1
--------------------------------------------------------------------------------
COGENTRIX VIRGINIA LEASING CORPORATION
------------------------
THIRD AMENDED AND RESTATED
LOAN AGREEMENT
Dated as of
December 22, 1997
------------------------
CREDIT LYONNAIS,
as the Agent,
the Issuing Bank
and a Lender
and
the other financial institutions
parties hereto, as Lenders
--------------------------------------------------------------------------------
2
Table of Contents
Page
----
SECTION 1. TERM LOANS...................................................... 2
1.1 Term Loans................................................... 2
1.2 Procedure for Borrowing of Additional Term Loans............. 2
1.3 Term Notes................................................... 3
1.4 Repayment of Term Loans...................................... 3
1.5 Reduction of Total Permitted Term Loan Amount................ 3
1.6 Reduction Amount Schedule.................................... 4
SECTION 2. INTEREST AND FEES............................................... 4
2.1 Rate of Interest............................................. 4
2.2 Interest Payment Dates....................................... 4
2.3 Continuation of Eurodollar Loans and CD Rate Loans........... 5
2.4 Conversion of Loans.......................................... 5
2.5 Minimum Amounts of Tranches.................................. 6
2.6 Computation of Interest...................................... 6
2.7 Inability to Determine Interest Rate......................... 6
2.8 Pro Rata Treatment and Payments.............................. 7
2.9 Illegality................................................... 8
2.10 Requirements of Law.......................................... 8
2.11 Taxes........................................................ 9
2.12 Indemnity.................................................... 10
2.13 Fees......................................................... 10
SECTION 2A. DEBT SERVICE LETTER OF CREDIT.................................. 11
2A.1 Issuance of Debt Service Letter of Credit.................... 11
2A.2 Available Amount............................................. 12
2A.3 Debt Service Letter of Credit Operations..................... 12
2A.4 Agreement To Repay Debt Service Letter of Credit
Disbursements............................................. 12
2A.5 Application of Payments...................................... 15
2A.6 Debt Service Letter of Credit Fee............................ 15
2A.7 Effect of Event of Default................................... 16
2A.8 Obligations Absolute......................................... 16
2A.9 Survival of Agreements, Representations and Warranties, Etc.. 16
2A.10 Increased Costs.............................................. 17
SECTION 3. PAYMENTS, ETC................................................... 18
3.1 Prepayments.................................................. 18
(a) Mandatory........................................ 18
(b) Optional......................................... 18
3.2 Overdue Payments............................................. 19
3.3 Computation of Time Periods.................................. 19
- i -
3
Page
----
3.4 Right to Set off............................................. 19
3.5 Total Additional Term Loan Commitment Reductions............. 20
(a) Mandatory........................................ 20
(b) Optional......................................... 20
SECTION 4. CONDITIONS PRECEDENT............................................ 20
4.1 Conditions to Effectiveness........................... 20
(a) Agreement........................................ 20
(b) Deed of Trust Amendment.......................... 21
(c) Pledge Agreement. ............................... 21
(d) Security Agreement Amendment..................... 21
(e) Security Deposit Agreement....................... 21
(f) Existing Interest Rate Protection Agreements..... 21
(g) Ship Mortgage Amendment.......................... 21
(h) Management Agreement Amendment................... 21
(i) Title Insurance; Survey.......................... 21
(j) Cogentrix Energy Indemnity Agreement............. 22
(k) Power Purchaser Consent.......................... 22
(l) Corporate Proceedings of the Borrower............ 22
(m) Incumbency Certificate of the Borrower........... 22
(n) Corporate Proceedings of the Parent.............. 22
(o) Incumbency Certificate of the Parent............. 22
(p) Corporate Proceedings of Cogentrix Energy........ 23
(q) Incumbency Certificate of Cogentrix Energy....... 23
(r) Legal Opinions................................... 23
(s) No Default....................................... 23
(t) Representations and Warranties................... 24
(u) Responsible Officer's Certificate................ 24
(v) Certificate of Ownership and Abstract of Title... 24
(w) Certificates..................................... 24
(x) Evidence of Insurance............................ 24
(y) Bank Assignment.................................. 24
(z) Assigned Contracts; Consents..................... 24
(aa) Insurance Advisor's Report....................... 24
(bb) Engineer's Report................................ 24
(cc) Notes............................................ 25
(dd) Fees............................................. 25
(ee) Pro Forma Financial Statements................... 25
(ff) Debt Service Letter of Credit.................... 25
(gg) Power Purchase Agreement Amendment............... 25
(hh) Power Purchaser Notice........................... 25
(ii) Borrowing Request................................ 25
(jj) Payment of Interest and Fees..................... 26
(kk) Additional Matters............................... 26
4.2 Conditions to Additional Term Loans................... 26
(a) No Default....................................... 26
(b) No Event of Loss................................. 26
- ii -
4
Page
----
SECTION 5. REPRESENTATIONS AND WARRANTIES.................................. 26
5.1 Financial Statements; Liabilities............................ 26
5.2 Corporate Existence.......................................... 27
5.3 Compliance with Law.......................................... 27
5.4 Corporate Power and Authorization; Enforceable Obligations... 27
5.5 Governmental Actions......................................... 28
5.6 No Legal Bar................................................. 28
5.7 No Litigation................................................ 29
5.8 No Default or Event of Loss.................................. 29
5.9 Ownership of Property; Liens................................. 29
5.10 No Burdensome Restrictions................................... 29
5.11 Taxes........................................................ 29
5.12 Public Utility Status........................................ 30
5.13 Federal Regulations.......................................... 30
5.14 ERISA........................................................ 31
5.15 Investment Company Act....................................... 31
5.16 Security Documents........................................... 31
5.17 Full Disclosure.............................................. 31
5.18 Power Purchase Agreement and Other Assigned Contracts........ 31
5.19 Principal Place of Business, Etc............................. 32
5.20 Water Supply................................................. 32
5.21 Compliance with Building Codes, Zoning Laws, Etc............. 32
5.22 Roads........................................................ 33
5.23 Deed of Trust................................................ 33
5.24 Sufficiency of Project Documents............................. 33
5.25 Outstanding Shares of Capital Stock of Borrower.............. 33
5.26 Environmental Matters........................................ 33
5.27 Subsidiaries................................................. 34
5.28 Representations and Warranties in Other Project Documents.... 34
5.29 Relocation of Coal Conveyor and Steam Pipelines.............. 34
SECTION 6. AFFIRMATIVE COVENANTS........................................... 34
6.1 Financial Statements......................................... 34
6.2 Certificates; Other Information.............................. 35
6.3 Payment of Obligations....................................... 36
6.4 Conduct of Business and Maintenance of Existence............. 37
6.5 Maintenance of Property; Operation of Project;
Restoration of Facility.................................... 37
6.6 Assigned Contracts........................................... 37
6.7 Insurance.................................................... 38
6.8 Inspection of Property; Books and Records; Discussions....... 42
6.9 Notices...................................................... 42
6.10 Assignments of Additional Contracts; Maintenance of
Liens of the Security Documents; Future Mortgages.......... 44
- iii -
5
Page
----
6.11 Employee Plans............................................... 44
6.12 Management Letters........................................... 45
6.13 Plans........................................................ 45
6.14 Correction of Work........................................... 45
6.15 Defend Title................................................. 45
6.16 Deposits..................................................... 45
6.17 Interest Rate Protection..................................... 45
6.18 Hazardous Material........................................... 46
6.19 Notice under Consents........................................ 47
6.20 Major Maintenance Reserve Account............................ 47
SECTION 7. NEGATIVE COVENANTS.............................................. 47
7.1 Indebtedness................................................. 47
7.2 Limitation on Liens.......................................... 47
7.3 Limitation on Contingent Obligations......................... 48
7.4 Limitation on Restricted Payments............................ 48
7.5 Limitation on Investments.................................... 48
7.6 Prohibition of Fundamental Changes; Change of Office......... 49
7.7 Limitation on Leases......................................... 49
7.8 Compliance with ERISA........................................ 49
7.9 Restrictions on Disposition and Purchase of Assets........... 49
7.10 Amendments, Etc. of Contracts................................ 50
7.11 Transactions with Affiliates and Others...................... 50
7.12 Limitation on Capital Expenditures........................... 50
7.13 Conduct of Business.......................................... 51
7.14 Qualifying Facility.......................................... 51
SECTION 8. EVENTS OF DEFAULT............................................... 51
8.1 Events of Default............................................ 51
SECTION 9. THE AGENT....................................................... 56
9.1 Appointment.................................................. 56
9.2 Delegation of Duties......................................... 57
9.3 Exculpatory Provisions....................................... 57
9.4 Reliance by Agent............................................ 57
9.5 Notice of Default............................................ 58
9.6 Non-Reliance on Agent........................................ 58
9.7 Indemnification.............................................. 59
9.8 The Agent in Its Individual Capacity......................... 59
9.9 Successor Agent.............................................. 59
SECTION 10. MISCELLANEOUS.................................................. 60
10.1 Amendments and Waivers....................................... 60
10.2 Notices...................................................... 61
10.3 No Waiver; Cumulative Remedies............................... 61
- iv -
6
Page
----
10.4 Survival of Representations and Warranties................... 61
10.5 Payment of Expenses and Taxes................................ 61
10.6 Successors and Assigns....................................... 62
10.7 Financing Parties Sole Beneficiaries......................... 64
10.8 Release of Collateral........................................ 65
10.9 Counterparts................................................. 66
10.10 SUBMISSION TO JURISDICTION; WAIVERS.......................... 66
10.11 Governing Law................................................ 67
10.12 Limitation of Liability...................................... 67
- v -
7
Annex A DEFINITIONS
Schedule I Description of Site
Schedule II Liabilities
Schedule III Governmental Actions and Permits
Schedule IV Recordings and Filings
Schedule V Environmental Notices
Schedule VI Permitted Liens
Schedule VII Reduction Amount Schedule
Schedule VIII Pending and Threatened Litigation
Schedule IX Lender Information
Exhibit A Form of Borrowing Request
Exhibit B-1 Form of Term Note
Exhibit B-2 Form of Debt Service Letter of Credit Note
Exhibit C-1 Form of Legal Opinion of ▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇, PLLC
Exhibit C-2 Form of Legal Opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Exhibit C-3 Form of Legal Opinion of Vandeventer, Black,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
Exhibit C-4 Form of Legal Opinion of McGuire, Woods, Battle
& ▇▇▇▇▇▇
Exhibit D [intentionally omitted]
Exhibit E Form of Bank Assignment
Exhibit F Form of Loan Transfer Supplement
Exhibit G Form of Cogentrix Energy Indemnity Agreement
Exhibit H Form of Debt Service Letter of Credit
Exhibit I Form of Deed of Trust Amendment
Exhibit J Form of Pledge Agreement
Exhibit K Form of Ship Mortgage Amendment
Exhibit L Form of Security Agreement Amendment
Exhibit M Form of Third Amended and Restated Security
Deposit Agreement
Exhibit N Form of Subordination Provisions for Junior
Working Capital Loans
Exhibit O Form of Management Agreement Amendment
- vi -
8
THIRD AMENDED AND RESTATED LOAN AGREEMENT, dated as of
December 22, 1997, among (i) COGENTRIX VIRGINIA LEASING CORPORATION, a North
Carolina corporation (the "Borrower"), (ii) CREDIT LYONNAIS and each other
financial institution which becomes a party hereto pursuant to Section 10.6(c)
hereto (individually a "Lender" and collectively the "Lenders"), (iii) CREDIT
LYONNAIS, as the issuer of the Debt Service Letter of Credit referred to below
(in such capacity, the "Issuing Bank") and (iv) CREDIT LYONNAIS, as agent for
the Lenders and the Issuing Bank (in such capacity, the "Agent").
W I T N E S S E T H :
WHEREAS, the Borrower, The CIT Group/Equipment Financing. Inc.
("CIT"), The Sumitomo Bank, Limited, Chicago Branch ("Sumitomo"), Bank of
Montreal ("BMO"; collectively with CIT and Sumitomo, the "Transferor Lenders")
and CIT, as agent for the Transferor Lenders (in such capacity, the "Original
Agent") are parties to the Second Amended and Restated Loan Agreement, dated as
of May 22, 1992, as amended by the First Amendment thereto, dated as of December
15, 1993 (the "Existing Loan Agreement"), pursuant to which the Transferor
Lenders made Term Loans (capitalized terms being used herein with the respective
meanings specified therefor in Annex A) to the Borrower;
WHEREAS, Credit Lyonnais, immediately prior to this
Agreement's becoming effective pursuant hereto on the Third Restatement
Effective Date, will purchase the outstanding Term Loans made by the Transferor
Lenders and will assume all of the rights and obligations of the Transferor
Lenders under the Existing Loan Agreement;
WHEREAS, pursuant to subsection 9.9 of the Existing Loan
Agreement, CIT has notified the Transferor Lenders and the Borrower that it
shall resign as the Original Agent thereunder immediately prior to this
Agreement's becoming effective on the Third Restatement Effective Date; and
WHEREAS, the Agent is willing to assume the obligations and
responsibilities of the Original Agent under the Existing Loan Agreement; and
WHEREAS, the parties hereto mutually desire to amend the
Existing Loan Agreement to provide for, among other things, (i) the making by
the Lenders of the Additional Term Loans, (ii) the changing of the principal
amortization schedule for the Term Loans, (iii) the changing of the interest
rate in respect of the Term Loans, (iv) the extension of the maturity of the
Term Loans and (v) the issuance by the Issuing Bank of the Debt Service Letter
of Credit in favor of the Agent, and to restate the Existing Loan Agreement, as
so amended, in its entirety as hereinafter set forth;
9
2
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants herein contained and for other good and valuable consideration,
the receipt and adequacy of which is hereby acknowledged, each of the parties
hereto hereby agrees that, from and after the Third Restatement Effective Date,
the Existing Loan Agreement (including all Exhibits and Schedules thereto) shall
be, and the same hereby is, amended and restated in its entirety to read as
follows:
SECTION 1. TERM LOANS.
1.1 Term Loans. (a) Immediately prior to this Agreement's
becoming effective on the Third Restatement Effective Date, the Lenders shall
purchase all of the outstanding Term Loans from the Transferor Lenders pursuant
to the Bank Assignment, so that the outstanding Term Loan held by each Lender
(collectively, the "Existing Term Loans") shall be in the amount set forth
opposite such Lender's name in Column A of Schedule IX hereto.
(b) Subject to the terms and conditions of this Agreement,
each Lender agrees to make additional term loans to the Borrower on the Third
Restatement Effective Date and on up to seventeen (17) Borrowing Dates
thereafter during the Additional Term Loan Commitment Period in an aggregate
principal amount on each such date up to but not exceeding such Lender's
Available Additional Term Loan Commitment on such date (collectively, the
"Additional Term Loans"; the Existing Term Loans and the Additional Term Loans
being hereinafter collectively referred to as the "Term Loans").
(c) The Existing Term Loans on the Third Restatement Effective
Date and any Additional Term Loans made on the Third Restatement Effective Date
shall initially be Prime Rate Loans. Thereafter, subject to and upon the terms
and conditions of this Agreement, the Term Loans may from time to time be
Eurodollar Loans, CD Rate Loans or Prime Rate Loans or a combination thereof, as
determined by the Borrower and notified to the Agent in accordance with
subsection 2.4.
1.2 Procedure for Borrowing of Additional Term Loans. The
Borrower may borrow under the Total Additional Term Loan Commitment on the Third
Restatement Effective Date and on up to seventeen Borrowing Dates thereafter
during the Additional Term Loan Commitment Period, provided that the Borrower
shall give the Agent irrevocable notice (which notice must be received by the
Agent prior to 10:00 A.M., New York City time, on the Third Restatement
Effective Date, in the case of any requested borrowing on such date, and in any
other case (a) three Business Days prior to the requested Borrowing Date, if all
or any part of the requested Additional Term Loans are to be initially
Eurodollar Loans, (b) two Business Days prior to the requested Borrowing Date,
if all or any part of the requested Additional Term Loans are to be initially CD
Rate Loans, or (c) one Business
10
3
Day prior to the requested Borrowing Date, otherwise) by the delivery to the
Agent of a properly completed Borrowing Request, duly executed by a Responsible
Officer of the Borrower, specifying (i) the amount to be borrowed, (ii) the
requested Borrowing Date, (iii) whether the borrowing is to be of Eurodollar
Loans, Prime Rate Loans, CD Rate Loans or a combination thereof and (iv) if the
borrowing is to be entirely or partly of Eurodollar Loans or CD Rate Loans or a
combination thereof, the respective amounts of each such Type of Additional Term
Loan and the respective lengths of the initial Interest Periods therefor. Each
borrowing under the Additional Term Loan Commitments (other than on the Third
Restatement Effective Date) shall be in an amount equal to $1,000,000 or a whole
multiple of $1,000,000 in excess thereof. Upon receipt of any such notice from
the Borrower, the Agent shall promptly notify each Lender thereof. Each Lender
will make the amount of its pro rata share of each borrowing available to the
Agent for the account of the Borrower at the office of the Agent specified in
subsection 10.2 prior to 11:00 A.M., New York City time, on the Borrowing Date
requested by the Borrower in funds immediately available to the Agent. Such
borrowing will then be made available to the Borrower by the Agent by wire
transfer to the account specified by the Borrower in the Borrowing Request with
the aggregate of the amounts made available to the Agent by the Lenders and in
like funds as received by the Agent.
1.3 Term Notes. The Borrower shall issue to each Lender on the
Third Restatement Effective Date a promissory note substantially in the form of
Exhibit B-1 hereto with appropriate insertions (collectively, the "Term Notes"),
to evidence the Borrower's obligation to pay the principal of, and interest on,
the Term Loans made by such Lender. Each Term Note shall (a) be dated the Third
Restatement Effective Date, (b) be in a principal amount equal to the lesser of
(x) such Lender's Loan Percentage of the Total Permitted Term Loan Amount on the
Third Restatement Effective Date and (y) the aggregate unpaid principal amount
of all Term Loans made by such Lender, (c) bear interest on the unpaid principal
amount thereof as provided in Section 2 hereof and (d) be entitled to the
benefits of this Agreement and the Security Documents.
1.4 Repayment of Term Loans. The Borrower shall repay the Term
Loans in 19 consecutive quarterly installments on the 7th day of each March,
June, September and December, commencing on March 7, 1998, and on one
installment on the Final Payment Date (each such day on which an installment is
to be made, an "Installment Payment Date"), each such installment to be in an
amount equal to such Lender's Loan Percentage of the Term Loan Amortization
Amount for the Installment Payment Date on which such installment is payable.
1.5 Reduction of Total Permitted Term Loan Amount. The Total
Permitted Term Loan Amount shall automatically be reduced (a) on each
Installment Payment Date by the Reduction Amount for such Installment Payment
Date and (b) on each date on
11
4
which the Term Loans are prepaid pursuant to subsection 3.1(a) of the Loan
Agreement, by an amount equal to the sum of the principal amount of Term Loans
so prepaid on such date and (c) on each day on which the Total Additional Term
Loan Commitment is reduced pursuant to subsection 3.5(a) or (b), by an amount
equal to the amount of such reduction.
1.6 Reduction Amount Schedule. In the event that the Total
Additional Term Loan Commitment shall have been reduced pursuant to subsection
3.5(a) or (b), the parties hereto agree that Schedule VII shall be amended, in a
manner satisfactory to the Agent and the Borrower, to reduce the amount of each
Reduction Amount for the then remaining Installment Payment Dates on a pro rata
basis in an aggregate amount equal to the amount of such reduction in the Total
Additional Term Loan Commitment.
SECTION 2. INTEREST AND FEES.
2.1 Rate of Interest. (a) Eurodollar Loans shall bear interest
for each day during each Interest Period with respect thereto on the unpaid
principal amount thereof at a rate per annum equal to the Eurodollar Rate
determined for such day plus the Applicable Margin.
(b) CD Rate Loans shall bear interest for each day during each
Interest Period with respect thereto on the unpaid principal amount thereof at a
rate per annum equal to the CD Rate determined for each day plus the Applicable
Margin.
(c) Prime Rate Loans shall bear interest on the unpaid
principal amount thereof at a rate per annum equal to the Prime Rate plus the
Applicable Margin.
(d) If all or a portion of the principal amount of any of the
Loans shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), each Eurodollar Loan and CD Rate Loan shall be
converted to a Prime Rate Loan at the end of the Interest Period with respect
thereto. Any such overdue principal amount shall bear interest at a rate per
annum which is 2% above the rate which would otherwise be applicable pursuant to
subsection 2.1(a), (b) or (c) from the date of such non-payment until paid in
full (as well after as before judgment).
2.2 Interest Payment Dates. (a) Interest in respect of each
Prime Rate Loan shall be payable in arrears on each Installment Payment Date
commencing on the first such day to occur after any conversion of any Eurodollar
Loan or CD Rate Loan to a Prime Rate Loan pursuant to subsections 2.3, 2.4, 2.7
or 2.9 and at maturity (whether by acceleration or otherwise).
(b) Interest in respect of each Eurodollar Loan shall be
payable in arrears (i) as to any Eurodollar Loan in respect of which the
Borrower has selected an Interest Period of one or three months, on the last day
of the then applicable Interest
12
5
Period with respect thereto, (ii) as to any Eurodollar Loan in respect of which
the Borrower has selected an Interest Period of six, nine or twelve months, on
the day which is three months after the first day of such Interest Period and
the last day of each successive three month period thereafter, to and including
the last day of such Interest Period and (iii) at maturity (whether by
acceleration or otherwise).
(c) Interest in respect of each CD Rate Loan shall be payable
in arrears (i) as to any CD Rate Loan in respect of which the Borrower has
selected an Interest Period of 30, 60 or 90 days, on the last day of the then
applicable Interest Period with respect thereto, (ii) as to any CD Rate Loan in
respect of which the Borrower has selected an Interest Period of 180 or 360
days, on the day which is 90 days after the first day of such Interest Period
and the last day of each successive 90 day period thereafter, to and including
the last day of such Interest Period and (iii) at maturity (whether by
acceleration or otherwise).
2.3 Continuation of Eurodollar Loans and CD Rate Loans. Unless
the Borrower otherwise elects pursuant to the proviso of this sentence or
pursuant to subsection 2.4, the Borrower shall be deemed to have elected to
continue the then outstanding principal amount of any Eurodollar Loans or CD
Rate Loans at the expiration of the Interest Period with respect thereto as
Loans of the same Type having an Interest Period of the same duration as such
expiring Interest Period; provided, that the Borrower may elect to convert any
Eurodollar Loans or CD Rate Loans, on the last day of the then current Interest
Period with respect thereto, to Loans of the same Type having an Interest Period
of any other authorized duration by providing irrevocable notice to the Agent
not less than three Working Days prior to the last day of the then current
Interest Period with respect to such Eurodollar Loans or CD Rate Loans.
Notwithstanding anything to the contrary contained in this subsection 2.3, no
Eurodollar Loan or CD Rate Loan shall be continued as such when any Default or
Event of Default has occurred and is continuing, but shall be automatically
converted to a Prime Rate Loan on the last day of the then current Interest
Period with respect thereto. The Agent shall promptly notify the Borrower and
each of the Lenders that such automatic conversion contemplated by this
subsection 2.3 will occur.
2.4 Conversion of Loans. The Borrower may elect from time to
time to convert Loans which are Eurodollar Loans or CD Rate Loans to Prime Rate
Loans by giving the Agent at least three Working Days' prior irrevocable notice
of such election, provided that any such conversion of Eurodollar Loans or CD
Rate Loans to Prime Rate Loans shall only be made on the last day of an Interest
Period with respect thereto. The Borrower may elect from time to time to convert
Loans which are Prime Rate Loans or CD Rate Loans to Eurodollar Loans by giving
the Agent at least three Working Days prior irrevocable notice of such election
specifying the Interest Period selected with respect thereto. The Borrower may
elect from time to time to convert Loans (other than any Debt
13
6
Service Letter of Credit Loan) which are Prime Rate Loans or Eurodollar Loans to
CD Rate Loans by giving the Agent at least three Working Days prior irrevocable
notice of such election specifying the Interest Period selected with respect
thereto. Upon receipt of such notice, the Agent shall promptly notify each
Lender thereof. All or any part of outstanding Loans which are Eurodollar Loans,
CD Rate Loans or Prime Rate Loans may be converted as provided herein, provided
that no Loan may be converted into a Eurodollar Loan or CD Rate Loan when any
Default or Event of Default has occurred and is continuing.
2.5 Minimum Amounts of Tranches. All borrowings, payments,
prepayments and selections of Interest Periods hereunder shall be in such
amounts and be made pursuant to such elections so that, after giving effect
thereto, the aggregate principal amount of any Eurodollar Tranche or CD Rate
Tranche shall not be less than $1,000,000 (or the then remaining aggregate
outstanding principal amount of the Loans, if less than $1,000,000).
2.6 Computation of Interest. (a) Interest in respect of the
Eurodollar Loans and CD Rate Loans shall be calculated on the basis of a 360-day
year for the actual days elapsed and in respect of Prime Rate Loans on the basis
of 365 (366) days for the actual days elapsed. The Agent shall as soon as
practicable notify the Borrower and the Lenders of each determination of a
Eurodollar Rate or CD Rate. Any change in the interest rate on a Loan resulting
from a change in the Prime Rate, the Eurocurrency Reserve Requirement or the CD
Reserve Percentage shall become effective as of the opening of business on the
day on which such change in the Prime Rate is announced or such change in the
Eurocurrency Reserve Requirements or the CD Reserve Percentage shall become
effective, as the case may be. The Agent shall as soon as practicable notify the
Borrower, the Issuing Bank and the Lenders of the effective date and the amount
of each such change.
(b) Each determination of an interest rate by the Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower, the Issuing Bank and the Lenders in the absence of manifest error.
The Agent shall, at the request of the Borrower, deliver to the Borrower a
statement showing the quotations used by the Agent in determining any interest
rate pursuant to subsection 2.1(a) or (b).
2.7 Inability to Determine Interest Rate. In the event that:
(i) the Agent shall have determined (which determination
shall be conclusive and binding upon the Borrower) that, by reason of
circumstances affecting the interbank eurodollar market or the domestic
certificate of deposit market, adequate and reasonable means do not
exist for ascertaining the Eurodollar Rate or the CD Rate for any
requested Interest Period; or
14
7
(ii) the Agent shall have received notice prior to the
first day of such Interest Period from Lenders constituting the
Required Lenders that the interest rate determined pursuant to
subsection 2.1(a) or (b) for such Interest Period does not accurately
reflect the cost to such Lenders (as conclusively certified by such
Lenders) of making or maintaining their affected Loans during such
Interest Period;
then with respect to (a) proposed Loans that the Borrower has requested be made
as Eurodollar Loans or CD Rate Loans, as the case may be, or (b) the
continuation of Eurodollar Loans or CD Rate Loans, as the case may be, beyond
the expiration of the then current Interest Period with respect thereto, the
Agent shall forthwith give telecopy or telephonic notice of such determination
to the Borrower, the Issuing Bank and the Lenders at least one day prior to, as
the case may be, the requested borrowing date for such Eurodollar Loans or CD
Rate Loans, as the case may be, or the last day of such Interest Period. If such
notice is given (x) any requested Eurodollar Loans or CD Rate Loans, as the case
may be, shall be made as Prime Rate Loans, and (y) any outstanding Eurodollar
Loans or CD Rate Loans, as the case may be, shall be converted, on the last day
of the then current Interest Period with respect thereto, to Prime Rate Loans.
Until such notice has been withdrawn by the Agent, no further Eurodollar Loans
or CD Rate Loans, as the case may be, shall be made.
2.8 Pro Rata Treatment and Payments. Each payment (including
each prepayment) by the Borrower on account of principal of and interest on the
Term Loans shall be made pro rata according to the respective Loan Percentage of
each Lender. All payments (including prepayments) to be made to the Lenders by
the Borrower on account of principal, interest and fees shall be made without
set off or counterclaim and shall be made to the Agent, for the account of the
Lenders, at the Agent's office set forth in subsection 10.2, in lawful money of
the United States of America and in immediately available funds. The Agent shall
distribute such payments to the Lenders promptly upon receipt in like funds as
received. If any payment hereunder (other than payments on the Eurodollar Loans)
becomes due and payable on a day other than a Business Day, such payment shall
be extended to the next succeeding Business Day, and, with respect to payments
of principal, interest thereon shall be payable at the then applicable rate
during such extension. If any payment on a Eurodollar Loan becomes due and
payable on a day other than a Working Day, the maturity thereof shall be
extended to the next succeeding Working Day unless the result of such extension
would be to extend such payment into another calendar month in which event such
payment shall be made on the immediately preceding Working Day.
2.9 Illegality. Notwithstanding any other provisions hereof,
if any Requirement of Law or any change therein or in the interpretation or
application thereof shall make it unlawful for
15
8
any Financing Party to make or maintain Eurodollar Loans as contemplated by this
Agreement, (a) the commitment of such Financing Party hereunder to make
Eurodollar Loans shall forthwith be cancelled and (b) all or any portion of such
Financing Party's Loans then outstanding as Eurodollar Loans shall be converted
automatically to Prime Rate Loans on the respective last days of the then
current Interest Periods therefor or within such earlier period as required by
law. If any such prepayment or conversion of a Eurodollar Loan occurs on a day
which is not the last day of the current Interest Period with respect thereto,
the Borrower shall pay to such Financing Party such amounts, if any, as may be
required pursuant to subsection 2.12.
