agent and the other Lenders shall continue
to deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and (v) no participant under any
such participation shall have any right to approve any amendment or waiver of
any provision of any Loan Document, or any consent to any departure by any Loan
Party therefrom, except to the extent that such amendment, waiver or consent
would reduce the principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, in each case to the extent subject to such
participation, postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation, or release all or
substantially all of the Collateral.
(g) Any Lender may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 9.07, disclose
to the assignee or participant or proposed assignee or participant, any
information relating to the Borrower or any other Loan Party furnished to such
Lender by or on behalf of the Borrower; PROVIDED, HOWEVER, that, prior to any
such disclosure, the assignee or participant or proposed assignee or participant
shall agree to preserve the confidentiality of any Confidential Information
received by it from such Lender.
(h) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time create a security interest in all or any portion of
its rights under this Agreement (including, without limitation, the Advances
owing to it and the Note or Notes held by it) in favor of any Federal Reserve
Bank in accordance with Regulation A of the Board of Governors of the Federal
Reserve System.
SECTION 9.08. EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of a manually executed counterpart of
this Agreement.
SECTION 9.09. CONFIDENTIALITY. Neither the Administrative Agent, the
Collateral Agent, the Depositary Bank, any Lender nor any agents or
representatives thereof
103
(each, a "DISCLOSING PARTY") shall disclose any Confidential Information to any
Person without the consent of the Borrower, other than (a) to the Administrative
Agent's, the Collateral Agent's or such Lender's Affiliates and their officers,
directors, employees, agents and advisors and to actual or prospective Eligible
Assignees and participants, and then only on a confidential basis, (b) as
required by any law, rule or regulation or judicial process, (c) as requested or
required by any state, federal or foreign authority or examiner regulating banks
or banking or (d) if advised by counsel of such Disclosing Party that such
disclosure is legally required.
SECTION 9.10. JURISDICTION, ETC. (a) Each of the parties hereto 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 any of the other Loan Documents to which it is a party, 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 any such New York State
court 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 proceeding
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 any party may otherwise have to bring any action or
proceeding relating to this Agreement or any of the other Loan Documents in the
courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection that
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 any of the other Loan
Documents to which it is a party 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.
SECTION 9.11. GOVERNING LAW. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 9.12. WAIVER OF JURY TRIAL. Each of the Borrower, the
Administrative Agent, the Collateral Agent, the Depositary Bank and the Lenders
irrevocably waives all right to trial by jury in any action, proceeding or
counterclaim (whether based on contract, tort or otherwise) arising out of or
relating to any of the Loan Documents, the
104
Advances or the actions of the Administrative Agent, the Collateral Agent, the
Depositary Bank or any Lender in the negotiation, administration, performance or
enforcement thereof.
105
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
BORROWER:
---------
NORTHEAST GENERATION
COMPANY
By
------------------------------
Name:
Title:
AGENTS:
-------
CITIBANK, N.A., as
Administrative Agent
By
------------------------------
Name:
Title:
CITIBANK, N.A., as
Collateral Agent and
as Depositary Bank
By
------------------------------
Name:
Title:
106
TRANCHE A INITIAL LENDERS:
--------------------------
CITIBANK, N.A.
By
------------------------------
Name:
Title:
BARCLAYS BANK PLC
By
------------------------------
Name:
Title:
CANADIAN IMPERIAL BANK OF
COMMERCE
By
------------------------------
Name:
Title:
TORONTO DOMINION (TEXAS), INC.
By
------------------------------
Name:
Title:
▇▇▇
▇▇▇▇▇▇▇ ▇ INITIAL LENDERS:
--------------------------
CITIBANK, N.A.
By
-------------------------------
Name:
Title:
BARCLAYS BANK PLC
By
-------------------------------
Name:
Title:
CANADIAN IMPERIAL BANK OF
COMMERCE
By
-------------------------------
Name:
Title:
TORONTO DOMINION (TEXAS), INC.
By
-------------------------------
Name:
Title:
MEESPIERSON CAPITAL CORP.
By
-------------------------------
Name:
Title:
UNION BANK OF CALIFORNIA, N.A.
By
-------------------------------
Name:
Title:
108
SCHEDULE I
COMMITMENTS AND APPLICABLE LENDING OFFICES
Name of Initial Lender
Citibank, N.A.
Tranche A Commitment
US$108,875,000.00
Tranche B Commitment
US$71,666,666.67
Domestic Lending Office
Citibank, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Eurodollar Lending Office
Citibank, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Business / Credit Matters:
Citibank, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
email: ▇▇▇▇▇▇▇▇.▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
Administrative / Operations Matters:
Citibank, N.A.
▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
email: ▇▇▇▇▇.▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
Name of Initial Lender
Barclays Bank plc
Tranche A Commitment
US$108,875,000.00
Tranche B Commitment
US$71,666,666.67
Domestic Lending Office
Barclays Bank PLC
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
email: ▇▇▇▇▇▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Eurodollar Lending Office
Barclays Bank PLC
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
email: ▇▇▇▇▇▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Business / Credit Matters:
Barclays Bank PLC
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
email: ▇▇▇▇.▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Administrative / Operations Matters:
Barclays Bank PLC
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
email: ▇▇▇▇▇▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
with a copy to:
Barclays Bank PLC
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
email: ▇▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Name of Initial Lender
Canadian Imperial Bank of Commerce
Tranche A Commitment
US$108,875,000.00
Tranche B Commitment
US$71,666,666.67
Domestic Lending Office
Canadian Imperial Bank of Commerce
Two Paces West
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
email: ▇▇▇▇▇▇▇▇@▇▇.▇▇▇▇.▇▇▇
Eurodollar Lending Office
Canadian Imperial Bank of Commerce
Two Paces West
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
email: ▇▇▇▇▇▇▇▇@▇▇.▇▇▇▇.▇▇▇
Business / Credit Matters:
CIBC World Markets
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ Klaussmann
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
email: ▇▇▇▇▇▇▇▇@▇▇.▇▇▇▇.▇▇▇
with a copy to:
CIBC World Markets
▇/▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇ ▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Administrative / Operations Matters:
Canadian Imperial Bank
of Commerce
Two Paces West
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
email: ▇▇▇▇▇▇▇▇@▇▇.▇▇▇▇.▇▇▇
with a copy to:
Canadian Imperial Bank
of Commerce
Two Paces West
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
email: ▇▇▇▇▇▇▇▇@▇▇.▇▇▇▇.▇▇▇
Name of Initial Lender
Toronto Dominion (Texas), Inc.
