CONFORMED COPY
======================================================================
CREDIT AGREEMENT
Dated as of June 12, 1997,
as amended and restated as of June 27, 1997
among
PACIFICORP POWERCOAL LLC,
THE LENDERS NAMED HEREIN
and
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK,
as Paying Agent, Collateral Agent,
Issuing Bank and Swingline Lender
--------------------
CITICORP SECURITIES, INC.,
▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P.
and
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.,
as Arrangers
======================================================================
[CS&M Ref. No. 4020-271]
TABLE OF CONTENTS
Page
----
ARTICLE I
Definitions
SECTION 1.01. Defined Terms 2
SECTION 1.02. Terms Generally 28
ARTICLE II
The Credits
SECTION 2.01. Commitments 28
SECTION 2.02. Loans 29
SECTION 2.03. Borrowing Procedure 30
SECTION 2.04. Evidence of Debt; Repayment of Loans 31
SECTION 2.05. Fees 31
SECTION 2.06. Interest on Loans 32
SECTION 2.07. Default Interest 33
SECTION 2.08. Alternate Rate of Interest 33
SECTION 2.09. Termination and Reduction of Commitments 33
SECTION 2.10. Conversion and Continuation of Borrowings 34
SECTION 2.11. Repayment of Term Borrowings 35
SECTION 2.12. Optional Prepayments 38
SECTION 2.13. Mandatory Prepayments 38
SECTION 2.14. Reserve Requirements; Change in Circumstances 40
SECTION 2.15. Change in Legality 41
SECTION 2.16. Indemnity 42
SECTION 2.17. Pro Rata Treatment 42
SECTION 2.18. Sharing of Setoffs 43
SECTION 2.19. Payments 43
SECTION 2.20. Taxes 44
SECTION 2.21. Assignment of Commitments Under Certain Circumstances;
Duty to Mitigate 46
SECTION 2.22. Swingline Loans 47
SECTION 2.23. Letters of Credit 48
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization 52
SECTION 3.02. Corporate and Governmental Authorization; No Contravention 52
SECTION 3.03. Enforceability 52
SECTION 3.04. Financial Statements 53
SECTION 3.05. No Material Adverse Change 53
SECTION 3.06. Title to Properties; Possession Under Leases 53
SECTION 3.07. Subsidiaries 54
SECTION 3.08. Litigation; Compliance with Laws; Reserves 54
Contents, p.2
SECTION 3.09. Agreements................................................... 54
SECTION 3.10. Federal Reserve Regulations.................................. 55
SECTION 3.11. Investment Company Act; Public Utility Holding Company Act... 55
SECTION 3.12. Use of Proceeds.............................................. 55
SECTION 3.13. Tax Returns.................................................. 55
SECTION 3.14. No Material Misstatements.................................... 55
SECTION 3.15. Employee Benefit Plans....................................... 55
SECTION 3.16. Environmental Matters........................................ 56
SECTION 3.17. Insurance.................................................... 56
SECTION 3.18. Security Documents........................................... 56
SECTION 3.19. Location of Real Property and Leased Premises................ 57
SECTION 3.20. Labor Matters................................................ 57
SECTION 3.21. Solvency..................................................... 58
ARTICLE IV
Conditions
SECTION 4.01. Effective Date............................................... 58
SECTION 4.02. Borrowings................................................... 59
ARTICLE V
Affirmative Covenants
SECTION 5.01. Existence; Businesses and Properties......................... 61
SECTION 5.02. Insurance.................................................... 61
SECTION 5.03. Obligations and Taxes........................................ 61
SECTION 5.04. Financial Statements, Reports, etc........................... 62
SECTION 5.05. Litigation and Other Notices................................. 63
SECTION 5.06. Maintaining Records; Access to Properties and Inspections.... 63
SECTION 5.07. Use of Proceeds.............................................. 63
SECTION 5.08. Compliance with Laws......................................... 63
SECTION 5.09. Preparation of Environmental Reports......................... 64
SECTION 5.10. Further Assurances........................................... 64
SECTION 5.11. Interest Rate Protection Agreements.......................... 65
SECTION 5.12. Concentration and Disbursement Accounts...................... 65
SECTION 5.13. ▇▇▇▇▇ Subsidiaries; PPM Contribution......................... 65
ARTICLE VI
Negative Covenants
SECTION 6.01. Indebtedness................................................. 65
SECTION 6.02. Liens........................................................ 67
SECTION 6.03. Sale and Lease-Back Transactions............................. 68
SECTION 6.04. Investments, Loans and Advances.............................. 68
SECTION 6.05. Mergers, Consolidations, Sales of Assets and Acquisitions.... 70
SECTION 6.06. Dividends and Distributions; Restrictions on Ability of
Subsidiaries to Pay Dividends.............................. 70
SECTION 6.07. Transactions with Affiliates................................. 71
SECTION 6.08. Business of Borrower and Subsidiaries........................ 72
Contents, p.3
SECTION 6.09. Other Indebtedness and Agreements............................ 72
SECTION 6.10. Capital Expenditures......................................... 72
SECTION 6.11. Leverage Ratio............................................... 73
SECTION 6.12. Interest Expense Coverage Ratio.............................. 73
SECTION 6.13. Net Worth.................................................... 73
SECTION 6.14. Current Ratio................................................ 73
SECTION 6.15. Fiscal Year.................................................. 74
ARTICLE VII
Events of Default
ARTICLE VIII
The Paying Agent and the Collateral Agent
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices...................................................... 79
SECTION 9.02. Survival of Agreement........................................ 80
SECTION 9.03. Binding Effect............................................... 80
SECTION 9.04. Successors and Assigns....................................... 80
SECTION 9.05. Expenses; Indemnity.......................................... 83
SECTION 9.06. Right of Setoff.............................................. 84
SECTION 9.07. APPLICABLE LAW............................................... 84
SECTION 9.08. Waivers; Amendment........................................... 84
SECTION 9.09. Interest Rate Limitation..................................... 85
SECTION 9.10. Entire Agreement............................................. 85
SECTION 9.11. WAIVER OF JURY TRIAL......................................... 86
SECTION 9.12. Severability................................................. 86
SECTION 9.13. Counterparts................................................. 86
SECTION 9.14. Headings..................................................... 86
SECTION 9.15. Jurisdiction; Consent to Service of Process.................. 86
SECTION 9.16. Judgment Currency............................................ 87
SECTION 9.17. Confidentiality.............................................. 87
SECTION 9.18. Intercreditor Agreement...................................... 88
SECTION 9.19. Additional Borrowers......................................... 88
SECTION 9.20. Margin Regulations........................................... 88
Exhibits and Schedules
Exhibit A Administrative Questionnaire
Exhibit B Assignment and Acceptance
Exhibit C Bidco Note
Exhibit D Borrowing Request
Exhibit E Collateral Assignment
Exhibit F Intercreditor Agreement
Exhibit G Guarantee Agreement
Exhibit H Indemnity, Subrogation and Contribution Agreement
Contents, p.4
Exhibit I Pledge Agreement
Exhibit J Security Agreement
Exhibit K-1 Opinion of Stoel Rives LLP
Exhibit K-2 Opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
Schedule 1.01(a) Offer Conditions Precedent
Schedule 1.01(b) ▇▇▇▇▇ Indebtedness
Schedule 1.01(c) ▇▇▇▇▇ Subsidiaries
Schedule 2.01 Commitments
Schedule 3.06(b) Leases
Schedule 3.07(a) Subsidiaries
Schedule 3.08 Litigation
Schedule 3.16 Environmental Matters
Schedule 3.17 Insurance
Schedule 3.19(a) Owned Real Property
Schedule 3.19(b) Leased Real Property
Schedule 6.01(a) Indebtedness
Schedule 6.04(c) Investments, Loans and Advances
Schedule 6.05(a) Certain Subsidiaries
CREDIT AGREEMENT dated as of June 12, 1997, as
amended and restated as of June 27, 1997, among
PACIFICORP POWERCOAL LLC, an Oregon limited liability
company (the "Borrower"), the Lenders (as defined in
Article I), and ▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW
YORK, a New York banking corporation ("▇▇▇▇▇▇"), as
swingline lender (in such capacity, the "Swingline
Lender"), as issuing bank (in such capacity, the
"Issuing Bank"), as paying agent (in such capacity,
the "Paying Agent") and as collateral agent (in such
capacity, the "Collateral Agent") for the Lenders.
The parties hereto are parties to a Credit Agreement dated as of June 12,
1997 (the "Original Credit Agreement").
Pursuant to the Offer (such term and each other capitalized term used but
not defined herein having the meaning given it in Article I), Bidco has offered
or will offer to purchase each outstanding Share (including Shares represented
by Depositary Shares) at a purchase price of 695.5 ▇▇▇▇▇ net per share in cash
to the holder thereof (which includes a net dividend of 5.5 ▇▇▇▇▇ per share to
be paid by the Target on July 4, 1997). In connection therewith and to provide
a portion of the financing therefor, (a) Bidco has entered into the Bidco
Facility Agreement, (b) Energyco has entered into the Energyco Bridge Loan
Agreement and (c) PHI has entered into the PHI Credit Agreement.