2.10 Requirements of Law. (a) In the event that any
Requirement of Law or any change therein or in the interpretation or application
thereof or compliance by any Lender with any request or directive (whether or
not having the force of law) from any central bank or other Governmental
Authority:
(i) does or shall subject any Lender to any tax (except for
taxes covered by subsection 2.11) of any kind whatsoever with respect
to this Agreement, any Term Note or any Eurodollar Loans or CD Rate
Loan made by it (except for taxes on the overall net income of such
Lender), or change the basis of taxation of payments to such Lender of
principal, interest or any other amount payable hereunder (except for
changes in the rate of tax on the overall net income of such Lender);
(ii) does or shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, or deposits or other liabilities in or for the
account of, advances or loans by, or other credit extended by, or any
other acquisition of funds by, any office of such Lender which are not
otherwise included in the determination of the Eurodollar Rate or CD
Rate;
(iii) does or shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by any amount which such Lender deems to be material, of making, renewing or
maintaining advances or extensions of credit or to reduce any amount receivable
hereunder, in each case in respect of its Eurodollar Loans or CD Rate Loans,
then, in any such case, the Borrower shall promptly pay such Lender, upon its
demand, any additional amounts necessary to compensate such Lender for such
additional cost or reduced amount receivable. If a Lender becomes entitled to
claim any additional amounts pursuant to this subsection, it shall promptly
notify the Borrower, through the Agent, of the event by reason of which it has
become so entitled. A certificate as to
16
9
any additional amounts payable pursuant to the foregoing sentence submitted by
such Lender, through the Agent, to the Borrower shall be conclusive in the
absence of manifest error. This covenant shall survive the termination of this
Agreement and payment of the outstanding Notes.
(b) In the event that any Lender shall have determined that
the adoption of any law, rule, regulation or guideline regarding capital
adequacy, or any change therein or in the interpretation or application thereof
or compliance by any Lender or any corporation controlling such Lender with any
request or directive regarding capital adequacy (whether or not having the force
of law) from any central bank or Governmental Authority, including, without
limitation, the issuance of any final rule, regulation or guideline, does or
shall have the effect of reducing the rate of return on such Lender's or such
corporation's capital as a consequence of its obligations hereunder to a level
below that which such Lender or such corporation could have achieved but for
such adoption, change or compliance (taking into consideration such Lender's or
such corporation's policies with respect to capital adequacy) by an amount
deemed by such Lender to be material, then from time to time, after submission
by such Lender to the Borrower (with a copy to the Agent) of a written request
therefor, the Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender for such reduction.
2.11 Taxes. (a) All payments made by the Borrower under this
Agreement shall be made free and clear of, and without reduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority excluding, in the case of the Agent and each other Financing Party,
net income and franchise taxes imposed on the Agent or such other Financing
Party by the jurisdiction under the laws of which the Agent or such other
Financing Party is organized or any political subdivision or taxing authority
thereof or therein, or by any jurisdiction in which such Financing Party's
Domestic Lending Office or Eurodollar Lending Office, as the case may be, is
located or any political subdivision or taxing authority thereof or therein (all
such non-excluded taxes, levies, imposts, deductions, charges or withholdings
being hereinafter called "Taxes"). If any Taxes are required to be withheld from
any amounts payable to the Agent or any other Financing Party hereunder or under
the Notes, the amounts so payable to the Agent or such other Financing Party
shall be increased to the extent necessary to yield to the Agent or such other
Financing Party (after payment of all Taxes) interest or any such other amounts
payable hereunder at the rates or in the amounts specified in this Agreement and
the Notes. Whenever any Taxes are payable by the Borrower, as promptly as
possible thereafter, the Borrower shall send to the Agent for its own account or
for the account of such other Financing Party, as the case may be, a certified
copy of an original official receipt
17
10
received by the Borrower showing payment thereof. If the Borrower fails to pay
any Taxes when due to the appropriate taxing authority or fails to remit to the
Agent the required receipts or other required documentary evidence, the Borrower
shall indemnify the Agent and the other Financing Parties for any incremental
taxes, interest or penalties that may become payable by the Agent or any other
Financing Party as a result of any such failure.
(b) The agreements in subsection 2.11(a) shall survive the
termination of this Agreement and the payment of the Notes and all other amounts
payable hereunder.
2.12 Indemnity. (a) The Borrower agrees to indemnify each
Financing Party and to hold each Financing Party harmless from any loss or
expense which such Financing Party may sustain or incur as a consequence of (i)
default by the Borrower in payment when due of the principal amount of or
interest on any Eurodollar Loans or CD Rate Loans, including, but not limited
to, any such loss or expense arising from interest or fees payable by such
Financing Party to lenders of funds obtained by it in order to maintain the
Eurodollar Loans or CD Rate Loans hereunder, (ii) default by the Borrower in
making a borrowing after the Borrower has given a notice of borrowing in
accordance with subsection 1.2, (iii) default by the Borrower in making any
prepayment after the Borrower has given a notice in accordance with subsection
3.1 or subsection 2A.4(h), as the case may be, (iv) default by the Borrower in
continuing any Eurodollar Loan or CD Rate Loan as such after the Borrower has
been deemed to have elected to continue such Eurodollar Loan or CD Rate Loan
pursuant to subsection 2.3 or (v) the making of a prepayment of a Eurodollar
Loan or a CD Rate Loan on a day which is not the last day of an Interest Period
with respect thereto, including, without limitation, any such loss or expense
arising from interest or fees payable by such Financing Party to lenders of
funds obtained by it in order to make or maintain the Eurodollar Loans or CD
Rate Loans hereunder. This covenant shall survive termination of this Agreement
and payment of the outstanding Notes.
(b) The Borrower agrees to indemnify each Interest Hedging
Counterparty and each Financing Party, and to hold each Interest Hedging
Counterparty and each Financing Party harmless from, any loss or expense which
such Person may sustain or incur as a result of the early termination of any
Interest Rate Protection Agreement or any modification to or amendment of any
Interest Rate Protection Agreement. This covenant shall survive the termination
of this Agreement and payment of the Loans.
2.13 Fees. (a) The Borrower agrees to pay to the Agent an
administration fee of $40,000 per annum for the period from the Third
Restatement Effective Date to the date that this Agreement shall be terminated
and all of the Obligations paid in full (the "Administration Fee"). The
Administration Fee shall be payable on the Third Restatement Effective Date and
on each anniversary of such date; provided, that no Administration Fee
18
11
shall be payable on the anniversary of such date immediately preceding the Final
Payment Date except that, in the event that on the Final Payment Date, this
Agreement shall not have been terminated and all of the Obligations paid in
full, the Administration Fee shall be payable on the Final Payment Date and each
anniversary thereafter of the Third Restatement Effective Date until this
Agreement shall have been terminated and all of the Obligations paid in full.
(b) The Borrower agrees to pay, on the Third Restatement
Effective Date, to Credit Lyonnais for its own account an up-front fee in the
amount heretofore agreed between the Borrower and Credit Lyonnais.
(c) The Borrower agrees to pay to the Agent for the account of
each Lender a commitment fee (the "Commitment Fee") for the period from and
including the Third Restatement Effective Date to the Final Payment Date,
computed at the rate of 1/4th of 1% per annum on the average daily amount of the
Available Additional Term Loan Commitment of such Lender during the period for
which payment is made, payable quarterly in arrears on the seventh day of each
March, June, September and December and on the Final Payment Date or such
earlier date as the Total Additional Term Loan Commitment shall terminate and be
reduced to zero as provided herein, commencing on the first of such dates to
occur after the date hereof.
2.14 Maximum Interest. Anything in this Agreement or the Notes
to the contrary notwithstanding, the interest rate on any Loan or any other
amount payable under this Agreement or any Security Document shall in no event
be in excess of the maximum permitted by applicable law; provided that, to the
extent permitted by applicable law, in the event that interest is not collected
as a result of the operation of this subsection 2.14 and interest thereafter
payable pursuant to this Agreement or the Notes shall be less than such maximum
amount, then such interest thereafter payable shall be increased up to such
maximum amount to the extent necessary to recover the amount of interest, if
any, theretofore uncollected as a result of the operation of this subsection
2.14. In determining whether or not any interest payable under this Agreement or
the Notes exceeds the maximum rate permitted by applicable law, any
non-principal payment, except payments specifically stated to be "interest,"
shall be deemed, to the extent permitted by applicable law, to be a fee, expense
reimbursement or premium rather than interest.
SECTION 2A. DEBT SERVICE LETTER OF CREDIT
2A.1 Issuance of Debt Service Letter of Credit. The Issuing
Bank shall issue on the Third Restatement Effective Date, upon the terms and
subject to the conditions hereunder, the Debt Service Letter of Credit in favor
of the Agent for the benefit of the Lenders and the Issuing Bank. The Debt
Service Letter of Credit shall expire upon the first to occur of (a) the close
of
19
12
business on the Final Payment Date, (b) the payment in full of the Term Loans
and all accrued and unpaid interest thereon, (c) the Issuing Bank's receipt of
written notice from the Agent to the effect that the Agent has accepted a letter
of credit or an alternate form of security provided by the Borrower and
acceptable to the Agent as a substitute for the Debt Service Letter of Credit,
(d) any drawing of the Debt Service Letter of Credit subsequent to the
occurrence of an Acceleration Event, as defined below, and (e) such earlier time
and date as the Agent, the Issuing Bank and the Borrower shall otherwise agree.
The date on which the Debt Service Letter of Credit shall expire is herein
referred to as the "Expiration Date." "Acceleration Event" shall mean any event
resulting in the acceleration of the maturity of the entire unpaid principal
amount of the Loans, causing all such principal and all accrued and unpaid
interest thereon to become immediately due and payable, pursuant to the
provisions of Section 8 of this Agreement.
2A.2 Available Amount. It is understood and agreed that the
Issuing Bank shall not have any obligation to pay any draft presented by the
Agent under the Debt Service Letter of Credit if the amount of such draft shall
exceed the Available Amount (as defined below) as of the date of payment of such
draft. "Available Amount" shall mean, as of any date, the amount by which the
Required Stated Amount exceeds the aggregate outstanding principal amount of all
Debt Service Letter of Credit Loans as of such date.
2A.3 Debt Service Letter of Credit Operations. The Issuing
Bank shall, as soon as practicable following its receipt of any draft and
accompanying documents purporting to represent a demand for payment under the
Debt Service Letter of Credit, (a) examine such draft and accompanying documents
to confirm that the same appear on their face to comply with the terms and
conditions of the Debt Service Letter of Credit and (b) give written or telecopy
notice to the Borrower (i) of such demand for payment and the determination by
the Issuing Bank as to whether such demand for payment was in accordance with
the terms and conditions of the Debt Service Letter of Credit and (ii) if such
demand was so in accordance, that the Issuing Bank will make a disbursement
under the Debt Service Letter of Credit on the date of such receipt or, if
permitted by the Debt Service Letter of Credit, the next Business Day
thereafter; provided, however, that the failure to give such notice shall not
relieve the Borrower of its obligation to reimburse the Issuing Bank for such
disbursement.
2A.4 Agreement To Repay Debt Service Letter of Credit
Disbursements. (a) Each payment by the Issuing Bank of any drawing under the
Debt Service Letter of Credit shall constitute a term loan (a "Debt Service
Letter of Credit Loan") made by the Issuing Bank to the Borrower on the date of
such payment in a principal amount equal to the amount of such drawing. Each
Debt Service Letter of Credit Loan shall be a Prime Rate Loan on the date made.
Thereafter, subject to and upon the terms of this
20
13
Agreement, the Debt Service Letter of Credit Loans may from time to time be
Eurodollar Loans, Prime Rate Loans or any combination thereof, as determined by
the Borrower and notified to the Agent in accordance with subsection 2.3 or 2.4.
(b) Interest shall accrue on the outstanding Debt Service
Letter of Credit Loans as provided for and at the rates specified in subsection
2.1 and in addition to being payable on each date as specified in subsection 2.2
shall be payable on (i) each date on which a transfer is required to be made
pursuant to clause "first" of Section 4.02 of the Security Deposit Agreement
commencing on the first such date to occur after the Third Restatement Effective
Date and (ii) the Expiration Date.
(c) Each payment of interest hereunder shall be paid in
Dollars and in immediately available funds in accordance with subsection
2A.4(i).
(d) If the Borrower shall fail to make any payment due
hereunder to the Issuing Bank or under the Debt Service Letter of Credit Note
when due, it shall, on demand from time to time, pay interest on such defaulted
amount (to the extent permitted by law) to the date of actual payment (after as
well as before judgment) at the applicable rate as specified in subsection 3.2.
(e) The Debt Service Letter of Credit Loans shall be evidenced
by a single note, substantially in the form of Exhibit B-2 with the blanks
appropriately filled (the "Debt Service Letter of Credit Note"), dated the Third
Restatement Effective Date, in the principal amount of the Required Stated
Amount. The Debt Service Letter of Credit Note shall be duly executed and
delivered by the Borrower on or prior to the Third Restatement Effective Date
and payable to the order of the Issuing Bank. The Issuing Bank shall, and is
hereby irrevocably authorized by the Borrower to, endorse Schedule A (or any
continuation thereof) to the Debt Service Letter of Credit Note to evidence the
related Debt Service Letter of Credit Loan or Loans and each payment of
principal of and interest on such Debt Service Letter of Credit Loan or Loans.
The endorsements made by the Issuing Bank to Schedule A (or any continuation
thereof) to any Debt Service Letter of Credit Note shall be conclusive evidence
of the outstanding aggregate principal amount owing to the Issuing Bank with
respect to such Debt Service Letter of Credit Note and the related Debt Service
Letter of Credit Loan or Loans in the absence of manifest error; provided,
however, that the Borrower's obligations to make payments of principal and
interest in respect of Debt Service Letter of Credit Loans in accordance with
the terms of this Agreement and the Debt Service Letter of Credit Note shall not
be affected by any failure to endorse Schedule A to any Debt Service Letter of
Credit Note correctly or at all.
(f) All Debt Service Letter of Credit Loans shall be due and
payable on the Expiration Date, and the Borrower shall pay the entire
outstanding principal amount of the Debt Service
21
14
Letter of Credit Loans, together with all accrued and unpaid interest thereon,
on such date.
(g) The Borrower shall cause any amount to be distributed to
the Issuing Bank on any date pursuant to clause "first" of Section 4.02 of the
Security Deposit Agreement to be applied forthwith to prepay the Debt Service
Letter of Credit Loans. Any such prepayment shall be without premium or penalty.
(h) The Borrower shall have the right at any time and from
time to time to prepay the Debt Service Letter of Credit Loans, in whole or in
part, upon at least five Business Days' prior written notice to the Issuing
Bank. Any partial prepayment of Debt Service Letter of Credit Loans shall be in
an amount that is an integral multiple of $10,000 and not less than $50,000.
Each notice of prepayment shall specify the prepayment date and the principal
amount of the Debt Service Letter of Credit Loan (or portion thereof) to be
prepaid, shall be irrevocable and shall commit the Borrower to prepay such
amount on such prepayment date. All prepayments under this paragraph (h) shall
be accompanied by all accrued and unpaid interest on the principal amount being
prepaid to the date of prepayment. Any such prepayment shall be without premium
or penalty.
(i) The Borrower shall make or cause the Security Agent to
make each payment or prepayment due hereunder to the Issuing Bank (including
principal of or interest on the Debt Service Letter of Credit Note or any fees
or other amounts) not later than 12:00 Noon, New York City time, on the date
when due, to the Issuing Bank at the Issuing Bank's office set forth in
subsection 10.2 in Dollars and in immediately available funds.
Any such payment or prepayment shall be made without set-off or counterclaim.
(j) If any payment to be made hereunder to the Issuing Bank or
under the Debt Service Letter of Credit Note shall 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 be included in computing interest in connection
with such payment.
(k) The Borrower's obligation to repay the Issuing Bank for
all payments and disbursements made by the Issuing Bank under the Debt Service
Letter of Credit and to pay all interest, fees and other amounts payable
hereunder shall be absolute, unconditional and irrevocable under any and all
circumstances and irrespective of: (i) any lack of validity or enforceability of
this Agreement or the Debt Service Letter of Credit; (ii) any amendment or
waiver of, or consent to departure from, this Agreement or the Debt Service
Letter of Credit; (iii) the existence of any claim, setoff, defense or other
right which the Borrower or any other Person may at any time have against any
Financing Party (other than a defense based on the gross negligence or wilful
misconduct of the Issuing Bank) or any other Person in connection with this
Agreement, the Debt Service Letter
22
15
of Credit or any other agreement or transaction; (iv) any draft or other
document presented under the Debt Service Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect; or (v) payment by the Issuing Bank
under the Debt Service Letter of Credit against presentation of a draft or other
document which does not comply with the terms of the Debt Service Letter of
Credit, provided that such payment shall not have constituted gross negligence
or wilful misconduct of the Issuing Bank.
(l) It is understood that in making any payment or
disbursement under the Debt Service Letter of Credit, the following shall not be
deemed to constitute gross negligence or wilful misconduct of the Issuing Bank:
(x) the Issuing Bank's exclusive reliance on the documents presented to it by
the Agent under the Debt Service Letter of Credit as to any and all matters set
forth therein, including, without limitation, reliance on the amount of the
draft presented under the Debt Service Letter of Credit, whether or not any
document presented pursuant to the Debt Service Letter of Credit proves to be
insufficient in any respect, if such document on its face appears to be in
order, and whether or not any draft or other document presented pursuant to the
Debt Service Letter of Credit proves to be forged or invalid or any statement
therein proves to be inaccurate or untrue in any respect whatsoever and (y) any
noncompliance in any immaterial respect of the documents presented under the
Debt Service Letter of Credit with the terms thereof.
2A.5 Application of Payments. Each cash payment received
hereunder by the Issuing Bank shall be applied in the following order of
priority:
(a) first, to the payment of (i) any fee (including the Debt
Service Letter of Credit Fee) or expense of the Issuing Bank required
to be paid or reimbursed by the terms hereof or of any other Project
Document, (ii) accrued and unpaid interest on the Debt Service Letter
of Credit Loans and (iii) any amount (other than amounts referred to in
clause (b) below) required to be paid or reimbursed by the terms
hereof; and
(b) second, to the payment of the principal of the Debt
Service Letter of Credit Loans.
2A.6 Debt Service Letter of Credit Fee. The Borrower agrees to
pay the Issuing Bank, on each Installment Payment Date, a fee (a "Debt Service
Letter of Credit Fee") of 1.500% per annum on the average daily Available Amount
during the preceding three-month period (or shorter period commencing with the
Third Restatement Effective Date or ending with the Expiration Date). The Debt
Service Letter of Credit Fee shall commence to accrue on the Third Restatement
Effective Date and shall cease to accrue on the Expiration Date and shall be
computed on the basis of the actual number of days elapsed over a year of 365 or
366 (as the
23
16
case may be) days. Once paid, the Debt Service Letter of Credit Fee shall not be
refundable under any circumstances whatsoever.
2A.7 Effect of Event of Default. The Debt Service Letter of
Credit shall not be terminated or accelerated as a result of an Event of
Default, and the Issuing Bank shall continue to honor demands for payment made
by the Agent under the Debt Service Letter of Credit in accordance with its
terms. The exercise of remedies by the Issuing Bank pursuant to this Agreement
or any other Project Document shall not affect the Agent's ability to demand
payments under the Debt Service Letter of Credit or the Issuing Bank's
obligations thereunder in respect of such demands.
2A.8 Obligations Absolute. All sums payable by the Borrower to
the Issuing Bank hereunder shall be paid without presentment, demand, protest or
other notice of any kind, all of which are hereby expressly waived, anything
contained herein or in the Debt Service Letter of Credit Note or in any of the
other Project Documents to the contrary notwithstanding. The obligations and
liabilities of the Borrower to the Issuing Bank hereunder shall in no way be
released, discharged or otherwise affected (except as may be expressly provided
herein) for any reason, including without limitation: (a) any bankruptcy,
insolvency, reorganization, composition, adjustment, dissolution, liquidation or
other like proceeding relating to the Issuing Bank, the Borrower, the Agent or
any other Person, or any action taken with respect to any Project Document by
any trustee or receiver of the Issuing Bank, the Borrower, the Agent or any
other Person, or by any court; (b) any default or failure on the part of the
Issuing Bank to perform or comply with any of the terms hereof or of any other
agreement; or (c) any other occurrence whatsoever, whether similar or dissimilar
to the foregoing, whether or not the Borrower shall have notice or knowledge of
any of the foregoing. Except as expressly provided herein, the Borrower, to the
extent permitted by law, waives all rights now or hereafter conferred by statute
or otherwise to any abatement, suspension, deferment, diminution or reduction of
any sum payable by the Borrower hereunder.
2A.9 Survival of Agreements, Representations and Warranties,
Etc. All warranties, representations and covenants made by the Borrower in this
Agreement or in any certificate or other instrument delivered by the Borrower or
on its behalf in connection with this Agreement shall be considered to have been
relied upon by the Issuing Bank and shall survive the issuance of the Debt
Service Letter of Credit, the making of the Debt Service Letter of Credit Loans
herein contemplated and the issuance and delivery to the Issuing Bank of the
Debt Service Letter of Credit Note, regardless of any investigation made by the
Issuing Bank or on its behalf, and shall continue in full force and effect until
all amounts due or to become due hereunder and on the Debt Service Letter of
Credit Note shall have been paid in full.
24
17
2A.10 Increased Costs. (a) If after the date of this Agreement
any change in law, rule or regulation or the enforcement, interpretation or
administration thereof (whether or not having force of law) by any Governmental
Authority, central bank or comparable agency charged with the enforcement or
interpretation or administration thereof shall (i) impose, modify or deem
applicable any reserve, special deposit or similar requirement against assets
of, deposits with or for the account of, credit extended by, or letters of
credit issued by the Issuing Bank, (ii) subject extensions of credit or letters
of credit issued by the Issuing Bank to any assessment or other cost imposed by
the Federal Deposit Insurance Corporation or any successor thereto or (iii)
impose on the Issuing Bank any other or similar condition regarding this
Agreement, the Debt Service Letter of Credit Loans or the Debt Service Letter of
Credit, and the result of any event referred to in clause (i), (ii) or (iii)
above shall be (A) to increase the cost to the Issuing Bank of agreeing to
issue, issuing or maintaining the Debt Service Letter of Credit or funding (or
agreeing to fund) drawings under the Debt Service Letter of Credit or of making
or maintaining any Debt Service Letter of Credit Loan or (B) to reduce the
amount of any sum received or receivable by the Issuing Bank hereunder or under
the Debt Service Letter of Credit Note, then the Issuing Bank shall promptly
notify the Borrower in writing of such increase or reduction in a certificate
certified by an officer of the Issuing Bank, setting forth in reasonable detail
such increased cost incurred or reduction suffered by the Issuing Bank, and
shall demand payment of such additional amounts as will compensate the Issuing
Bank for such increased cost incurred or reduction suffered. On the first
Monthly Distribution Date to occur after receipt of demand from the Issuing
Bank, the Borrower shall pay to the Issuing Bank the additional amounts
specified in the notice to compensate the Issuing Bank for such increased cost
or reduction from the date of such change. The notification from the Issuing
Bank to the Borrower described above shall, absent manifest error, be conclusive
and binding as to the amounts to be paid by the Borrower pursuant to this
paragraph (a) and for all other purposes.
(b) If the costs specified in paragraph (a) of this subsection
2A.10 are to be incurred on a continuing basis and the Borrower shall have been
so notified by the Issuing Bank in writing as to the amount thereof, such costs
shall be paid to the Issuing Bank by the Borrower in arrears on each Monthly
Distribution Date. The Issuing Bank shall notify the Borrower of any subsequent
change in the amount of such costs.
(c) The agreements set forth in this subsection 2A.10 shall
survive the termination of this Agreement and the payment in full of the Loans
and its other obligations hereunder and under the Notes.
25
18
SECTION 3. PAYMENTS, ETC.
3.1 Prepayments. (a) Mandatory. (i) If an Event of Loss shall
occur, on the earlier of (i) the date occurring 90 days after the date of such
Event of Loss and (ii) the date on which the insurance proceeds are received
with respect to such Event of Loss, the Borrower shall prepay in full the unpaid
principal amount of the then outstanding Loans, together with accrued interest
thereon to the date of prepayment and all other amounts owing hereunder and
under the Security Documents.
(ii) If any of the conditions to the payment by the Borrower
of Restricted Payments set forth in subsection 7.4 hereof are unsatisfied on six
consecutive Quarterly Distribution Dates, the Borrower shall, on the Borrower
Distribution Date immediately succeeding the last such Quarterly Distribution
Date, prepay the Term Loans in an amount equal to the aggregate amount then on
deposit in the Borrower's Security Account less the amount transferred on such
date from the Borrower's Security Account to optionally prepay the Term Loans
pursuant to subsection 3.1(b)(ii).
(iii) The Borrower shall prepay the Term Loans to the extent
of any net cash proceeds from sales of assets pursuant to subsection 10.8(b).
(b) Optional. (i) On any Borrower Distribution Date the
Borrower may, at its option from cash made available on such date to the
Borrower pursuant to clause "seventh" of Section 4.07 of the Security Deposit
Agreement, prepay the Term Loans, without premium or penalty, in whole or in
part, together with accrued interest thereon to the date of prepayment;
provided, that the Borrower may prepay the Term Loans in whole (but not in part)
on any Business Day so long as the Borrower shall on the same such day pay in
full all of the other Obligations and reduce pursuant to subsection 3.5(b) the
Total Additional Term Loan Commitment to zero.
(ii) On any Borrower Distribution Date, the Borrower may
request the Security Agent to transfer from the Borrower's Security Account on
such date to the Agent pursuant to Section 4.12 of the Security Deposit
Agreement an amount not exceeding the Optional Prepayment Cap for the
three-month period ending on the Installment Payment Date immediately preceding
such Borrower Distribution Date, and the Agent shall apply the amount so
transferred to it to the prepayment, without premium or penalty, of the
outstanding principal amount of the Term Loans, together with accrued interest
on the principal amount so prepaid to the date of prepayment.
(iii) Any optional prepayment of the Term Loans shall be in
an aggregate principal amount equal to $1,000,000 or a whole multiple of
$1,000,000 in excess thereof. Except as provided in this subsection 3.1(b), the
Borrower may not prepay the Term Loans at its option.
26
19
(c) Notice and Application. The Borrower shall give the Agent
(which shall promptly notify each Lender) at least one Business Day's notice of
each prepayment pursuant to subsection 3.1(a) or (b) setting forth the date and
amount thereof. Partial prepayments of the Loans shall be applied first to any
Prime Rate Loans then outstanding and secondly, to the extent of any excess, to
the CD Rate Loans and Eurodollar Loans then outstanding, pro rata according to
the respective outstanding aggregate principal amounts of each such Type of
Loan; provided that prepayments of Eurodollar Loans and CD Rate Loans, if not on
the last day of the Interest Period with respect thereto, shall, at the
Borrower's option, be either (x) prepaid subject to the provisions of subsection
2.12 or (y) an amount equal to the amount of such prepayment shall be deposited
with the Agent as cash collateral for the Loans on terms reasonably satisfactory
to the Required Lenders and thereafter shall be applied to the prepayment of the
Loans in the order of the Interest Periods next ending most closely to the date
of deposit of such amount and on the last day of each such Interest Period.
3.2 Overdue Payments. Overdue principal of all Loans shall
bear interest as specified in subsection 2.1(d). All other overdue payments
hereunder or under the Notes, including overdue payments of interest, shall bear
interest until paid in full (both before and after judgment), payable on demand,
at a rate per annum equal to the Default Rate.
3.3 Computation of Time Periods. As used in this Agreement
with respect to the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including" and each of the
words "to" and "until" means "to but not including". All computations of
interest and of commitment fees shall be made by the Agent.
3.4 Right to Set off. Any deposits or other sums at any time
credited by or due from any Financing Party and any securities or other property
of the Borrower in the possession of such Financing Party may at all times be
treated as collateral security for the payment of the Notes and all other
obligations of the Borrower to the Financing Parties under this Agreement and
the Security Documents. Regardless of the adequacy of any collateral, any such
deposits or other sums credited by or due from such Financing Party to the
Borrower may be applied to or setoff against the Borrower's obligations to the
Financing Parties under the Notes and this Agreement and the Security Documents
at any time after the occurrence and during the continuance of any Event of
Default. The parties hereto agree that, if, as a result of the foregoing rights,
any Financing Party shall be entitled to apply or set-off any such deposits or
other sums, such application or set-off shall be made against the obligations of
the Borrower to the Financing Parties in the same ratio as the ratio of the then
outstanding principal amounts of their respective Loans shall bear to each
other, and the Financing Party so applying or setting off shall forthwith pay to
the other Financing Parties and will, in the event it has
27
20
previously received payment on account of any such deposits or other sums
pursuant to the immediately preceding sentence, forthwith repay to such
Financing Parties its allocable share (determined as provided in the immediately
preceding sentence) of any such amounts so required to be returned or repaid.
3.5 Total Additional Term Loan Commitment Reductions.
(a) Mandatory. (i) If an Event of Loss shall occur, the Total
Additional Term Loan Commitment shall immediately be permanently terminated and
reduced to zero.
(ii) On the date that the Total Additional Term Loan
Commitment shall be reduced to zero, the Total Additional Term Loan Commitment
shall immediately be permanently terminated and permanently reduced to zero.
(iii) On the date, if any, on which the Borrower shall have
made its seventeenth borrowing of Additional Term Loans hereunder (not including
any such borrowing on the Third Restatement Effective Date), immediately after
such borrowing, the Total Additional Term Loan Commitment shall permanently be
terminated and reduced to zero.