Tranche A Commitment
US$108,875,000.00
Tranche B Commitment
US$71,666,666.67
Domestic Lending Office
Toronto Dominion
(Texas), Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
email: ▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
Eurodollar Lending Office
Toronto Dominion
(Texas), Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
email: ▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
Business / Credit Matters:
Toronto Dominion
Securities
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
email: ▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
Administrative / Operations Matters:
The Toronto-Dominion Bank
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
email: ▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
Name of Initial Lender
MeesPierson Capital Corp.
Tranche A Commitment
US$0US
Tranche B Commitment
$71,666,666.66
Domestic Lending Office
MeesPierson Capital Corp.
3 Stamford Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
email: ▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Eurodollar ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
email: ▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Business / Credit Matters:
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
email: ▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
email: ▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Administrative / Operations Matters:
MeesPierson Capital Corp.
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
email: ▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
email: ▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Name of Initial Lender
Union Bank of California, N.A.
Tranche A Commitment
US$0
Tranche B Commitment
US$71,666,666.66
Domestic Lending Office
Union Bank of California, N.A.
Energy Capital Services
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
email: ▇▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
Eurodollar Lending Office
Union Bank of California, N.A.
Energy Capital Services
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
email: ▇▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
Business / Credit Matters:
Union Bank of California, N.A.
Energy Capital Services
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
email: ▇▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
Administrative / Operations Matters:
Union Bank of California, N.A.
Commercial Loan
Operations
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Union Bank of
California, N.A.
Commercial Loan
Operations
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Total
$435,500,000.00
$430,000,000.00
SCHEDULE 5
Insurance
(A) Insurance by the Borrower: The Borrower shall procure at its own expense and
maintain in full force and effect throughout the term of this Agreement (unless
otherwise specified below) insurance policies with responsible insurance
companies with (i) a Best Insurance Reports rating of "A-" or better and an
financial size category of "IX" or higher, (ii) or a S & P financial strength
rating of ABBB+@ or higher, (iii) or other companies acceptable to the
Collateral Agent, with limits and coverage provisions sufficient to satisfy the
requirements set forth in each of the Project Documents, but in no event less
than the limits and coverage provisions set forth below.
(1) General Liability Insurance: Liability insurance on an occurrence basis,
except for claims made forms issued by the insurers AEGIS or EIM against claims
filed anywhere in the world and occurring anywhere in the world for the
Borrowers liability arising out of claims for personal injury (including bodily
injury and death) and property damage. Such insurance shall provide coverage for
products-completed operations, blanket contractual, broad form property damage,
personal injury insurance, independent contractors and sudden and accidental
pollution liability with a $100,000,000 minimum limit per occurrence for
combined bodily injury and property damage. A maximum deductible or self-insured
retention of $250,000 per occurrence shall be allowed.
(2) Automobile Liability Insurance: Automobile liability insurance for the
Borrowers liability arising out of claims for bodily injury and property damage
covering all owned (if any), leased, non-owned and hired vehicles of the
Borrower, including loading and unloading, with a $10,000,000 minimum limit per
accident for combined bodily injury and property damage and containing
appropriate no-fault insurance provisions wherever applicable. A maximum
deductible or self-insured retention of $125,000 per occurrence shall be
allowed.
(3) Aircraft Liability Insurance: If the performance of any of the Project
Documents requires the use of any aircraft that is owned, leased or chartered by
the Borrower, aircraft liability insurance insuring the Borrower with a
$25,000,000 minimum limit per occurrence for combined property damage and bodily
injury, including passengers and crew.
(4) Property Damage Insurance: Property insurance on an "all risk" basis
insuring the Borrower and the Secured Parties, as their interests may appear,
including coverage against damage or loss caused by earth movement (including
but not limited to earthquake, landslide, subsidence and volcanic eruption),
flood, turbine and machinery accidents.
(a) Property Insured: The property insurance shall provide coverage for (i) the
buildings, structures, turbine, machinery, equipment, facilities, fixtures,
supplies, fuel and other properties constituting a part of the Generating
Assets, (ii) steam and electrical transmission lines along with related
equipment for which the Borrower has an insurable interest, (iii) the cost of
recreating plans, drawings or any other documents or computer system records,
(iv) electronic equipment and (v) foundations and other property below the
surface of the ground.