The Borrower has requested the Lenders to extend credit in the form of (a)
Tranche A Term Loans at any time during the Term Loan Availability Period, in an
aggregate principal amount not in excess of $250,000,000, (b) Tranche B Term
Loans at any time during the Term Loan Availability Period, in an aggregate
principal amount not in excess of $800,000,000, and (c) Revolving Loans at any
time and from time to time prior to the Revolving Credit Maturity Date, in an
aggregate principal amount at any time outstanding not in excess of
$575,000,000. The Borrower has requested the Swingline Lender to extend credit,
at any time and from time to time prior to the Revolving Credit Maturity Date,
in the form of Swingline Loans. The Borrower has requested the Issuing Bank to
issue letters of credit, in an aggregate face amount at any time outstanding not
in excess of $400,000,000, to support payment obligations incurred in the
ordinary course of business by the Borrower and the Subsidiaries (including PPM
before it becomes a Subsidiary if it shall have become a Guarantor) and
Citizens.
The proceeds of the Term Loans, together with not less than $600,000,000 in
net cash proceeds of the equity contribution received by Powercoal from Newco
(the "Newco Equity Contribution"), are to be used solely to fund loans (the
"Powercoal/Bidco Loans") to Bidco in exchange for the Bidco Note, and to pay
fees and expenses related to the Offer. The proceeds of the Revolving Loans
(including Letters of Credit) and the Swingline Loans are to be used (a) to
refinance the ▇▇▇▇▇ Refinanced Indebtedness and (b) for general corporate
purposes of the Borrower and the Subsidiaries (including PPM before it becomes a
Subsidiary if it shall have become a Guarantor) and Citizens. . Bidco will use
(a) the proceeds of the Powercoal/Bidco Loans, (b) certain proceeds from
borrowings under the Bidco Facility Agreement and (c) certain proceeds that
Bidco will receive as a result of borrowings by Energyco and PHI under the
Energyco Bridge Loan Agreement and the PHI Credit Agreement, respectively, to
(i) finance the Offer and for the purposes specified in
2
Clause 3.1(a)(i) of the Bidco Facility Agreement, as in effect on the
Restatement Date, and (ii) refinance certain existing Indebtedness of the Target
and its subsidiaries.
The Borrower has requested that the Original Credit Agreement be amended
and restated in the form hereof. The Lenders and the Issuing Bank are willing
so to amend and restate the Original Credit Agreement and to extend such credit
to the Borrower, on the terms and subject to the conditions set forth herein.
Accordingly, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the following
terms shall have the meanings specified below:
"Acquisition Borrowing" shall mean any Term Borrowing, the proceeds of
which are loaned to Bidco and used by Bidco to finance a portion of the Offer
and/or for the purposes specified in Clause 3.1(a)(i) of the Bidco Facility
Agreement, as in effect on the Restatement Date.
"Adjustment Amount" shall mean the cumulative amount (during the
period from the initial Borrowing hereunder to the end of the period relating to
the relevant determination) by which the cash expenditures of the Borrower and
its subsidiaries for reclamation and related liabilities, workers compensation
liabilities, postretirement benefit costs, industry fund obligations and similar
items exceed the sum of: (a) the cumulative expense during such period
recognized in Consolidated Net Income of the Borrower and its subsidiaries
(after giving effect to the transfer of the ▇▇▇▇▇ Subsidiaries to the Borrower)
for reclamation and related liabilities, workers compensation liabilities,
postretirement benefit costs, industry fund obligations and similar items and
(b) $50,000,000.
"Adjusted LIBO Rate" shall mean, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the product of (a) the LIBO Rate
in effect for such Interest Period and (b) Statutory Reserves.
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in the form of Exhibit A or such other form as shall be approved
by the Paying Agent.
"Affiliate" shall mean, when used with respect to a specified person,
any other person that directly or indirectly, through one or more
intermediaries, Controls or is Controlled by or is under direct or indirect
common Control with such specified person; provided that, for purposes of
Section 6.07 only, beneficial ownership of 10% or more of the voting securities
of a person shall be deemed to be Control for purposes of the definition of
"Affiliate". Neither the Lenders nor any of their Affiliates will be treated as
an Affiliate of the Borrower or any of its Subsidiaries for purposes of this
Agreement.
"Aggregate Revolving Credit Exposure" shall mean the aggregate amount
of the Lenders' Revolving Credit Exposures.
3
"Applicable Percentage" shall mean, for any day, with respect to any
Eurodollar Loan or Base Rate Loan that is a Tranche A Term Loan or a Revolving
Loan, or with respect to the Commitment Fees, as the case may be, the applicable
percentage set forth below under the caption "Eurodollar Spread", "Base Rate
Spread" or "Fee Percentage", as the case may be, based upon the Leverage Ratio
as of the relevant date of determination:
Eurodollar Base Rate Fee
Spread Spread Percentage
----------- ---------- -----------
Category 1
----------
Greater than or equal to 4.50 to 2.50% 1.50% .50%
1.00
Category 2
----------
Less than 4.50 to 1.00 but greater 1.75% .75% .50%
than or equal to 4.00 to 1.00
Category 3
----------
Less than 4.00 to 1.00 but greater 1.50% .50% .45%
than or equal to 3.50 to 1.00
Category 4
----------
Less than 3.50 to 1.00 but greater 1.25% .25% .375%
than or equal to 3.00 to 1.00
Category 5
----------
Less than 3.00 to 1.00 but greater 1.00% .00% .30%
than or equal to 2.50 to 1.00
Category 6
----------
Less than 2.50 to 1.00 .75% .00% .25%
Notwithstanding the foregoing, until the Borrower has delivered the
financial statements for the fiscal quarter ending June 30, 1998, in accordance
with Section 5.04(b), the Leverage Ratio shall be deemed to be in Category 2 for
purposes of determining the Applicable Percentage; provided, however that, in
the event that any financial statements delivered in accordance with Section
5.04(a) or (b) prior thereto indicate that the Leverage Ratio is greater than or
equal to 4.50 to 1.00, the Applicable Percentage shall be as set forth in
Category 1. Each change in the Applicable Percentage resulting from a change in
the Leverage Ratio shall be effective with respect to all Tranche A Term Loans,
Revolving Loans, Commitments and Letters of Credit outstanding on and after the
date of delivery to the Paying Agent of the financial statements and
certificates required by Section 5.04(a) or (b) indicating such change until the
date immediately preceding the next date of delivery of such
4
financial statements and certificates indicating another such change.
Notwithstanding the foregoing, (i) at any time during which the Borrower has
failed to deliver the financial statements and certificates required by Section
5.04(a) or (b), or (ii) at any time after the occurrence and during the
continuance of an Event of Default, the Leverage Ratio shall be deemed to be in
Category 1 for purposes of determining the Applicable Percentage.
"Applicable Tranche B Percentage" shall mean, for any day, with
respect to any Eurodollar Loan or Base Rate Loan that is a Tranche B Term Loan,
as the case may be, the applicable percentage set forth below under the caption
"Eurodollar Spread" or "Base Rate Spread", as the case may be, based upon the
Leverage Ratio as of the relevant date of determination:
Eurodollar Base Rate
Spread Spread
----------- ----------
Category 1
----------
Greater than or equal to 4.50 to 3.00% 2.00%
1.00
Category 2
----------
Less than 4.50 to 1.00 but greater 2.25% 1.25%
than or equal to 3.50 to 1.00
Category 3
----------
Less than 3.50 to 1.00 2.00% 1.00%
Notwithstanding the foregoing, until the Borrower has delivered the
financial statements for the fiscal quarter ending June 30, 1998, in accordance
with Section 5.04(b), the Leverage Ratio shall be deemed to be in Category 2 for
purposes of determining the Applicable Tranche B Percentage; provided, however
that, in the event that any financial statements delivered in accordance with
Section 5.04(a) or (b) prior thereto indicate that the Leverage Ratio is greater
than or equal to 4.50 to 1.00, the Applicable Tranche B Percentage shall be as
set forth in Category 1. Each change in the Applicable Tranche B Percentage
resulting from a change in the Leverage Ratio shall be effective with respect to
all Tranche B Term Loans outstanding on and after the date of delivery to the
Paying Agent of the financial statements and certificates required by Section
5.04(a) or (b) indicating such change until the date immediately preceding the
next date of delivery of such financial statements and certificates indicating
another such change. Notwithstanding the foregoing, (i) at any time during
which the Borrower has failed to deliver the financial statements and
certificates required by Section 5.04(a) or (b), or (ii) at any time after the
occurrence and during the continuance of an Event of Default, the Leverage Ratio
shall be deemed to be in Category 1 for purposes of determining the Applicable
Tranche B Percentage.
"Assessment Rate" shall mean for any date the annual rate (rounded
upwards, if necessary, to the next 1/100 of 1%) most recently estimated by the
Paying Agent as the then current net annual assessment rate that will be
employed in determining amounts payable by the Paying Agent to the
5
Federal Deposit Insurance Corporation (or any successor thereto) for insurance
by such Corporation (or such successor) of time deposits made in dollars at the
Paying Agent's domestic offices.