(b) Optional. The Borrower shall have the right, upon not less
than five Business Days' notice to the Agent, to terminate the Total Additional
Term Loan Commitment or, from time to time, to reduce the amount of the Total
Additional Term Loan Commitment. Any such reduction shall be in an amount equal
to $10,000,000 or a whole multiple thereof and shall reduce permanently the
Total Additional Term Loan Commitment then in effect.
SECTION 4. CONDITIONS PRECEDENT.
4.1 Conditions to Effectiveness. This Third Amended and
Restated Loan Agreement shall become effective on the date (such date being
herein called the "Third Restatement Effective Date") each of the following
conditions have been fulfilled in a manner satisfactory to the Financing
Parties:
(a) Agreement. The Agent shall have received counterparts of
this Third Amended and Restated Loan Agreement, duly executed and
delivered by the Borrower and each Financing Party.
(b) Deed of Trust Amendment. The Agent shall have received the
Deed of Trust Amendment No. 5, duly executed and delivered by the
Borrower, and the Deed of Trust Amendment No. 5 shall have been duly
recorded in the real estate records of the City of Portsmouth,
Virginia.
28
21
(c) Pledge Agreement. The Agent shall have received the Pledge
Agreement, duly executed and delivered by the Parent, along with
certificates evidencing the stock pledged thereunder and executed but
undated stock powers, with respect thereto.
(d) Security Agreement Amendment. The Agent shall have
received the Security Agreement Amendment, duly executed and delivered
by the Borrower.
(e) Security Deposit Agreement. The Agent shall have received
the Security Deposit Agreement, duly executed and delivered by each of
the parties thereto.
(f) Existing Interest Rate Protection Agreements. The Agent
shall have received evidence satisfactory to it that the Borrower shall
have terminated, or otherwise has been relieved of all of its
obligations under, all Interest Rate Protection Agreements (as defined
in the Existing Loan Agreement) in effect on the Third Restatement
Effective Date and shall have paid in full all amounts owing by it
thereunder.
(g) Ship Mortgage Amendment. The Ship Mortgage Amendment shall
have been duly executed and delivered by the Borrower and filed with
the Office of the United States Coast Guard National Vessel
Documentation Center for recording with such office.
(h) Management Agreement Amendment. The Agent shall have
received the Management Agreement Amendment, duly executed and
delivered by the parties thereto.
(i) Title Insurance; Survey. The Agent shall have received a
mortgagee's title insurance policy satisfactory to the Agent (i) in the
amount of $116,000,000, (ii) dated the Third Restatement Effective
Date, (iii) indicating that there are no Liens affecting the Project
(except Permitted Liens other than judgment liens and such Liens, if
any, as may have been approved in writing by the Agent) and (iv)
indicating that there are no survey exceptions not theretofore approved
by the Agent in writing. The Agent shall have received an "as built"
survey of the site by a licensed surveyor satisfactory to the Agent and
the title insurance company issuing such endorsement, showing no state
of facts unsatisfactory to the Agent. The Agent shall have received
evidence that the premium in respect of such endorsement shall have
been paid.
(j) Cogentrix Energy Indemnity Agreement. The Agent shall have
received the Cogentrix Energy Indemnity Agreement, duly executed and
delivered by the parties thereto.
29
22
(k) Power Purchaser Consent. The Agent shall have received the
Power Purchaser Consent, duly executed and delivered by the Power
Purchaser.
(l) Corporate Proceedings of the Borrower. The Agent shall
have received a copy of the resolutions, in form and substance
satisfactory to the Agent, of the Board of Directors of the Borrower
authorizing (i) the execution, delivery and performance of this Third
Amended and Restated Loan Agreement, the Notes, the Security Agreement
Amendment, the Deed of Trust Amendment No. 5, the Security Deposit
Agreement, the Management Agreement Amendment and the Ship Mortgage
Amendment, (ii) borrowings provided for in this Third Amended and
Restated Loan Agreement and (iii) the consummation of the transactions
contemplated hereby and thereby. Such resolutions shall be certified by
the Secretary or an Assistant Secretary of the Borrower as being true,
correct and complete and in full force and effect on and as of the
Third Restatement Effective Date.
(m) Incumbency Certificate of the Borrower. The Agent shall
have received a certificate of the Secretary or an Assistant Secretary
of the Borrower, dated the Third Restatement Effective Date, as to the
incumbency and signature of the officer or officers signing this Third
Amended and Restated Loan Agreement, the Notes, the Security Agreement
Amendment, the Deed of Trust Amendment No.5, the Security Deposit
Agreement, the Management Agreement Amendment and the Ship Mortgage
Amendment, as the case may be, and any other agreement, document or
certificate to be delivered by the Borrower pursuant hereto, together
with evidence of the incumbency of such Secretary or Assistant
Secretary.
(n) Corporate Proceedings of the Parent. The Agent shall have
received a copy of the resolutions, in form and substance satisfactory
to the Agent, of the Board of Directors of the Parent authorizing (i)
the execution, delivery and performance of the Pledge Agreement and
(ii) the consummation of the transactions contemplated hereby and
thereby. Such resolutions shall be certified by the Secretary or an
Assistant Secretary of the Parent as being true, correct and complete
and in full force and effect on and as of the Third Restatement
Effective Date.
(o) Incumbency Certificate of the Parent. The Agent shall have
received a certificate of the Secretary or an Assistant Secretary of
the Parent, dated the Third Restatement Effective Date, as to the
incumbency and signature of the officer or officers signing the Pledge
Agreement and any other agreement, document or certificate to be
delivered by the Parent pursuant hereto, together with evidence of the
incumbency of such Secretary or Assistant Secretary.
30
23
(p) Corporate Proceedings of Cogentrix Energy. The Agent shall
have received a copy of the resolutions, in form and substance
satisfactory to the Agent, of the Board of Directors of Cogentrix
Energy authorizing (i) the execution, delivery and performance of the
Cogentrix Energy Indemnity Agreement and the Management Agreement
Amendment and (ii) the consummation of the transactions contemplated
hereby and thereby. Such resolutions shall be certified by the
Secretary or an Assistant Secretary of Cogentrix Energy as being true,
correct and complete and in full force and effect on and as of the
Third Restatement Effective Date.
(q) Incumbency Certificate of Cogentrix Energy. The Agent
shall have received a certificate of the Secretary or an Assistant
Secretary of Cogentrix Energy, dated the Third Restatement Effective
Date, as to the incumbency and signature of the officer or officers
signing the Cogentrix Energy Indemnity Agreement and the Management
Agreement Amendment, and any other agreement, document or certificate
to be delivered by Cogentrix Energy pursuant hereto, together with
evidence of the incumbency of such Secretary or Assistant Secretary.
(r) Legal Opinions. There shall have been delivered to the
Agent and addressed to the Agent and the other Financing Parties the
following opinions of counsel, each dated the Third Restatement
Effective Date and each in form and substance satisfactory to the
Agent:
(i) an opinion of ▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇, PLLC,
counsel for the Borrower, the Parent and Cogentrix Energy,
substantially in the form of Exhibit C-1;
(ii) an opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special New
York counsel for the Borrower, the Parent and Cogentrix
Energy, substantially in the form of Exhibit C-2;
(iii) an opinion of Vandeventer, Black, ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇, special Virginia and admiralty counsel for the
Borrower, the Parent and Cogentrix Energy, substantially in
the form of Exhibit C-3; and
(iv) an opinion of McGuire, Woods, Battle &
▇▇▇▇▇▇, special real estate counsel for the Agent,
substantially in the form of Exhibit C-4.
(s) No Default. No Default or Event of Default shall have
occurred and be continuing as of the Third Restatement Effective Date.
(t) Representations and Waranties. The representations and
warranties contained in Section 5 of this Agreement or which are
contained in any certificate, document or financial or other statement
furnished at any time under or in connection with this Agreement shall
be
31
24
true and correct on and as of the Third Restatement Effective Date as
if made on such date.
(u) Responsible Officer's Certificate. The Agent shall have
received a certificate, dated the Third Restatement Effective Date, of
a Responsible Officer of the Borrower to the effect set forth in
paragraphs (s) and (t) above.
(v) Certificate of Ownership and Abstract of Title. The Agent
shall have received a copy of the Certificate of Documentation and a
copy of the Abstract of Title of the Barge, indicating that the Barge
is owned by the Borrower free and clear of all recorded Liens other
than the Ship Mortgage.
(w) Certificates. The Agent shall have received the insurance
broker's certificate as required by the terms of the Ship Mortgage.
(x) Evidence of Insurance. The Financing Parties shall have
received evidence satisfactory to the Financing Parties of the
existence of the insurance specified in subsection 6.7 and of the
designation of the Agent and each other Financing Party as named
insured or loss payee, as the case may be, with respect thereto
accompanied by a certificate of the insurance broker arranging such
insurance stating that all insurance required hereunder has been
obtained and that such insurance is of the type usual and customary for
transactions similar to the transactions contemplated by this
Agreement.
(y) Bank Assignment. The Bank Assignment shall have been duly
executed and delivered by the parties thereto effecting the transfers
of the Existing Term Loans contemplated thereby.
(z) Assigned Contracts; Consents. The Agent shall have
received, with a copy for each other Financing Party, a true and
complete copy of each Assigned Contract and each Consent, certified as
such on the Third Restatement Effective Date by a Responsible Officer
of the Borrower.
(aa) Insurance Advisor's Report. The Financing Parties shall
have received the report of the Insurance Advisor, which report shall
be in form and substance satisfactory to the Financing Parties.
(bb) Engineer's Report. The Financing Parties shall have
received the report of the Independent Engineer, which report shall be
in form and substance satisfactory to the Financing Parties.
(cc) Notes. There shall have been delivered to each of the
Lenders its respective Term Note and to the Issuing
32
25
Bank the Debt Service Letter of Credit Note, each such Note to be duly
authorized and executed by the Borrower.
(dd) Fees. The Agent and each Lender shall have received from
the Borrower such of the fees referred to in subsection 2.13 as are
payable on or before the Third Restatement Effective Date.
(ee) Pro Forma Financial Statements. The Agent and each other
Financing Party shall have received from the Borrower (i) a pro-forma
opening balance sheet of the Borrower reflecting the transactions to be
consummated on the Third Restatement Effective Date and acceptable in
form and substance to each Financing Party and (ii) pro forma
projections of the expected revenues, operating expenses and cash flows
(including Debt Coverage Ratios) of the Borrower for the period from
the Third Restatement Effective Date to the Final Payment Date, which
projections shall (A) be satisfactory in form and substance to each
Financing Party, (B) be consistent with the report of the Independent
Engineer received by the Agent in satisfaction of subsection 4.1(bb)
above and (C) show, among other things, a Debt Coverage Ratio of no
less than 1.4 to 1.0 for the period from the Third Restatement
Effective Date to the Final Payment Date and of no less than 1.25 to
1.0 for each calendar year or portion thereof during such period.
(ff) Debt Service Letter of Credit. The Agent shall have
received the Debt Service Letter of Credit, dated no later than the
Third Restatement Effective Date.
(gg) Power Purchase Agreement Amendment. The Agent shall have
received, with a copy for each Lender, a true and complete copy of the
Power Purchase Agreement Amendment, certified as such on the Third
Restatement Effective Date by a Responsible Officer of the Borrower.
(hh) Power Purchaser Notice. The Agent shall have received
evidence satisfactory to it that the Borrower shall have delivered to
the Power Purchaser the notice specified in Section 2.3 of the Power
Purchase Agreement Amendment in order for the Power Purchase Agreement
Amendment to become effective.
(ii) Borrowing Request. The Agent shall have received a
Borrowing Request from the Borrower, properly completed in accordance
with Section 1.2, requesting a borrowing of Additional Term Loans in an
amount not more than $5,000,000.
(jj) Payment of Interest and Fees. All interest on the
Existing Term Loans, if any, outstanding under the Existing Loan
Agreement which is accrued and unpaid to and including the Third
Restatement Effective Date, and all commissions, fees and other amounts
payable by the Borrower under the Existing Loan Agreement (whether or
not then due
33
26
and payable) shall have been paid in full (including any amounts
payable to any of the Transferor Lenders pursuant to subsection 2.12 of
the Existing Loan Agreement as a result of the transactions
contemplated under the Bank Assignment).
(kk) Additional Matters. All other documents and legal matters
in connection with the transactions contemplated by this Agreement
shall be satisfactory in form and substance to the Agent and its
counsel.
4.2 Conditions to Additional Term Loans. The agreement of each
Lender to make any Additional Term Loan requested to be made by it after the
Third Restatement Effective Date is subject to the satisfaction of the following
conditions precedent in a manner satisfactory to such Lender:
(a) No Default. No Specified Default or Event of Default shall
have occurred and be continuing on such date after giving effect to the
Additional Term Loans requested to be made on such date.
(b) No Event of Loss. No Event of Loss shall have occurred
prior to such date.
SECTION 5. REPRESENTATIONS AND WARRANTIES.
In order to induce the Financing Parties to enter into this
Agreement, the Borrower represents and warrants to the Financing Parties that:
5.1 Financial Statements; Liabilities. (a) The financial
statements of the Borrower for the fiscal year ended June 30, 1997 and for the
three-month period ended September 30, 1997, copies of which have been delivered
to the Financing Parties, are true and correct in all material respects, have
been prepared in accordance with GAAP and fairly present the financial condition
of the Borrower on such dates and the results of its operations and cash flows
for the respective fiscal periods ended on such dates. All material liabilities,
direct or indirect, absolute or contingent, of the Borrower as at such dates are
either disclosed in such balance sheets or are listed on Schedule II hereto.
(b) The consolidated financial statements of Cogentrix Energy
for the fiscal year ended June 30, 1997 and for the three-month period ended
September 30, 1997, copies of which have been delivered to the Financing
Parties, are true and correct in all material respects, have been prepared in
accordance with GAAP and fairly present the consolidated financial condition of
Cogentrix Energy on such dates and the consolidated results of their operations
and cash flows for the respective fiscal periods ended on such dates. All
material liabilities, direct or indirect, absolute or contingent, of Cogentrix
Energy as at such dates are
34
27
either disclosed in such balance sheets or are listed on Schedule II hereto.
(d) Since June 30, 1997, there has been no material adverse
change in the properties, business, operations or financial condition of the
Borrower, the Parent, Cogentrix Energy or, to the knowledge of the Borrower, any
other Project Participant.
5.2 Corporate Existence. The Borrower is (a) duly organized
and validly existing and in good standing under the laws of the State of North
Carolina, (b) has the corporate power and authority and the legal right to own
and operate its property, to lease the property it operates as lessee and to
conduct the business in which it is currently engaged and (c) is duly qualified
as a foreign corporation and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property or the conduct
of its business requires such qualification except to the extent that the
failure to so qualify could not, in the aggregate, have a material adverse
effect on the business, operations, property or financial or other condition of
the Borrower and could not materially adversely affect the ability of the
Borrower to perform its obligations under this Agreement or the Notes or the
other Project Documents to which it is a party. The Borrower has been, is, and
will be engaged solely in the business of constructing, owning and operating the
Project and has no obligations or liabilities other than those incurred in
connection with its execution and delivery of the Project Documents to which it
is a party and those incurred pursuant to the provisions of the Project
Documents.
5.3 Compliance with Law. The Borrower is in compliance with
all Requirements of Law except to the extent that the failure to comply
therewith (a) would not reasonably be expected, in the aggregate, to have a
material adverse affect on the business, operations, properties or financial or
other condition of the Borrower and (b) would not materially adversely affect
the ability of the Borrower to perform its obligations under this Agreement, the
Notes or the other Project Documents to which it is a party.
5.4 Corporate Power and Authorization; Enforceable
Obligations. The Borrower has full corporate power and authority and the legal
right to own and operate the Project, to conduct its business as now conducted
and as proposed to be conducted by it, to execute, deliver and perform this
Agreement, the Notes and the other Project Documents to which it is or is to
become a party, to grant the mortgages and security interests provided for in
the Security Documents and to borrow hereunder. The Borrower has taken all
necessary corporate and legal action to authorize the borrowings on the terms
and conditions of this Agreement, the Notes and the other Project Documents to
which it is a party, to grant the mortgages and security interests provided for
in the Security Documents and to authorize the execution, delivery and
35
28
performance of this Agreement, the Notes and the other Project Documents to
which it is or is to become a party. No consent or authorization of, filing
with, or other act by or in respect of any Governmental Authority, is required
in connection with the borrowings hereunder or with the execution, delivery,
performance, validity or enforceability of this Agreement, the Notes or the
other Project Documents to which the Borrower is or is to become a party, except
as referred to in Section 5.5. This Agreement, each Note and each other Project
Document to which the Borrower is a party have been duly executed and delivered
by the Borrower and constitute legal, valid and binding obligations of the
Borrower enforceable against the Borrower in accordance with their respective
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the rights of
creditors generally.
5.5 Governmental Actions. No Governmental Actions are required
in connection with the participation by the Borrower, the Parent, Cogentrix
Energy, the Lenders, the Issuing Bank or the other Project Participants in the
transactions contemplated by this Agreement and the other Project Documents, or
the execution, delivery and performance by any of such Persons of the Project
Documents to which such Person is a party, or the construction, use, ownership
or operation of the Project in accordance with the applicable provisions of the
Project Documents and in compliance with all Requirements of Law (including
Environmental Laws and regulations), except for those Governmental Actions which
are set forth in Schedule III hereto. As of the Third Restatement Effective
Date, each of the Governmental Actions listed in Schedule III has been duly
obtained or made, is in full force and effect, are not the subject of any
pending or threatened judicial or administrative proceedings and, if the
applicable statute, rule or regulation provides for a fixed period for judicial
or administrative appeal or review thereof, such period has expired.
5.6 No Legal Bar. The execution, delivery and performance of
this Agreement, the Notes and the other Project Documents, the borrowings
hereunder and the use of the proceeds thereof, will not violate any Requirement
of Law or any Contractual Obligation of the Borrower (including any other
Project Document), and will not result in, or require, the creation or
imposition of any Lien on any of its properties or revenues pursuant to any
Requirement of Law or Contractual Obligation, except for the Liens created by
the Security Documents. No approvals and consents of any trustee or any holder
of any indebtedness, obligations or securities of the Borrower or, to the best
of the knowledge of the Borrower, of any other Project Participant, are required
in connection with the execution, delivery and performance by the Borrower or
any Project Participant of any Project Document to which it is a party, except
such as have been duly obtained and are in full force and effect.
36
29
5.7 No Litigation. Except as disclosed in Schedule VIII, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is on the Third Restatement Effective Date pending or, to
the knowledge of the Borrower, threatened by or against the Borrower or against
any of its properties or revenues (a) with respect to this Agreement, the Notes
or any other Project Document or any of the transactions contemplated hereby or
thereby, or (b) which could have a material adverse effect on the business,
operations, property or financial or other condition of the Borrower or (c)
which could materially adversely affect the ability of the Borrower to perform
its obligations under this Agreement, the Notes or any of the other Project
Documents to which it is a party.
5.8 No Default or Event of Loss. The Borrower is not in
default under or with respect to any Contractual Obligation in any respect which
could be materially adverse to its business, operations, property or financial
or other condition, or which could materially adversely affect the ability of
the Borrower to perform its obligations under this Agreement, the Notes or any
of the other Project Documents to which it is a party. No Default or Event of
Default as to the Borrower or the Parent or Cogentrix Energy and, to the best of
the Borrower's knowledge, no Default or Event of Default arising from the acts
or omissions of any other Project Participant, has occurred and is continuing;
no Event of Loss has occurred.
5.9 Ownership of Property; Liens. The Borrower has (i) good
record and marketable title in fee simple to the property described in the Deed
of Trust (other than the Easements and the property leased pursuant to the
Ground Lease), (ii) valid title to the Easements, (iii) a valid leasehold
interest in the property leased pursuant to the Ground Lease and (iv) good and
valid title to the Barge and to the portion of the Facility constituting
personal property, in each case free and clear of all Liens other than Permitted
Liens.
5.10 No Burdensome Restrictions. No Contractual Obligation of
the Borrower and no Requirement of Law materially adversely affects, or insofar
as the Borrower may reasonably foresee is likely to materially adversely affect,
the business, operations, property or financial or other condition of the
Borrower.
5.11 Taxes. The Borrower has filed or caused to be filed all
tax returns which are required to be filed by it, and has paid all taxes shown
to be due and payable on said returns or on any assessments made against it or
any of its property and all other taxes, fees or other charges imposed on it or
any of its property by any Governmental Authority; and no tax Liens have been
filed and no claims are being asserted with respect to any such taxes, fees or
other charges.
37
30
5.12 Public Utility Status. (a) Neither the Borrower nor the
Parent nor any of their respective Affiliates is or will be, by reason of (i)
the ownership of the Project or the operation thereof by the Borrower or the
Parent, or (ii) any other transaction contemplated by this Agreement or any of
the other Project Documents, deemed by any Governmental Authority having
jurisdiction to be subject to financial, organizational or rate regulation as an
"electric utility", "electric corporation", "electrical company", "public
utility" or a "public utility holding company" under any existing law, rule or
regulation of any Governmental Authority.
(b) Neither the Lenders nor the Agent nor the Issuing Bank nor
any of their Affiliates is or will be, by reason of (i) the ownership of the
Project or the operation thereof by the Borrower, (ii) the making of the Term
Loans hereunder, (iii) the securing of the Term Loans by Liens on the Project
and the Assigned Contracts or (iv) any other transaction contemplated by this
Agreement or any of the other Project Documents, deemed to be, or be subject to
regulation as, an "electric utility", "electric corporation", "electrical
company", "public utility" or a "public utility holding company" under any
existing law, rule or regulation of any Governmental Authority; and neither the
Lenders nor the Issuing Bank nor the Agent nor any of their respective
Affiliates will, by reason of its ownership or operation of the Project upon the
exercise of remedies under the Security Documents, be deemed to be subject to
financial, organizational or rate regulation as an "electric utility", "electric
corporation", "electrical company", "public utility" or a "public utility
holding company" under any existing law, rule or regulation of any Governmental
Authority.
(c) The Facility is, and on the Third Restatement Effective
Date and thereafter at all times will continue to be, a Qualifying Facility and
is and will be exempt from all regulation under the Public Utility Holding
Company Act of 1935, as amended.
(d) The Borrower meets, and will on the Third Restatement
Effective Date and thereafter at all times continue to meet, the ownership
criteria for a "qualifying cogeneration facility" set forth in 18 CFR 292.207.
5.13 Federal Regulations. The Borrower is not engaged and will
not engage in the business of extending credit for the purpose of "purchasing"
or "carrying" any "margin stock" within the respective meanings of each of the
quoted terms under Regulations G, U and X of the Board of Governors of the
Federal Reserve System as now and from time to time hereafter in effect. No part
of the proceeds of any Term Loan will be used for "purchasing" or "carrying" any
"margin stock" as so defined or for any purpose which violates, or which would
be inconsistent with, the provisions of the Regulations of such Board of
Governors.
38
31
5.14 ERISA. The Borrower is not in violation of applicable
provisions of ERISA or the regulations and published interpretations thereunder,
and no Reportable Event has occurred and is continuing with respect to any Plan.
5.15 Investment Company Act. The Borrower is not an
"investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
5.16 Security Documents. The Security Documents create, in
favor of the Agent for the ratable benefit of the Financing Parties, legal,
valid and enforceable mortgage Liens on or security interests in all of the
Collateral, and such Liens and security interests constitute perfected Liens on
and perfected security interests in all right, title, estate and interest of the
Borrower in the Collateral prior and superior to all other Liens, existing or
future, except for Permitted Liens. The recordings and filings shown on Schedule
IV are all the actions necessary or advisable in order to establish, protect and
perfect the interest of the Agent in the Collateral.
5.17 Full Disclosure. Neither this Agreement nor any
certificate, written statement or other document furnished by the Borrower or
the Parent or Cogentrix Energy to the Financing Parties, or to any appraiser or
engineer or environmental consultant submitting a report to the Financing
Parties, by, or to the knowledge of the Borrower on behalf of, the Borrower or
any Affiliate thereof in connection with the transactions contemplated by this
Agreement and the other Project Documents or the design, description, testing or
operation of the Project, contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
contained herein or therein not misleading. There is no fact known to the
Borrower which the Borrower has not disclosed in writing to the Financing
Parties which materially adversely affects or, so far as the Borrower can now
reasonably foresee, will materially adversely affect the properties, business,
prospects or financial or other condition of the Borrower or the ability of the
Borrower to perform its obligations hereunder and under the Assigned Contracts
and the other Project Documents.
5.18 Power Purchase Agreement and Other Assigned Contracts.
The Power Purchase Agreement (including, without limitation, the Power Purchase
Agreement Amendment) has been duly executed and delivered by VEP and constitutes
the legal, valid and binding obligation of VEP, enforceable against VEP in
accordance with its terms except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
rights of creditors generally. If the Facility remains a Qualifying Facility
pursuant to the rules and regulations of the FERC, no Governmental Actions were
or are required in connection with the execution, delivery and performance by
the Power Purchaser of the Power Purchase Agreement Amendment, other than the
filing of the Power Purchase
39
32
Agreement Amendment with the Virginia State Corporation Utilities Commission
(which filing, if required, will be made on or before December 31, 1998) and
except for those which have been duly obtained or made and are in full force and
effect. As of the Third Restatement Effective Date the Borrower will have duly
performed and complied with all agreements and conditions which are required to
be performed or complied with by it under the Power Purchase Agreement
(including, without limitation, the Power Purchase Agreement Amendment) as of
such date. Each of the other Assigned Contracts has been duly executed and
delivered by the parties thereto and constitutes the legal, valid and binding
obligation of such parties, enforceable against such parties in accordance with
its terms except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the rights of
creditors generally. As of the Third Restatement Effective Date the Borrower
will have duly performed and complied with all agreements and conditions which
are required to be performed or complied with by it thereunder as of such date.
Each of the Assigned Contracts is in full force and effect and has not been
amended. There exists no default or event of default or breach in the
performance of any covenant, agreement, obligation or condition to be performed
by the Borrower under any Assigned Contract, no notice of default has been given
under any Assigned Contract, and no consent or authorization need be obtained by
the Borrower from any other party to any Assigned Contract in connection with
the execution and delivery of the Third Amended and Restated Loan Agreement, or
of any other Project Document (including any amendment thereto) being executed
and delivered on the Third Restatement Effective Date.
5.19 Principal Place of Business, Etc. The chief executive
office and principal place of business of the Borrower, and the office where it
keeps its records concerning the Project and all contracts relating thereto, is
and will be located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇.
5.20 Water Supply. There is readily available to the Facility
sufficient flow of water to permit the continued operation of the Facility in
accordance with the Minimum Performance Requirements.
5.21 Compliance with Building Codes, Zoning Laws, Etc. The
Project is in all material respects in compliance with all applicable zoning,
environmental protection, use and building codes, laws, regulations and
ordinances. The Borrower has no knowledge of any material violations of any
laws, ordinances, codes, requirements or orders of any Governmental Authority
affecting the Project.
5.22 Roads. All roads necessary for the full utilization of
the Project for its intended purposes have been completed.
40
33
5.23 Deed of Trust. The Lien of the Deed of Trust, as amended,
is a first lien on the Mortgaged Property (as defined in the Deed of Trust),
subject only to those matters shown on that certain title insurance policy dated
as of the date of the Deed of Trust, and endorsements to such title insurance
policy dated through the date of recordation of Deed of Trust Amendment No. 5,
issued by Chicago Title Insurance Company.
5.24 Sufficiency of Project Documents. The services being and
to be performed, the materials being and to be supplied and the leasehold and
other property interests, easements and other rights granted pursuant to the
Project Documents:
(a) comprise substantially all of the property interests
necessary to secure any right material to the operation and maintenance
of the Facility in accordance with all Requirements of Law and in
accordance with projections, and
(b) provide adequate ingress and egress from the Site for any
reasonable purpose in connection with the operation of the Facility,
all without reference to any material proprietary information not owned
by the Borrower.
There are no services, materials or rights required for the operation of the
Facility in accordance with the Project Documents, other than (x) those granted
by or to be provided by or on behalf of the Borrower pursuant to the Project
Documents or (y) those that are commercially available at the Site.
5.25 Outstanding Shares of Capital Stock of Borrower. All of
the outstanding shares of the capital stock of the Borrower have been duly
authorized and validly issued in conformity with all applicable federal and
state laws and regulations and are fully paid and non-assessable. All of such
shares are held by the Parent free and clear of all Liens, except for the Lien
created by the Pledge Agreement.
5.26 Environmental Matters.
(a) Except as disclosed in the Environmental Assessment,
the Site does not contain, and, to the best knowledge of the Borrower, has not
previously contained, any Hazardous Materials or underground storage tanks
(except for underground storage tanks which have been removed by the Borrower as
previously disclosed in writing to the Lenders).
(b) Except as disclosed in the Environmental Assessment, the
Site is in compliance with all applicable federal, state and local environmental
standards and requirements affecting the Site or the Facility and there are no
environmental conditions in respect of Hazardous Materials which could interfere
with the continued operation of the Facility.
41
34
(c) Except as disclosed on Schedule V hereof, the Borrower has
not received any notices of violation or advisory action by regulatory agencies
regarding environmental control matters or permit compliance.
(d) No Hazardous Material or ash has been transferred from the
Site to any other location which is not in compliance with all applicable
environmental laws, regulations or permit requirements.
(e) With respect to the Site and the Facility, there are no
proceedings, governmental administrative actions or judicial proceedings pending
or, to the best of the Borrower's knowledge, contemplated under any federal,
state or local law regulating the discharge of hazardous or toxic materials or
substances into the environment, to which the Borrower is named as a party.