(b) Additional Coverages: The property insurance shall insure (i) transit and
off-site repair including ocean marine and air transit, if applicable, with
sub-limits sufficient to insure the full replacement value of the property or
equipment prior to its being moved to or from the Generating Assets sites and
while located away from the Generating Assets sites, (ii) attorney's fees,
engineering and other consulting costs, and permit fees directly incurred in
order to repair or replace damaged insured property in a minimum amount of
$2,000,000, (iii) the cost of preventive measures to reduce or prevent a loss
(▇▇▇ & labor) in an amount not less than $2,500,000, (iv) increased cost of
construction and loss to undamaged property as the result of enforcement of
building laws or ordinances with sub-limits not less than $15,000,000, (v)
debris removal with sub-limits not less than $5,000,000, (vi) expediting
expenses (defined as extraordinary expenses incurred after an insured loss to
make temporary repairs and expedite the permanent repair of the damaged property
in excess of the business interruption even if such expense does not reduce the
business interruption loss) in an amount not less than $5,000,000 and (vii) the
cleaning of civil works, channels, tunnels, equipment or other assets affected
by accidental events involving mud or water accumulation, falling rocks,
landslides and similar acts of nature that prevent the continuation of normal
activities, although no physical damage to the Generating Assets has occurred in
an amount not less than $2,000,000.
(c) Special Clauses: The property policy shall include a (i) 72 hour clause for
flood, windstorm and earthquakes, (ii) unintentional errors and omissions
clause, (iii) requirement that the insurer pay losses within 30 days after
receipt of an acceptable proof of loss or partial proof of loss and (iv) other
insurance clause making this insurance primary over any other insurance.
(d) Sum Insured: Losses shall be valued at their repair or replacement cost,
without deductible for physical depreciation or obsolescence. The property
damage policy shall insure the Generating Assets in an amount not less than
$150,000,000 per occurrence. The earth movement and flood coverage may be
insured with a sub-limit not less than $150,000,000."
(e) Deductibles: The property damage insurance may have deductibles of not
greater than $1,000,000 per occurrence.
(f) Prohibited Exclusions: The property damage policy shall not contain any (i)
coinsurance provision, (ii) exclusion for loss or damage resulting from
freezing, mechanical breakdown, (iii) exclusion for loss or damage covered under
any guarantee or warranty arising out of an insured peril, (iv) exclusion for
resultant damage caused by ordinary wear and tear, gradual deterioration, normal
subsidence, settling cracking, expansion or contraction or (v) a faulty
workmanship, design or materials exclusion substantially different from the DE-5
or LEG-3 exclusions.
(5) Business Interruption Insurance: Business interruption insurance insuring
the Borrower and the Secured Parties, as their interests may appear, covering
100% of the Borrowers continuing normal operating expenses including payroll and
debt service for a period of 12 months, arising from loss required to be insured
by Section(A)(4) above.
Such insurance shall (a) have a deductible no greater than 60 days per
occurrence, (b) include for a period of 2 months that portion of fixed expenses
and debt service not earned arising from an insured loss or occurrence at the
premises of any service (electricity, water, gas, etc.) supplier and the
premises of any purchaser of electricity, (c) cover loss sustained when access
to the Generating Assets sites is prevented due to an insured peril at premises
in the vicinity of the Generating Assets sites, (d) cover loss sustained due to
the action of a public authority preventing access to the Generating Assets
sites due to imminent or actual loss or destruction arising from an insured
peril at premises in the vicinity of the Generating Assets sites and (e) include
an clause allowing interim payments on account pending finalization of the claim
payment. Such insurance shall not contain any coinsurance clause or include a
waiver of such clause.
(6) Fidelity: Fidelity insurance providing coverage for employee dishonesty
including theft, computer funds transfer fraud, alteration and forgery insuring
loss of money, securities or other property resulting from any fraudulent or
dishonest act committed by the Borrowers employees, whether acting alone or in
collusion with others in an amount not less than $5,000,000.
(7) Endorsements: All policies of liability insurance required to be maintained
by the Borrower shall be endorsed as follows:
(a) To name the Secured Parties and their respective officers and employees (and
such other Persons as may be required by the Project Documents) as additional
insureds;
(b) To provide a severability of interests and cross liability clause;
(c) That the insurance shall be primary and not excess to or contributing with
any insurance or self-insurance maintained by the Secured Parties.
(8) Waiver of Subrogation: The Borrower hereby waives any and every claim for
recovery from the Secured Parties for any and all loss or damage covered by any
of the insurance policies to be maintained under this Agreement to the extent
that such loss or damage is recovered under any such policy. Inasmuch as the
foregoing waiver will preclude the assignment of any such claim to the extent of
such recovery, by subrogation (or otherwise), to an insurance company (or other
person), the Borrower shall give written notice of the terms of such waiver to
each insurance company which has issued, or which may issue in the future, any
such policy of insurance (if such notice is required by the insurance policy)
and shall cause each such insurance policy to be properly endorsed by the issuer
thereof to, or to otherwise contain one or more provisions that, prevent the
invalidation of the insurance coverage provided thereby by reason of such
waiver.
(B) Amendment of Requirements:
(1) Amendment by the Required Lenders: The Required Lenders may at any time
amend the requirements of this Schedule 5 due to (i) new information not known
by the Lenders as of the date of this Agreement and which poses a material risk
to the Generating Assets or (ii) changed circumstances after the date of this
Agreement which in the reasonable judgment of the Required Lenders renders such
coverage materially inadequate.