"Asset Sale" shall mean the sale, lease, transfer or other disposition
(by way of merger or otherwise, including as a result of a Condemnation Event or
a Casualty Event) by the Borrower or any of the Subsidiaries to any person other
than the Borrower or any wholly owned Subsidiary of (a) any capital stock of any
of the Subsidiaries or (b) any other assets of the Borrower or any of the
Subsidiaries (other than inventory, obsolete or worn-out assets, scrap and
Permitted Investments, in each case disposed of in the ordinary course of
business), except for (i) any sale, lease, transfer or other disposition in one
transaction or a series of related transactions having a value of $25,000,000 or
less, (ii) any sale of accounts receivable (or any related assets) under any
Permitted Receivables Financing, (iii) transfers of assets permitted by Section
6.05(a)(i), (iv) transfers of assets as part of a sale and lease-back
transaction permitted by Section 6.03, (v) payment of a cash dividend permitted
by Section 6.06(a), (vi) any disposition or cancelation of the Bidco Note in
connection with the transfer of the ▇▇▇▇▇ Subsidiaries to the Borrower and (vii)
any substantially contemporaneous exchange (including by way of a substantially
contemporaneous purchase and sale) of discrete energy-related assets of the
Borrower or any Subsidiary for one or more other energy-related assets used for
similar purposes, in each case to the extent that no net cash proceeds are
received by the Borrower or any Subsidiary as consideration in connection with
such exchange (the cash portion of such transaction, if any, being subject to
clause (i) above), provided that the Borrower or such Subsidiary complies with
Section 5.10 with respect to the property received by the Borrower or such
Subsidiary pursuant to such exchange. Notwithstanding anything to the contrary
with respect to the foregoing, all arrangements or transactions resulting in the
prepayment in respect of a coal supply contract of $25,000,000 or more in any
fiscal year (excluding, to the extent included in Consolidated Net Income, the
portion due to be paid within one year of any such arrangement or transaction in
accordance with the terms of such coal supply contract prior to any amendment
thereof relating to such transaction or arrangement) shall be deemed an Asset
Sale for purposes of Section 2.13(b).
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Lender and an assignee, and accepted by the Paying Agent, in
the form of Exhibit B or such other form as shall be approved by the Paying
Agent.
"Base Rate" shall mean, for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greatest of (a) the
Prime Rate in effect on such day, (b) the Base CD Rate in effect on such day
plus 1% and (c) the Federal Funds Effective Rate in effect on such day plus 1/2
of 1%. If for any reason the Paying Agent shall have determined (which
determination shall be conclusive absent manifest error) that it is unable to
ascertain the Base CD Rate or the Federal Funds Effective Rate or both for any
reason, including the inability or failure of the Paying Agent to obtain
sufficient quotations in accordance with the terms of the definition thereof,
the Base Rate shall be determined without regard to clause (b) or (c), or both,
of the preceding sentence, as appropriate, until the circumstances giving rise
to such inability no longer exist. Any change in the Base Rate due to a change
in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate shall be
effective on the effective date of such change in the Prime Rate, the Base CD
Rate or the Federal Funds Effective Rate, respectively. The term "Prime Rate"
shall mean the rate of interest per annum publicly announced from time to time
by the Paying Agent as its prime rate in effect at its principal office in New
York City; each change in the Prime Rate shall be effective on the date such
change is publicly announced as being effective. The term "Base CD Rate" shall
mean the sum of (a) the product of
6
(i) the Three-Month Secondary CD Rate and (ii) Statutory Reserves and (b) the
Assessment Rate. The term "Federal Funds Effective Rate" shall mean, for any
day, the weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day that is a Business Day,
the average of the quotations for the day for such transactions received by the
Paying Agent from three Federal funds brokers of recognized standing selected by
it.
"Base Rate Borrowing" shall mean a Borrowing comprised of Base Rate
Loans.
"Base Rate Loan" shall mean any Base Rate Term Loan or Base Rate
Revolving Loan.
"Base Rate Revolving Loan" shall mean any Revolving Loan bearing
interest at a rate determined by reference to the Base Rate in accordance with
the provisions of Article II.
"Base Rate Term Borrowing" shall mean a Borrowing comprised of Base
Rate Term Loans.
"Base Rate Term Loan" shall mean any Term Loan bearing interest at a
rate determined by reference to the Base Rate in accordance with the provisions
of Article II.
"Bidco" shall mean PacifiCorp Acquisitions, an unlimited company
incorporated in England and Wales, all the outstanding share capital of which on
the Restatement Date is beneficially owned by FinanceCo.
"Bidco Agent" shall mean Citibank International plc, in its capacity
as facility agent for the Bidco Lenders under the Bidco Facility Agreement, and
any successor or assign in such capacity.
"Bidco Facility Agreement" shall mean the facility agreement dated
June 13, 1997, among Bidco, Recco, FinanceCo, the Bidco Lenders, the Bidco
Agent and the Arrangers, the Security Agent and the LC Bank named therein.
"Bidco Lenders" shall mean the financial institutions that are parties
from time to time to the Bidco Facility Agreement as lenders thereunder.
"Bidco Note" shall mean the note in the form of Exhibit C, which shall
be issued to the Borrower to evidence the Powercoal/ Bidco Loans.
"Bidco Note Payment Default" shall mean the failure by Bidco to pay
any amount that it is obligated to pay under the Bidco Note to the Borrower at
the time such amount is due in accordance with the terms of the Bidco Note.
"Board" shall mean the Board of Governors of the Federal Reserve
System of the United States of America.
"Borrowing" shall mean a group of Loans of a single Type made by the
Lenders on a single date and as to which a single Interest Period is in effect.
7
"Borrowing Request" shall mean a request by the Borrower in accordance
with the terms of Section 2.03 and substantially in the form of Exhibit D or
such other form as shall be approved by the Paying Agent.
"Business Day" shall mean any day other than a Saturday, Sunday or day
on which banks in New York City are authorized or required by law to close;
provided, however, that when used in connection with a Eurodollar Loan, the term
"Business Day" shall also exclude any day on which banks are not open for
dealings in dollar deposits in the London interbank market.
"Capital Expenditures" shall mean, for any period, the sum of the
aggregate of all expenditures (whether paid in cash or other consideration or
accrued as a liability) by the Borrower and the Subsidiaries during such period
that, in accordance with GAAP, are or should be included in additions to
property, plant or equipment or similar items reflected in the consolidated
statement of cash flows of the Borrower and the Subsidiaries for such period,
except that (notwithstanding GAAP) bonuses relating to Federal coal leases
contemplated in the Confidential Information Memorandum and the information
previously provided to the Initial Lenders prior to the Closing Date shall be
deemed "Capital Expenditures" only to the extent cash payments are made;
provided, however, that "Capital Expenditures" shall not include (a)
acquisitions of property that are investments permitted by Section 6.04 (other
than investments permitted by Section 6.04(d)) and (b) any acquisition of or
investment in property in connection with an exchange contemplated by clause
(vii) of the definition of "Asset Sale" or in connection with a reinvestment
contemplated by clause (y) of the proviso to the definition of "Net Cash
Proceeds".
"Capital Lease Obligations" of any person shall mean the obligations
of such person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Casualty Event" shall mean an event pursuant to which the Borrower or
any of the Subsidiaries has the right to collect insurance proceeds under any
insurance policies with respect to any insured casualty or other insured damage
to any property of the Borrower or any of the Subsidiaries.
A "Change in Control" shall be deemed to have occurred if (a) any
person or group (within the meaning of Rule 13d-5 of the Securities Exchange Act
of 1934 as in effect on the Closing Date) shall own directly or indirectly,
beneficially or of record, shares representing more than 35% of the aggregate
ordinary voting power represented by the issued and outstanding capital stock of
PacifiCorp; (b) a majority of the seats (other than vacant seats) on the board
of directors of PacifiCorp shall at any time be occupied by persons who were
neither (i) nominated by the board of directors of PacifiCorp, nor (ii)
appointed by directors so nominated; (c) any change in control (or similar
event, however denominated) with respect to PacifiCorp shall occur under and as
defined in any indenture or agreement in respect of Indebtedness to which the
Borrower, any person directly or indirectly Controlling the Borrower or any
Subsidiary is a party; (d) PacifiCorp consolidates with, or merges with or into,
any person, or any person consolidates with or merges with or into PacifiCorp in
any such event pursuant to a transaction in which any of the issued and
outstanding capital stock of PacifiCorp is converted into or exchanged for cash,
securities or other property, other than any such
8
transaction where the capital stock of PacifiCorp outstanding immediately prior
to such transaction is converted into or exchanged for capital stock of the
surviving or transferee person constituting a majority of the issued and
outstanding shares of such capital stock of such surviving or transferee person
(immediately after giving effect to such conversion or exchange); (e) PacifiCorp
shall own, directly or indirectly, beneficially and of record, less than 80% of
the outstanding capital stock of Newco, free and clear of all Liens (other than
Liens permitted under the Transaction Loan Documents); or (f) Newco shall cease
to own, directly or indirectly, beneficially and of record, 100% of the
outstanding capital stock of the Borrower, free and clear of all Liens (other
than Liens permitted under the Transaction Loan Documents).
"Citibank" shall mean Citibank, N.A., a national banking association.
"Citizens" shall mean Citizens Power LLC and its subsidiaries.
"Clean-up Period" shall mean the period commencing on the Closing Date
and ending on the date that is 90 days after the date of the initial Borrowing
hereunder.