5.27 Subsidiaries. The Borrower has no subsidiaries, and will
not in the future have any subsidiaries.
5.28 Representations and Warranties in Other Project
Documents. The representations and warranties of the Borrower, Cogentrix Energy
and the Parent contained in the other Project Documents were true and correct on
and as of the date made, and except to the extent any such representation or
warranty relates solely to an earlier date, the Borrower hereby confirms as of
the date hereof each such representation and warranty with the same effect as if
set forth in full herein.
5.29 Relocation of Coal Conveyor and Steam Pipelines. Since
October 5, 1988, neither Borrower nor any other Person has moved or
reconstructed all or any portion of the coal conveyor or steam pipelines lying
(as of October 5, 1988) within the boundaries of the Easements so as to cause
all or any portion of such coal conveyor or steam pipelines to lie outside the
boundaries of the Easements.
SECTION 6. AFFIRMATIVE COVENANTS.
So long as any Note remains outstanding and unpaid or any
other amount is owing to any Financing Parties hereunder or under the Security
Documents, the Borrower hereby agrees that it shall:
6.1 Financial Statements. Furnish or cause to be furnished to
each of the Financing Parties:
(a) as soon as available, but in any event within 120 days
after the end of each fiscal year of each of the Borrower and Cogentrix
Energy, a copy of the balance sheet of each of the Borrower and
Cogentrix Energy as at the end of such year and the related statements
of income, retained earnings and changes in cash flow for such year of
each of
42
35
the Borrower and Cogentrix Energy, setting forth in each case in
comparative form the figures for the previous year, certified without
qualification arising out of the scope of the audit by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
LLC or other independent certified public accountants of nationally
recognized standing, and
(b) as soon as available, but in any event within 60 days
after the end of each quarterly period of each fiscal year of each of
the Borrower and Cogentrix Energy, a copy of the unaudited balance
sheet of each of the Borrower and Cogentrix Energy as at the end of
such quarterly period and the related unaudited statements of income,
retained earnings and changes in cash flow of each of the Borrower and
Cogentrix Energy for such quarterly period and for the portion of the
fiscal year then ended, setting forth in each case in comparative form
the figures for the previous period, certified by a Responsible Officer
(subject to normal year-end audit adjustments);
All financial statements delivered pursuant to this subsection shall be complete
and correct in all material respects (subject, in the case of interim
statements, to normal year-end audit adjustments) and shall be prepared in
reasonable detail and in accordance with GAAP applied consistently throughout
the periods reflected therein.
6.2 Certificates; Other Information. Furnish to the Agent:
(a) concurrently with the delivery of the financial statements
referred to in Section 6.1(a) for the Borrower, a certificate of the
independent public accountants that certified such financial statements
stating that in making the examination necessary for the audit thereof
no knowledge was obtained of any Default or Event of Default, except as
specified in such certificate;
(b) concurrently with the delivery of the financial statements
referred to in Sections 6.1(a) and 6.1(b) with respect to the Borrower,
a certificate of a Responsible Officer stating that during the period
covered by such financial statements the Borrower has observed and
performed all of its covenants and other agreements, and satisfied
every condition, contained in this Agreement and the other Project
Documents to be observed, performed or satisfied by it, and that such
Officer has obtained no knowledge of any Default or Event of Default at
any time during such period or on the date of such certificate, except
as specified in such certificate;
(c) not less than 30 or more than 60 days prior to the end of
each fiscal year of the Borrower, operating budgets for the next
succeeding fiscal year of the Borrower;
43
36
(d) within 30 days after each Installment Payment Date, a
certificate of the chief financial officer or treasurer of the Borrower
setting forth the Debt Service, Project Cash Flow, Project Revenues and
Cash Operating Costs for the three-month period ended on such
Installment Payment Date, and the Twelve-Month Project Cash Flow,
Twelve-Month Debt Service and Twelve-Month Debt Coverage Ratio
determined as of such Installment Payment Date;
(e) within five days after the filing thereof, the "Annual
Returns" (Form 5500 series) and attachments filed annually with the
Internal Revenue Service with respect to each Single Employer Plan;
(f) with respect to any Single Employer Plan adopted or
amended by the Borrower or any Commonly Controlled Entity, any
determination letters received from the Internal Revenue Service with
respect to the qualification of such Plan, as initially adopted or
amended under Section 401(a) of the Code;
(g) promptly, copies of any material notices, reports or
certificates given to the Borrower, Delaware Holdings, Cogentrix Energy
or the Parent under any Project Document;
(h) promptly, such additional financial and other information,
including, without limitation, budgets and operating reports, with
respect to the Borrower, Delaware Holdings, Cogentrix Energy, the
Parent, or the Project as any Financing Party may from time to time
reasonably request.
The Financing Parties will use reasonable efforts to keep confidential the
Project Documents, any financial information or any other information relating
to the plans and specifications with respect to the Project, in each case as
furnished to them by the Borrower or the Parent, except to the extent (i)
otherwise required by statute, rule, regulation or judicial process, by bank
examiners and/or auditors, (ii) the Financing Parties wish to furnish such
information to prospective purchasers of the Project in anticipation of a
foreclosure sale or other exercise of remedies under the Security Documents, or
(iii) permitted by subsection 10.6(d).
6.3 Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all of its Indebtedness and other obligations of whatever nature, except for
any Indebtedness or other obligations which are being contested in good faith
and by appropriate proceedings if (i) adequate reserves with respect thereto are
maintained on the books of the Borrower in accordance with GAAP and (ii) such
contest does not involve any risk of the sale, forfeiture or loss of any of the
Collateral.
44
37
6.4 Conduct of Business and Maintenance of Existence. (i)
Engage solely in the business of owning and operating the Project, (ii)
preserve, renew and keep in full force and effect its existence and good
standing as a corporation under the laws of the State of North Carolina and its
qualification to do business and good standing in the Commonwealth of Virginia,
(iii) take all action necessary to maintain in full force and effect all
Governmental Actions in effect on the Third Restatement Effective Date and to
obtain and maintain all Governmental Actions required at any time after the
Third Restatement Effective Date in connection with the ownership or operation
of the Facility, and (iv) maintain the Facility as a Qualifying Facility. The
Borrower will comply with all Contractual Obligations, Governmental Actions and
Requirements of Law relating to the Project or any other property of the
Borrower except to the extent that the failure to comply therewith would not, in
the aggregate, have a material adverse effect on the business, operations,
property or financial or other condition of the Borrower.
6.5 Maintenance of Property; Operation of Project; Restoration
of Facility. (a) At the Borrower's expense, keep the Facility in good working
order and condition and make all repairs, replacements and renewals with respect
thereto and additions and betterments thereto which are necessary for the
Facility to operate efficiently in accordance with the Minimum Performance
Requirements, any applicable requirements of insurance policies and at least in
accordance with accepted industry standards for similar properties. All repairs,
replacements and renewals shall be equal in quality and class to the original
work. The Borrower shall operate and maintain the Facility in a safe manner in
accordance with those electrical practices and methods as are commonly used in
prudent electrical engineering to operate equipment for the distribution of
electricity, in accordance with all Federal, State and local laws and
regulations and in accordance with the National Electric Safety Code. The
Financing Parties shall have the right to review and approve the individual(s)
or company(s) responsible for operating the Project.
(b) If, after any loss, theft, destruction or damage with
respect to the Facility referred to in clause (ii) of the definition of "Event
of Loss", the Agent determines in accordance with subclause (y) of said clause
(ii) that sufficient funds are or will be available to restore the Facility, the
Borrower at all times thereafter will proceed diligently with all work necessary
to correct the loss, theft, destruction or damage to the Facility referred to in
said clause (ii).
6.6 Assigned Contracts. Maintain or cause to be maintained in
full force and effect, without amendment or modification (except as permitted in
Section 7.10), and observe and perform all of its covenants and obligations
under, comply with all conditions under, and diligently enforce all its rights
45
38
under and in accordance with the terms of, each Assigned Contract.
6.7 Insurance. (a) Types of Insurance. Without cost to the
Agent or any other Financing Party, the Borrower shall maintain or cause to be
maintained in effect at all time insurance with respect to the Facility against
such hazards, in such form (subject to the provisions of Section 6.7(c) hereof)
and with such insurers as shall be approved by the Required Lenders, and in such
amounts as the Borrower would, in the prudent management of its property,
maintain, or as would be maintained by others similarly situated in respect of
property similar to the Facility; provided that, in any event, on or prior to
the Third Restatement Effective Date, the Borrower shall procure or cause to be
procured at its own expense and maintain in full force and effect until such
time as all of its obligations under this Agreement and the Notes shall have
been paid in full, with responsible insurers authorized to do business in the
State of Virginia with a Best's rating of "A-" or better (except for policies
underwritten by Lloyds of London and approved English companies, acceptable to
the Agent), the following types of insurance:
(i) Physical Damage Insurance: Property damage insurance
on an "all risk" basis including but not limited to fire and extended
coverage and coverage against earth movement and flood and providing
(1) coverage for the Facility in a minimum amount equal to the "full
insurable value" of the Facility, but in no event less than the sum of
(i) the sum of the aggregate unpaid amount of the Loans plus the amount
of the Total Available Additional Term Loan Commitment plus the
Available Amount, (ii) $6,000,000 (provided that in the event the
Borrower has not entered into an Interest Rate Protection Agreement
that provides for breakage costs, the amount of this clause (ii) shall
be zero) and (iii) all other amounts necessary to remove all liens,
encumbrances or mortgages from any of the Collateral, (2) transit
coverage with sub-limits sufficient to insure the full replacement
value of all property or equipment removed from the Project, but in no
event less than $10,000,000, (3) coverage for the steam and electrical
transmission lines and related equipment for which the insured has an
insurable interest and (4) coverage for foundations and other property
below the surface of the ground. For purposes of this Section 6.7,
"full insurable value" shall mean the full replacement value of the
Facility, including any improvements and equipment, fuel and supplies,
without deduction for physical depreciation and/or obsolescence. Such
insurance shall include an "agreed amount" clause with no co-insurance
clause and shall provide for increased costs of debris removal and loss
to undamaged property as the result of enforcement of building laws or
ordinances. Testing coverage shall be included, if applicable.
46
39
(ii) Boiler and Machinery Insurance: Boiler and machinery
insurance coverage to be written on a "comprehensive form" basis for
all insurable objects, including but not limited to pressure vessels,
electrical turbines and equipment, motors, air tanks, boilers,
machinery, pressure piping or any other similar objects located on or
adjacent to the Site in a minimum aggregate amount equal to the
replacement value of the insurable objects. If the boiler and machinery
insurance is written on a policy separate from the property damage
insurance policy, both the boiler and machinery insurance policy and
the property damage insurance policy shall contain a joint loss
agreement endorsement.
The insurance policies in clauses (i) and (ii) above may have a
combined deductible of not greater than $250,000 or such other amount acceptable
to the Agent as shall (in the good faith judgment of the Agent) be available on
commercially reasonable terms in the insurance market place.
(iii) Business Interruption Insurance: Business interruption
insurance covering loss of net profits, fixed expenses, principal and
interest payable on the Notes and all liquidated damages payable
pursuant to any Project Document for a minimum period of 12 months;
such policy may provide that insurance proceeds will not be paid in
respect of the first 30 days of such business interruption or such
other period requested by the Borrower and reasonably acceptable to the
Agent and the other Financing Parties.
(iv) Contingent Business Interruption Insurance: Contingent
business interruption insurance covering loss of net profits, fixed
expenses, principal and interest payable on the Notes and all
liquidated damages payable pursuant to any Project Document for a
minimum period of 12 months during the period when the operation of the
Facility is impaired due to physical loss or damage to facilities owned
by others; such policy may provide that insurance proceeds will not be
paid in respect of the first 30 days of such impairment of operation.
(v) Workers' Compensation Insurance: Workers' compensation
insurance as required by Virginia state law, including, without
limitation, employer's liability insurance for all employees of the
Borrower, Delaware Holdings, Cogentrix Energy or the Parent in the
amount of $500,000 per occurrence (the policies with respect to which
shall include all states' coverage). The coverage of such insurance
shall comply with all Requirements of Law.
(vi) Comprehensive General Liability Insurance: Insurance
against claims for personal injury (including bodily injury and death)
and property damage. Such insurance shall be written on an occurrence
basis and provide coverage for products, completed operations, blanket
47
40
contractual, explosion, collapse and underground coverage and broad
form property damage with a $1,000,000 combined single limit for bodily
injury and property damage and a $2,000,000 aggregate limit.
(vii) Comprehensive Automobile Liability: Insurance against
claims of personal injury (including bodily injury and death) and
property damage covering all owned, leased, non-owned and hired
vehicles with a $ 1,000,000 minimum limit per occurrence for combined
bodily injury and property damage liability, including no fault
insurance, where applicable.
(viii) Excess Insurance: Excess liability insurance on an
"occurrence" basis covering claims in excess of the underlying
insurance described in the foregoing clauses (v), (vi) and (vii) with a
$30,000,000 minimum limit per occurrence and a $30,000,000 minimum
aggregate annual limit.
(ix) Barge Insurance: Hull and machinery damage, protection
and indemnity, stevedoring/wharfingers legal liability and water
quality insurance coverage for the Barge, and all insurance required
for the Borrower to keep the Barge insured pursuant to the requirements
of Section 15 of Article I of the Ship Mortgage.
(b) Loss Payee. All insurance policies required in Section
6.7(a) covering loss or damage to the Facility including, without limitation,
those policies required by clauses (i), (ii), (iii) and (iv) of Section 6.7(a),
shall name the Agent as first loss payee pursuant to a standard first mortgage
endorsement substantially equivalent to the "New York Standard Mortgage
Endorsement" or "Lenders Loss Payable Endorsement 438 BFU" and shall provide
that any payment thereunder for any loss or damage shall be made to the Agent.
(c) Special Policy Provisions. All policies (other than
policies with respect to workers' compensation, occupational disability benefits
or similar insurance) shall name the Agent and the other Financing Parties as
additional insureds and shall insure the interests of the Agent and the other
Financing Parties regardless of any breach or violation by the Borrower of
warranties, declarations or conditions contained in such policies or any action
or inaction of the Borrower or any other Person; each liability policy shall
expressly provide that all provisions thereof, except the limits of liability
(which shall be applicable to all insureds as a group) and liability for
premiums, commissions, assessments or calls (which shall be solely a liability
of the Borrower) shall operate in the same manner as if there were a separate
policy covering each such insured; each policy (except workers' compensation)
shall waive any right of subrogation of the insurers to any set-off or
counterclaim against the Agent or any other Financing Party or any other
deduction, whether by attachment or otherwise, in respect of any liability of
the Borrower; and each such policy
48
41
shall provide that, if such insurance is to be canceled or terminated or
materially changed for any reason whatsoever the insurers will promptly notify
the Borrower and the Agent, and any such material change, cancellation or
termination shall not be effective as to the Agent and the other Financing
Parties for 60 days (or (x) 10 days in the case of a cancellation or termination
resulting from a failure to pay a premium in respect of such policy (other than
a policy provided pursuant to clause (ix) (Barge Insurance) of subsection
6.7(a)) and (y) 30 days in the case of a material change, modification,
cancellation or termination of a policy provided pursuant to clause (ix) (Barge
Insurance) of subsection 6.7(a)) after receipt of such notice by the Agent, and
that appropriate certification shall be made to the Borrower by each insurer
with respect thereto. All insurance as required in Section 6.7(a) shall be
primary and not excess to or contributing with any insurance or self insurance
maintained by the Agent or the other Financing Parties, or their respective
officers and employees. The Agent shall have the right to join the Borrower in
the settlement, adjustment or compromise of any claim in excess of $100,000
under any insurance policy maintained pursuant to this Section 6.7.
(d) Additional Requirements. In addition to the other
requirements of this Section 6.7, the Borrower shall comply in all respects with
any insurance requirements contained in any other Project Document to which it
is a party.
(e) Certificates of Insurance. The Borrower shall deliver to
the Agent prior to the expiration date of each insurance policy required to be
maintained by it pursuant to this Section 6.7, an original certificate of
insurance executed by the insurer or its duly authorized agent evidencing the
continuance of such insurance policy (and, upon request, a certified copy of
such insurance policy). The Borrower shall deliver to the Agent within 30 days
of the end of each fiscal year of the Borrower, beginning with the fiscal year
ending December 31, 1998, a certificate or other evidence of insurance from a
recognized independent insurance broker or agent confirming (i) that all
insurance policies required by this Section 6.7 are in full force and effect as
of the date thereof, provided, however, that such broker or agent may rely as to
subsection 6.7(a)(i)(1)(ii) and (iii) on the representations and warranties of
the Borrower contained in this Agreement, (ii) that all premiums due on such
policies have been paid, (iii) the names of the issuers of such policies and
(iv) the respective amounts and expiration dates of such policies.
(f) Application of Payments. All payments received by the
Agent, any other Financing Party or the Borrower under any business interruption
insurance policy shall promptly be deposited in the Revenue Account for
application in accordance with the provisions of Sections 4.01 and 4.02 of the
Security Deposit Agreement. All payments received by the Agent, any other
Financing Party or the Borrower from any insurer with respect to loss or damage
to the Facility or other Collateral shall promptly
49
42
be deposited in the Insurance Proceeds Account for application in accordance
with the provisions of Section 4.06 of the Security Deposit Agreement.
(g) No Duty of any Agent or any Lender to Verify. No provision
of this Section 6.7 or any provision of any other Project Document shall impose
on the Agent or any other Financing Party any duty or obligation to verify the
existence or adequacy of the insurance coverage maintained by the Borrower, nor
shall the Agent or any other Financing Party be responsible for any
representations or warranties made by or on behalf of the Borrower to any
insurance company or underwriter.
It is understood and agreed that the Financing Parties reserve
the right to require, through the Agent, that the amounts and scope of coverage
of any of the aforesaid insurance policies be modified if a state of facts shall
exist in respect of the Project which was not reasonably foreseeable by the
parties hereto on the Third Restatement Effective Date and which, in the Agent's
opinion, renders such coverage materially inadequate.
6.8 Inspection of Property; Books and Records; Discussions.
Keep proper books of record and account in which full, true and correct entries
in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities, and permit
representatives of the Financing Parties during normal business hours and after
notice to visit and inspect any of its properties and examine and make abstracts
from any of its books and records as often as reasonably may be desired, and to
discuss the business, operations, properties and financial and other condition
of the Borrower with officers and employees of the Borrower and with its
independent public accountants (and the Borrower hereby authorizes its
independent public accountants to discuss, at the request of any Financing
Party, such matters with the Financing Parties' representatives).
The Financing Parties shall have the right, at the Borrower's
expense, from time to time at reasonable intervals during the term of this
Agreement, to have the Project inspected by the Independent Engineer. The Agent
shall give reasonable notice to the Borrower prior to each such inspection. If
the Borrower obtains an inspection report on the Project or any portion thereof
at its own request, it will promptly provide a copy of such report to the Agent.
The Borrower agrees to correct or cause to be corrected any substantial defect
in the Project which the Borrower discovers or which is disclosed by any
inspection provided for in this subsection upon learning of same, or to promptly
give the Agent a reasonably detailed explanation in writing specifying the
reasons that such correction is not required within a reasonable time.
6.9 Notices. Promptly upon obtaining knowledge of any of the
following, give notice to the Agent:
50
43
(a) of the occurrence of any Default or Event of Default;
(b) of any default or event of default under any of the
Assigned Contracts or any notice or assertion of such a default;
(c) of any (i) default or event of default under any
Contractual Obligation (other than the Assigned Contracts) of the
Borrower or (ii) litigation, investigation or proceeding which may
exist at any time between the Borrower and any Governmental Authority,
which in either case could have a material adverse effect on the
business, operations, property or financial or other condition of the
Borrower;
(d) of any litigation or proceeding affecting the Borrower in
which the amount involved is $100,000 or more or in which injunctive or
similar relief is sought;
(e) of the following events, as soon as possible and in any
event within 30 days after the Borrower has reason to know thereof: (i)
the occurrence or expected occurrence of any Reportable Event with
respect to any Single Employer Plan which could reasonably be expected
to have a material adverse effect on the Borrower or the Parent, or
(ii) the institution of proceedings or the taking or expected taking of
any other action by PBGC or the Borrower or the Parent to terminate,
withdraw or partially withdraw from any Single Employer Plan, or (iii)
the Reorganization or Insolvency of any Multiemployer Plan, and, in
addition to such notice, deliver to the Agent whichever of the
following may be applicable: (A) a certificate of a Responsible Officer
of the Borrower or the Parent setting forth details as to such
Reportable Event and the action that the Borrower or the Parent, as the
case may be, proposes to take with respect thereto, together with a
copy of any notice of such Reportable Event that may be required to be
filed with PBGC, or (B) any notice delivered by PBGC evidencing its
intent to institute such proceedings or any notice to PBGC that such
Plan is to be terminated, or (C) any notice of the Reorganization or
Insolvency of a Multiemployer Plan received by the Borrower or the
Parent, as the case may be;
(f) of any material adverse change in the business,
operations, property, prospects or financial or other condition of the
Borrower, the Parent, Cogentrix Energy or VEP and of any actual or
prospective change of law, rule or regulation which has or would have
such a material adverse effect;
(g) of any loss or damage to the Collateral in excess of
$50,000;
(h) of any event or condition which would change any matter
represented to in subsection 5.12; and
51
44
(i) of any proposed Additional Contract.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower proposes to take or cause to be taken with
respect thereto and, with respect to a notice given pursuant to clause (i),
shall be accompanied by a copy of the proposed Additional Contract or, if the
proposed Additional Contract has not yet been prepared, shall include a
description of the proposed terms and conditions of such Additional Contract.
For all purposes of clause (e) of this Section, the Borrower shall be deemed to
have all knowledge or knowledge of all facts attributable to the administrator
of any Single Employer Plan.
6.10 Assignments of Additional Contracts; Maintenance of Liens
of the Security Documents; Future Mortgages.
(a) Concurrently with the execution of any Additional
Contract, execute and deliver to the Agent an Assignment with respect to such
Additional Contract and cause the other party or parties to such Additional
Contract to execute and deliver to the Agent a Consent with respect to such
Assignment;
(b) Promptly upon the request of the Agent, and 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 Security
Documents, and take such other action deemed by the Required Lenders to be
necessary or desirable for the creation or perfection of the liens and security
interests purported to be created by the Security Documents; and
(c) If the Borrower shall at any time acquire any real
property or leasehold or other interests therein not covered by the Deed of
Trust, promptly upon such acquisition execute, deliver and record a first deed
of trust in favor of the Agent covering such real property or leasehold or other
interests (which deed of trust shall be satisfactory in form and substance to
the Agent), provide a mortgagee's policy of title insurance in an amount equal
to the purchase price of such property, and in connection therewith deliver to
the Agent such opinions of counsel and certificates as shall be reasonably
requested by the Agent.
6.11 Employee Plans. For each Single Employer Plan adopted by
the Borrower, the Borrower will (a) use its best efforts to seek and receive
determination letters from the Internal Revenue Service to the effect that such
Plan is qualified within the meaning of Section 401(a) of the Code; and (b) from
and after the date of adoption of any Plan, cause such Plan to be qualified
within the meaning of Section 401(a) of the Code and to be administered in all
material respects in
52
45
accordance with the requirements of ERISA and Section 401(a) of the Code.
6.12 Management Letters. Promptly deliver to the Agent a copy
of each report delivered to the Borrower or Cogentrix Energy by its independent
public accountants in connection with any annual or interim audit of the
Borrower's books, including, without limitation, any letters or reports
addressed to the Borrower or Cogentrix Energy or any of their officers relating
to the Borrower's internal controls, adequacy of records or the like.
6.13 Plans. At all times maintain at the Facility an accurate
and complete set of "as built" plans and specifications for the Facility, which
shall be amended and supplemented from time to time to reflect on a current
basis all improvements, additions and modifications to the Facility.
6.14 Correction of Work. Upon demand of the Agent, correct any
structural defect in the Project, all at the sole cost and expense of the
Borrower.
6.15 Defend Title. At all times at the Borrower's own cost and
expense warrant and defend the title to the Facility against the claims and
demands of all Persons whomsoever, except with respect to Permitted Liens.
6.16 Deposits. The Borrower will deposit or cause to be
deposited into each of the Accounts such amounts as are required to be deposited
therein pursuant to the terms of the Security Deposit Agreement.
6.17 Interest Rate Protection. If on any date the implied
yield on U.S. Treasury bonds having a maturity most nearly equal to the then
remaining period from such date to the Final Payment Date exceeds 8% per annum
(an "Interest Rate Trigger Event"), then, within 10 days of such date, the
Borrower shall enter into one or more Interest Rate Protection Agreements
reasonably satisfactory to the Agent which fix or "cap" the interest rates
payable by the Borrower with respect to 50% of the then outstanding unpaid
principal amount of the Loans in a manner reasonably satisfactory to the Agent,
taking into account the amortization of principal provided for under subsection
1.4, for the period of time from such date to the Final Payment Date (the "Cap
Requirement"). If after such date (i) the Borrower shall make a borrowing of
Additional Term Loans hereunder and (ii) an Interest Rate Trigger Event shall
exist on the date of such borrowing and (iii) the Interest Rate Protection
Agreements in effect on such date do not satisfy the Cap Requirement as
determined as of such date (taking into account the aggregate principal amount
of the Additional Term Loans then being made), then within 10 days of the date
of such borrowing, the Borrower shall enter into one or more Interest Rate
Protection Agreements reasonably satisfactory to the Agent which cause the Cap
Requirement then to be met.
53
46
6.18 Hazardous Material. (a) The Borrower shall comply with or
cause compliance with all applicable Environmental Laws, shall pay or cause to
be paid when due the costs of removal of any Hazardous Material and the costs of
compliance with applicable Environmental Laws, and shall keep the Site or cause
the Site to be kept free of any Lien imposed pursuant to such Environmental
Laws. In the event the Borrower fails to do so, after notice to the Borrower and
the expiration of the earlier of (i) 30 days following such notice, or (ii) the
cure period permitted under the applicable Environmental Law, the Agent may
declare such failure an Event of Default or cause the removal of the Hazardous
Material from the Site and the cost of such removal (with interest) shall
immediately be due from the Borrower to the Agent and the same shall be added to
the Term Loans. The Borrower agrees not to release or dispose of any Hazardous
Material at the Project except in compliance with all applicable Environmental
Laws. In addition, the Borrower agrees not to allow the manufacture, storage,
transmission, presence or disposal of any Hazardous Material over, upon or under
the Site in violation of applicable Environmental Laws. The Agent shall have the
right at any time to conduct an environmental audit of the Site and the Borrower
shall cooperate in the conduct of such environmental audit. The Borrower shall
give the Agent and its agents and employees access to the Site to remove
Hazardous Material which is stored, disposed of or otherwise present at the Site
in violation of applicable Environmental Laws and the Borrower agrees to execute
a manifest to enable the Agent to do so and in the event the Borrower fails to
execute such manifest, the Borrower hereby appoints the Agent as its
attorney-in-fact to execute such manifest. The Borrower agrees to deliver to the
Agent copies of all material correspondence and notices to or from any agency,
official or other third party regarding Hazardous Materials and/or Environmental
Laws. The Borrower agrees to defend, indemnify and hold the Agent and each other
Financing Party free and harmless from and against all liability, loss, costs,
damage and expense (including attorneys' fees and expenses and consequential
damages) the Agent or the other Financing Parties may sustain by reason of (A)
the imposition or recording of a Lien by any Governmental Authority pursuant to
any Environmental Law; (B) claims of any Governmental Authority or private
parties regarding violations of Environmental Laws; (C) costs and expenses
(including, without limitation, attorneys' fees and expenses and fees incidental
to the securing of repayment of such costs and expenses) incurred by Borrower,
the Agent or any other Financing Party in connection with the removal of any
such Lien, or removal of any Hazardous Material or in connection with the
Borrower's, the Agent's or any other Financing Party's compliance with any
Environmental Laws; and (D) the assertion against the Agent or any other
Financing Party by any party of any claim in connection with Hazardous Material.
(b) The foregoing indemnification shall be a recourse
obligation of the Borrower and shall survive repayment of the Loans.
54
47
6.19 Notice under Consents. Within 60 days after the Third
Restatement Effective Date, deliver a notice to each party to a Consent (other
than the Power Purchaser or the Borrower) that Credit Lyonnais is the Agent and
of Credit Lyonnais' address and of the other transactions contemplated
hereunder, each such notice to be in a form satisfactory to the Agent, and to be
delivered by a method in accordance with the notice provisions of such Consent
and by which evidence of receipt is obtained.
6.20 Major Maintenance Reserve Account. On each Quarterly
Distribution Date, the Borrower shall deposit or cause to be deposited into the
Major Maintenance Reserve Account an amount in Dollars and in immediately
available funds equal to the lesser of (a) an amount equal to the excess of (i)
100% of the Available Project Cash Flow for the three-month period ended on the
immediately preceding Installment Payment Date over (ii) the outstanding
principal amount of the Debt Service Letter of Credit Loans as of such Quarterly
Distribution Date and (b) the amount by which the Required Major Maintenance
Reserve Amount for such Quarterly Distribution Date exceeds the amount then on
deposit in the Major Maintenance Reserve Account. Amounts on deposit in the
Major Maintenance Reserve Account shall be held and disbursed by the Security
Agent in accordance with the Security Deposit Agreement.
SECTION 7. NEGATIVE COVENANTS.