(2) Amendment Due To Commercial Unfeasibility: In the event any insurance
(including the limits or deductibles thereof) hereby required to be maintained
shall not be reasonably available and commercially feasible in the commercial
insurance market, the Required Lenders shall not unreasonably withhold their
agreement to waive such requirement to the extent the maintenance thereof is not
so available; provided, however, that (i) the Borrower shall first request any
such waiver in writing, which request shall be accompanied by a written report
prepared by the Insurance Consultant, certifying that such insurance is not
reasonably available and commercially feasible (and, in any case where the
required amount is not so available, certifying as to the maximum amount which
is so available) and explaining in detail the basis for such conclusions; (ii)
at any time after the granting of any such waiver, but not more often than once
a year, the Required Lenders may request, and the Borrower shall furnish to the
Required Lenders within fifteen (15) days after such request, supplemental
reports reasonably acceptable to the Required Lenders from the Insurance
Consultant updating their prior report and reaffirming such conclusion; and
(iii) any such waiver shall be effective only so long as such insurance shall
not be reasonable available and commercially feasible in the commercial
insurance market, it being understood that the failure of the Borrower to timely
furnish any such supplemental report shall be conclusive evidence that such
waiver is no longer effective because such condition no longer exists, but that
such failure is not the only way to establish such non-existence. The failure at
any time to satisfy the condition to any waiver of an insurance requirement set
forth in the proviso to the preceding sentence shall not impair or be construed
as a relinquishment of the Borrower's ability to obtain a waiver of an insurance
requirement pursuant to the preceding sentence at any other time upon
satisfaction of such conditions. For the purposes of this sub-section insurance
will be considered not reasonably available and commercially feasible if it is
obtainable only at excessive costs which are not justified in terms of the risk
to be insured and is generally not being carried by or applicable to independent
power producers with operations similar to the Borrower because of such
excessive costs.
(C) Conditions:
(1) Loss Notification: The Borrower shall promptly notify the Collateral Agent
of any single loss or event likely to give rise to a claim against an insurer
for an amount in excess of $1,000,000 covered by any insurance maintained
pursuant to Sections (A)(4) and (5).
(2) Payment of Loss Proceeds: All policies of insurance required to be
maintained pursuant to Sections (A)(4) and (5), shall provide that the proceeds
of such policies shall be payable solely to the Collateral Agent pursuant to a
standard first mortgage endorsement substantially equivalent to the Lenders Loss
Payable Endorsement 438BFU or ISO endorsement CP12181091 without contribution.
(3) Loss Adjustment and Settlement: A loss under any insurance required to be
carried under Sections (A)(4) and (5), shall be adjusted with the insurance
companies, including the filing in a timely manner of appropriate proceedings,
by the Borrower, subject to the approval of the Required Lenders if such loss is
in excess of $10,000,000. In addition the Borrower may in its reasonable
judgment consent to the settlement of any loss, provided that in the event that
the amount of the loss exceeds $10,000,000 the terms of such settlement is
concurred with by the Required Lenders.
(4) Policy Cancellation and Change: All policies of insurance required to be
maintained pursuant to this Schedule 5 shall be endorsed so that if at any time
should they be canceled, or coverage be reduced (by any party including the
insured) which affects the interests of the Secured Parties, such cancellation
or reduction shall not be effective as to the Secured Parties for 60 days,
except for non-payment of premium which shall be for 10 days, after receipt by
the Collateral Agent of written notice from such insurer of such cancellation or
reduction.
(5) Miscellaneous Policy Provisions: All policies of insurance required to be
maintained pursuant to Sections (A)(4) and (5), shall (i) not include any annual
or term aggregate limits of liability or clause requiring the payment of
additional premium to reinstate the limits after loss except as regards the
insurance applicable to the perils of flood, earth movement, sabotage and
terrorism, (ii) shall include the Secured Parties as additional insureds as
their interests may appear, and (iii) include a clause requiring the insurer to
make final payment on any claim within 30 days after the submission of proof of
loss and its acceptance by the insurer.
(6) Separation of Interests: All policies (other than in respect to liability or
workers compensation insurance) shall insure the interests of the Secured
Parties regardless of any breach or violation by the Borrower or any other party
of warranties, declarations or conditions contained in such policies, any action
or inaction of the Borrower or others, or any foreclosure relating to the
Generating Assets or any change in ownership of all or any portion of the
Generating Assets.
(7) Acceptable Policy Terms and Conditions: All policies of insurance required
to be maintained pursuant to this Schedule 5 shall contain terms and conditions
reasonably acceptable to the Required Lenders after consultation with the
Insurance Consultant.
(8) Waiver of Subrogation: All policies of insurance to be maintained by the
provisions of this Schedule 5 shall provide for waivers of subrogation in favor
of the Secured Parties and their respective officers and employees (and such
other Persons as may be required by the Project Documents).
(D) Evidence of Insurance: As of the Borrowing Date and on an annual basis at
least 10 days prior to each policy anniversary, the Borrower shall furnish the
Collateral Agent with (1) certificates of insurance or binders, in a form
acceptable to the Collateral Agent, evidencing all of the insurance required by
the provisions of this Schedule 5 and (2) a schedule of the insurance policies
held by or for the benefit of the Borrower and required to be in force by the
provisions of this Schedule 5. Such certificates of insurance/binders shall be
executed by each insurer or by an authorized representative of each insurer
where it is not practical for such insurer to execute the certificate itself.
Such certificates of insurance/binders shall identify underwriters, the type of
insurance, the insurance limits and the policy term and shall specifically list
the special provisions enumerated for such insurance required by this Schedule
5. Upon request, the Borrower will promptly furnish the Collateral Agent with
copies of all insurance policies, binders and cover notes or other evidence of
such insurance relating to the insurance required to be maintained by the
Borrower. The schedule of insurance shall include the name of the insurance
company, policy number, type of insurance, major limits of liability and
expiration date of the insurance policies.