"Closing Date" shall mean June 12, 1997.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" shall mean all the "Collateral" as defined in any
Security Document.
"Collateral Assignment" shall mean the Collateral Assignment,
substantially in the form of Exhibit E, made by the Borrower in favor of the
Collateral Agent for the benefit of the Secured Parties.
"Commitment" shall mean, with respect to any Lender, such Lender's
Revolving Credit Commitment, Term Loan Commitment and Swingline Commitment.
"Commitment Fee" shall have the meaning assigned to such term in
Section 2.05(a).
"Condemnation Event" shall mean an event pursuant to which the
Borrower or any of the Subsidiaries has the right to collect and receive
proceeds as a result of any action or proceeding for the taking of any property
of the Borrower or any Subsidiary, or any part thereof or interest therein, for
public or quasi-public use under the power of eminent domain, by reason of any
public improvement or condemnation proceeding, or in any other manner.
"Confidential Information Memorandum" shall mean the Confidential
Information Memorandum of the Borrower to be used by the Initial Lenders and
their Affiliates in connection with the syndication of the Commitments following
the Closing Date.
"Consolidated Current Assets" shall mean, at any date of
determination, all assets (other than cash and cash-equivalents) that would, in
accordance with GAAP, be classified on a consolidated balance sheet of the
Borrower and its subsidiaries as current assets at such date of determination.
9
"Consolidated Current Liabilities" shall mean, at any date of
determination, all liabilities (other than, without duplication (x) the current
portion of long-term Indebtedness and (y) outstanding Swingline Loans and
Revolving Loans) that would, in accordance with GAAP, be classified on a
consolidated balance sheet of the Borrower and its subsidiaries as current
liabilities at such date of determination.
"Consolidated EBITDA" shall mean, for any period, Consolidated Net
Income for such period, plus, without duplication and to the extent deducted
from revenues in determining Consolidated Net Income, the sum of (a) the
aggregate amount of Consolidated Interest Expense for such period, (b) the
aggregate amount of income tax expense for such period, (c) all amounts
attributable to depreciation, depletion and amortization for such period and
(d) all noncash nonrecurring charges during such period, and minus, without
duplication, (i) to the extent included in determining Consolidated Net Income,
all nonrecurring gains during such period (including any gains attributable to
commodities to be delivered in subsequent periods under Prepaid Forward Sales
Agreements) and (ii) the Net Adjustment Amount, all as determined on a
consolidated basis with respect to the Borrower or its subsidiaries in
accordance with GAAP.
"Consolidated Interest Expense" shall mean, for any period, the gross
interest expense (including the interest component in respect of Capital Lease
Obligations), accrued or, without duplication, paid (unless accrued in a
previous period) by the Borrower and its subsidiaries during such period (all as
determined on a consolidated basis with respect to the Borrower or its
subsidiaries in accordance with GAAP), plus, without duplication, interest-
equivalent costs associated with any Permitted Receivables Financing, whether
accounted for as an interest expense or loss on the sale of receivables. For
purposes of the foregoing, gross interest expense shall be determined after
giving effect to any net payments made or received by the Borrower or its
subsidiaries (after giving effect to the transfer of the ▇▇▇▇▇ Subsidiaries to
the Borrower) with respect to the Interest Rate Protection Agreements.
"Consolidated Net Income" shall mean, for any period, net income or
loss of the Borrower and its subsidiaries for such period determined on a
consolidated basis in accordance with GAAP, provided that there shall be
excluded (a) the income of any person in which any other person (other than the
Borrower or any of such subsidiaries or any director holding qualifying shares
in compliance with applicable law) has a joint interest, except to the extent of
the amount of dividends or other distributions actually paid to the Borrower or
any of such subsidiaries by such person during such period and (b) the income
(or loss) of any person accrued prior to the date it becomes a subsidiary (other
than the ▇▇▇▇▇ Subsidiaries) or is merged into or consolidated with the Borrower
or any of its subsidiaries or the date that person's assets are acquired by the
Borrower or any of its subsidiaries.
"Consolidated Net Worth" shall mean, as at any date of determination,
the consolidated stockholders' equity of the Borrower and its consolidated
subsidiaries, as determined on a consolidated basis in accordance with GAAP,
plus Permitted Junior Indebtedness.
"Consolidated Working Capital" shall mean, at any date of
determination, Consolidated Current Assets at such date of determination minus
Consolidated Current Liabilities at such date of determination.
10
"Control" shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
person, whether through the ownership of voting securities, by contract or
otherwise, and the terms "Controlling" and "Controlled" shall have meanings
correlative thereto.
"Default" shall mean any event or condition which upon notice, lapse
of time or both would constitute an Event of Default.
"Depositary Shares" shall mean the American Depositary Shares,
evidenced by American Depositary Receipts, each such American Depositary Share
representing four Shares.
"dollars" or "$" shall mean lawful money of the United States of
America.
"Domestic Subsidiaries" shall mean all Subsidiaries incorporated or
organized under the laws of the United States of America, any State thereof or
the District of Columbia.
"Energyco" shall mean PacifiCorp EnergyCo, an unlimited company
incorporated in England and Wales, all the outstanding share capital of which on
the Restatement Date is beneficially owned by Newco.
"Energyco Bridge Loan Agreement" shall mean the bridge loan agreement
dated as of June 12, 1997, among Energyco, Newco, the lenders from time to time
party thereto, the Arrangers named therein, and Citibank, as administrative
agent thereunder.
"Energyco Senior Notes" shall mean the Senior Notes issued by Energyco
after the Closing Date, the proceeds of which shall be used to repay all amounts
outstanding under the Energyco Bridge Loan Agreement.
"environment" shall mean ambient air, surface water and groundwater
(including potable water, navigable water and wetlands), the land surface or
subsurface strata, the workplace or as otherwise defined in any Environmental
Law.
"Environmental Claim" shall mean any written accusation, allegation,
notice of violation, claim, demand, order, directive, cost recovery action or
other cause of action by, or on behalf of, any Governmental Authority or any
person for damages, injunctive or equitable relief, personal injury (including
sickness, disease or death), Remedial Action costs, tangible or intangible
property damage, natural resource damages, nuisance, pollution, any adverse
effect on the environment caused by any Hazardous Material, or for fines,
penalties or restrictions, resulting from or based upon (a) the existence, or
the continuation of the existence, of a Release (including sudden or non-sudden,
accidental or non-accidental Releases), (b) exposure to any Hazardous Material,
(c) the presence, use, handling, transportation, storage, treatment or disposal
of any Hazardous Material or (d) the violation or alleged violation of any
Environmental Law or Environmental Permit.
"Environmental Law" shall mean any and all applicable present and
future treaties, laws, rules, regulations, codes, ordinances, orders, decrees,
judgments, injunctions, notices or binding agreements issued, promulgated or
entered into by any Governmental Authority, relating in any way
10
11
to the environment, preservation or reclamation of natural resources, the
management, Release or threatened Release of any Hazardous Material or to health
and safety matters.
"Environmental Permit" shall mean any permit, approval, authorization,
certificate, license, variance, filing or permission required by or from any
Governmental Authority pursuant to any Environmental Law.
"Equity Contribution" shall mean any equity contribution made by
PacifiCorp, Newco or PHI to the Borrower.
"Equity Issuance" shall mean any issuance or sale by the Borrower or
any Subsidiary of any shares of capital stock or other equity securities of the
Borrower or any Subsidiary or any obligations convertible into or exchangeable
for, or giving any person a right, option or warrant to acquire such securities
or such convertible or exchangeable obligations, except in each case for (a) any
issuance or sale to PacifiCorp, PHI, Newco, the Borrower or any wholly owned
Subsidiary, (b) any issuance of directors' qualifying shares, (c) any issuance
or sale to officers and employees under employee benefit or compensation plans,
(d) any Equity Contribution and (e) any issuance or sale of an interest in a
Single Purpose Entity.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code, or solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" shall mean (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder, with respect to a
Plan, except a reportable event for which the requirement of notice to the PBGC
has been waived; (b) the adoption of any amendment to a Plan that would require
the provision of security pursuant to Section 401(a)(29) of the Code or Section
307 of ERISA; (c) the existence with respect to any Plan of an "accumulated
funding deficiency (as defined in Section 412 of the Code or Section 302 of
ERISA), whether or not waived; (d) the filing pursuant to Section 412(d) of the
Code or Section 303(d) of ERISA of an application for a waiver of the minimum
funding standard with respect to any Plan; (e) the incurrence of any liability
in excess of $1,000,000 under Title IV of ERISA with respect to the termination
of any Plan or the withdrawal or partial withdrawal of the Borrower or any of
its ERISA Affiliates from any Plan or Multiemployer Plan; (f) the receipt by the
Borrower or any ERISA Affiliate from the PBGC or a plan administrator of a
Multiemployer Plan of any notice relating to the intention to terminate any Plan
or Plans or to appoint a trustee to administer any Plan; (g) the receipt by the
Borrower or any ERISA Affiliate of any notice concerning the imposition of
Withdrawal Liability in excess of $1,000,000 or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA; (h) the occurrence of a "prohibited
transaction" with respect to which the Borrower or any of its Subsidiaries is a
party to the prohibited transaction and is a "disqualified person" (within the
meaning of Section 4975 of the Code) or with respect to which the Borrower or
any such Subsidiary could otherwise be liable; and (i) any other event or
condition with respect to a
12
Plan or Multiemployer Plan that could reasonably be expected to result in
liability of the Borrower in excess of $1,000,000.