So long as any Note remains outstanding and unpaid or any
other amount is owing to the Agent or any other Financing Party hereunder or
under the Security Documents, the Borrower agrees that it shall not:
7.1 Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness, except (i) Indebtedness in respect of the Notes and other
Indebtedness owed to the Financing Parties, (ii) Indebtedness in respect of
Junior Working Capital Loans and (iii) Indebtedness in respect of Interest Rate
Protection Agreements.
7.2 Limitation on Liens. Create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired, except: (a) Liens in favor of the Agent or the other
Financing Parties created by the Security Documents; (b) Liens for taxes not yet
due, or which are being contested in good faith and by appropriate proceedings
if (i) adequate reserves with respect thereto are maintained on the books of the
Borrower in accordance with GAAP and (ii) such contest does not involve any risk
of the sale, forfeiture or loss of any of the Collateral; (c) carriers',
warehousemen's, mechanics', materialmen's, repairmen's or other like Liens
arising in the ordinary course of business which secure payment of sums which
are not overdue for a period of more than 30 days, or which are being contested
in good faith and by appropriate proceedings if (i) adequate reserves with
respect thereto are maintained on the books of the Borrower in accordance
55
48
with GAAP and (ii) such contest does not involve any risk of the sale,
forfeiture or loss of any of the Collateral; (d) judgment liens which are
discharged within ten days after the entry thereof; (e) pledges or Liens in
connection with workmen's compensation, unemployment insurance and other social
security legislation; (f) deposits to secure the performance of statutory
obligations, surety and appeal bonds, performance bonds and other obligations of
a like nature incurred in the ordinary course of business; (g) the Permitted
Liens listed on Schedule VI; and (h) rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount, and which do not in any case
materially reduce the value of the property subject thereto or interfere with
the ordinary conduct of the business of the Borrower.
7.3 Limitation on Contingent Obligations. Agree to, or assume,
guarantee, endorse or otherwise in any way be or become responsible or liable
for, directly or indirectly, any Contingent Obligation, except: (a) those
created by the Security Documents, and (b) those created by the other Project
Documents.
7.4 Limitation on Restricted Payments. (a) Declare any
dividends (other than dividends payable solely in stock of the Borrower) on, or
make any payment on account of, or set apart assets for a sinking or other
analogous fund for the purchase, redemption, retirement or other acquisition of,
any shares of any class of stock of the Borrower, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property or in obligations of the Borrower or
(b) make any payment of principal or interest or other amount in respect of any
Junior Working Capital Loan or (c) pay or permit the payment of any Management
Fees to Cogentrix Energy or of any amount to Cogentrix Energy or any other
Person in respect of the payment of any federal, state or local income taxes or
(d) pay any amount representing regional or central support costs (each such
payment or distribution described in (a), (b), (c) or (d) above, a "Restricted
Payment"); provided, that so long as no Default or Event of Default shall have
occurred and be continuing immediately prior to or will occur or be continuing
immediately after giving effect thereto and the Twelve-Month Debt Coverage Ratio
(determined as of the most recent Installment Payment Date) equals or exceeds
1.15 to 1.0, the Borrower may make Restricted Payments on any Borrower
Distribution Date to the extent of cash made available to the Borrower pursuant
to and in accordance with Section 4.07 of the Security Deposit Agreement (other
than clauses "first" and "second" thereof). The foregoing provisions of this
subsection 7.4 to the contrary notwithstanding, the Borrower may, on any date on
which the Lenders make Additional Term Loans to the Borrower, pay a cash
dividend in an amount not exceeding the amount of such Additional Term Loans.
7.5 Limitation on Investments. Make or commit to make any
Investment other than (a) Permitted Investments, (b) loans to
56
49
Cogentrix Energy or any Affiliate thereof on any date on which the Lenders make
Additional Term Loans to the Borrower in an amount not exceeding the amount of
such Additional Term Loans and (c) a loan to Cogentrix Energy or any Affiliate
thereof on the Third Restatement Effective Date in an amount not exceeding
$12,000,000.
7.6 Prohibition of Fundamental Changes; Change of Office. (a)
Enter into any transaction of merger or consolidation, or change its form of
organization or its business, or liquidate or dissolve itself (or suffer any
liquidation or dissolution), or
(b) Change the location of its chief executive office or
principal place of business or the office where it keeps its records concerning
the Project and all contracts relating thereto from that set forth in subsection
5.19, unless the Borrower shall have given the Agent at least 30 days' prior
written notice thereof and all action necessary or advisable in the Agent's
opinion to protect and perfect the Liens and security interests with respect to
the Collateral created by the Security Documents shall have been taken.
7.7 Limitation on Leases. Enter into any agreement, or be or
become liable as lessee under any agreement (other than the Ground Lease), for
the lease, hire or use of any real or personal property without the prior
written consent of the Required Lenders, except for operating leases of personal
property entered into in the ordinary course of business, under which the
Borrower's aggregate payment obligations do not exceed $100,000 in any fiscal
year, and which are not for the purpose of acquiring fixed or capital assets.
7.8 Compliance with ERISA. (a) Terminate any Single Employer
Plan so as to result in any material liability to PBGC, (b) engage in or permit
any Affiliate to engage in any "prohibited transaction" (as defined in Section
406 of ERISA or Section 4975 of the Code) involving any Plan which would subject
the Borrower to any material tax, penalty or other liability, (c) incur or
suffer to exist any material "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, involving any Plan subject to
Section 412 of the Code or Part 3 of Title I(B) of ERISA, (d) allow or permit to
exist any event (including a Reportable Event) or condition which represents a
material risk of incurring a material liability to PBGC, or (e) permit the
present value of all benefits vested under all Single Employer Plans subject to
Title IV of ERISA, based on those assumptions used to fund the Plans, as of any
valuation date with respect to such Plans to exceed the value of the assets of
the Plans allocable to such benefits.
7.9 Restrictions on Disposition and Purchase of Assets. (a)
Sell, assign, lease (as lessor), transfer or otherwise dispose of any part of
its property or assets except (i) sales of electric power pursuant to the Power
Purchase
57
50
Agreement, sales of steam pursuant to the Steam Purchase Contract and sales of
any other by-products of the fuel combustion process of the Facility, (ii) any
sale, transfer or disposition of assets permitted under subsection 10.8, (iii)
sales of Permitted Investments for cash or other Permitted Investments and (iv)
sales of water pursuant to the Water Purchase Contract.
(b) Purchase or acquire any assets other than (a) assets
purchased in the ordinary course of business reasonably required in connection
with the operation and maintenance of the Facility and (b) Permitted
Investments.
7.10 Amendments, Etc. of Contracts. Without the prior written
consent of the Required Lenders, enter into any Additional Contract or enter
into or consent to or permit (i) the cancellation or termination of any Project
Document (except upon expiration of the stated term thereof), (ii) the
assignment of the rights or obligations of any party to any Project Document
except as contemplated by this Agreement, (iii) any amendment, supplement or
modification (including, without limitation, any change orders) of, or waiver
with respect to any of the provisions of, any Project Document, or (iv) any
modification or supplement of the Plans; provided, that the Borrower may, upon
not less than five Business Days' prior written notice to the Agent, amend,
supplement, waive or otherwise modify any Project Document to which it is a
party (other than the Power Purchase Agreement, the Coal Sales Agreement, the
Coal Sales Agreement Guarantee, the Barge Transportation Contract, the Ash
Hauling Agreement, the Steam Purchase Contract, the Management Agreement, the
Ground Lease, the Easements, the Railroad Transportation Contract, the Water
Purchase Contract or any Project Document to which any Financing Party is a
party or which is expressly for the benefit of any Financing Party as a named
third-party beneficiary) in any manner which does not alter in any material
respect the rights or obligations of the respective parties thereto or adversely
affect the Borrower's ability to perform its obligations under the Loan
Agreement or any other Project Document.
7.11 Transactions with Affiliates and Others. (a) Directly or
indirectly, purchase, acquire, exchange or lease any property from, or sell,
transfer or lease any property to, or borrow any money from, or enter into any
management or similar fee agreement with, any Affiliate or any officer, director
or employee of the Parent, Delaware Holdings, Cogentrix Energy or the Borrower,
except for the transactions contemplated by the Project Documents and by this
Agreement (including, without limitation, the Management Agreement), or (b)
enter into any other transaction or arrangement or make any payment (except as
permitted by subsection 7.4 or 7.5) to or otherwise deal with, in the ordinary
course of business or otherwise, any Affiliate except in transactions
contemplated by the Project Documents.
7.12 Limitation on Capital Expenditures. Without the prior
written consent of the Required Lenders, make or commit to
58
51
make any Capital Expenditures except as contemplated by the Project Documents;
provided, that the Borrower may make or commit to make Capital Expenditures not
to exceed $300,000 in the aggregate for any fiscal year.
7.13 Conduct of Business. Engage in any business other than
the ownership and operation of the Project and all activities incidental
thereto.
7.14 Qualifying Facility. Take any action, or omit to take any
action, which would cause the Project to cease being a "qualifying cogeneration
facility" within the meaning of the Public Utility Regulatory Policies Act of
1978, as amended from time to time.
SECTION 8. EVENTS OF DEFAULT.
8.1 Events of Default. Upon the occurrence of any of the
following events:
(a) The Borrower shall fail to pay when due any principal of
any Loan, or within five (5) days of the date when due any interest on
any Loan or any Debt Service Letter of Credit Fee or any other fee or
other amount payable hereunder or under the Security Documents; or
(b) (i) Any representation or warranty made by the Borrower or
any Project Participant in this Agreement or in any other Project
Document or which is contained in any certificate, document or
financial or other statement furnished at any time under or in
connection with this Agreement or any other Project Document shall
prove to have been incorrect in any material respect on or as of the
date made or deemed made; or (ii) any representation contained in
subsection 5.12 shall not continue to be true and correct at all times;
or
(c) The Borrower shall default in the observance or
performance of (i) any covenant or agreement contained in subsection
6.7, (ii) any covenant or agreement contained in subsection 6.2(c) or
6.19 and such default shall continue unremedied for a period of 5 days
after notice thereof from the Agent or any other Financing Party, or
(iii) any covenant or agreement contained in Section 7 and such default
shall continue unremedied for a period of 30 days after the occurrence
thereof; or
(d) The Borrower shall default in the observance or
performance of any other covenant or agreement contained in this
Agreement or in the Security Deposit Agreement, or the Borrower, the
Parent, Delaware Holdings or Cogentrix Energy shall default in any
material respect in the observance or performance of any covenant or
agreement contained in any other Project Document (other than a
Security Document or
59
52
the Cogentrix Energy Indemnity Agreement) or in any Interest Rate
Protection Agreement, and (i) the Borrower, Delaware Holdings,
Cogentrix Energy or the Parent shall not have notified the Agent of
such default within 30 days after it obtained knowledge thereof or (ii)
the Borrower, Delaware Holdings, Cogentrix Energy or the Parent shall
have given the notice required by clause (i) and such default shall
continue unremedied for a period of 15 days after notice from any
Financing Party requiring that such defaults be remedied; or Cogentrix
Energy shall default in the performance or observance of any covenant
or agreement in the Cogentrix Energy Indemnity Agreement (including,
without limitation, any obligation to make a payment thereunder) and
(x) if such default is in respect of an obligation to make a payment,
such default shall continue unremedied for a period of three Business
Days or (y) otherwise, Cogentrix Energy shall not have notified the
Agent of such default within 30 days after it obtained knowledge
thereof or such default shall continue unremedied for a period of 15
days after notice from any Financing Party requiring that such default
be remedied; or
(e) (1) The Borrower shall (i) default in any payment of
principal of or interest on any Indebtedness (other than the Notes)
beyond the period of grace, if any, provided in the instrument or
agreement under which such Indebtedness was created; or (ii) default in
the observance or performance of any other agreement or condition
relating to any such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of
such Indebtedness (or a trustee or agent on behalf of such holder or
holders) to cause such Indebtedness to become due prior to its stated
maturity or to realize upon any collateral given as security therefor;
or (2) any Project Participant shall fail to perform or observe any of
its covenants or obligations contained in any of the Project Documents
(other than the covenants and obligations referred to in paragraphs
(a), (b), (c) and (d) above) within the grace period, if any, provided
for in such Project Documents, which failure shall continue unremedied
for a period of 30 days after notice by the Agent to the Borrower and
which failure could reasonably be expected to materially adversely
affect (i) the interest of the Lenders under such Project Document or
any other Project Document, (ii) the ability of any Project Participant
to perform its obligations under such Project Document or any other
Project Document or (iii) the ability of the Borrower to perform its
obligations under any of the Project Documents to which it is a party;
provided, that it shall not be an Event of Default under this Section
8.1(e) if, within 30 days after the occurrence of any of the foregoing
events with respect to a Project Participant (other than the Borrower,
the Parent, Delaware Holdings,
60
53
Cogentrix Energy, VEP or the Steam Purchaser), such Project Participant
shall have been replaced by another Person acceptable to the Required
Lenders who shall have entered into Project Document(s) similar to, and
at least as favorable to the Agent and the other Financing Parties as,
the Project Document(s) to which such Project Participant was a party
and such replacement Project Document(s) shall have been assigned to
the Agent to the same extent as the Project Document(s) being replaced;
or
(f) (i) The Borrower or any Project Participant shall commence
any case, proceeding or other action (A) under any existing or future
law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate
it a bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other
relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian or other similar official for it or for
all or any substantial part of its assets, or the Borrower or any
Project Participant shall make a general assignment for the benefit of
its creditors; or (ii) there shall be commenced against the Borrower or
any Project Participant any case, proceeding or other action of a
nature referred to in clause (i) above which (A) results in the entry
of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of 60 days;
or (iii) there shall be commenced against the Borrower or any Project
Participant any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against
all or any substantial part of its assets, which results in the entry
of an order for any such relief which shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 days from the
entry thereof; or (iv) the Borrower or any Project Participant shall
take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii) or (iii) above; or (v) the Borrower or any Project
Participant shall be unable to, or shall admit in writing its inability
to, pay its debts as they become due; provided, that it shall not be an
Event of Default under this Section 8.1(f) if, within 30 days after the
occurrence of any of the foregoing events with respect to a Project
Participant (other than the Borrower, the Parent, Delaware Holdings,
Cogentrix Energy, VEP or the Steam Purchaser), such Project Participant
shall have been replaced by another Person acceptable to the Required
Lenders who shall have entered into Project Documents(s) similar to,
and at least as favorable to the Agent and the other Financing Parties
as, the Project Documents(s) to which such Project Participant was a
party and such replacement Project
61
54
Documents(s) shall have been assigned to the Agent to the same extent
as the Project Document(s) being replaced; or
(g) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan which is not remedied before the imposition of
a 100% penalty tax and which, in the sole opinion of the Required
Lenders, will result in a liability to the Borrower in excess of
$100,000, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect
to any Plan, or (iii) a Reportable Event shall occur with respect to,
or proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate any Single Employer
Plan, which Reportable Event or institution of proceedings is, in the
reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, and, in the
case of a Reportable Event, the continuance of such Reportable Event
unremedied for ten days after notice of such Reportable Event pursuant
to Section 4043(a), (c) or (d) of ERISA is given or the continuance of
such proceedings for ten days after commencement thereof, as the case
may be, or (iv) any Single Employer Plan shall terminate for purposes
of Title IV of ERISA, or (v) any other event or condition shall occur
or exist with respect to a Single Employer Plan; and in each case in
clauses (i) through (v) above, such event or condition, together with
all other such events or conditions, if any, would in the reasonable
opinion of the Required Lenders subject the Borrower, Delaware
Holdings, Cogentrix Energy or the Parent to any tax, penalty or other
liabilities in the aggregate material in relation to the business,
operations, property or financial or other condition of the Borrower,
Delaware Holdings, Cogentrix Energy or the Parent; or
(h) One or more judgments or decrees shall be entered against
the Borrower, the Parent, Delaware Holdings, Cogentrix Energy or VEP
involving in the aggregate a liability (not paid or fully covered by
insurance) of at least $250,000 in the case of the Borrower, $3,000,000
in the case of the Parent, Delaware Holdings or Cogentrix Energy, or
$10,000,000 in the case of VEP, and all such judgments or decrees shall
not have been bonded, vacated, discharged or stayed within 60 days from
the entry thereof; or
(i) Any Security Document shall cease, for any reason, to be
in full force and effect (except upon the termination thereof in
accordance with its terms), or the Borrower shall so assert in writing,
or the Borrower or the Parent shall default in the observance or
performance of any covenant or agreement contained in any Security
Document; or
62
55
(j) Any Project Document shall at any time for any reason
cease to be in full force and effect (other than by reason of any
action by any Financing Party), or shall be declared to be null and
void in whole or in part or be terminated (other than by reason of any
action by any Financing Party) except upon expiration of the stated
term thereof, or any Project Participant shall renounce the same or
deny that it has any or further liability thereunder; provided, that it
shall not be an Event of Default under this Section 8.1(j) if, within
30 days after the occurrence of any of the foregoing events with
respect to a Project Participant (other than the Borrower, the Parent,
Delaware Holdings, Cogentrix Energy, VEP or the Steam Purchaser), such
Project Participant shall have been replaced by another Person
acceptable to the Required Lenders who shall have entered into Project
Document(s) similar to, and at least as favorable to the Agent and the
other Financing Parties as, the Project Document(s) to which such
Project Participant was a party and such replacement Project
Document(s) shall have been assigned to the Agent to the same extent as
the Project Document(s) being replaced; or
(k) The Borrower shall fail to comply with any material
requirement of any Governmental Authority within 30 days after notice
in writing of such requirement shall have been given to the Borrower by
such Governmental Authority or, if such notice shall specify a later
date for compliance, by such later date, unless the Borrower is
contesting such requirement in any reasonable manner which contest does
not adversely affect the operation of the Facility, or in the sole
opinion of the Lenders, affect the Lenders' rights or the priority of
their Liens on or security interests in the Collateral; or
(l) At any time title to any part of the Collateral shall not
be satisfactory to the Agent by reason of any Lien or other defect
(even though the same may have existed prior to the Third Restatement
Effective Date), except Permitted Liens and the Liens of the Security
Documents, and such Lien or other defect shall not be corrected within
15 days after notice to the Borrower; or
(m) (i) The Parent shall at any time sell, assign, mortgage,
pledge, encumber, hypothecate or otherwise transfer or dispose of any
of the shares of the capital stock of the Borrower held by it, except
in accordance with the provisions on the Pledge Agreement, or (ii)
Cogentrix Energy shall cease at any time to be the owner, directly or
indirectly through one or more wholly-owned Subsidiaries, of all of the
outstanding shares of stock of the Borrower of each class having
ordinary voting power (other than stock having such power only by
reason of the happening of a contingency).
63
56
then, and in any such event, (a) if such event is an Event of Default specified
in paragraph (f) above with respect to the Borrower, the principal amount of the
Loans (with accrued interest thereon) and all other amounts owing under this
Agreement and the Security Documents shall immediately become due and payable,
and the Total Additional Term Loan Commitment shall immediately terminate and
the Available Additional Term Loan Commitment of each Lender shall be
immediately reduced to zero, without any action by the Financing Parties; and
(b) if such event is any other Event of Default, with the consent of the
Required Lenders, the Agent may or upon the request of the Required Lenders, the
Agent shall, by notice of default to the Borrower, do either or both of the
following: (i) declare the Total Additional Term Loan Commitment to be
terminated and the Available Additional Term Loan Commitment of each Lender to
be reduced to zero forthwith, whereupon the Additional Term Loan Commitment
shall immediately terminate and the Available Additional Term Loan Commitment of
each Lender shall immediately be reduced to zero and (ii) declare the principal
amount of the Loans (with accrued interest thereon) and all other amounts owing
under this Agreement and the Security Documents to be due and payable forthwith,
whereupon the same shall immediately become due and payable. Presentment,
demand, protest and, except as expressly provided above in this Section 8.1, all
notices of any kind are hereby expressly waived. Upon the occurrence and during
the continuance of any Event of Default, the rights, powers, privileges and
remedies available to the Agent and the other Financing Parties under this
Agreement and the Security Documents or by statute or by rule of law may be
exercised by the Agent and the other Financing Parties at any time and from time
to time whether or not the Loans shall be due and payable, and whether or not
the Agent or the other Financing Parties shall have instituted any foreclosure
or other action for the enforcement of the Security Documents or the Notes. In
the event that the entire unpaid principal amount of the Loans, and all interest
accrued thereon, and all other amounts owing under this Agreement and the
Security Documents shall have become due and payable pursuant to this subsection
8.1, the Agent shall make a drawing on the Debt Service Letter of Credit in the
amount then permitted to be drawn thereunder.
SECTION 9. THE AGENT
9.1 Appointment. Each Lender and the Issuing Bank hereby
irrevocably designates and appoints Credit Lyonnais as the agent of such
Financing Party under this Agreement and the Security Documents. Each such
Lender and the Issuing Bank hereby irrevocably authorizes Credit Lyonnais, as
the agent for such Financing Party, to take such action on its behalf under the
provisions of this Agreement and the Security Documents, to execute on its
behalf, where required, the Security Documents (and any amendments, supplements
or modifications thereof) and to exercise such powers and perform such duties as
are expressly delegated to the Agent by the terms of this Agreement and the
64
57
Security Documents, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement or the Security Documents, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein and therein, or any
fiduciary relationship with any Lender or the Issuing Bank, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or the Security Documents, or shall otherwise exist
against the Agent.
9.2 Delegation of Duties. The Agent may execute any of its
duties under this Agreement and the Security Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible to any
Lender or the Issuing Bank for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
9.3 Exculpatory Provisions. Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates shall be
(i) liable to any Lender or the Issuing Bank for any action lawfully taken or
omitted to be taken by it or any such Person under or in connection with this
Agreement or any other Project Document (except for its or such Person's own
gross negligence or willful misconduct), or (ii) responsible in any manner to
any of the Lenders or the Issuing Bank for any recitals, statements,
representations or warranties made by, on behalf of, or with respect to any
Project Participant contained in this Agreement or any other Project Document or
in any certificate, report, statement or other document referred to or provided
for in, or received by the Agent from any Person under or in connection with,
this Agreement, any Note or any other Project Document or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement, any other Project Document or the Notes or for any failure of the
Borrower or any Project Participant to perform its obligations hereunder or
thereunder. Neither the Agent nor any of its officers shall be under any
obligation to any Lender or the Issuing Bank to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or
conditions of, this Agreement, the Notes or the other Project Documents, or to
inspect the properties, books or records of any Project Participant.
9.4 Reliance by Agent. The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any Note, writing, resolution,
notice, consent, certificate, affidavit, letter, telecopy, telex or teletype
message, statement, order of other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrower), independent accountants and other experts.
The Agent may deem and treat the payee of any Note as the owner thereof for all
65
58
purposes unless a written notice of assignment, negotiation or transfer thereof
shall have been filed with the Agent. The Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any Security
Document or Project Document unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate and it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Agent shall in all cases be fully protected in acting,
or in refraining from acting, under this Agreement, the Notes, the Security
Documents and the Project Documents in accordance with a request of the Required
Lenders, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Notes.
9.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder or of any default under any other Project Document unless it has
received notice from a Lender, the Issuing Bank or the Borrower referring to
this Agreement (or such Project Document), describing such Default or Event of
Default or other default and stating that such notice is a "notice of default".
In the event that the Agent receives such a notice, it shall promptly give
notice thereof to the Lenders and the Issuing Bank and shall consult with them
concerning the course of action to be taken on their behalf. The Agent shall
take such action with respect to such Default, Event of Default or other default
as shall be reasonably directed by the Required Lenders; provided that, unless
and until the Agent shall have received such directions, the Agent may (but
shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Default, Event of Default or other default as it shall deem
advisable in the best interests of the Lenders and the Issuing Bank.
9.6 Non-Reliance on Agent. Each Lender and the Issuing Bank
expressly acknowledges that neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by the Agent hereinafter
taken, including any review of the affairs of any Project Participant, shall be
deemed to constitute any representation or warranty by the Agent to any Lender
or the Issuing Bank. Each Lender and the Issuing Bank represents to the Agent
that it has, independently and without reliance upon the Agent or any other
Lender or the Issuing Bank, and based on such documents and information as it
has deemed appropriate, made its own appraisal of the business, operations,
property, projections, financial and other condition and creditworthiness of the
Borrower and the other Project Participants and made its own decision to make
its Loans hereunder and enter into this Agreement. Each Lender and the Issuing
Bank also represents that it will, independently and without reliance upon
either the Agent or any other Lender or the Issuing Bank, and based on such
documents and information as it
66
59
shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the documents executed in connection herewith, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of any Project Participant.
9.7 Indemnification. The Lenders and the Issuing Bank agree to
indemnify the Agent in its capacity as such (to the extent not reimbursed by the
Borrower and without limiting the obligation of the Borrower to do so), ratably
in accordance with their respective Loan Percentages, from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment of the
Term Notes) be imposed on, incurred by or asserted against the Agent in any way
relating to or arising out of the use of proceeds of the Loans hereunder or
relating to or arising out of this Agreement, the Notes or the other Project
Documents or any other documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by the Agent under or in connection with any of the foregoing;
provided that neither any Lender nor the Issuing Bank shall be liable for the
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
solely from the Agent's gross negligence or willful misconduct. The agreements
in this subsection shall survive the payment of the Notes and all other amounts
payable hereunder.
9.8 The Agent in Its Individual Capacity. The Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Borrower and its Affiliates as though the Agent were
not the Agent hereunder. With respect to Loans made by it and any Note issued to
it, the Agent shall have the same rights and powers under this Agreement as any
Lender and may exercise the same as though it were not the Agent, and the terms
"Lender" and "Lenders" shall include the Agent in its individual capacity.
9.9 Successor Agent. The Agent may resign as Agent upon 30
days' notice to the Lenders, the Issuing Bank and the Borrower. If such notice
shall be given, the Agent shall use reasonable commercial efforts during such
30-day period to procure a successor reasonably satisfactory to the Borrower and
the Required Lenders to serve as agent hereunder and under and in connection
with the other Project Documents. If at the end of such 30-day period the Agent
shall be unable to produce such a successor, the Required Lenders shall appoint
a successor agent for the Lenders and the Issuing Bank. Any such successor agent
shall succeed to the rights, powers and duties of the resigning Agent, and the
term "Agent" shall mean such successor agent. Upon the appointment of such
successor agent or upon the
67
60
expiration of such 30-day period (or any longer period to which the resigning
Agent has agreed), the resigning Agent's rights, powers and duties as Agent
shall be terminated, without any other or future act or deed on the part of such
resigning Agent or any of the parties to this Agreement or any of the other
Project Documents or any holders of the Notes. After the resigning Agent's
resignation hereunder as "Agent", the provisions of this Section 9 shall inure
to the benefit of such resigning Agent as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.
SECTION 10. MISCELLANEOUS.
10.1 Amendments and Waivers. Neither this Agreement, any Note,
nor any terms hereof or thereof may be amended, supplemented or modified except
in accordance with the provisions of this subsection. With the written consent
of the Required Lenders and the Issuing Bank, the Agent and the Borrower may,
from time to time, enter into written amendments, supplements or modifications
hereto for the purpose of adding any provisions to this Agreement or the Notes
or changing in any manner the rights of the Lenders or the Issuing Bank or of
the Borrower hereunder or thereunder or waiving, on such terms and conditions as
the Agent may specify in such instrument, any of the requirements of this
Agreement or the Notes or any Default or Event of Default and its consequences;
provided, however, that (except as may be otherwise provided under subsection
1.6) no such waiver and no such amendment, supplement or modification shall (a)
extend the maturity of any Note or any installment thereof, or reduce the rate
or extend the time of payment of interest thereon, or reduce the principal
amount thereof, or reduce any fee payable to the Lenders hereunder, or change
the amount of any Lender's Loan Percentage or release any Collateral or amend,
modify or waive any provision of this subsection or reduce the percentage
specified in the definition of Required Lenders, or consent to the assignment or
transfer by the Borrower of any of its rights and obligations under this
Agreement, in each case without the written consent of all the Lenders and the
Issuing Bank, or (b) amend, modify or waive any provision of Section 9 without
the written consent of the then Agent. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Lenders and the
Issuing Bank and shall be binding upon the Borrower, each of the Financing
Parties and all future holders of the Notes. In the case of any waiver, the
Borrower and each of the Financing Parties shall be restored to their former
position and rights hereunder and under the outstanding Notes, and any Default
or Event of Default waived shall be deemed to be cured and not continuing; but
no such waiver shall extend to any subsequent or other Default or Event of
Default, or impair any right consequent thereon.
68
61
10.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing and shall be
either delivered in person, sent by facsimile transmission or mailed by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows or to such other address as any party may hereafter
designate in writing to the other parties hereto:
The Borrower: Cogentrix Virginia Leasing
Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Vice President-
Finance and Treasurer
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
The Agent and
the Issuing Bank: Credit Lyonnais
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇/▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
The Lenders: The respective addresses set forth in
Schedule IX hereto.
Every notice, request and demand hereunder to the Borrower, the Agent or the
other Financing Parties shall be deemed to have been duly given or made when
delivered, or transmitted by facsimile transmission to it, or if mailed, when
actually received by it (as evidenced by the postal receipt therefor); provided
that a notice of default pursuant to Section 8 shall be deemed to have been duly
given to the Borrower when delivered, if in person, when transmitted, if by
facsimile transmission, or, if by mail, five (5) days after the date deposited
in the mail.
10.3 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Agent, the Issuing Bank or the
Lenders, any right, remedy, power or privilege hereunder, shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
10.4 Survival of Representations and Warranties. All
representations and warranties made hereunder and in any document, certificate
or statement delivered pursuant hereto or in connection herewith shall survive
the execution and delivery of this Agreement and the Notes.