(E) Reports: Prior to the expiration date of any required insurance policy, the
Borrower shall deliver to the Collateral Agent and the Insurance Consultant a
certificate of the Borrower stating that all insurance required to be maintained
by this Schedule 5 is in full force and effect, accompanied on each Broker
Reporting Date (as defined below) by a report or reports from the Borrower's
insurance brokers or agents that taken together show with reasonable specificity
the existence of all insurance required to be maintained by this Schedule 5
(including the scope and amount of coverage provided by, and the deductibles and
exclusions under, each required policy), and that all such insurance is then in
full force and effect and all premiums have been paid in full. The Collateral
Agent shall have the right to review copies of all policies providing the
coverage required by this Schedule 5. For the purposes of this Schedule 5,
"Broker Reporting Date" shall mean (i) any date upon which the Borrower has
renewed an insurance policy but with a different insurer, and (ii) any date upon
which an insurance policy is renewed and incorporates any changes (other than
changes of an administrative nature) from the previous corresponding insurance
policy.
The Borrower shall promptly notify the Collateral Agent of (i) any dispute with
an insurer that the Borrower, acting reasonably, considers material and might
adversely affect the payment of a claim under any policy of insurance required
to be maintained under this Schedule 5 or the ability of the Borrower to
maintain in effect any such required policy, (ii) the cancellation (or
notification concerning proposed cancellation) of any policy prior to its stated
term, (iii) the non-payment of any premium when due, (iv) the failure by the
Borrower, for any reason, to maintain in full force and effect any insurance
required by this Schedule 5, (v) any material change (other than increases in
scope of coverage) in any insurance coverage maintained by the Borrower, (vi)
any actual or, upon obtaining knowledge thereof, potential event of loss in
excess of $1,000,000 covered by such insurance, and (vii) any other information
relating to the insurance required by this Schedule 5 that may be reasonably
requested by any Lender or the Collateral Agent.
(F) Failure to Maintain Insurance: In the event the Borrower fails to take out
or maintain the full insurance coverage required by this Schedule 5, the
Collateral Agent, upon 30 days' prior notice (unless the aforementioned
insurance would lapse within such period, in which event notice should be given
as soon as reasonably possible) to the Borrower of any such failure, may (but
shall not be obligated to) take out the required policies of insurance and pay
the premiums on the same. All amounts so advanced thereof by the Collateral
Agent shall become an additional obligation of the Borrower to the Collateral
Agent, and the Borrower shall forthwith pay such amounts to the Collateral
Agent, together with interest thereon at the interest rate set forth in Section
2.06(b) of the Agreement from the date so advanced.
(G) No Duty of Collateral Agent to Verify or Review: No provision of this
Schedule 5 or any provision of this Agreement, any Acquisition Document or any
Project Document shall impose on the Collateral Agent any duty or obligation to
verify the existence or adequacy of the insurance coverage maintained by the
Borrower, nor shall the Collateral Agent be responsible for any representations
or warranties made by or on behalf of the Borrower to any insurance company or
underwriter. Any failure on the part of the Collateral Agent to pursue or obtain
the evidence of insurance required by this Agreement from the Borrower and/or
failure of the Collateral Agent to point out any non-compliance of such evidence
of insurance shall not constitute a waiver of any of the insurance requirements
in this Agreement.
(H) Maintenance of Insurance: The Borrower shall at all times maintain the
insurance coverage required under the terms of the Project Documents.
(I) Liability for Failure to Maintain Insurance: Failure to secure the requisite
insurance coverages, to comply fully with any of the provisions of this Schedule
5, or to secure such endorsements on the policies as may be necessary to carry
out the terms and provisions of this Schedule 5, shall in no way act to relieve
the Borrower from its obligations under this Schedule 5. In the event that
liability for loss or damage is denied by the underwriter(s), in full or in
part, because of breach of said insurance policies by the Borrower, or if the
Borrower fails to maintain any of the insurance herein required, the Borrower
shall hold harmless and indemnify the Secured Parties and the Agents against all
claims, demands, costs and expenses, including reasonable attorney's fees, which
would otherwise be covered by said insurance. The Borrower's indemnification
obligations under this Agreement (express or implied) shall not be limited to
the amount or scope of coverage provided by insurance which is required under
this Schedule 5.
(J) Insurance Consultant. The Borrower shall reimburse the Lenders from time to
time for the reasonable fees and expenses of the Insurance Consultant appointed
by the Required Lenders (a) to advise the Lenders with respect to the initial
contents of this Schedule 5, and the compliance by the Borrower on the Borrowing
Date with the applicable requirements of this Schedule 5, (b) if requested by
the Required Lenders, to review for compliance with the requirements of this
Schedule 5 any insurance policies or certificates with respect thereto delivered
to or made available by the Borrower pursuant to this Schedule 5, and (c) if
requested by the Required Lenders, to advise the Lenders as to whether any
change in this Schedule 5 as then in effect requested by the Borrower satisfied
the applicable requirements of this Schedule 5.
EXHIBIT A-1 TO THE CREDIT AGREEMENT
FORM OF TRANCHE A PROMISSORY NOTE
$ Dated: , 200
FOR VALUE RECEIVED, the undersigned, Northeast Generation Company, a Connecticut
corporation (the "Borrower"), HEREBY PROMISES TO PAY
(the "Lender") for the account of its Applicable
Lending Office (as defined in the Credit Agreement referred to below) the
principal amount of the Tranche A Advance (as defined below) owing to the Lender
by the Borrower pursuant to the Credit Agreement dated as of March 9, 2000 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"; terms defined therein being used herein as therein defined) among
the Borrower, the Lender and certain other Lenders party thereto, and Citibank,
N.A. ("Citibank"), as Administrative Agent for the Lender and such other
Lenders, as Collateral Agent for the Secured Parties and as Depositary Bank, on
the Tranche A Maturity Date.