"Eurodollar Borrowing" shall mean a Borrowing comprised of Eurodollar
Loans.
"Eurodollar Loan" shall mean any Eurodollar Revolving Loan or
Eurodollar Term Loan.
"Eurodollar Revolving Loan" shall mean any Revolving Loan bearing
interest at a rate determined by reference to the Adjusted LIBO Rate in
accordance with the provisions of Article II.
"Eurodollar Term Borrowing" shall mean a Borrowing comprised of
Eurodollar Term Loans.
"Eurodollar Term Loan" shall mean any Term Loan bearing interest at a
rate determined by reference to the Adjusted LIBO Rate in accordance with the
provisions of Article II.
"Event of Default" shall have the meaning assigned to such term in
Article VII.
"Excess Cash Flow" shall mean, for any fiscal year, the excess of (a)
the sum, without duplication, of (i) Consolidated EBITDA, (ii) the Net Cash
Proceeds received by the Borrower and its consolidated subsidiaries in
connection with the issuance of debt or equity securities, the sale or other
disposition of assets or Casualty or Condemnation Events to the extent not
included in Consolidated EBITDA and to the extent used for mandatory prepayments
of the principal of the Loans in accordance with Section 2.13 (other than
Section 2.13(d)), (iii) extraordinary cash gains of the Borrower and its
subsidiaries to the extent not included in Consolidated EBITDA, (iv) interest
income of the Borrower and its subsidiaries to the extent not included in
Consolidated EBITDA, (v) an amount equal to any decrease in Consolidated Working
Capital during such fiscal year and (vi) an amount equal to any increase in
provisions for reclamation and related liabilities, workers compensation
liabilities, postretirement benefit costs, industry fund obligations and similar
items over (b) the sum, without duplication, of (i) taxes paid or payable
(including payments in respect of taxes under the Tax Sharing Arrangement) in
cash by the Borrower and its subsidiaries on a consolidated basis during such
fiscal year, (ii) Consolidated Interest Expense paid in cash by the Borrower and
its subsidiaries during such fiscal year, (iii) Capital Expenditures made in
cash (excluding any Capital Expenditures made from amounts that are carried-
forward from the prior year) and in accordance with Section 6.10 during such
fiscal year and carry-forwards to the following year of Capital Expenditures
permitted by the proviso to Section 6.10, (iv) scheduled and mandatory principal
repayments of Indebtedness made by the Borrower and its subsidiaries during such
fiscal year, (v) optional and mandatory prepayments of the principal of Loans
(other than mandatory prepayments pursuant to Section 2.13(d)) during such
fiscal year, but only to the extent that such prepayments cannot by their terms
be reborrowed or redrawn and do not occur in connection with a refinancing of
all or any portion of such Loans, (vi) an amount equal to any increase in
Consolidated Working Capital during such fiscal year, (vii) dividends or other
distributions made by the Borrower in cash that are permitted by Section
6.06(a)(ii), (viii) extraordinary cash expenses paid, if any, by the Borrower
and its subsidiaries and not included in Consolidated EBITDA, (ix) an amount
equal to any decrease in provisions for reclamation and related liabilities,
workers compensation liabilities, postretirement benefit costs, industry fund
obligations and similar items and (x) non-cash revenues used in determining
Consolidated EBITDA.
13
"Exchange Rate Protection Agreement" shall mean any Hedging Agreement
that is (a) entered into by the Borrower with a counterparty that as of the date
of such Hedging Agreement is a Lender (or an affiliate of a Lender) and (b) is
designed to protect the Borrower against fluctuations in currency exchange rates
and not for speculation.
"Fees" shall mean the Commitment Fees, the L/C Participation Fees and
the Issuing Bank Fees.
"FinanceCo" shall mean PacifiCorp Finance (UK) Limited, a limited
company incorporated in England and Wales, all the outstanding share capital of
which on the Restatement Date is beneficially owned by Recco.
"Financial Definitions" shall mean Adjustment Amount, Capital
Expenditures, Consolidated Current Amount, Consolidated Current Liabilities,
Consolidated EBITDA, Consolidated Interest Expense, Consolidated Net Income, Net
Adjustment Amount and Total Debt.
"Financial Officer" of any corporation shall mean the chief financial
officer, principal accounting officer, Treasurer or Controller of such
corporation.
"Foreign Subsidiary" shall mean any Subsidiary that is not a Domestic
Subsidiary.
"Funding Exchange Rate Protection Agreement" shall mean any Exchange
Rate Protection Agreement that is designed to ensure that the applicable
borrowings under this Agreement, the Energyco Bridge Loan Agreement and the PHI
Credit Agreement will provide a sufficient amount in pounds sterling (together
with borrowings under the Bidco Facility Agreement and certain other sources of
funds) to pay for the Shares.
"GAAP" shall mean generally accepted accounting principles in the
United States applied on a consistent basis.
"Goldman" shall mean ▇▇▇▇▇▇▇ Sachs Credit Partners L.P., a Bermuda
limited partnership.
"Governmental Authority" shall mean any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or regulatory
body.
"Guarantee" of or by any person shall mean any obligation, contingent
or otherwise, of such person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other person (the "primary obligor") in any
manner, whether directly or indirectly, and including any obligation of such
person, direct or indirect, (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or to purchase (or to advance
or supply funds for the purchase of) any security for the payment of such
Indebtedness, (b) to purchase or lease property, securities or services for the
purpose of assuring the owner of such Indebtedness of the payment of such
Indebtedness or (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness; provided, however, that the
term "Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business.
14
"Guarantee Agreement" shall mean the Guarantee Agreement,
substantially in the form of Exhibit G, made by the Guarantors in favor of the
Collateral Agent for the benefit of the Secured Parties.
"Guarantors" shall mean each person that becomes party to a Guarantee
Agreement as a Guarantor, and the permitted successors and assigns of each such
person.
"Hazardous Materials" shall mean all explosive or radioactive
substances or wastes, hazardous or toxic substances or wastes, pollutants,
solid, liquid or gaseous wastes, including petroleum or petroleum distillates,
asbestos or asbestos containing materials, polychlorinated biphenyls ("PCBs") or
PCB-containing materials or equipment, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedging Agreement" shall mean any rate swap transaction, basis swap,
forward rate transaction, commodity swap, commodity option, equity or equity
index swap, equity or equity index option, bond option, interest rate option,
foreign exchange transaction, cap transaction, floor transaction, collar
transaction, currency swap transaction, cross-currency rate swap transaction,
currency option or any other similar transaction (including any option with
respect to any of the foregoing transactions) or any combination of the
foregoing transactions.
"Inactive Subsidiaries" shall mean any subsidiary of the Borrower that
has (a) total assets not in excess of $10,000, (b) has not in the last six
months conducted any business activity and (c) is not the obligor (whether
primary or by virtue of any Guarantee) in respect of any Indebtedness other than
Indebtedness held by the Borrower or any Guarantor.
"Indebtedness" of any person shall mean, without duplication, (a) all
obligations of such person for borrowed money, (b) all obligations of such
person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such person under conditional sale or other title retention
agreements relating to property or assets purchased by such person, (d) all
obligations of such person issued or assumed as the deferred purchase price of
property or services (excluding trade accounts payable and accrued obligations
incurred in the ordinary course of business), (e) all Indebtedness of others
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such person, whether or not the obligations secured thereby have
been assumed (provided that, for purposes hereof, the amount of such
Indebtedness shall be limited to the lesser of (x) the principal amount thereof
and (y) the fair market value of such property), (f) all Guarantees by such
person of Indebtedness of others, (g) all Capital Lease Obligations of such
person, (h) all obligations of such person as an account party in respect of
letters of credit and bankers' acceptances and (i) all obligations of such
person for Production Payments from property operated by or on behalf of such
person; provided that, for purposes of the definition of "Total Debt" as used in
Section 6.11, "Indebtedness" shall also include all obligations of such person
in respect of Hedging Agreements (other than any Interest Rate Protection
Agreement and any Exchange Rate Protection Agreement) to the extent the Net
Termination Value of such Hedging Agreements at any time exceeds $100,000,000.
For purposes of this Agreement, the amount of Non-Recourse Indebtedness of the
Borrower and its subsidiaries included in the calculation of Indebtedness of the
Borrower and its subsidiaries at any time shall equal the lesser of (i) the
aggregate principal amount of such Indebtedness and (ii) the equity of the
Borrower and its subsidiaries in the asset or Single Purpose Entity, as the case
may be, relating to such
15
Non-Recourse Indebtedness. For the purposes of this Agreement, the amount of
Indebtedness (other than Non-Recourse Indebtedness) of any partnership, limited
liability company or similar pass-through entity (as used in this definition, a
"partnership") in which the Borrower or a subsidiary is a general partner or
other member or equity holder with unlimited liability (as used on this
definition, a "general partner") and in which there are one or more Qualified
General Partners shall only be included in the calculation of Indebtedness of
the Borrower and its subsidiaries at any time (a) to the extent of the
Borrower's or such subsidiary's pro rata share of the interest of the general
partners in the partnership at such time, or (b) if the applicable governing or
other relevant agreement specifies that the Borrower or any of its subsidiaries
is liable to the partnership or its creditors for a specific percentage of such
partnership's liabilities, to the extent of such specified percentage. For
purposes hereof, "Qualified General Partner" shall mean a general partner of a
partnership that (a) is a person that was not created solely for the purpose of
investing in such partnership, and (b) at the time of the investment in such
partnership, the Borrower reasonably believes that (i) such person has a credit
quality (or credit support) approximately equal to that of the Borrower or the
applicable Subsidiary, and (ii) such person will be able to perform its share of
the obligations under such Indebtedness when due.