10.5 Payment of Expenses and Taxes. The Borrower agrees (a) to
pay or reimburse the Agent, the Issuing Bank and
69
62
the Lenders for all out-of-pocket costs and expenses incurred in connection with
the negotiation, preparation and execution of this Agreement, the Project
Documents and the Notes or any amendment, supplement or modification to this
Agreement, the Project Documents and the Notes and any other documents prepared
in connection herewith or therewith, and the consummation of the transactions
contemplated hereby and thereby, including, without limitation, the fees and
disbursements of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel to the Agent, the fees and
expenses of the Independent Engineer and the fees and expenses of the Insurance
Advisor; (b) to pay or reimburse the Agent, the Issuing Bank and the Lenders for
all costs and expenses, including, without limitation, fees and disbursements of
counsel, incurred in connection with the enforcement or preservation of any
rights under this Agreement, the Notes and the Project Documents; (c) to pay the
premium for any policy of title insurance issued to the Agent, the Issuing Bank
or the Lenders in connection with the Deed of Trust, including, without
limitation, any endorsements thereto and continuations thereof; (d) to pay,
indemnify, and hold the Agent, the Issuing Bank and the Lenders harmless from,
any and all title and conveyancing charges, mortgage taxes, escrow fees and
recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise and other taxes (other than
taxes on the overall net income of such Lender), if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
the consummation of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the Notes or any other Project Document; and (e) to pay,
indemnify, and hold the Agent, the Issuing Bank and the Lenders harmless from
and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the Notes and the other
Project Documents (all the foregoing being called, collectively, the
"indemnified liabilities"), provided that the Borrower shall have no obligation
hereunder with respect to indemnified liabilities arising from the gross
negligence or willful misconduct of the Agent, the Issuing Bank or any Lender.
The agreements in this Section shall survive repayment of the Notes and the
termination of this Agreement and the other Project Documents.
10.6 Successors and Assigns. (a) This Agreement shall be
binding upon and inure to the benefit of the Borrower, the Lenders, the Issuing
Bank, the Agent, their respective successors and assigns and all future holders
of the Notes, except that the Borrower may not assign or transfer any of its
rights under this Agreement without the prior written consent of the Lenders and
the Issuing Bank.
(b) Any Financing Party may, in the ordinary course of its
business and in accordance with applicable law, at any time
70
63
sell to one or more financial institutions or other entities ("Participants")
participating interests in any Loans owing to such Financing Party or any other
interests of such Financing Party hereunder. In the event of any such sale by a
Financing Party of a participating interest to a Participant, such Financing
Party's obligations under this Agreement to the other parties to this Agreement
shall remain unchanged, such Financing Party shall remain solely responsible for
the performance thereof, such Financing Party shall remain the holder of its
Note for all purposes under this Agreement, and the Borrower and the Agent shall
continue to deal solely and directly with such Financing Party in connection
with such Financing Party's rights and obligations under this Agreement. The
Borrower agrees that if amounts outstanding under this Agreement, the Security
Documents or the Notes are due or unpaid, or shall have been declared or shall
have become due and payable upon the occurrence of an Event of Default, each
Participant shall be deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement, the Security
Documents and any Notes to the same extent as if the amount of its participating
interest were owing directly to it as a Financing Party under this Agreement or
any Notes; provided that such right of set-off shall be subject to the
obligation of such Participant to share with the Financing Parties, and the
Financing Parties agree to share with such Participant, as provided in
subsection 3.4. The Borrower also agrees that each Participant shall be entitled
to the benefits of subsections 2.10, 2.11, 2.12 and (in the case of a
participating interest in any Debt Service Letter of Credit Loan) 2A.10, with
respect to its participation in the Eurodollar Loans outstanding from time to
time; provided, that no Participant shall be entitled to receive any greater
amount pursuant to such subsections than the transferor Financing Party would
have been entitled to receive in respect of the amount of the participation
transferred by such transferor Financing Party to such Participant had no such
transfer occurred.
(c) Any Lender may, in the ordinary course of its business and
in accordance with applicable law, at any time assign to one or more banks or
other entities ("Assignees"), all or any part of any Term Loans owing to such
Lender, any Term Notes held by such Lender or any other interest of such Lender
hereunder, pursuant to a Loan Transfer Supplement, substantially in the form of
Exhibit F, executed by such Assignee, such transferor Lender and the Agent
provided that each Lender shall use reasonable efforts to offer to sell such
rights and obligations to financial institutions reasonably acceptable to the
Borrower, provided, further, that the ultimate decision with respect to any
disposition of such rights and obligations shall be made by such Lender in its
sole judgment. Upon (i) the execution of such Loan Transfer Supplement, (ii)
delivery of an executed copy thereof to the Borrower and (iii) payment by such
Assignee to the transferor Lender, such Assignee shall for all purposes be a
Lender party to this Agreement and shall have all the rights and obligations of
a Lender under this Agreement, to the same extent as if it were an original
party hereto. Upon the
71
64
consummation of any transfer to an Assignee pursuant to this paragraph (c), the
transferor Lender, the Agent and the Borrower shall make appropriate
arrangements so that, if required, replacement Term Notes are issued to such
transferor Lender and new Term Notes or, as appropriate, replacement Term Notes,
are issued to such Assignee, in each case in principal amounts reflecting their
outstanding Term Loans as adjusted pursuant to such Loan Transfer Supplement.
(d) The Borrower authorizes each Financing Party to disclose
to any Participant or Assignee (each, a "Transferee") and to any prospective
Transferee any and all financial and other information in such Financing Party's
possession concerning the Borrower pursuant to this Agreement or which has been
delivered to such Financing Party by the Borrower pursuant to this Agreement or
which has been delivered to such Financing Party by the Borrower in connection
with such Financing Party's credit evaluation of the Borrower prior to entering
into this Agreement.
(e) If, pursuant to this subsection, any interest in this
Agreement or any Note is transferred to any Assignee which is organized under
the laws of any jurisdiction other than the United States or any State thereof,
the transferor Lender shall cause such Assignee, concurrently with the
effectiveness of such transfer, (i) to represent to the transferor Lender (for
the benefit of the transferor Lender, the Agent and the Borrower) that under
applicable law and treaties no taxes will be required to be withheld by the
Agent, the Borrower or the transferor Lender with respect to any payments to be
made to such Assignee in respect of the Term Loans, (ii) to furnish to the
transferor Lender, the Agent and the Borrower either U.S. Internal Revenue
Service Form 4224 or U.S. Internal Revenue Service Form 1001 (wherein such
Transferee claims entitlement to complete exemption from U.S. federal
withholding tax on all interest payments hereunder) and (iii) to agree (for the
benefit of the transferor Lender, the Agent and the Borrower), to deliver to the
Agent and the Borrower a new Form 4224 or Form 1001 on or before the date that
any such form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form previously delivered by it pursuant
hereto, and such extensions or renewals thereof as may reasonably be requested
by the Borrower or the Agent, unless in any such case an event (including,
without limitation, any change in treaty, law or regulation) has occurred prior
to the date on which any such delivery would otherwise be required which renders
any such form inapplicable or which would prevent such Assignee from duly
completing and delivering any such form with respect to it and such Assignee so
advises the Borrower and the Agent.
10.7 Financing Parties Sole Beneficiaries. All conditions of
the obligation of any Financing Party to make Loans hereunder are imposed solely
and exclusively for the benefit of the Financing Parties and their respective
successors and assigns and no other Person shall have standing to require
satisfaction of such conditions in accordance with their terms or be entitled
72
65
to assume that any Financing Party will refuse to make Loans in the absence of
strict compliance with any or all thereof and no Person shall, under any
circumstances, be deemed to be a beneficiary of such conditions, any or all of
which may be freely waived in whole or in part by the Financing Parties at any
time if in their sole discretion they deem it advisable to do so. Inspections
and approvals of the Plans, the Project, and the workmanship and materials used
therein impose no responsibility or liability of any nature whatsoever on any
Financing Party, and no Person shall, under any circumstances, be entitled to
rely upon such inspections and approvals by any Financing Party for any reason.
The Financing Parties are obligated hereunder solely to make Loans if and to the
extent required by this Agreement.
10.8 Release of Collateral. (a) From time to time after the
execution and delivery of the Security Documents, the Borrower may, without the
consent of the Financing Parties, sell, transfer or dispose of (i) any tangible
property subject to the Lien of the Security Documents for which replacement
items of the same character and at least equivalent fair market value, useful
life and utility have been substituted and become part of the Collateral and
(ii) other tangible property subject to the Lien of the Security Documents that
is not, and is not reasonably foreseeable to be at any future time, necessary
for the proper operation of the Project, if, at the time of such disposition and
after giving effect thereto, (A) no Default or Event of Default exists and the
property subject to the Lien of the Security Documents will be adequate to
operate the Project with the same capabilities as before such disposition, and
(B) the net cash proceeds, if any, of such sale, transfer or disposition shall
be deposited in the Revenue Account pursuant to Section 3.01 of the Security
Deposit Agreement; provided, however, that the Borrower shall not in any
calendar year dispose of property pursuant to the foregoing clause (ii) having a
fair market value as of the respective time or times of the sale, transfer or
disposition exceeding $350,000 at any one time or $750,000 in the aggregate.
(b) With the consent of each of the Financing Parties, the
Borrower may sell, transfer or dispose of assets in excess of the limits
contained in the proviso of paragraph (a) above provided that the net cash
proceeds from any such sales, transfers or dispositions of assets shall be
applied to prepay the Term Loans, unless otherwise agreed in writing by each of
the Financing Parties.
(c) Upon any sale, transfer or disposition pursuant to
subsection (a) above, the Lien of the Security Documents shall cease as to the
property so sold, transferred or disposed of without the requirement of a formal
release by the Agent; provided, however, that upon request by the Borrower, the
Agent shall execute an appropriate instrument confirming the release of such
property from the Lien of the Security Documents.
(d) Neither the Agent nor any of the other Financing Parties
shall be required to make any release of Collateral other
73
66
than pursuant to subsection (c) above. Without limiting the generality of the
foregoing, neither the Agent nor any of the other Financing Parties shall be
required to make any release of Collateral if one or more Defaults or Events of
Default shall exist. The Borrower shall deliver to each Financing Party, in
connection with each request for the release of any part of the Collateral, a
certificate of a Responsible Officer of the Borrower stating that there is, and
that after giving effect to the release applied for there will be, no Default or
Event of Default.
10.9 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts and
all of said counterparts taken together shall be deemed to constitute one and
the same instrument.
10.10 SUBMISSION TO JURISDICTION; WAIVERS. (a) THE BORROWER
HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(i) SUBMITS FOR ITSELF AND ITS PROPERTY, IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, THE NOTES OR ANY
SECURITY DOCUMENT OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN
RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS
FROM ANY THEREOF;
(ii) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE
BROUGHT IN SUCH COURTS, AND WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN
INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(iii) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR
CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE
PREPAID, TO THE BORROWER AT ITS ADDRESS SPECIFIED IN SUBSECTION 10.2 OR
AT SUCH OTHER ADDRESS OF WHICH THE AGENT SHALL HAVE BEEN NOTIFIED
PURSUANT HERETO; AND
(iv) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO
EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL
LIMIT THE RIGHT TO ▇▇▇ IN ANY OTHER JURISDICTION.
(b) EACH OF THE BORROWER AND THE FINANCING PARTIES HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO OR ARISING OUT OF THIS AGREEMENT, THE NOTES OR ANY
SECURITY DOCUMENT AND FOR ANY COUNTERCLAIM THEREUNDER.
74
67
10.11 Governing Law. This Agreement and the Notes and the
rights and obligations of the parties under this Agreement and the Notes shall
be governed by, and construed and interpreted in accordance with, the laws of
the State of New York.
10.12 Limitation of Liability. There shall be full recourse to
the Borrower and all of its assets for the liabilities of the Borrower under
this Agreement and the Notes and its other obligations, but in no event shall
the Parent, Delaware Holdings, Cogentrix Energy or any officer, director or
holder of any equity interest in the Borrower, Delaware Holdings, Cogentrix
Energy or the Parent be personally liable or obligated for such liabilities and
obligations of the Borrower, except as may be specifically provided in any other
Project Document to which the Parent, Delaware Holdings, or Cogentrix Energy is
a party. Nothing herein contained shall limit or be construed to (i) limit the
obligations and liabilities of the Parent, Delaware Holdings or Cogentrix Energy
in accordance with the terms of any Project Document creating such liabilities
and obligations to which the Parent, Delaware Holdings or Cogentrix Energy is
party or (ii) effect or diminish any rights of any Person against any other
Person arising from misappropriation or misapplication of any funds or for such
other Person's fraud, gross negligence or willful misconduct. The provisions of
this Section 10.12 shall survive the termination of this Agreement.
75
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered in New York, New York by their
proper and duly authorized officers as of the day and year first above written.
COGENTRIX VIRGINIA LEASING
CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
Title:
CREDIT LYONNAIS, as a Lender,
as the Issuing Bank and as the
Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Title: Vice President
76
ANNEX A
DEFINITIONS
As used in the Agreement, the Notes and the Security Documents
(all as hereinafter defined), the following terms have the following meanings
(such definitions to be equally applicable to both singular and plural forms of
the terms defined):
"Acceleration Event": as defined in subsection 2A.1 of the
Agreement.
"Accounts": as defined in the Security Deposit Agreement.
"Additional Contract": any contract of the Borrower, other
than those specifically described in the definition of "Assigned
Contracts", providing for (i) the sale or exchange by the Borrower of
any of the Facility's electrical or steam output or (ii) the supply or
transportation of fuel, goods or services essential to the operation of
the Facility other than employment contracts and contracts involving
less than $50,000 or (iii) the removal of ash from the Facility or (iv)
the acquisition of real or personal property related to any
construction relating to, or the maintenance or operation of, the
Project.
"Additional Term Loan Commitment Period": the period starting
on and including the Third Restatement Effective Date and ending on but
not including the Final Payment Date.
"Additional Term Loans": as defined in subsection 1.1(b) of
the Agreement.
"Administration Fee": as defined in subsection 2.13(a) of the
Agreement.
"Affiliate": of any designated Person, any Person which,
directly or indirectly, controls or is controlled by or is under common
control with such designated Person and, without limiting the
generality of the foregoing, shall include (i) any Person which
beneficially owns or holds 10% or more of any class of voting
securities of such designated Person or 10% or more of the equity
interest in such designated Person and (ii) any Person of which such
designated Person beneficially owns or holds 10% or more of any class
of voting securities or in which such designated Person beneficially
owns or holds 10% or more of the equity interest. For the purposes of
this definition, "control" (including, with correlative meanings, the
terms "controlled by" and "under common control with"), as used with
respect to any Person, shall mean the possession, directly or
77
2
indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership
of voting securities or by contract or otherwise.
"Agent": Credit Lyonnais, as agent for the Lenders and the
Issuing Bank, or any successor
agent appointed pursuant to subsection 9.9 of the Agreement.
"Agreement": the Construction and Term Loan Agreement, dated
as of December 15, 1986, among the Borrower, CIT and MHT, as amended
and restated in its entirety by the Amended and Restated Construction
and Term Loan Agreement, dated as of September 15, 1988, among the
Borrower, the financial institutions parties thereto as lenders, CIT as
Agent for the lenders, and MHT as Paying Agent for the lenders, as
further amended and restated in its entirety by the Second Amended and
Restated Loan Agreement, as further amended and restated in its
entirety by the Third Amended and Restated Loan Agreement, and as the
same may be further amended, supplemented or otherwise modified from
time to time.
"Applicable Margin": as to any Eurodollar Loan, from the Third
Restatement Effective Date to but not including the first anniversary
of the Third Restatement Effective Date, 0.875%, and thereafter, 1.0%;
as to any CD Rate Loan, from the Third Restatement Effective Date to
but not including the first anniversary of the Third Restatement
Effective Date, 1.0%, and thereafter, 1.125%; as to any Prime Rate
Loan, from the Third Restatement Effective Date to but not including
the first anniversary of the Third Restatement Effective Date, 0.250%,
and thereafter, 0.375%.
"Arch Coal": Arch Coal, Inc. (formerly known as Arch Mineral
Corporation), a Delaware corporation.
"Arch Sales": Arch Coal Sales Company, Inc., a Delaware
corporation.
"Ash Hauling Agreement": the Agreement for Ash Removal
Services, dated as of January 27, 1990, as amended by the Amendment No.
1 thereto dated as of December 22, 1997, between the Borrower and ReUse
Technology, Inc., as the same may be amended, supplemented or otherwise
modified from time to time in accordance with the provisions of
subsection 7.10 of the Agreement.
"Assigned Contracts": the collective reference to the Power
Purchase Agreement, the Construction Contract, the Coal Sales
Agreement, the Coal Sales Agreement Guarantee, the Barge Transportation
Contract, the Ash Hauling Agreement, the Steam Purchase Contract, the
Water Purchase Contract, the Management Agreement, the Ground Lease,
the Easements, the Railroad Transportation Contract, the Technical
Services Agreement (insofar as it relates to the
78
3
Project) and, from and after the date any Additional Contract is
assigned by the Borrower to the Lenders pursuant to subsection 6.10(a)
of the Agreement, such Additional Contract.
"Assignments": the collective reference to the Assignments of
Contracts, each executed by the Borrower in favor of the Agent,
assigning to the Agent each of the Assigned Contracts, and from and
after the date any Additional Contract is assigned by the Borrower to
the Agent pursuant to subsection 6.10(a) of the Agreement, the
Assignment with respect to such Additional Contract.
"Assumed Debt Service": for any period, the sum of:
(a) Debt Service for such period (excluding any
amount in respect of any Commitment Fee and any payments made
in respect of principal of the Term Loans pursuant to
subsection 1.4 of the Loan Agreement) plus
(b) the sum obtained by adding together the Reduction
Amounts for the Installment Payment Dates occurring during
such period plus
(c) the Assumed Interest Amount for such period.
"Assumed Interest Amount": for any period, the product of the
Commitment Fees, if any, payable during such period times 26.5.
"Available Additional Term Loan Commitment": as to any Lender
on any date, an amount equal to the product of such Lender's Loan
Percentage times the Total Additional Term Loan Commitment on such
date.
"Available Amount": as defined in subsection 2A.2 of the
Agreement.
"Available Project Cash Flow": for any period, the amount, if
any, by which Project Cash Flow for such period exceeds Debt Service
for such period.
"Bank Assignment": the Loan Transfer Supplement, dated as of
December 22, 1997, among the Transferor Lenders and Credit Lyonnais,
substantially in the form of Exhibit E to the Agreement.
"Barge": that certain vessel named "COGENTRIX 1", Official No.
974857 owned by the Borrower and mortgaged to the Agent pursuant to the
Ship Mortgage.
"Barge Operator": ▇▇▇▇▇▇▇▇▇▇ Brothers, Inc., a New York
corporation.
79
4
"Barge Transportation Contract": the Barge Transportation
Contract, dated as of December 23, 1986, as amended by Amendment No. 1
dated as of November 1, 1990, between the Borrower and the Barge
Operator, and as the same may be further amended, supplemented or
otherwise modified from time to time in accordance with the provisions
of Section 7.10 of the Agreement.
"BMO": Bank of Montreal.
"Borrower": Cogentrix Virginia Leasing Corporation, a North
Carolina corporation.
"Borrower Distribution Date": as defined in the Security
Deposit Agreement.
"Borrower's Security Account": The Borrower's Security Account
established pursuant to the Security Deposit Agreement.
"Borrowing Date": any day specified in a Borrowing Request
pursuant to subsection 1.2 as a day on which the Borrower requests the
Lenders to make Additional Term Loans, which day must be either (i) the
Third Restatement Effective Date or (ii) in the case of Eurodollar
Loans, a Working Day, or otherwise, a Business Day.
"Borrowing Request": a request and certificate of the Borrower
substantially in the form of Exhibit A to the Agreement (with such
changes as may be agreed upon by the Agent and the Borrower).
"Business Day": a day other than a Saturday, a Sunday or any
other day on which commercial banks in New York City or Charlotte,
North Carolina are required or authorized by law to be closed.
"Capital Expenditure": any expenditure in respect of the
purchase or other acquisition of fixed capital assets (excluding normal
replacements and maintenance which are properly charged to current
operations).
"Capital Lease": any lease of property, real or personal,
which, in accordance with GAAP, would be required to be capitalized on
a balance sheet of the lessee or, if not so capitalized, for which the
amounts of the asset and liability (had such lease been capitalized)
would at such time be so required to be disclosed in a note to such a
balance sheet.
"Carrier": Norfolk and Western Railway Company.
"Cash Operating Costs": for any period, the sum (without
duplication) of the following for the Borrower: (i) all salaries,
employee benefits and other compensation
80
5
paid, plus (ii) the cost of fuel and the cost of other materials and
utilities paid, including the transportation costs paid for fuel and
such other materials and utilities, plus (iii) ash disposal costs paid,
plus (iv) insurance premiums paid, plus (v) costs of operating and
maintaining the Project paid (excluding any allocation of regional or
central support costs), plus (vi) property and other taxes (except
income taxes) paid, plus (vii) fees for accounting, legal and other
professional services paid, plus (viii) general and administrative
expenses paid, plus (ix) Capital Expenditures paid, plus (x) all other
cash expenditures relating to operating, maintenance and administrative
costs of the Project paid, plus (xi) Specified Costs paid; provided
that there shall be excluded from the foregoing items (i) through (xi)
payments with respect to federal, state and local income taxes,
payments with respect to Management Fees, payments with respect to Debt
Service and payments of principal, interest or fees with respect to all
other Indebtedness for borrowed money (including, without limitation,
Junior Working Capital Loans); provided further, that (i) in the event
that Specified Costs are incurred during any period in which Cogentrix
Energy is required to provide funds on behalf of the Borrower pursuant
to Section 2.02 of the Cogentrix Energy Indemnity Agreement, such
Specified Costs shall be included as Cash Operating Costs only to the
extent Cogentrix Energy shall have actually provided such funds in
accordance with such section on or before the date such Specified Costs
become due and payable and (ii) in the event that during any period
Cogentrix Energy shall have paid under the Cogentrix Energy Indemnity
Agreement an amount which when added to all other amounts which
Cogentrix Energy shall have paid under such agreement equals or exceeds
$30,000,000, Specified Costs paid during such period or any period
thereafter shall be included as Cash Operating Costs in any period only
to the extent that the amount of such Specified Costs, when added to
the amount of all Specified Costs previously paid, do not exceed
$30,000,000.
"CD Assessment Rate": for any day as applied to any CD Rate
Loan, the net annual assessment rate (rounded upward to the nearest
1/100th of 1%) determined by Credit Lyonnais to be payable by prime
banks to the Federal Deposit Insurance Corporation or any successor
("FDIC") for FDIC's insuring time deposits made in dollars at offices
of such banks in the United States.
"CD Base Rate": with respect to each day during each Interest
Period pertaining to a CD Rate Loan, the rate of interest per annum
equal to the rate notified to the Borrower by the Agent as the average
rate per annum bid at 11:00 A.M. (New York City time) (or as soon
thereafter as practicable) on the first day of such Interest Period by
a total of three certificates of deposit dealers of recognized standing
selected by Credit Lyonnais for the purchase at
81
6
face value from Credit Lyonnais of its certificates of deposit in an
amount comparable to the CD Rate Loan of Credit Lyonnais to which such
Interest Period applies and having a maturity comparable to such
Interest Period.
"CD Rate": with respect to each day during each Interest
Period pertaining to a CD Rate Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to
the nearest 1/100th of 1%):
CD Base Rate
---------------------------- + CD Assessment Rate
1.00 - CD Reserve Percentage
"CD Rate Loans": Loans as to which the applicable rate of
interest is based upon the CD Rate.
"CD Reserve Percentage": for any day as applied to any CD Rate
Loan, that percentage (expressed as a decimal) which is in effect on
such day, as prescribed by the Board of Governors of the Federal
Reserve System (or any successor), for determining the maximum reserve
requirement for a member bank of the Federal Reserve System in New York
City with deposits exceeding one billion Dollars in respect of new
non-personal time deposits in Dollars in New York City having a
maturity comparable to the Interest Period for such CD Rate Loan and in
an amount of $100,000 or more.
"CD Rate Tranche": the collective reference to CD Rate Loans
the Interest Periods with respect to all of which begin on the same
date and end on the same later date (whether or not such CD Rate Loans
shall originally have been made on the same day).
"CIT": the CIT Group/Equipment Financing, Inc., a New York
corporation.
"Clairant": Clairant Corporation.
"Coal Sales Agreement": Coal Sales Agreement, dated as of
December 15, 1986, among the Borrower, Enoxy Coal Sales, Inc. and Enoxy
Coal, Inc., as assigned pursuant to the Assignment and Assumption
Agreement, dated as of September 29, 1995 to Arch Sales, as amended by
the First Amendment thereto, dated as of September 29, 1995, as the
same may be further amended, supplemented or otherwise modified from
time to time in accordance with the provisions of subsection 7.10 of
the Agreement.
"Coal Sales Agreement Guarantee": Guarantee Agreement, dated
as of September 29, 1995, between Arch Coal and the Borrower, as the
same may be amended, supplemented or otherwise modified from time to
time in accordance with the provisions of subsection 7.10 of the
Agreement.
82
7
"Coal Supplier": Arch Sales or any other coal supplier
satisfactory to the Required Lenders.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Cogentrix Energy": Cogentrix Energy, Inc., a North Carolina
corporation.
"Cogentrix Energy Indemnity Agreement": the Indemnity
Agreement, dated as of December 22, 1997, between Cogentrix Energy and
the Agent, substantially in the form of Exhibit G to the Agreement.
"Collateral": the collective reference to all real and
personal property of the Borrower, tangible and intangible, and the
proceeds thereof, subjected from time to time to the Liens intended to
be created by the Agreement or any Security Document.
"Commitment Fee": as defined in subsection 2.13(c).
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Borrower within
the meaning of Section 414(b) or (c) of the Code.
"Consents": the collective reference to the Power Purchaser
Consent and each of the other consents and agreements executed and
delivered by the parties (other than the Borrower) to each Assigned
Contract, consenting to the assignment by the Borrower to the Agent on
behalf of the Lenders of such Assigned Contract.
"Construction Contract": the Construction Contract, dated as
of December 31, 1985 and as amended as of December 1, 1986 (including
all exhibits, schedules, annexes and drawings and specifications
attached thereto or referred to therein), between the Borrower and the
Contractor, providing for construction of the Facility, as the same may
be amended, supplemented or otherwise modified from time to time in
accordance with the provisions of subsection 7.10 of the Agreement.
"Contingent Obligation": as to any Person, any obligation of
such Person guaranteeing or in effect guaranteeing any Indebtedness,
leases, dividends or other obligations ("primary obligations") of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such
Person, whether or not contingent, (a) to purchase any such primary
obligation or any property constituting direct or indirect security
therefor, (b) to advance or supply funds (i) for the purchase or
payment of any such primary obligation or (ii) to maintain working
capital or equity
83
8
capital of the primary obligor or otherwise to maintain the net worth
or solvency of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to
make payment of such primary obligation or (d) otherwise to assure or
hold harmless the owner of such primary obligation against loss in
respect thereof; provided, however, that the term Contingent Obligation
shall not include endorsements of instruments for deposit or collection
in the ordinary course of business. The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof as
determined by the independent public accountants referred to in
subsection 6.1 of the Agreement.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of
its property is bound.
"Debt Coverage Ratio": for any period, the ratio of (a)
Project Cash Flow for such period to (b) Debt Service (not counting,
for the purposes of calculating this ratio, any mandatory prepayments
of principal on the Term Loans pursuant to subsection 3.1(a)(ii) of the
Third Amended and Restated Loan Agreement) for such period.
"Debt Service": for any period, the sum, without duplication,
of (a) all amounts payable by the Borrower during such period pursuant
to the Agreement in respect of principal of, and interest on, the
Loans, (b) all amounts, if any, payable by the Borrower (minus the
amounts, if any, receivable by the Borrower to the extent such amounts
have actually been received by the Borrower, or may be set off or
applied by the Borrower against amounts payable by the Borrower) during
such period under any Interest Rate Protection Agreement or any other
interest rate hedging arrangement, (c) fees payable under or in
connection with the Agreement (including without limitation all
Commitment Fees, Administration Fees and Debt Service Letter of Credit
Fees) and (d) all other amounts in respect of principal, interest, cash
collateral and other fees and expenses payable by the Borrower during
such period to the Agent or the Lenders pursuant to the Project
Documents (whether upon the payment date thereof, by acceleration or
otherwise).
"Debt Service Account": the Debt Service Account established
pursuant to the Security Deposit Agreement.
"Debt Service Letter of Credit": the irrevocable letter of
credit, substantially in the form of Exhibit H to
84
9
the Agreement to be issued pursuant thereto by the Issuing Bank in
favor of the Agent, on behalf of the Lenders and the Issuing Bank, for
the account of the Borrower and in the amount of the Required Stated
Amount.
"Debt Service Letter of Credit Fee": as defined in subsection
2A.6 of the Agreement.
"Debt Service Letter of Credit Loans": as defined in
subsection 2A.4(a) of the Agreement.
"Debt Service Letter of Credit Note": as defined in subsection
2A.4(e) of the Agreement.
"Deed of Trust": the Deed of Trust and Security Agreement,
dated as of December 15, 1986, made by the Borrower in favor of
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ of Arlington, Virginia, as Trustee (the "Trustee"),
as amended by the Deed of Trust Amendment No. 1, Deed of Trust
Amendment No. 2, Deed of Trust Amendment No. 3, the Deed of Trust
Amendment No. 4 and the Deed of Trust Amendment No. 5, and as the same
may be further amended, supplemented or otherwise modified in
accordance with its terms.