The Borrower promises to pay interest on the unpaid principal amount of the
Tranche A Advance from the date of the Tranche A Advance until such principal
amount is paid in full, at such interest rates, and payable at such times, as
are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the United States of
America to Citibank, as Administrative Agent, at the Administrative Agent's
Account, in immediately available funds. The Tranche A Advance owing to the
Lender by the Borrower and all payments made on account of principal thereof,
shall be recorded by the Lender and, prior to any transfer hereof, endorsed on
the grid attached hereto, which is part of this Tranche A Promissory Note.
This Promissory Note is one of the Notes referred to in, and is entitled to the
benefits of, the Credit Agreement. The Credit Agreement, among other things, (i)
provides for the making of an advance (the "Tranche A Advance") by the Lender to
the Borrower in an amount not to exceed the U.S. dollar amount first above
mentioned, the indebtedness of the Borrower resulting from the Tranche A Advance
being evidenced by this Promissory Note, and (ii) contains provisions for
acceleration of the maturity hereof upon the happening of certain stated events.
The obligations of the Borrower under this Promissory Note, and the obligations
of the other Loan Parties under the Loan Documents, are secured by the
Collateral as provided in the Loan Documents.
NORTHEAST GENERATION COMPANY
By
Name:
Title:
TRANCHE A ADVANCE AND PAYMENTS OF PRINCIPAL
Date
Amount of Tranche A Advance
Amount of Principal Paid
Unpaid Principal Balance
Notation Made By
EXHIBIT A-2 TO THE CREDIT AGREEMENT
FORM OF TRANCHE B PROMISSORY NOTE
$
Dated: , 2000
FOR VALUE RECEIVED, the undersigned, Northeast Generation Company, a Connecticut
corporation (the "Borrower"), HEREBY PROMISES TO PAY
(the "Lender") for the account of its Applicable
Lending Office (as defined in the Credit Agreement referred to below) the
principal amount of the Tranche B Advance (as defined below) owing to the Lender
by the Borrower pursuant to the Credit Agreement dated as of March 9, 2000 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"; terms defined therein being used herein as therein defined) among
the Borrower, the Lender and certain other Lenders party thereto, and Citibank,
N.A. ("Citibank"), as Administrative Agent for the Lender and such other
Lenders, as Collateral Agent for the Secured Parties and as Depositary Bank, on
the Tranche B Maturity Date.
The Borrower promises to pay interest on the unpaid principal amount of the
Tranche B Advance from the date of the Tranche B Advance until such principal
amount is paid in full, at such interest rates, and payable at such times, as
are specified in this Agreement.
Both principal and interest are payable in lawful money of the United States of
America to Citibank, as Administrative Agent, at the Administrative Agent's
Account, in immediately available funds. The Tranche B Advance owing to the
Lender by the Borrower, and all payments made on account of principal thereof,
shall be recorded by the Lender and, prior to any transfer hereof, endorsed on
the grid attached hereto, which is part of this Tranche B Promissory Note.
This Promissory Note is one of the Notes referred to in, and is entitled to the
benefits of, the Credit Agreement. The Credit Agreement, among other things, (i)
provides for the making of an advance (the "Tranche B Advance") by the Lender to
the Borrower in an amount not to exceed the U.S. dollar amount first above
mentioned, the indebtedness of the Borrower resulting from the Tranche B Advance
being evidenced by this Promissory Note, and (ii) contains provisions for
acceleration of the maturity hereof upon the happening of certain stated events
and also for prepayments on account of principal hereof prior to the maturity
hereof upon the terms and conditions therein specified. The obligations of the
Borrower under this Promissory Note, and the obligations of the other Loan
Parties under the Loan Documents, are secured by the Collateral as provided in
the Loan Documents.
NORTHEAST GENERATION COMPANY
By
Name:
Title:
TRANCHE B ADVANCE AND PAYMENTS OF PRINCIPAL
Date
Amount of Tranche B Advance
Amount of Principal Paid or Prepaid
Unpaid Principal Balance
Notation Made By
EXHIBIT B TO THE CREDIT AGREEMENT
FORM OF NOTICE OF BORROWING
Citibank, N.A., as Administrative Agent
under the Credit Agreement
referred to below
[Date]
Attention:
Ladies and Gentlemen:
The undersigned, Northeast Generation Company, refers to the Credit Agreement
dated as of March 9, 2000 (as amended, supplemented or otherwise modified from
time to time, the "Credit Agreement", the terms defined therein being used
herein as therein defined), among the undersigned, certain Lenders party
thereto, and Citibank, N.A., as Administrative Agent for said Lenders and
Collateral Agent for the Secured Parties and Depositary Bank, and hereby gives
you notice, irrevocably, pursuant to Section 2.02 of the Credit Agreement that
the undersigned hereby requests two Borrowings under the Credit Agreement, and
in that connection sets forth below the information relating to such Borrowings
(the "Proposed Borrowing") as required by Section 2.02(a) of the Credit
Agreement:
(i) The Business Day of the Proposed Borrowing is , 2000.
(ii) The aggregate amount of the Tranche A Borrowing is $ and of the
Tranche B Borrowing is $ .
(iii) The Type of Advances comprising the Proposed Tranche B Borrowing
is [Base Rate Advances] [Eurodollar Rate Advances].
(iv) The aggregate amount of the Proposed Borrowing is $ .
[(v) The initial Interest Period for each Eurodollar Rate Advance made as part
of the Proposed Tranche B Borrowing is month[s].]
The undersigned hereby certifies that the following statements are true on the
date hereof, and will be true on the date of the Proposed Borrowing:
(A) the representations and warranties contained in each Loan Document are
correct on and as of the date of the Proposed Borrowing, before and after giving
effect to the Proposed Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date; and
(B) no event has occurred and is continuing, or would result from such Proposed
Borrowing or from the application of the proceeds therefrom, that constitutes a
Default.