"Indemnity, Subrogation and Contribution Agreement" shall mean the
Indemnity, Subrogation and Contribution Agreement, substantially in the form of
Exhibit H, among the Borrower, the Guarantors and the Collateral Agent.
"Initial Lenders" shall mean Citibank, Goldman and ▇▇▇▇▇▇.
"Intercreditor Agreement" shall mean the Intercreditor Agreement dated
27 June, 1997, among the Borrower, Bidco, the Paying Agent on behalf of itself
and the Lenders and the Bidco Agent on behalf of itself and the Bidco Lenders,
substantially in the form of Exhibit F.
"Interest Expense Coverage Ratio" shall mean, as of the last day of
any fiscal quarter, the ratio of (a) Consolidated EBITDA for the period of four
consecutive fiscal quarters ended on such day to (b) Consolidated Interest
Expense for the period of four consecutive fiscal quarters ended on such date,
with the pro forma results as set forth on the Pro Forma Financial Statements,
or the pro forma financial statements provided by the Borrower pursuant to
Section 5.04(c), used for the periods prior to the Separation Date.
"Interest Payment Date" shall mean, with respect to any Loan, the last
day of the Interest Period applicable to the Borrowing of which such Loan is a
part and, in the case of a Eurodollar Borrowing with an Interest Period of more
than three months' duration, each day that would have been an Interest Payment
Date had successive Interest Periods of three months' duration been applicable
to such Borrowing, and, in addition, the date of any prepayment of such
Borrowing or conversion of such Borrowing to a Borrowing of a different Type.
"Interest Period" shall mean (a) as to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on the last
day) in the calendar month that is 1, 2, 3 or 6 months thereafter, as the
Borrower may elect and (b) as to any Base Rate Borrowing, the period commencing
on the date of such Borrowing and ending on the earliest of (i) the next
succeeding March 31, June 30, September 30 or December 31, (ii) the Revolving
Credit Maturity Date, the Tranche A Maturity Date
16
or the Tranche B Maturity Date, as applicable, and (iii) the date such Borrowing
is converted to a Borrowing of a different Type in accordance with Section 2.10
or repaid or prepaid in accordance with Section 2.11, 2.12 or 2.13; provided,
however, that if any Interest Period would end on a day other than a Business
Day, such Interest Period shall be extended to the next succeeding Business Day
unless, in the case of a Eurodollar Borrowing only, such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day. Interest shall accrue from
and including the first day of an Interest Period to but excluding the last day
of such Interest Period.
"Interest Rate Protection Agreement" shall mean any Hedging Agreement
that is (a) entered into by the Borrower with a counterparty that as of the date
of such Hedging Agreement is a Lender (or an affiliate of a Lender) and (b) is
designed to protect the Borrower against fluctuations in interest rates and not
for speculation.
"Issuing Bank Fees" shall have the meaning assigned to such term in
Section 2.05(b).
"L/C Commitment" shall mean the commitment of the Issuing Bank to
issue Letters of Credit pursuant to Section 2.23.
"L/C Disbursement" shall mean a payment or disbursement made by the
Issuing Bank pursuant to a Letter of Credit.
"L/C Exposure" shall mean at any time the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate principal amount of all L/C Disbursements that have not yet been
reimbursed at such time. The L/C Exposure of any Revolving Credit Lender at any
time shall mean its Pro Rata Percentage of the aggregate L/C Exposure at such
time.
"L/C Participation Fee" shall have the meaning assigned to such term
in Section 2.05(b).
"Lenders" shall mean (a) the Initial Lenders (other than any such
Initial Lender that has ceased to be a party hereto pursuant to an Assignment
and Acceptance) and (b) any financial institution that has become a party hereto
pursuant to an Assignment and Acceptance. Unless the context clearly indicates
otherwise, the term "Lenders" shall include the Swingline Lender.
"Letter of Credit" shall mean any letter of credit issued pursuant to
Section 2.23.
"Leverage Ratio" shall mean, as of the last day of any fiscal quarter,
the ratio of (a) Total Debt as of such date to (b) Consolidated EBITDA for the
period of four consecutive fiscal quarters ended on such date, with the pro
forma results as set forth on the Pro Forma Financial Statements, or the pro
forma financial statements provided by the Borrower pursuant to Section 5.04(c),
used for the periods prior to the Separation Date.
"LIBO Rate" shall mean, with respect to any Eurodollar Borrowing for
any Interest Period, the rate appearing on Page 3750 of the Telerate Service (or
on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the Paying
Agent from time
17
to time for purposes of providing quotations of interest rates applicable to
dollar deposits in the London interbank market) at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period, as the rate for dollar deposits with a maturity comparable to such
Interest Period. In the event that such rate is not available at such time for
any reason, then the "LIBO Rate" with respect to such Eurodollar Borrowing for
such Interest Period shall be the rate at which dollar deposits of $5,000,000
and for a maturity comparable to such Interest Period are offered by the
principal London office of the Paying Agent in immediately available funds in
the London interbank market at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period.
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed
of trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement relating to such asset and
(c) any other preferential arrangement that has substantially the same practical
effect as a security interest.
"Loan Documents" shall mean this Agreement, the Guarantee Agreement,
the Security Documents, the Intercreditor Agreement and the Indemnity,
Subrogation and Contribution Agreement.
"Loan Parties" shall mean the Borrower and the Guarantors.
"Loans" shall mean the Revolving Loans, the Term Loans and the
Swingline Loans.
"Margin Stock" shall have the meaning assigned to such term in
Regulation U.
"Matching Amount" shall have the meaning assigned to such term in the
Bidco Facility Agreement, as in effect on the Restatement Date.
"Material Adverse Effect" shall mean (a) a materially adverse effect
on the business, assets, liabilities, operations or condition, financial or
otherwise, of the Borrower and the Subsidiaries, taken as a whole, (b) material
impairment of the ability of the Loan Parties to perform their obligations under
the Loan Documents to which they are or will be a party or (c) material
impairment of the rights of or benefits available to the Lenders under the Loan
Documents.
"Material Hedging Obligations" shall mean payment obligations in
respect of one or more Hedging Agreements with a single counterparty (or its
Affiliates) that have Negative Termination Values exceeding $50,000,000 in the
aggregate amount.
"▇▇▇▇▇▇" shall have the meaning assigned to such term in the preamble
to this Agreement.
"Mortgages" shall have the meaning assigned to such term in Section
5.10.
"Multiemployer Plan" shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
18
"Negative Termination Value" shall mean, with respect to any Hedging
Agreement, the amount (if any) that would be required to be paid by the Borrower
or any Subsidiary if such Hedging Agreement were terminated by reason of a
default by or other termination event relating to the Borrower or any
Subsidiary. The Negative Termination Value of any Hedging Agreement at any date
shall be determined (a) as of the end of the most recent fiscal quarter ended on
or prior to such date if such Hedging Agreement was then outstanding or (b) as
of the date such Hedging Agreement is entered into if it is entered into after
the end of such fiscal quarter; provided, however, that if an agreement between
the Borrower or any Subsidiary and the relevant counterparty provides that, upon
any such termination by such counterparty, one or more other Hedging Agreements
(if any then exist) between the Borrower or any Subsidiary and such counterparty
would also terminate and the amount (if any) payable by the Borrower or any
Subsidiary would be a net amount reflecting the termination of all Hedging
Agreements so terminated, then the Negative Termination Value of all the Hedging
Agreements subject to such netting shall be, at any date, a single amount equal
to such net amount (if any) payable by the Borrower or any Subsidiary determined
as of the later of (a) the end of the most recently ended fiscal quarter or (b)
the date on which the most recent Hedging Agreement subject to such netting was
entered into.
"Net Adjustment Amount" shall mean, for any period, the Adjustment
Amount less the aggregate Adjustment Amounts applied to reduce Consolidated
EBITDA in prior periods.