"Deed of Trust Amendment No. 1": the First Amendment of Deed
of Trust, dated as of September 15, 1988, by and between the Borrower,
the Trustee, the Agent and MHT.
"Deed of Trust Amendment No. 2": the Second Amendment of Deed
of Trust, dated as of April 26, 1991, by and among the Borrower, the
Trustee, the Agent and MHT.
"Deed of Trust Amendment No. 3": the Third Amendment of Deed
of Trust, dated as of May 15, 1992, by and among the Borrower, the
Trustee, the Agent and MHT.
"Deed of Trust Amendment No. 4": the Fourth Amendment of Deed
of Trust, dated as of February 1, 1995, by and among the Borrower, the
Trustee and the Original Agent.
"Deed of Trust Amendment No. 5": the Fifth Amendment of Deed
of Trust, dated as of December 22, 1997, by and among the Borrower, the
Trustee and the Agent, substantially in the form of Exhibit I to the
Agreement.
"Deeds": the collective reference to (i) the Deed, dated as of
January 15, 1987 between Hampton Roads Sanitation District and the
Borrower; and (ii) the Deed, dated as of January 15, 1987, between
Sweetbriar Development Corporation and the Borrower.
"Default": any of the events specified in Section 8 of the
Agreement, whether or not any requirement for the giving of notice, the
lapse of time, or both, or for the happening of any other condition,
has been satisfied.
85
10
"Default Rate": for any day, the Prime Rate for such day plus
a margin of 2%.
"Delaware Holdings": Cogentrix Delaware Holdings, Inc., a
Delaware corporation and a wholly-owned subsidiary of Cogentrix Energy.
"Designer": Duke Power Company.
"Dollars" and "$": dollars in lawful currency of the United
States of America.
"Domestic Lending Office": initially, the office of each
Lender designated as such in Schedule IX; thereafter, such other office
of such Lender, if any, located within the United States which shall be
making or maintaining Prime Rate Loans.
"Easement Agreement": the Easements Agreement, dated as of
December 1, 1986, between VCI and the Borrower, as amended by the
Easement Agreement Amendment, and as the same may be further amended,
supplemented or modified from time to time in accordance with the
provisions of Section 7.10 of the Agreement.
"Easements": the easements conveyed pursuant to the Easement
Agreement.
"Easement Agreement Amendment": the First Amendment to
Easement Agreement, dated as of September 1, 1988, between VCI and the
Borrower.
"Enoxy": Enoxy Coal, Inc., a Delaware corporation.
"Environmental Assessment": the environmental assessment dated
April 16, 1992 by Engineering Consulting Services, Ltd., as supplied
pursuant to subsection 4.1(x) of the Existing Loan Agreement.
"Environmental Laws": any and all Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees or requirements of any Governmental Authority
regulating, relating to or imposing liability or standards of conduct
concerning environmental protection matters, including, without
limitation, Hazardous Materials, as now or may at any time hereafter be
in effect.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurocurrency Reserve Requirement": for any day as applied to
a Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on
such day (including, without limitation, basic, supplemental, marginal
and
86
11
emergency reserves under any regulations of the Board of Governors of
the Federal Reserve System or other Governmental Authority having
jurisdiction with respect thereto), dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of such Board) maintained by
a member bank of such System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum at
which Dollar deposits are offered to Credit Lyonnais by prime banks in
the London interbank market at or about 10:00 a.m., New York City time,
two Working Days prior to the beginning of such Interest Period for
delivery on the first day of such Interest Period for the number of
days comprised therein and in an amount comparable to the amount of the
Eurodollar Loan of Credit Lyonnais to be outstanding during such
Interest Period.
"Eurodollar Lending Office": initially, the office of each
Lender designated as such in Schedule IX; thereafter, such other office
of such Lender, if any, which shall be making or maintaining Eurodollar
Loans as designated in a written notice from such Lender to the Agent
and the Borrower.
"Eurodollar Loans": loans hereunder at such time as they are
made and/or are being maintained at a rate of interest based upon the
Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum
determined for such day in accordance with the following formula
(rounded upwards to the nearest 1/100th of one percent):
Eurodollar Base Rate
---------------------------------------
1.00 - Eurocurrency Reserve Requirement
"Eurodollar Tranche": the collective reference to Eurodollar
Loans the Interest Periods with respect to all of which begin on the
same date and end on the same later date (whether or not such
Eurodollar Loans shall originally have been made on the same day).
"Event of Default": any of the events specified in Section 8
of the Agreement, provided that any requirement for the giving of
notice, the lapse of time, or both, or for the happening of any other
condition, has been satisfied.
"Event of Loss": (i) the actual or constructive total loss of
the Facility; or (ii) the loss, theft, destruction or damage (herein
called an "Event") of such portion of the Facility as shall render the
Facility unable to meet the Minimum Performance Requirements, unless
(x) no Default or
87
12
Event of Default shall have occurred and be continuing and (y) in the
opinion of the Agent sufficient funds are or will be available to the
Borrower to restore the Facility such that it will be able to meet the
Minimum Performance Requirements within one year after the occurrence
of such Event; or (iii) the condemnation, confiscation or seizure of,
or requisition of title to, or requisition for a period exceeding six
months of the use of, such portion of the Facility and/or the Site as
shall render the Facility unable to meet the Minimum Performance
Requirements.
"Existing Loan Agreement": as defined in the first recital to
the Third Amended and Restated Loan Agreement.
"Expiration Date": as defined in subsection 2A.1 of the
Agreement.
"Facility": the 110 megawatt coal-fueled cogeneration facility
(consisting of two 55 megawatt units) constructed on the Site, having
the design-scope and the minimum performance characteristics described
in the Plans prepared by the Designer, including the interconnection
and transportation equipment installed by the Borrower and including
the coal unloading facility, coal conveyor system, steam delivery
system and the Barge.
"Federal Funds Rate": for any day, the rate per annum (rounded
upwards to the nearest 1/100th of one percent) equal to the weighted
average of the rates on overnight Federal funds transactions with
member banks of the Federal Reserve System arranged by Federal Funds
brokers on such day as published by the Federal Reserve Bank of New
York; provided, that (a) if such day is not a Business Day, the Federal
Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding
Business Day and (b) if no such rate is so published on the next
succeeding Business Day, the Federal Funds Rate for such day shall be
the average rate quoted by Credit Lyonnais on such day on such
transactions as determined by the Agent.
"FERC": the Federal Energy Regulatory Commission or any
successor or analogous Governmental Authority.
"Final Payment Date": December 31, 2002.
"Financing Parties": the collective reference to the Agent,
the Lenders, the Issuing Bank and the Interest Hedging Counterparties;
individually, a "Financing Party."
"GAAP": generally accepted accounting principles in the United
States of America in effect from time to time.
"Governmental Actions": authorizations, consents, approvals,
waivers, exemptions, variances, franchises,
88
13
permissions, permits and licenses of, and filings and declarations
with, any Governmental Authority, including, without limitation, FERC,
the Virginia State Corporation Commission, the U.S. Army Corps of
Engineers, the Interstate Commerce Commission and the Virginia State
Department of Environmental Quality.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Ground Lease": the Ground Lease and Easement Agreement, dated
as of December 1, 1986, between VCI and the Borrower, as the same may
be amended, supplemented or modified from time to time in accordance
with the provisions of subsection 7.10 of the Agreement.
"Hazardous Materials": any hazardous materials, hazardous
wastes, hazardous constituents, hazardous or toxic substances,
petroleum products (including crude oil or any fraction thereof)
defined or regulated as such in or under any Environmental Law.
"Hoescht": Hoescht Celanese Corporation.
"Indebtedness": as to any Person, without duplication, (a) all
obligations of such Person for borrowed money or with respect to
deposits or advances of any kind (including repurchase obligations);
(b) all obligations of such Person evidenced by bonds, debentures,
notes or similar instruments; (c) (i) all obligations of such Person
upon which interest charges are customarily paid, (ii) all obligations
of such Person under any conditional sale or other title retention
agreement relating to property purchased by such Person and (iii) all
obligations of such Person issued or assumed as the deferred purchase
price of property or services (in each case other than obligations
under agreements for the purchase of goods (including fuel) and
services in the normal course of business which are not more than 90
days past due); (d) all obligations of such Person associated with
Capital Leases; (e) all obligations of such Person associated with
interest rate protection agreements, foreign currency exchange
agreements or other interest or exchange rate hedging arrangements; (f)
all obligations of such Person associated with direct or indirect
guarantees of, and all obligations (contingent or otherwise) to
purchase or otherwise acquire, or otherwise to assure a creditor
against loss in respect of, any Indebtedness of any other Person (other
than endorsements of negotiable instruments in the ordinary course of
business); (g) all obligations of such Person as an account party in
respect of letters of credit and bankers' acceptances and
89
14
(h) all obligations of such Person or a Commonly Controlled Entity to a
Multiemployer Plan.
"Independent Engineer": the ▇▇▇▇▇▇ Group, or any other
independent engineering firm approved in writing by the Agent.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Installment Payment Date": as defined in subsection 1.4 of
the Agreement.
"Insurance Advisor": Sedgewick Power and Nuclear Services or
such other insurance advisor as the Required Lenders may engage at any
time to examine and advise the Financing Parties with respect to the
insurance relating to the Facility.
"Insurance Proceeds Account": the Insurance Proceeds Account
established pursuant to the Security Deposit Agreement.
"Interest Hedging Counterparty": Credit Lyonnais and any
Lender, in each case in its capacity as a counterparty to an Interest
Rate Protection Agreement.
"Interest Period": (a) with respect to any Eurodollar Loan:
each period commencing on the last day of the next preceding
Interest Period applicable to such Eurodollar Loans and ending
one, three, six, nine or twelve months thereafter, as selected
by the Borrower in accordance with the provisions of
subsection 2.3 of the Agreement;
and (b) with respect to any CD Rate Loan:
a period beginning on, as the case may be, the date of
conversion of a Prime Rate Loan or a Eurodollar Loan into such
CD Rate Loan or the date of expiration of the then current
Interest Period for such CD Rate Loan, and ending 30, 60, 90,
180 or 360 days thereafter (to the extent available), as
selected by the Borrower in its notice of conversion or
continuation as provided in subsection 2.3 of the Agreement;
provided that the foregoing provisions relating to Interest Periods are
subject to the following:
(i) if any Interest Period pertaining to a
Eurodollar Loan would otherwise end on a day which is not a
Working Day, that Interest Period shall be extended to the
next succeeding Working Day unless the
90
15
result of such extension would be to carry such Interest
Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Working
Day;
(ii) if any Interest Period pertaining to a CD
Rate Loan would end on a day that is not a Business Day, such
Interest Period shall be extended to the next succeeding
Business Day;
(iii) any Interest Period that would otherwise
extend beyond the date final payment of the Loan is due shall
end on such date and the Borrower shall not select any
Interest Period that will end after the Final Payment Date;
(iv) if the Borrower shall fail to give notice as
provided in subsection 2.3 of the Agreement, the Borrower
shall be deemed to have selected a Loan of the same Type as
the Loan with respect to which the Interest Period is expiring
and having an Interest Period of the same duration as the
expiring Interest Period;
(v) any Interest Period pertaining to a
Eurodollar Loan that begins on the last Working Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Working Day of a
calendar month;
(vi) the Borrower shall select Interest Periods so
as not to require a payment or optional prepayment of any
Eurodollar Loan or CD Rate Loan during an Interest Period for
such Loan; and
(vii) the Borrower shall not select any Interest
Period in respect of any Eurodollar Loan which is a Debt
Service Letter of Credit Loan that will end after the next
succeeding Quarterly Distribution Date.
"Interest Rate Protection Agreement": any contract entered
into by the Borrower with an Interest Hedging Counterparty in respect
of an interest rate swap transaction, interest "cap" or "collar"
transaction and/or any other interest rate hedging transaction or
interest rate protection transaction and, solely for the purposes of
subsection 6.17 of the Agreement, any unsecured contract entered into
by the Borrower with any financial institution in respect of an
interest rate "cap" transaction provided that such financial
institution has a credit rating for its long-term unsecured debt of "A"
or better by Standard & Poor's Corporation and "A2" or better by
▇▇▇▇▇'▇ Investors Service, Inc., and is otherwise reasonably
satisfactory to the Agent.
91
16
"Investment": as to any Person, all investments, computed in
accordance with GAAP, made by purchase of stock, bonds, notes,
debentures or other securities, capital contribution, loan, advance,
guarantee of any Indebtedness of such Person or creation or assumption
of any other contingent liability in respect of any Indebtedness of
such Person, or otherwise.
"Issuing Bank": Credit Lyonnais, in its capacity as the issuer
of the Debt Service Letter of Credit.
"Junior Working Capital Loans": unsecured Indebtedness of the
Borrower (a) that is evidenced by an instrument or instruments
subordinated to the rights of the holders of the Notes by provisions
substantially in the form of Exhibit N to the Agreement or
incorporating such provisions by reference, (b) that is for money
borrowed by the Borrower from and owed to Cogentrix Energy and/or
Delaware Holdings, and (c) the proceeds of which are used entirely to
pay Cash Operating Costs or Debt Service.
"Lenders": Credit Lyonnais and each other financial
institution that becomes a "Lender" pursuant to subsection 10.6(c) of
the Agreement.
"Lien": any mortgage, pledge, hypothecation, assignment,
encumbrance, lien (statutory or other), or preference, priority or
other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, any conditional sale
or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the
filing of any statement under the Uniform Commercial Code or comparable
law of any jurisdiction).
"Loans": the collective reference to the Term Loans and the
Debt Service Letter of Credit Loans; individually, a "Loan."
"Loan Percentage": as to any Lender, the percentage set forth
opposite the name of such Lender in Column B of Schedule IX to the
Agreement.
"Management Agreement": the Amended and Restated Management
Agreement, dated as of September 15, 1988 between the Borrower and the
Parent, as supplemented by the Supplemental Agreement, dated as of
December 15, 1993, by Cogentrix Energy, Delaware Holdings and the
Parent, as amended by the Management Agreement Amendment, and as the
same may be further amended, supplemented or otherwise modified from
time to time in accordance with the provisions of subsection 7.10 of
the Agreement.
92
17
"Management Agreement Amendment": the Amendment No. 1 to the
Management Agreement, dated as of December 22, 1997, substantially in
the form of Exhibit O to the Agreement.
"Management Fee": any fee payable pursuant to Article IV of
the Management Agreement, including without limitation the General
Management Fee payable thereunder.
"Major Maintenance Costs": all costs incurred by the Borrower
for labor, materials and other direct expenses for any overhaul or
refurbishment of the turbines of the Facility.
"Major Maintenance Reserve Account": the Major Maintenance
Reserve Account established pursuant to the Security Deposit Agreement.
"Major Maintenance Reserve Account Deposit Amount": for any
Quarterly Distribution Date, the amount required to be deposited into
the Major Maintenance Reserve Account pursuant to subsection 6.20 of
the Loan Agreement on such date.
"MHT": Manufacturers Hanover Trust Company, a New York banking
corporation.
"Minimum Performance Requirements": the requirements set forth
below:
(i) the Facility shall be in compliance in all
material respects with all Federal, State and local laws and
governmental regulations (including zoning, pollution and
environmental control requirements); and
(ii) the Facility shall have a continuous net
generating capacity of at least 94.7 megawatts.
"Monthly Distribution Date": as defined in the Security
Deposit Agreement.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Notes": the collective reference to the Term Notes and the
Debt Service Letter of Credit Note; individually, a "Note."
"Obligations": as defined in the Security Deposit Agreement.
"Optional Prepayment Cap": for any period, an amount equal to
the excess, if any, of (a) the Assumed Debt Service for such period
over (b) Debt Service for such period.
93
18
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Parent": Cogentrix, Inc., a North Carolina corporation and a
wholly-owned subsidiary of Cogentrix Holdings Corporation.
"Permits": all applicable authorizations, consents,
certificates, licenses, approvals, waivers, exemptions, variances,
franchises, permissions and permits of any Governmental Authority
required in connection with the purchase, acquisition, design,
construction,installation, ownership or operation of the Project and/or
in connection with any of the transactions contemplated by the Project
Documents.
"Permitted Investments": investments in the instruments and
securities specified in Section 6.1 of the Security Deposit Agreement,
and advances customarily required in the ordinary course of business to
agents and suppliers of the Borrower as advance payment of insurance
premiums, taxes and telephone charges, fuel, supplies, operating
deposits or other like payments or expenses.
"Permitted Liens": the Liens (i) permitted under subsection
7.2 of the Agreement and (ii) listed on Schedule VI to the Agreement.
"Person": an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"Plan": any pension plan which is covered by Title IV of ERISA
and in respect of which the Borrower, Delaware Holdings, Cogentrix
Energy or the Parent or a Commonly Controlled Entity is an "employer"
as defined in Section 3(5) of ERISA.
"Plans": the plans and specifications for construction of the
Facility referenced on Schedule V to the Existing Loan Agreement, as
prepared by Duke Power Company (the "Designer" or "Duke").
"Pledge Agreement": the Third Amended and Restated Pledge and
Security Agreement, dated as of December 22, 1997, made by Cogentrix,
Inc. to the Agent, substantially in the form of Exhibit J to the Loan
Agreement and as the same may be further amended, supplemented or
otherwise modified from time to time.
"Power Purchase Agreement": the Power Purchase and Operating
Agreement, dated as of July 21, 1986, as amended as of January 9, 1987,
and as further amended by the letter dated July 7, 1987 from VEP to the
Parent, originally
94
19
between VEP and Cogentrix of Virginia, Inc. ("CVI"), and as assigned to
and assumed by the Borrower with the consent of VEP, and including the
▇▇▇▇ of Sale, Assignment and Assumption between CVI and the Borrower
and the Consent to Assignment and Release by VEP relating thereto, and
as amended and restated by the Power Purchase Agreement Amendment, as
the same may be further amended, supplemented or otherwise modified
from time to time in accordance with the provisions of Section 7.10 of
the Agreement.
"Power Purchase Agreement Amendment": the Third Amendment and
Restatement of the Power Purchase and Operating Agreement, dated as of
December 5, 1997, by and between the Borrower and the Power Purchaser.
"Power Purchaser": VEP.
"Power Purchaser Consent": the Consent to Assignment of Power
Purchase Agreement, dated December 5, 1997, by the Power Purchaser.
"Prime Rate": the greater of (i) 3/4 of 1% above the Federal
Funds Rate and (ii) the prime commercial lending rate publicly
announced by Credit Lyonnais in New York, New York from time to time
for extensions of credit in the United States. The Prime Rate is not
intended to be the lowest rate of interest charged by Credit Lyonnais
in connection with extensions of credit to debtors. Each change in the
Prime Rate shall, on the date of such change, result in a corresponding
change in any interest rate provided for in the Agreement which is
based on the Prime Rate.
"Prime Rate Loans": loans hereunder at such time as they are
made and/or being maintained at a rate of interest based upon the Prime
Rate.
"Project": the Facility, the Site and all licenses, permits
and easements and other real property interests and rights relating to
the Facility or the Site which are owned or leased by the Borrower or
in which the Borrower has any rights, including, without limitation,
the Easements.
"Project Cash Flow": for any period, the amount, if any, by
which Project Revenues for such period exceed Cash Operating Costs for
such period.
"Project Documents": the collective reference to the
Agreement, the Notes, any Interest Rate Protection Agreements, the
Deeds, the Plans, the Security Documents, the Cogentrix Energy
Indemnity Agreement, the Assigned Contracts and any Additional
Contracts.
95
20
"Project Participant": any Person, other than any Financing
Party, party to a Project Document (other than the Deeds).
"Project Revenues": for any period, the sum (without
duplication) of (i) all revenues received by the Borrower under the
Power Purchase Agreement and the Steam Purchase Contract during such
period plus (ii) all other revenues received by the Borrower during
such period from the sale of electricity, heat or steam produced by the
Facility or the sale of ash or other by-products produced by the
Facility plus (iii) the amount of income distributed to the Revenue
Account in respect of Permitted Investments during such period plus
(iv) all payments made by Cogentrix Energy pursuant to the Cogentrix
Energy Indemnity Agreement during such period plus (v) all proceeds of
any Additional Term Loans to the extent actually applied to pay
Specified Costs during such period.
"Property Tax Account": the Property Tax Account established
pursuant to the Security Deposit Agreement.
"Qualifying Facility": a cogeneration facility meeting all the
requirements for a "cogeneration facility" which is a "qualifying
facility" set forth in Part 292 of the rules and regulations of FERC
under the Public Utility Regulatory Policies Act of 1978 ("PURPA"), as
such statutes, rules and regulations may from time to time be amended
or supplemented or replaced by other statutes, rules and regulations.
"Quarterly Distribution Date": as defined in the Security
Deposit Agreement.
"Railroad Transportation Contract": the Railroad
Transportation Contract, dated as of December 22, 1986, between the
Borrower and the Carrier, as amended by the First Amendment thereto,
dated October 3, 1991, and as the same may be further amended,
supplemented or otherwise modified from time to time in accordance with
the provisions of Section 7.10 of the Agreement.
"Reduction Amount": for any Installment Payment Date, the
amount set forth opposite such Installment Payment Date on Schedule VII
to the Agreement.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such Plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder.
"Required Stated Amount": $6,000,000.
96
21
"Required Lenders": at a particular time Lenders whose
Commitment Percentages aggregate at least 66 2/3%.
"Required Major Maintenance Reserve Amount":
(i) during the period from the Third Restatement
Effective Date to the day preceding the first Quarterly
Distribution Date to occur in calendar year 2000, $0;
(ii) during the period from such Quarterly
Distribution Date to the day preceding the second Quarterly
Distribution Date to occur in calendar year 2000, $200,000
less the cumulative amount withdrawn prior to such Quarterly
Distribution Date from the Major Maintenance Reserve Account
to pay Major Maintenance Costs;
(iii) during the period from such Quarterly
Distribution Date to the day preceding the third Quarterly
Distribution Date to occur in calendar year 2000, $400,000
less the cumulative amount withdrawn prior to such Quarterly
Distribution Date from the Major Maintenance Reserve Account
to pay Major Maintenance Costs;
(iv) during the period from such Quarterly
Distribution Date to the day preceding the fourth Quarterly
Distribution Date to occur in calendar year 2000, $600,000
less the cumulative amount withdrawn prior to such Quarterly
Distribution Date from the Major Maintenance Reserve Account
to pay Major Maintenance Costs;
(v) during the period from such Quarterly
Distribution Date to the day preceding the first Quarterly
Distribution Date to occur in calendar year 2001, $800,000
less the cumulative amount withdrawn prior to such Quarterly
Distribution Date from the Major Maintenance Reserve Account
to pay Major Maintenance Costs,
(vi) during the period from such Quarterly
Distribution Date to the day preceding the second Quarterly
Distribution Date to occur in calendar year 2001, $1,000,000
less the cumulative amount withdrawn prior to such Quarterly
Distribution Date from the Major Maintenance Reserve Account
to pay Major Maintenance Costs;
(vii) during the period from such Quarterly
Distribution Date to the day preceding the third Quarterly
Distribution Date to occur in calendar year 2001, $1,200,000
less the cumulative amount withdrawn prior to such Quarterly
Distribution Date from the
97
22
Major Maintenance Reserve Account to pay Major Maintenance
Costs;
(viii) during the period from such Quarterly
Distribution Date to the day preceding the fourth Quarterly
Distribution Date to occur in calendar year 2001, $1,400,000
less the cumulative amount withdrawn prior to such Quarterly
Distribution Date from the Major Maintenance Reserve Account
to pay Major Maintenance Costs;
(ix) during the period from such Quarterly
Distribution Date and to the date that the Agent receives a
certificate from a Responsible Officer of the Borrower
certifying that no more Major Maintenance Expenses will be
incurred and that all such costs have been paid in full,
$1,600,000 less the cumulative amount withdrawn prior to such
Quarterly Distribution Date from the Major Maintenance Reserve
Account to pay Major Maintenance Costs; and
(x) thereafter, $0.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or partnership agreement or other
organizational or governing documents of such Person, and any law,
treaty, rule or regulation, or determination of an arbitrator or a
court or other Governmental Authority, in each case applicable to or
binding upon such Person or any of its properties or to which such
Person or any of its properties is subject.
"Responsible Officer": the president, the principal financial
officer, the treasurer, the vice-president of finance, a senior vice
president or an executive vice president of the Borrower or, with
respect to financial matters, the chief financial officer of the
Borrower.
"Restricted Payment": as defined in subsection 7.4 of the
Agreement.
"Revenue Account": the Revenue Account established pursuant to
the Security Deposit Agreement.
"Second Amended and Restated Loan Agreement": the Second
Amended and Restated Loan Agreement, dated as of May 15, 1992, among
the Borrower, the financial institutions parties thereto as lenders,
and the Original Agent.
"Security Agent": First Union National Bank of North Carolina,
as security agent under the Security Deposit Agreement.
"Security Agreement": the Amended and Restated Security
Agreement, dated as September 15, 1988, between the
98
23
Borrower and CIT, as agent for the Lenders, as amended by the First
Amendment thereto dated as of May 15, 1992, as further amended by the
Security Agreement Amendment and as the same may be further amended,
supplemented or otherwise modified from time to time.
"Security Agreement Amendment": the Second Amendment to the
Security Agreement dated as of December 22, 1997, substantially in the
form of Exhibit L to the Agreement.
"Security Deposit Agreement": the Third Amended and Restated
Security Deposit Agreement, dated as of December 22, 1997, among the
Agent, the Security Agent and the Borrower substantially in the form of
Exhibit M to the Agreement, as the same may be amended, supplemented or
otherwise modified from time to time.
"Security Documents": the Deed of Trust, the Ship Mortgage,
the Pledge Agreement, the Assignments, the Security Agreement and the
Security Deposit Agreement.
"Ship Mortgage": the First Preferred Ship Mortgage dated April
16, 1991, made by the Borrower in favor of the Agent, as amended by the
First Amendment thereto, dated as of May 15, 1992, as further amended
by the Ship Mortgage Amendment, and as the same may from time to time
be further amended, supplemented or otherwise modified.
"Ship Mortgage Amendment": the Second Amendment to the Ship
Mortgage, dated as of December 22, 1997, substantially in the form of
Exhibit K to the Loan Agreement.
"Single Employer Plan": any Plan which is not a Multiemployer
Plan.
"Site": the location in Portsmouth, Virginia described in
Schedule I to the Agreement, together with all improvements from time
to time constructed thereon and all appurtenances thereto.
"Specified Costs": as defined in the Cogentrix Energy
Indemnity Agreement.
"Specified Default": any of the events specified in subsection
8.1(f) with respect to the Borrower, whether or not any requirement for
the giving of notice, the lapse of time, or both, or for the happening
of any other condition, has been satisfied.
"Steam Purchaser": Clariant and any other party obligated to
purchase steam under the Steam Purchase Contract.
"Steam Purchase Contract": the Steam Purchase Contract, dated
as of December 31, 1985, between the
99
24
Borrower and the Steam Purchaser (as the successor thereunder to VCI),
as the same may be amended, supplemented or otherwise modified from
time to time in accordance with the provisions of subsection 7.10 of
the Agreement.
"Sumitomo": The Sumitomo Bank, Limited, Chicago Branch.
"Tax Account": the Tax Account established pursuant to the
Security Deposit Agreement.
"Technical Services Agreement": Technical Services Agreement,
dated as of April 26, 1983, between Cogentrix of North Carolina, Inc.
and the Designer, as the same has been assigned to the Borrower
pursuant to the Assignment dated as of December 1, 1986.
"Term Loan Amortization Amount": for any Installment Payment
Date, an amount equal to the excess, if any, of the then outstanding
unpaid principal amount of the Term Loans over the Total Permitted Term
Loan Amount on such Installment Payment Date.
"Term Loans": as defined in subsection 1.1 of the Agreement.
"Term Notes": as defined in subsection 1.3 of the Agreement.
"Third Amended and Restated Loan Agreement": the Third Amended
and Restated Loan Agreement, dated as of December 22, 1997, among the
Borrower, the Lenders, the Issuing Bank and the Agent, as the same may
be amended, supplemented or otherwise modified from time to time.
"Third Restatement Effective Date": the date on which the
conditions set forth in subsection 4.1 of the Third Amended and
Restated Loan Agreement shall have been fulfilled in a manner
satisfactory to the Lenders or waived by the Lenders, as such date is
specified in a notice given by the Agent to the other parties hereto.
"Total Additional Term Loan Commitment": for any day, an
amount equal to the lesser of (a) an amount equal to the excess of the
Total Permitted Term Loan Amount on such day over the aggregate unpaid
principal amount of the Term Loans on such day and (b) the Total
Additional Term Loan Commitment Cap for such day.
"Total Additional Term Loan Commitment Cap": on any day, an
amount equal to $43,500,000 less the aggregate amount of all reductions
made on or before such day in the amount of the Total Additional Term
Loan Commitment pursuant to subsection 3.5(a) or (b) of the Loan
Agreement.
100
25
"Total Permitted Term Loan Amount": (a) on the Third
Restatement Effective Date, an amount equal to $102,000,000 and (b) on
any date thereafter, such amount as reduced from time to time pursuant
to subsection 1.5 of the Loan Agreement.
"Tranche": the collective reference to Eurodollar Loans or CD
Rate Loans having the same Interest Period (whether or not originally
made on the same day); Tranches may be identified as "Eurodollar
Tranches" or "CD Rate Tranches", as the case may be.