Very truly yours,
NORTHEAST GENERATION COMPANY
By
Name:
Title:
EXHIBIT C TO THE CREDIT AGREEMENT
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of March 9, 2000 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement")
among Northeast Generation Company, a Connecticut corporation (the "Borrower"),
the Lenders (as defined in the Credit Agreement) and Citibank, N.A., as
administrative agent for the Lenders (the "Administrative Agent"), as Collateral
Agent for the Secured Parties and as Depositary Bank. Terms defined in the
Credit Agreement are used herein with the same meaning.
The "Assignor" and the "Assignee" referred to on Schedule 1 hereto agree as
follows:
1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, an interest in and to the
Assignor's rights and obligations under the Credit Agreement as of the date
hereof equal to the percentage interests specified on Schedule 1 hereto of all
outstanding rights and obligations under the Credit Agreement. After giving
effect to such sale and assignment, the Assignee's Commitments and the amount of
the Advances owing to the Assignee will be as set forth on Schedule 1 hereto.
2. The Assignor (i) represents and warrants that it is the legal and beneficial
owner of the interest being assigned by it hereunder and that such interest is
free and clear of any adverse claim; (ii) makes no representation or warranty
and assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Loan Documents or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of, or the perfection or priority of any lien or security interest created or
purported to be created under or in connection with, the Loan Documents or any
other instrument or document furnished pursuant thereto; and (iii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of any Loan Party or the performance or observance by any
Loan Party of any of its obligations under any Loan Document or any other
instrument or document furnished pursuant thereto; and (iv) attaches the Note or
Notes held by the Assignor and requests that the Administrative Agent exchange
such Note or Notes for a new Note or Notes payable to the order of the Assignee
in an amount equal to the Commitments assumed by the Assignee pursuant hereto or
new Notes payable to the order of the Assignee in an amount equal to the
Commitments assumed by the Assignee pursuant hereto and the Assignor in an
amount equal to the Commitments retained by the Assignor under this Agreement,
respectively, as specified on Schedule 1 hereto.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 5.01 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon the Administrative Agent, the Collateral Agent, the Assignor or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Agreement; (iii) confirms that it is an
Eligible Assignee; (iv) appoints and authorizes the Administrative Agent and the
Collateral Agent (as the case may be) to take such action as agent on its behalf
and to exercise such powers and discretion under the Loan Documents as are
delegated to the Administrative Agent and the Collateral Agent, respectively, by
the terms thereof, together with such powers and discretion as are reasonably
incidental thereto; (v) agrees that it will perform in accordance with their
terms all of the obligations that by the terms of the Credit Agreement are
required to be performed by it as a Lender; and (vi) attaches any U.S. Internal
Revenue Service forms required under Section 2.11 of the Credit Agreement.
4. Following the execution of this Assignment and Acceptance, it will be
delivered to the Administrative Agent for acceptance and recording by the
Administrative Agent. The effective date for this Assignment and Acceptance (the
"Effective Date") shall be the date of acceptance hereof by the Administrative
Agent, unless otherwise specified on Schedule 1 hereto.
5. Upon such acceptance and recording by the Administrative Agent, as of the
Effective Date, (i) the Assignee shall be a party to the Credit Agreement and,
to the extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Administrative Agent, from and
after the Effective Date, the Administrative Agent shall make all payments under
the Credit Agreement and the Notes in respect of the interest assigned hereby
(including, without limitation, all payments of principal, interest and
commitment fees with respect thereto) to the Assignee. The Assignor and Assignee
shall make all appropriate adjustments in payments under the Credit Agreement
and the Notes for periods prior to the Effective Date directly between
themselves.
7. This Assignment and Acceptance shall be governed by, and construed
in accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of
Schedule 1 to this Assignment and Acceptance by telecopier shall be effective as
delivery of a manually executed counterpart of this Assignment and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule 1 to this
Assignment and Acceptance to be executed by their officers thereunto duly
authorized as of the date specified thereon.
SCHEDULE 1 to ASSIGNMENT AND ACCEPTANCE
Percentage interest in Tranche A assigned: %
Percentage interest in Tranche B assigned: %
Assignee's Tranche A Commitment: $
Assignee's Tranche B Commitment: $
Aggregate outstanding principal amount of Tranche A Advances assigned: $
Aggregate outstanding principal amount of Tranche B Advances assigned: $
Principal amount of Tranche A Note payable to Assignee: $
Principal amount of Tranche B Note payable to Assignee: $
Assignor's Tranche A Commitment: $
Assignor's Tranche B Commitment: $
Principal amount of Tranche A Note payable to Assignor: $__________
Principal amount of Tranche B Note payable to Assignor: $
Effective Date (if other than date of acceptance by Administrative Agent): **
This date should be no earlier than five Business Days after the delivery of
this Assignment and Acceptance to the Administrative Agent. ,
200
[NAME OF ASSIGNOR], as Assignor
By
Name:
Title:
Dated: , 200
[NAME OF ASSIGNEE], as Assignee
By
Name:
Title:
Dated: , 200
Domestic Lending Office:
Eurodollar Lending Office:
Accepted ** Required if the Assignee is an Eligible Assignee solely by reason of
clause (vii) the definition of Eligible Assignee.[and Approved] this day of ,
200
CITIBANK, N.A. as Administrative Agent
By
Name
Title
*[Approved this day of , 200
NORTHEAST GENERATION COMPANY
By
Name
Title:]
EXHIBIT J TO THE CREDIT AGREEMENT
FORM OF SOLVENCY CERTIFICATE OF
[NAME OF COMPANY]
I, the undersigned, [Name Officer], in my capacity as Chief Financial Officer of
[Name of Company], a corporation (the "Company"), am duly authorized to execute
and deliver and make the representations and certifications made in this
Certificate and DO HEREBY CERTIFY on behalf of the Company that:
1. This certificate is hereby delivered on behalf of the Company pursuant to
Section 3.01(m)(xiv) of the Credit Agreement dated as of March 9, 2000 (as
further amended, supplemented or otherwise modified from time to time, the
"Credit Agreement") among Northeast Generation Company, certain banks, financial
institutions and other institutional lenders from time to time party thereto
(the "Lenders") and Citibank, N.A., as Administrative Agent, Collateral Agent
and Depositary Bank. Capitalized terms not otherwise defined in this Certificate
shall have the same meanings as specified therefor in the Credit Agreement.