"Net Cash Proceeds" shall mean (a) with respect to any Asset Sale, the
cash proceeds thereof received by the Borrower or the Subsidiaries (including
cash and cash equivalents and cash payments received by way of deferred payment
of principal pursuant to a note or installment receivable or otherwise, but only
as and when received), net of (i) costs of sale (including payment of the
outstanding principal amount of, premium or penalty, if any, interest and other
amounts on any Indebtedness (other than Loans) secured by a Lien permitted
pursuant to Section 6.02 on such assets and required to be repaid under the
terms thereof as a result of such Asset Sale), (ii) taxes paid or payable in the
year such Asset Sale occurs or in the following year as a result thereof and
(iii) amounts provided as a reserve against any liabilities under any
indemnification obligations associated with such Asset Sale (except that, to the
extent and at the time any such amounts are released from such reserve, such
amounts shall constitute Net Cash Proceeds); provided, however, that (x) in the
event the Asset Sale is a result of a Casualty Event or Condemnation Event, the
cash proceeds thereof for purposes of this definition shall not include proceeds
thereof to the extent they are used (or committed to be used) to replace or
repair the damaged or condemned property, as applicable, within 180 days of
receipt of such proceeds, in each case so long as no Default or Event of Default
shall have occurred and be continuing, and (y) with respect to any Asset Sale of
energy-related assets, if the Borrower shall deliver a certificate of a
Financial Officer to the Paying Agent at the time of any Asset Sale setting
forth the Borrower's intent to reinvest (or commit to reinvest) the proceeds of
such Asset Sale in other energy-related assets within 180 days of receipt of
such proceeds and no Default shall have occurred and shall be continuing at the
time of such certificate or at the proposed time of the application of such
proceeds, such proceeds shall not constitute Net Cash Proceeds, except to the
extent not so used or committed within such 180-day period (or if committed
within such 180 days, not used within 270 days of the receipt thereof), at which
time such proceeds shall be deemed Net Cash Proceeds, and (b) with respect to
any Equity Issuance, any issuance or other disposition of Indebtedness for
borrowed money or any Permitted Receivables Financing, the cash proceeds thereof
net of underwriting commissions or placement fees and expenses directly incurred
in connection therewith.
19
"Newco" shall mean PacifiCorp Group Holdings Company, a corporation
organized under the laws of Oregon, all the outstanding capital stock of which
on the Restatement Date is directly owned by PHI.
"Newco Equity Contribution" shall have the meaning assigned to such
term in the preamble to this Agreement.
"Net Termination Value" shall mean with respect to all Hedging
Agreements (other than any Interest Rate Protection Agreement and any Exchange
Rate Protection Agreement), the difference between (a) the aggregate amounts (if
any) that would be required to be paid by the Borrower or any subsidiary if such
Hedging Agreements were terminated by reason of a default relating to the
Borrower or any subsidiary, and (b) the aggregate amounts (if any) that the
Borrower or any subsidiary would be entitled to receive if such Hedging
Agreements were terminated by reason of a default relating to the Borrower or
any subsidiary. The Net Termination Value shall be determined (a) as of the end
of the most recent fiscal quarter ended on or prior to such date if such Hedging
Agreement was then outstanding or (b) as of the date such Hedging Agreement is
entered into if it is entered into after the end of such fiscal quarter.
"Non-Recourse Indebtedness" of any person shall mean at any time
Indebtedness secured by a Lien in or upon one or more assets of such person
where the rights and remedies of the holder of such Indebtedness in respect of
such Indebtedness do not extend to any other assets of such person.
Notwithstanding the foregoing, Indebtedness of any person shall not fail to
constitute Non-Recourse Indebtedness by reason of the inclusion in any document
evidencing, governing, securing or otherwise relating to such Indebtedness of
provisions to the effect that such person shall be liable, beyond the assets
securing such Indebtedness, for (a) misapplied moneys, including insurance and
condemnation proceeds and security deposits, (b) indemnification by such person
in favor of holders of such Indebtedness and their affiliates in respect of
liabilities to third parties, including environmental liabilities, (c) breaches
of customary representations and warranties given to the holders of such
Indebtedness and (d) such other similar obligations as are customarily excluded
from the provisions that otherwise limit the recourse of commercial lenders
making so-called "non-recourse" loans to institutional borrowers. Indebtedness
of a Single Purpose Entity shall constitute Non-Recourse Indebtedness of such
Single Purpose Entity.
"Obligation Currency" shall have the meaning assigned to such term in
Section 9.16.
"Obligations" shall mean all obligations defined as "Obligations" in
the Guarantee Agreement and the Security Documents.
"Offer" shall mean the offer by ▇▇▇▇▇▇▇ Sachs International on behalf
of Bidco to acquire all the outstanding Shares (including the Shares represented
by Depositary Shares), substantially on the terms and conditions referred to in
the Press Release, as amended, supplemented or otherwise modified.
"Offer Account" shall mean the account in the name of Bidco opened
with the Bidco Agent on or before the Unconditional Date for the purposes of
effecting the acquisition of the Shares.
20
"Offer Conditions Precedent" shall mean the conditions precedent set
forth on Schedule 1.01(a).
"Offer Document" shall mean the document to be delivered to the
shareholders of the Target containing the formal Offer.
"PacifiCorp" shall mean PacifiCorp, a corporation organized under the
laws of Oregon.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to
and defined in ERISA.
"▇▇▇▇▇ Group" shall mean Peabody Holding Company, Inc. and its
consolidated subsidiaries.
"▇▇▇▇▇ Indebtedness" shall mean the Indebtedness of the ▇▇▇▇▇
Subsidiaries set forth on Schedule 1.01(b).
"▇▇▇▇▇ Refinanced Indebtedness" shall mean the ▇▇▇▇▇ Indebtedness
designated as "▇▇▇▇▇ Refinanced Indebtedness" on Schedule 1.01(b).
"▇▇▇▇▇ Subsidiaries" shall mean the persons set forth on Schedule
1.01(c).
"Perfection Certificate" shall mean the Perfection Certificate
substantially in the form of Annex 1 to the Security Agreement.
"Permitted Capital Expenditures" shall mean Capital Expenditures not
in excess of:
(a) for the fiscal year ending December 31, 1998, $175,000,000;
and
(b) for each fiscal year thereafter, the greater of (i)
$150,000,000 and (ii) the amount equal to 50% of Consolidated EBITDA
for the fiscal year immediately preceding such fiscal year.
"Permitted Dividend Amount" shall mean, (a) with respect to the period
prior to December 31, 1997, $5,000,000, and (b) with respect to any fiscal year
ending after December 31, 1997, the greater of (i) $20,000,000 and (ii) 40% of
the lesser of (A) cumulative Consolidated Net Income and (B) cumulative Excess
Cash Flow, in each case, (x) measured from the Closing Date through and
including the last day of the fiscal quarter for which financial statements have
been delivered to the Paying Agent immediately prior to the date of the
applicable dividend and (y) less cumulative dividend payments made during such
period (such greater amount referred to as the "Base Dividend Amount").
Notwithstanding the foregoing, if and during any time that the Leverage Ratio as
of the last day of the fiscal quarter for which financial statements have been
delivered to the Paying Agent immediately prior to any dividend payment is less
than 2.75 to 1.00, the Borrower may make dividend payments in addition to the
Base Dividend Amount so long as the total amount of dividends on a cumulative
basis made during the term of this Agreement pursuant to this proviso shall not
exceed $40,000,000, plus 60% of cumulative Consolidated Net Income measured from
the Closing Date through and including the last day of the fiscal quarter for
which financial statements have been delivered to the Paying Agent immediately
prior to the date of the applicable dividend.
21
"Permitted Investments" shall mean:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any agency thereof to the extent such obligations
are backed by the full faith and credit of the United States of
America), in each case maturing within one year from the date of
acquisition thereof;
(b) investments in commercial paper (or money market funds
substantially all the assets of which are invested in such commercial
paper) maturing within 270 days from the date of acquisition thereof
and having, at such date of acquisition, one of the two highest credit
ratings obtainable from Standard & Poor's Ratings Group or from
▇▇▇▇▇'▇ Investors Service, Inc.;
(c) investments in certificates of deposit, banker's acceptances
and time deposits maturing within one year from the date of
acquisition thereof issued or guaranteed by or placed with, and money
market deposit accounts issued or offered by, any domestic office of
any commercial bank organized under the laws of the United States of
America or any State thereof that has a combined capital and surplus
and undivided profits of not less than $250,000,000; and
(d) obligations issued by any state or political subdivision
thereof, having a rating of A or better by Standard & Poor's Ratings
Group, or similar rating by any other nationally recognized rating
agency with maturities of not more than one year.
"Permitted Junior Indebtedness" shall mean subordinated Indebtedness
of the Borrower that has (i) no principal payments due on a date that is earlier
than twenty-four months after the Tranche B Maturity Date, (ii) subordination
and intercreditor provisions that are reasonably satisfactory to the Required
Lenders and (iii) a fixed interest rate, which rate shall be, in the good faith
judgment of the a Financial Officer of the Borrower, consistent with the market
at the time of issuance for similar subordinated Indebtedness.
"Permitted Receivables Financing" shall mean the sale, nonrecourse
borrowing against or similar financing (a "Sale") of receivables (and related
assets) originated by the Borrower or any Subsidiary, provided that (i) any such
receivables financing involves Sales of receivables to secure not more than
$100,000,000 of Indebtedness outstanding at any time, (ii) Sales of receivables
are made at fair market value for the sales of receivables in comparable
receivables financings, (iii) the interest rate applicable to such receivables
financing shall be a market interest rate (as determined in good faith by a
Financial Officer of the Borrower) as of the time such financing is entered
into, (iv) such financing is non-recourse to the Borrower and the Subsidiaries
(other than a Receivables Subsidiary), except to a limited extent customary for
such financings, and (v) the covenants, events of default and other provisions
thereof, collectively, shall be market terms (as determined in good faith by a
Financial Officer of the Borrower).