"Transferor Lenders": the collective reference to CIT,
Sumitomo and BMO, as the lenders under the Existing Loan Agreement.
"Twelve-Month Project Cash Flow": as of any Installment
Payment Date, the sum of Project Cash Flow for the twelve-month period
ending on such date (or, in the case of the Installment Payment Dates
occurring in March, June, September and December of 1998, for the
period from the Third Restatement Effective Date to such Installment
Payment Date).
"Twelve-Month Debt Coverage Ratio": as of any Installment
Payment Date, the ratio of (a) Twelve-Month Project Cash Flow as of
such date to (b) Twelve-Month Debt Service (not counting, for purposes
of calculating this ratio, any mandatory prepayments of principal of
the Term Loans pursuant to subsection 3.1(a)(ii) of the Agreement) as
of such date.
"Twelve-Month Debt Service": as of any Installment Payment
Date, Assumed Debt Service for the twelve-month period ending on such
date (or, in the case of the Installment Payment Dates occurring in
March, June, September and December of 1998, for the period from the
Third Restatement Effective Date to such Installment Payment Date).
"Type": as to any Loan, its nature as a Prime Rate Loan, CD
Rate Loan or a Eurodollar Loan.
"Value": as defined in the Security Deposit Agreement.
"VCI": Virginia Chemicals, Inc.
"VEP": Virginia Electric and Power Company, a Virginia
corporation.
"Water Purchase Contract": the Water Purchase Contract, dated
as of February 1, 1995, between Clariant (as the successor thereunder
to Hoechst) and the Borrower, as
101
26
the same may be amended, supplemented or otherwise modified in
accordance with subsection 7.10 of the Agreement.
"Working Day": any Business Day on which dealings in foreign
currencies and exchange between banks may be carried on in London,
England.
All terms defined in this Annex A shall have the defined
meanings when used and not defined in the Agreement, any Note or any Security
Document or in any certificate or other document made or delivered pursuant
hereto.
As used in the Agreement, any Note or any Security Document
and in any certificate or other document made or delivered pursuant to any
thereof, accounting terms relating to the Borrower not defined in this Annex A,
and accounting terms partly defined in this Annex A to the extent not defined,
shall have the respective meanings given to them under GAAP.
The words "hereof," "herein" and "hereunder" and words of
similar import when used in an agreement shall refer to such agreement as a
whole and not to any particular provision of such agreement, and section,
schedule and exhibit references in any agreement are to such agreement unless
otherwise specified.
102
SCHEDULE I
DESCRIPTION OF SITE
The Site is described in Exhibits A and A-1 to the Deed of
Trust, which description is incorporated herein by reference.
103
SCHEDULE II
LIABILITIES
Cogentrix Virginia Leasing Corporation:
None
Cogentrix Energy, Inc.:
- Indemnity agreement in connection with loan agreement
between Credit Lyonnais, as agent, lenders and Cogentrix of
North Carolina, Inc.
- Reimbursement obligation related to draws under a $16
million letter of credit issued for the benefit of Credit
Suisse, as agent and lenders related to Birchwood Power
Partners, L.P.'s project debt.
104
SCHEDULE III
GOVERNMENTAL ACTIONS AND PERMITS
PART A
PERMITS OBTAINED
I. Federal Permits and Licenses
A. Certification as a Qualifying Facility,
Section 3, Federal Power Act
1. Order Granting Application for Certification as a
Qualifying Cogeneration Facility issued August 21,
1986, to Borrower by the Federal Energy Regulatory
Commission of the United States of America ("FERC").
2. Notice of Qualifying Status as a Qualifying
Cogeneration Facility filed December 30, 1993, by
Borrower to the FERC (Self-Certification).
3. Notice of Qualifying Status as a Qualifying
Cogeneration Facility filed December 22, 1997 by
Borrower with FERC to reflect a change in the owner of
the thermal host for the Facility.
B. Dredge and Fill Permits
1. Permit number ▇▇-▇▇▇▇-▇▇ effective December 17, 1986
issued by U.S. Army Corps of Engineers to permit
construction of pier facility at Virginia Chemicals
site located at the foot of Norfolk Road, Portsmouth,
Virginia.
2. Permit number ▇▇-▇▇▇▇-▇▇ effective December 17, 1986
issued by U.S. Army Corps of Engineers to permit
construction of conveyor and steam line over Lake
Kingman.
C. Coast Guard Approvals
1. Letter dated November 25, 1986 from U.S. Coast Guard
states that no Coast Guard permit is necessary for
construction of conveyor and steam line over Lake
Kingman.
2. Certificate of Ownership of Vessel issued by the
Department of Transportation U.S. Coast Guard on May 2,
1991 evidencing Borrower's ownership of Cogentrix I
(Official No. 974857).
105
2
II. Virginia State Permits and Licenses
A. Air Quality
1. Air Quality (PSD) ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇ issued December
23, 1986 to Borrower by the State Air Pollution
Control Board of the Commonwealth of Virginia.
B. Dredge and Fill Permits
1. Permit number ▇▇-▇▇▇▇-▇ dated December 15, 1986 issued
by the Marine Resources Commission of the Commonwealth
of Virginia to permit construction of pier facility at
Virginia Chemical site.
2. Permit number ▇▇-▇▇▇▇-▇ dated December 15, 1986 issued
by the Marine Resources Commission of the Commonwealth
of Virginia to permit construction of conveyor and
steam line over Lake Kingman.
C. Power Purchase Agreement
1. The Power Purchase and Operating Agreement, dated as of
July 21, 1986, between VEP and CVI, was filed with the
Virginia State Corporation Commission on March 31,
1986.
2. The amendment, dated January 9, 1987, to the Power
Purchase Agreement was filed with the Virginia State
Corporation Commission.
3. The amendment, dated July 13, 1987 to the Power
Purchase Agreement was filed with the Virginia State
Corporation Commission.
C. Water Quality
1. Water Quality (VPDES) permit ▇▇. ▇▇ ▇▇▇▇▇▇▇ was issued
by the Department of Environmental Quality of the
Commonwealth of Virginia on August 29, 1994.
2. Water Quality (VPDES) permit No. VA 0074781
Modification was issued by the Department of
Environmental Quality of the Commonwealth of Virginia
on August 26, 1997.
D. Well Permit
1. Ground water permit No. SE-98 for drilling of two ▇▇▇▇▇
was issued by the State Water Control Board of the
Commonwealth of Virginia on June 11, 1987.
106
3
III. Local Permits
A. Building
1. Initial building permit No. 0757 issued December 22,
1986 by City of Portsmouth to Borrower and
Contractor.
2. Borrower has obtained all necessary building permits
from the City of Portsmouth with respect to the
construction of the Facility.
B. Utility
1. Water Supply
Letter dated December 23, 1986 from Department of
Public Utilities, City of Portsmouth, stating the
capabilities of the Portsmouth Water System.
2. Sewer Hook-up
Letter dated November 18, 1986 from ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (HRSD) stating that the HRSD
sanitation main can accommodate the projected use from
the Facility.
C. Certificate of Occupancy
1. Borrower obtained the Permanent Certificate of
Occupancy from City of Portsmouth on October 3, 1988.
IV. Other
The UCC, real estate and barge filings and recordings listed on
Schedule IV, Part I have been made.
107
PART B
PERMITS TO BE OBTAINED
1. The UCC-3 assignments, real estate and barge filings
and recordings listed in Schedule IV, Part II will be
filed in connection with the transactions contemplated
by the Third Amended and Restated Loan Agreement in
each of the filing offices referred to in Schedule IV,
Part II.
2. The Power Purchase Agreement Amendment must be filed by
VEP with the Virginia State Corporation Commission on
or before December 31, 1998.
108
SCHEDULE IV
RECORDINGS AND FILINGS
I. EXISTING FILINGS AND OTHER ACTIONS
A. UNIFORM COMMERCIAL CODE FILINGS
====================================================================================================================================
Place of Filing Debtor Secured Party File No. File
--------------- ------ ------------- -------- Date/Type
---------
====================================================================================================================================
1. Secretary of State, Cogentrix Virginia The CIT Group/ Equipment 0293888 01/15/87
North Carolina Leasing Corporation Financing, Inc., as Agent Financing Statement UCC-1
(All of the Debtor's right, title
and interest in and to all property,
tangible and intangible,...)
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ The CIT Group/ Equipment 0301248 02/09/87
North Carolina Leasing Corporation Financing, Inc., as Agent Amendment UCC-3
(Change to Exhibit A, real
property for the Site.)
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ The CIT Group/ Equipment 0499997 10/13/88
North Carolina Leasing Corporation Financing, Inc., Agent Amendment (Exhibit A: Amendments to UCC-3
Coal Conveyor Easement, Steam Easement,
and Virginia Chemicals Ground
Lease parcel; Addition of Access
Easement. Addition of Ash Hauling
Agreement (Schedule I-"Basic Contracts"))
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ The CIT Group/ Equipment 0556838 04/10/89
North Carolina Leasing Corporation Financing, Inc., as Agent Amendment/D. address change from UCC-3
"Parkway Plaza Blvd" to
"Arrowpoint Blvd"
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ The CIT Group/ Equipment 0839434 12/02/91
North Carolina Leasing Corporation Financing, Inc., as Agent Continuation of F/S No. 0293888 UCC-3
at "Parkway Blvd"
====================================================================================================================================
Secretary of State, Cogentrix Virginia The CIT Group/ Equipment 0909964 07/23/92
North Carolina Leasing Corporation Financing, Inc., as Agent Amendment UCC-3
(Schedule I, Defined Terms:
Addition of "Barge," "Ground
Lease," and "Easements"; Amendment
to "Additional Contracts," "Facility,"
and "Security Deposit Agreement";
Amendment to Ash Hauling Agreement
("Basic Contracts"); Deletion of
"Performance Bond" and "Labor and
Material Payment Bond" ("Basic
Contracts"). Amendment to final
sentence of Schedule I to allow Debtor
109
2
====================================================================================================================================
Place of Filing Debtor Secured Party File No. File
--------------- ------ ------------- -------- Date/Type
---------
====================================================================================================================================
to sell collateral pursuant to the
terms of the Second Amended Restated
Loan Agreement.)
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ The CIT Group/ Equipment 1403846 12/04/96
North Carolina Leasing Corporation Financing, Inc., as Agent Continuation of F/S No. 0293888 UCC-3
at "Parkway Blvd"
====================================================================================================================================
2. Mecklenburg Cogentrix Virginia The CIT Group/ Equipment 000722 01/15/87
County, North Leasing Corporation Financing, Inc., as Agent Financing Statement UCC-1
Carolina (All of the Debtor's right, title and
interest in and to all property,
tangible and intangible,...)
====================================================================================================================================
Mecklenburg Cogentrix Virginia The CIT Group/ Equipment 001814 02/09/87
County, North Leasing Corporation Financing, Inc., as Agent Amendment UCC-3
Carolina (Change to Exhibit A, real property
for the Site.)
====================================================================================================================================
Mecklenburg Cogentrix Virginia The CIT Group/ Equipment 018813 10/13/88
County, North Leasing Corporation Financing, Inc., as Agent Amendment UCC-3
Carolina (Exhibit A: Amendments to Coal
Conveyor Easement, Steam
Easement, and Virginia Chemicals
Ground Lease parcel;
Addition of Access Easement.
Addition of Ash Hauling Agreement
(Schedule I-"Basic Contracts").)
====================================================================================================================================
Mecklenburg Cogentrix Virginia The CIT Group/ Equipment 006378 04/13/89
County, North Leasing Corporation Financing, Inc., as Agent Amendment/D. address change UCC-3
Carolina
====================================================================================================================================
Mecklenburg Cogentrix Virginia The CIT Group/ Equipment 015694 11/29/91
County, North Leasing Corporation Financing, Inc., as Agent Continuation of F/S No.000722 UCC-3
Carolina
====================================================================================================================================
Mecklenburg Cogentrix Virginia The CIT Group/ Equipment 010196 07/22/92
County, North Leasing Corporation Financing, Inc., as Agent Amendment UCC-3
Carolina (Schedule I, Defined Terms: Addition
of "Barge," "Ground Lease," and
"Easements"; Amendment to "Additional
Contracts," "Facility," and
"Security Deposit Agreement"; Amendment
to Ash Hauling Agreement ("Basic
Contracts"); Deletion of "Performance
Bond" and "Labor and Material Payment
Bond" ("Basic Contracts"). Amendment to
final sentence of Schedule I to allow
Debtor to sell collateral pursuant to
the terms of the Second
110
3
====================================================================================================================================
Place of Filing Debtor Secured Party File No. File
--------------- ------ ------------- -------- Date/Type
---------
====================================================================================================================================
Amended Restated Loan Agreement.)
====================================================================================================================================
Mecklenburg Cogentrix Virginia The CIT Group/ Equipment 014046 10/07/96
County, North Leasing Corporation Financing, Inc., as Agent Continuation of F/S No. 000722 UCC-3
Carolina
====================================================================================================================================
3. Secretary of Cogentrix Virginia The CIT Group/ Equipment 120499 (472135) 03/13/87
State, Kentucky Leasing Corporation Financing, Inc., as Agent Financing Statement UCC-1
(All of the Debtor's right, title
and interest in and to all property,
tangible and intangible,...)
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ The CIT Group/ Equipment 120499 (557880) 04/11/89
Kentucky Leasing Corporation Financing, Inc., as Agent Amendment/D. address change from UCC-3
"Parkway Plaza Blvd" to
"Arrowpoint Blvd"
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ The CIT Group/ Equipment 120499 (657330) 12/02/91
Kentucky Leasing Corporation Financing, Inc., as Agent Continuation of F/S No. 120499 at UCC-3
"Parkway Plaza Blvd"
====================================================================================================================================
Secretary of State, Cogentrix Virginia The CIT Group/ Equipment 120499 (692631) 11/05/92
Kentucky Leasing Corporation Financing, Inc., as Agent Amendment to original financing UCC-3
statement; and D. address change
(Exhibit A: Amendment to Coal
Conveyor Easement, Steam Easement,
and Virginia Chemicals Ground Lease
parcel; Addition of Access Easement.
Schedule I, Defined Terms: Addition
of "Barge, "Ground Lease," and
"Easements"; Amendment to "Additional
Contracts," "Facility," and "Security
Deposit Agreement";Amendment to Ash
Hauling Agreement ("Basic Contracts");
Deletion of "Performance Bond" and
"Labor and Material Payment Bond"
("Basic Contracts"). Amendment to
final sentence of Schedule I to
allow Debtor to sell collateral pursuant
to the terms of the Second Amended
Restated Loan Agreement.)
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ The CIT Group/ Equipment 120499 12/4/96
Kentucky Leasing Corporation Financing, Inc., as Agent Continuation of F/S No. 120499 UCC-3
====================================================================================================================================
Secretary of State, Cogentix Virginia The CIT Group/ Equipment 120499 01/07/97
Kentucky Leasing Corporation Financing, Inc., as Agent Continuation of F/S No. 120499 UCC-3
====================================================================================================================================
4. ▇▇▇▇▇▇ County, Cogentrix Virginia The CIT Group/ Equipment 42089 03/06/87
Kentucky Leasing Corporation Financing, Inc., as Agent Financing Statement UCC-1
(All of the Debtor's right, title
and interest in and to all
111
4
====================================================================================================================================
Place of Filing Debtor Secured Party File No. File
--------------- ------ ------------- -------- Date/Type
---------
====================================================================================================================================
property, tangible and intangible,...)
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ The CIT Group/ Equipment 55888 4/13/89
Kentucky Leasing Corporation Financing, Inc., as Agent Amendment/D. address change from UCC-3
"Parkway Plaza Blvd" to
"Arrowpoint Blvd"
====================================================================================================================================
▇▇▇▇▇▇ County, Cogentrix Virginia The CIT Group/ Equipment 42089 11/29/91
Kentucky Leasing Corporation Financing, Inc., as Agent Continuation of F/S 42089 UCC-3
====================================================================================================================================
▇▇▇▇▇▇ County, Cogentrix Virginia The CIT Group/ Equipment 42089 11/05/92
Kentucky Leasing Corporation Financing, Inc., as Agent Amendment (Exhibit A: Amendment to UCC-3
Coal Conveyor Easement, Steam
Easement, and Virginia Chemicals
Ground Lease parcel; Addition of
Access Easement. Schedule I, Defined
Terms: Addition of "Barge, "Ground
Lease," and "Easements"; Amendment
to "Additional Contracts," "Facility,"
and "Security Deposit Agreement";
Amendment to Ash Hauling Agreement
("Basic Contracts");Deletion of
"Performance Bond" and "Labor and
Material Payment Bond".
====================================================================================================================================
▇▇▇▇▇▇ County, Cogentrix Virginia The CIT Group/ Equipment 42089 02/13/97
Kentucky Leasing Corporation Financing, Inc., as Agent Continuation of F/S 42089 UCC-3
====================================================================================================================================
5. State Corporation Cogentrix Virginia The CIT Group/ Equipment 870120272 01/15/87
Commission, Leasing Corporation Financing, Inc., as Agent Financing Statement UCC-1
Virginia (All of the Debtor's right, title and
interest in and to all property,
tangible and intangible,...)
====================================================================================================================================
State Corporation Cogentrix Virginia The CIT Group/ Equipment 870212524 02/09/87
Commission, Leasing Corporation Financing, Inc., as Agent Amendment UCC-3
Virginia (Change to Exhibit A, real property
for Site.)
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ The CIT Group/ Equipment 881021216 10/13/88
Commission, Leasing Corporation Financing, Inc., as Agent Amendment (Exhibit A: Amendment to UCC-3
Virginia Coal Conveyor Easment, Steam Easement,
and Virginia Chemicals Ground Lease
parcel; Addition of Access Easement.
Addition of Ash Hauling Agreement
(Schedule I-"Basic contracts").)
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ The CIT Group/ Equipment 890421702 04/17/89
Commission, Leasing Corporation Financing, Inc., as Agent Amendment/ D. address change UCC-3
Virginia
112
5
====================================================================================================================================
Place of Filing Debtor Secured Party File No. File
--------------- ------ ------------- -------- Date/Type
---------
====================================================================================================================================
State Corporation Cogentrix Virginia The CIT Group/ Equipment 911210678 12/03/91
Commission, Leasing Corporation Financing, Inc., as Agent Continuation of F/S No. 870120272 UCC-3
Virginia
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ The CIT Group/ Equipment 920731112 07/24/92
Commission, Leasing Corporation Financing, Inc., as Agent Amendment UCC-3
Virginia (Schedule I, Defined Terms: Addition
of "Barge," "Ground Lease," and
"Easements"; Amendment to "Additional
Contracts," "Facility," and "Security
Deposit Agreement"; Amendment to Ash
Hauling Agreement ("Basic Contracts");
Deletion of "Performance Bond" and
"Labor and Material Payment Bond"
("Basic Contracts"). Amendment to
final sentence of Schedule I to allow
Debtor to sell collateral pursuant
to the terms of the Second Amended
Restated Loan Agreement.)
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ The CIT Group/ Equipment 9612047806 12/04/96
Commission, Leasing Corporation Financing, Inc., as Agent Continuation of F/S No. 870120272 UCC-3
Virginia
====================================================================================================================================
6. Portsmouth City, Cogentrix Virginia The CIT Group/ Equipment 56307 01/22/87
Virginia Leasing Corporation Financing, Inc., as Agent Financing Statement UCC-1
(All of the Debtor's right, title
and interest in and to all property,
tangible and intangible,...)
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ The CIT Group/ Equipment 56307 10/12/88
Virginia Leasing Corporation Financing, Inc., as Agent Amendment UCC-3
(Exhibit A: Amendments to Coal Conveyor
Easement, Steam Easement, and Virginia
Chemicals Ground Lease parcel; Addition
of Access Easement. Addition of Ash
Hauling Agreement (Schedule I-"Basic
Contracts").)
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ The CIT Group/ Equipment 56307 04/11/89
Virginia Leasing Corporation Financing, Inc., as Agent Amendment/ D. address change UCC-3
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ The CIT Group/ Equipment 56307 12/04/91
Virginia Leasing Corporation Financing, Inc., as Agent Continuation of F/S 56307 UCC-3
113
6
====================================================================================================================================
Place of Filing Debtor Secured Party File No. File
--------------- ------ ------------- -------- Date/Type
---------
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ The CIT Group/ Equipment 56307 07/27/92
Virginia Leasing Corporation Financing, Inc., as Agent Amendment UCC-3
(Schedule I, Defined Terms: Addition
of "Barge," "Ground Lease," and
"Easements"; Amendment to "Additional
Contracts," "Facility," and "Security
Deposit Agreement"; Amendment to Ash
Hauling Agreement("Basic Contracts");
Deletion of "Performance Bond" and
"Labor and Material Payment Bond"
("Basic Contracts"). Amendment to
final sentence of Schedule I to allow
Debtor to sell collateral pursuant
to the terms of the Second Amended
Restated Loan Agreement.)
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ The CIT Group/ Equipment 56307 12/06/96
Virginia Leasing Corporation Financing, Inc., as Agent Continuation of F/S 56307 UCC-3
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ The CIT Group/ Equipment 56307 01/09/97
Virginia Leasing Corporation Financing, Inc., as Agent Continuation of F/S 56307 UCC-3
====================================================================================================================================
114
7
B. REAL ESTATE RECORDINGS
====================================================================================================================================
Place of Filing Debtor Secured Party File No. File Date/Type
--------------- ------ ------------- -------- --------------
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ The CIT Group/ Equipment Deed Book 980, at Page 708 December 15, 1986;
Virginia Leasing Corporation Financing, Inc., as Agent Deed of Trust,
Deeds, Easement and
Ground Lease
====================================================================================================================================
City of Portsmouth, Cogentrix Virginia The CIT Group/ Equipment Deed Book 1013, at Page 1928 September 1, 1988;
Virginia Leasing Corporation Financing, Inc., as Agent Easements Agreement
Amendment
====================================================================================================================================
City of Portsmouth, Cogentrix Virginia The CIT Group/ Equipment Deed Book 1013, at Page 1941 September 15, 1988;
Virginia Leasing Corporation Financing, Inc., as Agent Deed of Trust
Amendment No. 1
====================================================================================================================================
City of Portsmouth, Cogentrix Virginia The CIT Group/ Equipment Deed Book 1056, at Page 1261 April 26, 1991;
Virginia Leasing Corporation Financing, Inc., as Agent Deed of Trust
Amendment No. 2
====================================================================================================================================
City of Portsmouth, Cogentrix Virginia The CIT Group/ Equipment Deed Book 1076, at Page 1467 May 15, 1992; Deed
Virginia Leasing Corporation Financing, Inc., as Agent of Trust Amendment
No. 3
====================================================================================================================================
City of Portsmouth, Cogentrix Virginia The CIT Group/ Equipment Deed Book 1207, at Page 1115 February 1, 1995;
Virginia Leasing Corporation Financing, Inc., as Agent Deed of Trust
Amendment No. 4
====================================================================================================================================
115
8
▇. ▇▇▇▇▇ FILINGS
====================================================================================================================================
Place of Filing Debtor Secured Party File No./ Type File Date
--------------- ------ ------------- -------------- ---------
====================================================================================================================================
Office of the Cogentrix Virginia The CIT Group/Equipment Book No. PM 9105 as Instrument No. 9 5/2/91
Documentation Officer; Leasing Corporation Financing, Inc., as Agent
Port of Norfolk,
Virginia
====================================================================================================================================
Office of the Cogentrix Virginia The CIT Group/Equipment Book No. PM 9208 as Instrument No. 47 8/5/92
Documentation Officer; Leasing Corporation Financing, Inc., as Agent
Port of Norfolk,
Virginia
====================================================================================================================================
II. NEW FILINGS AND OTHER ACTIONS
A. UNIFORM COMMERCIAL CODE FILINGS
====================================================================================================================================
Place of Filing Debtor Secured Party File No./ Type File Type
--------------- ------ ------------- -------------- ---------
====================================================================================================================================
2. Secretary of State, Cogentrix Virginia Credit Lyonnais, as Agent Assignment of Financing Statement UCC-3
North Carolina Leasing Corporation No. 0293888 from The CIT Group/
Equipment Financing, Inc. to
Credit Lyonnais
====================================================================================================================================
2. Secretary of Cogentrix Virginia Credit Lyonnais, as Agent Assignment of Financing Statement UCC-3
State, Kentucky Leasing Corporation No. 120499 from The CIT Group/
Equipment Financing, Inc. to
Credit Lyonnais
====================================================================================================================================
3. Mecklenburg Cogentrix Virginia Credit Lyonnais, as Agent Assignment of Financing Statement ▇▇▇-▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇ from The CIT Group/
Carolina Equipment Financing, Inc. to
Credit Lyonnais
====================================================================================================================================
4. ▇▇▇▇▇▇ County, Cogentrix Virginia Credit Lyonnais, as Agent Assignment of Financing Statement UCC-3
Kentucky Leasing Corporation No. 42089 from The CIT Group/
Equipment Financing, Inc. to
Credit Lyonnais
====================================================================================================================================
5. State Corporation Cogentrix Virginia Credit Lyonnais, as Agent Assignment of Financing Statement UCC-3
Commission, Leasing Corporation No. 870120272 from The CIT Group/
Virginia Equipment Financing, Inc. to
Credit Lyonnais
====================================================================================================================================
6. Portsmouth City, Cogentrix Virginia Credit Lyonnais, as Agent Assignment of Financing Statement UCC-3
Virginia Leasing Corporation No. 56307 from The CIT Group/
Equipment Financing, Inc. to
Credit Lyonnais
====================================================================================================================================
116
9
B. ACTIONS WITH RESPECT TO PLEDGED STOCK
Possession of stock certficates specified below together with undated stock powers executed in blank.
====================================================================================================================================
Grantor Issuer Class of Stock Stock Certificate No. and Date No. of Shares
------- ------ -------------- ------------------------------ -------------
====================================================================================================================================
Cogentrix, Inc. Cogentrix Virginia Common Stock 2 1,000
Leasing Corporation June 30, 1986
====================================================================================================================================
C. REAL ESTATE RECORDINGS
====================================================================================================================================
Place of Filing Debtor Secured Party File Type
--------------- ------ ------------- ---------
====================================================================================================================================
City of Portsmouth, Cogentrix Virginia Credit Lyonnais, as Agent Deed of Trust, Amendment No. 5
Virginia Leasing Corporation
====================================================================================================================================
▇. ▇▇▇▇▇ FILINGS
====================================================================================================================================
Place of Filing Debtor Secured Party File Type
--------------- ------ ------------- ---------
====================================================================================================================================
National Vessel Cogentrix Virginia Credit Lyonnais, as Agent Second Amendment to the First
Documentation Center; Leasing Corporation Preferred Ship Mortgage
Office of the United
States Coast Guard
====================================================================================================================================
117
SCHEDULE V
ENVIRONMENTAL NOTICES
In October 1993, the Virginia Department of Environmental
Quality (the "VDEQ") issued a notice of violation under the Facility's Virginia
Pollution Discharge Elimination System Permit (the "VPDES"). The notice of
violation related to a discharge of high pH water in excess of permit limits.
In August 1994 the VDEQ issued a notice of violation under the
VPDES. The notice of violation related to exceedences in the limit in the VPDES
for total suspended solids in July 94 and August 1994.
In each case, the exceedences were relatively minor, the
problems giving rise to the exceedences were corrected promptly and no fines
were assessed. No further action is required.
118
SCHEDULE VI
PERMITTED LIENS
All of the title exceptions listed on Schedule B of that
certain policy of title insurance Policy No. PM977493C issued by Commonwealth
Land Title Insurance Company and those certain Endorsements issued in reference
to such title insurance policy dated through the date of recordation of the Deed
of Trust Amendment No. 5, in each case as of the Third Restatement Effective
Date.
119
SCHEDULE VII
REDUCTION AMOUNT SCHEDULE
Installment
Number Payment Date Amount
------ ------------ ------
1 March 7, 1998 $4,590,000
2 June 7, 1998 $4,590,000
3 September 7, 1998 $4,590,000
4 December 7, 1998 $4,590,000
5 March 7, 1999 $4,845,000
6 June 7, 1999 $4,845,000
7 September 7, 1999 $4,845,000
8 December 7, 1999 $4,845,000
9 March 7, 2000 $5,355,000
10 June 7, 2000 $5,355,000
11 September 7, 2000 $5,355,000
12 December 7, 2000 $5,355,000
13 March 7, 2001 $5,610,000
14 June 7, 2001 $5,610,000
15 September 7, 2001 $5,610,000
16 December 7, 2001 $5,610,000
17 March 7, 2002 $6,120,000
18 June 7, 2002 $6,120,000
19 September 7, 2002 $6,120,000
20 December 31, 2002 $2,040,000
120
SCHEDULE VIII
PENDING AND THREATENED LITIGATION
A. Borrower
There is no pending or threatened litigation involving the
Borrower.
B. Project Participants
The Borrower is aware of no pending or threatened litigation
against any Project Participant which seeks to restrain, prevent or change the
transactions contemplated by the Project Documents or which could materially
adversely affect the ability of the Borrower, the Parent or any Project
Participant to perform its obligations under any of the Project Documents to
which it is a party in whole or in part, or questioning the validity or legality
of the transactions contemplated by the Project Documents.
121
SCHEDULE IX
Lender Column A Column B
Existing Term Loan Amount1/ Loan Percentage
------ --------------------------- ---------------
CREDIT LYONNAIS $58,500,000.03 100%
CREDIT LYONNAIS
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇/
(▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
DOMESTIC LENDING OFFICE AND
EURODOLLAR LENDING OFFICE:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇/
▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇/
(▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