2. I am knowledgeable and generally familiar with the properties, businesses,
prospects, financial condition and assets of the Company and have carefully
reviewed the Loan Documents, the Project Documents and the Acquisition Documents
and the contents of this Certificate and, in connection herewith, have reviewed
such other documentation and information and have made such investigations and
inquiries of the Company and directors and employees of the Company that are
necessary and prudent for a proper investigation.
3. The financial information and assumptions that underlie and form the basis
for the representations and certifications made in this Certificate were made in
good faith and were reasonable when made and continue to be reasonable as of the
date of this Certificate.
4. The Company understands that the Agents and the Lenders are relying upon the
truth and accuracy of this Certificate in connection with the transactions
contemplated by the Loan Documents, the Project Documents and the Acquisition
Documents.
5. On the date of this Certificate, immediately before and immediately after
giving pro forma effect to the [WMECO/CL&P] Acquisition and the transactions
contemplated by the Project Documents and the Acquisition Documents to occur on
or prior to the date of this Certificate, the fair value of the property and
assets of the Company is greater than the total amount of liabilities
(including, without limitation, contingent, subordinated, absolute, fixed,
matured or unmatured and liquidated or unliquidated liabilities) of the Company.
6. On the date of this Certificate, immediately before and immediately after
giving pro forma effect to the [WMECO/CL&P] Acquisition and the transactions
contemplated by the Project Documents and the Acquisition Documents to occur on
or prior to the date of this Certificate, the present fair saleable value of the
property and assets of the Company is not less than the amount that will be
required to pay the probable liability of the Company on its debts as they
become absolute and matured.
7. On the date of this Certificate, immediately before and immediately after
giving pro forma effect to the [WMECO/CL&P] Acquisition and the transactions
contemplated by the Project Documents and the Acquisition Documents to occur on
or prior to the date of this Certificate, the Company is not insolvent and the
Company will not be rendered insolvent by the transactions contemplated by the
Acquisition Documents and the Project Documents.
8. The Company has not incurred, nor does it intend to, and does not believe
that it will, incur debts or liabilities beyond its ability to pay such debts
and liabilities as they mature.
9. On the date of this Certificate, immediately before and immediately after
giving pro forma effect to the [WMECO/CL&P] Acquisition and the transactions
contemplated by the Project Documents and the Acquisition Documents to occur on
or prior to the date of this Certificate, the Company is not engaged in business
or a transaction, and is not about to engage in business or a transaction, for
which its property and assets would constitute an unreasonably small capital.
10. The Company does not intend, in consummating the [WMECO/CL&P] Acquisition
and the transactions contemplated by the Acquisition Documents and the Project
Documents to occur on or prior to the date of this Certificate, to hinder, delay
or defraud either present or future creditors or any other Person to which the
Company is or, on or after the date of this Certificate, will become indebted.
11. In reaching the conclusions set forth in this Certificate, the
Company has considered, among other things:
(a) the cash and other current assets of the Company reflected in the
Consolidated balance sheet and pro forma statements of income of the Company and
its Subsidiaries after giving effect to the [WMECO/CL&P] Acquisition and the
transactions contemplated by the Acquisition Documents and the Project Documents
[and reflecting the estimated purchase price accounting adjustments prepared by
independent public accountants];
(b) all of the unliquidated and contingent liabilities of the Company,
including, without limitation, any claims arising out of pending or, to the best
knowledge of the undersigned, threatened litigation against the Company or any
of its property and assets and, in so doing, the Company has computed the amount
of each such unliquidated or contingent liability as the amount that, in light
of all of the facts and circumstances existing on the date of this Certificate,
represents the amount that can reasonably be expected to become an actual or
matured liability;
(c) all of the obligations and liabilities of the Company, whether matured or
unmatured, liquidated or unliquidated, disputed or undisputed, secured or
unsecured, subordinated, absolute, fixed or contingent, including, without
limitation, any claims arising out of pending or, to the best knowledge of the
undersigned, threatened litigation against the Company or any of its property
and assets;
(d) historical and anticipated growth in the sales volume of the
Company and in the income stream generated by the Company;
(e) the customary sales terms and the trade payables and other accounts
payable of the Company;
(f) the amount of the credit extended to customers and by suppliers of
the Company; and
(g) the level of capital customarily maintained by the Company and, to the
extent that the Company has knowledge thereof, other entities engaged in the
same or a similar business as the businesses of the Company.
Delivery of an executed signature page to this Certificate by telecopier shall
be effective as delivery of a manually executed signature page hereof.
IN WITNESS WHEREOF, the Company has caused this Certificate to be executed by
its Chief Financial Officer thereunto duly authorized on this March , 2000.
[NAME OF COMPANY]
By
Name:
Title: Chief Financial Officer