"person" shall mean any natural person, corporation, limited liability
company, business trust, joint venture, association, company, partnership or
government, or any agency or political subdivision thereof.
22
"PHI" shall mean PacifiCorp Holdings, Inc., a corporation organized
under the laws of Delaware, all the capital stock of which is directly owned by
PacifiCorp.
"PHI Credit Agreement" shall mean the credit agreement dated as of
June 12, 1997, among PHI, the lenders from time to time party thereto, and
Citibank, as paying agent and issuing bank and Citicorp USA, Inc., as collateral
agent.
"PHI Equity Contribution" shall mean the cash contribution from PHI to
Newco from the proceeds of borrowings under the PHI Credit Agreement, a portion
of which such contribution shall be immediately contributed by Newco to the
Borrower.
"Plan" shall mean any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 307 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Pledge Agreement" shall mean the Pledge Agreement, substantially in
the form of Exhibit I, among Newco, the Borrower, the Subsidiaries party thereto
and the Collateral Agent for the benefit of the Secured Parties.
"pounds sterling" or "▇▇▇▇▇" shall mean the lawful currency for the
time being of the United Kingdom.
"Powercoal/Bidco Loans" shall have the meaning assigned to such term
in the preamble to this Agreement.
"PPM" shall mean PacifiCorp Power Marketing, Inc., a corporation
organized under the laws of Oregon.
"PPM Contribution" shall mean the indirect contribution of all the
capital stock of PPM by PHI to the Borrower.
"Prepaid Forward Sales Agreements" shall mean physical delivery
contracts for which the Borrower or any Subsidiary has received or has the right
to receive a cash payment in advance of physical delivery of the applicable
commodity and that would be reflected as a liability or a contingent liability
in the financial statements or notes thereto of such person in accordance with
GAAP.
"Prepayment Account" shall have the meaning assigned to such term in
Section 2.13(j).
"Press Release" shall have the meaning assigned to such term in the
Bidco Facility Agreement.
"Production Payments", with respect to any person, shall mean all
production payment obligations and other similar obligations with respect to
natural resources of such person that are
23
recorded as a liability or deferred revenue on the financial statements of such
person in accordance with GAAP.
"Pro Forma Financial Statements" shall have the meaning assigned to
such term in Section 3.04(b).
"Pro Rata Percentage" of any Revolving Credit Lender at any time shall
mean the percentage of the Total Revolving Credit Commitment represented by such
Lender's Revolving Credit Commitment.
"Properties" shall have the meaning assigned to such term in Section
3.16(a).
"Receivables Subsidiary" shall mean a bankruptcy-remote, special-
purpose wholly owned Subsidiary formed solely for purposes of engaging in any
Permitted Receivables Financing.
"Recco" shall mean PacifiCorp Services Limited, a limited company
incorporated in England and Wales, all the outstanding share capital of which on
the Restatement Date is directly owned by Energyco.
"Refinancing Indebtedness" shall have the meaning assigned to such
term in Section 6.01(k).
"Register" shall have the meaning given to such term in Section
9.04(d).
"Regulation G" shall mean Regulation G of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation T" shall mean Regulation T of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation U" shall mean Regulation U of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation X" shall mean Regulation X of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Release" shall mean any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping,
disposing, depositing, dispersing, emanating or migrating of any Hazardous
Material in, into, onto or through the environment.
"Remedial Action" shall mean (a) "remedial action" as such term is
defined in CERCLA, 42 U.S.C. Section 9601(24), and (b) all other actions
required by any Governmental Authority or voluntarily undertaken to: (i)
cleanup, remove, treat, ▇▇▇▇▇ or in any other way address any Hazardous Material
in the environment; (ii) prevent the Release or threat of Release, or minimize
the further Release of any Hazardous Material so it does not migrate or endanger
or threaten to endanger public health, welfare or the environment; or (iii)
perform studies and investigations in connection with, or as a precondition to,
(i) or (ii) above.
24
"Required Lenders" shall mean, at any time, Lenders having Loans
(excluding Swingline Loans), L/C Exposure, Swingline Exposure and unused
Revolving Credit and Term Loan Commitments representing at least a majority of
the sum of all Loans outstanding (excluding Swingline Loans), L/C Exposure,
Swingline Exposure and unused Revolving Credit and Term Loan Commitments at such
time; provided, however, with respect to any waivers of the conditions set forth
in Section 4.02(a)(iv), the term "Required Lenders" shall also include each
Initial Lender.
"Responsible Officer" of any corporation shall mean any executive
officer or Financial Officer of such corporation and any other officer or
similar official thereof responsible for the administration of the obligations
of such corporation in respect of this Agreement.
"Restatement Date" shall mean June 27, 1997.
"Revolving Credit Borrowing" shall mean a Borrowing comprised of
Revolving Loans.
"Revolving Credit Commitment" shall mean, with respect to each Lender,
the commitment of such Lender to make Revolving Loans hereunder as set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender
assumed its Revolving Credit Commitment, as applicable, as the same may be (a)
reduced from time to time pursuant to Section 2.09 and (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to
Section 9.04.
"Revolving Credit Exposure" shall mean, with respect to any Lender at
any time, the aggregate principal amount at such time of all outstanding
Revolving Loans of such Lender, plus the aggregate amount at such time of such
Lender's L/C Exposure, plus the aggregate amount at such time of such Lender's
Swingline Exposure.
"Revolving Credit Lender" shall mean a Lender with a Revolving Credit
Commitment.
"Revolving Credit Maturity Date" shall mean June 12, 2003.
"Revolving Loans" shall mean the revolving loans made by the Lenders
to the Borrower pursuant to Section 2.01(c). Each Revolving Loan shall be a
Eurodollar Revolving Loan or a Base Rate Revolving Loan.
"Secured Parties" shall have the meaning assigned to such term in the
Security Agreement.
"Security Agreement" shall mean the Security Agreement, substantially
in the form of Exhibit J, between the Borrower, the Subsidiaries party thereto
and the Collateral Agent for the benefit of the Secured Parties.
"Security Documents" shall mean the Mortgages, the Security Agreement,
the Pledge Agreement, the Collateral Assignment and each of the security
agreements, mortgages and other instruments and documents executed and delivered
pursuant to any of the foregoing or pursuant to Section 5.10.
25
"Separation Date" shall mean the first date upon which each ▇▇▇▇▇
Subsidiary is a wholly owned Subsidiary of the Borrower.
"Shares" shall mean the ordinary shares of the Target (par value 10
▇▇▇▇▇ per share).
"Significant Subsidiary" shall mean, on any date, any Subsidiary that
(a) has total assets, determined on a consolidated basis with its subsidiaries,
as of the end of the fiscal quarter preceding such date equal to or greater than
2.5% of the total assets of the Borrower and its Subsidiaries on a consolidated
basis as of the end of such fiscal quarter or (b) has income from continuing
operations before income taxes, extraordinary items and the cumulative effect of
a change in accounting principles ("Adjusted Income"), determined on a
consolidated basis with its subsidiaries, for the four fiscal quarter period
preceding such date equal to or greater than 2.5% of the Adjusted Income of the
Borrower and its Subsidiaries on a consolidated basis for such period, in all
cases as determined in accordance with GAAP.
"Single Purpose Entity" shall mean a person, other than an individual,
that (a) is organized solely for the purpose of holding, directly or indirectly,
an ownership interest in one entity or property that is acquired, purchased or
constructed, or in the case of previously undeveloped, non-income generating
property of the Borrower or a Subsidiary, developed by the Borrower or its
Subsidiaries, (b) does not engage in any business unrelated to such entity or
property or the financing thereof and (c) does not have any assets or
Indebtedness other than those related to its interest in such entity or property
or the financing thereof.
"Statutory Reserves" shall mean a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board (a) with respect to the Base CD Rate, for new
negotiable nonpersonal time deposits in dollars of over $100,000 with maturities
approximately equal to three months, and (b) with respect to the Adjusted LIBO
Rate, for Eurocurrency Liabilities (as defined in Regulation D of the Board).
Such reserve percentages shall include those imposed pursuant to such Regulation
D. Eurodollar Loans shall be deemed to constitute Eurocurrency Liabilities and
to be subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time to time to any
Lender under such Regulation D. Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"subsidiary" shall mean, with respect to any person (herein referred
to as the "parent"), any corporation, partnership, association or other business
entity of which securities or other ownership interests representing more than
50% of the equity or more than 50% of the ordinary voting power or more than 50%
of the general partnership interests are, at the time any determination is being
made, owned, controlled or held by the parent.
"Subsidiary" shall mean any subsidiary of the Borrower, other than any
Inactive Subsidiary.
26
"Swingline Commitment" shall mean the commitment of the Swingline
Lender to make loans pursuant to Section 2.22, as the same may be reduced from
time to time pursuant to Section 2.09.
"Swingline Exposure" shall mean at any time the aggregate principal
amount at such time of all outstanding Swingline Loans. The Swingline Exposure
of any Revolving Credit Lender at any time shall equal its Pro Rata Percentage
of the aggregate Swingline Exposure at such time.
"Swingline Loan" shall mean any loan made by the Swingline Lender
pursuant to Section 2.22.
"Target" shall mean The Energy Group PLC, a public limited company
incorporated in England and Wales.
"Tax Sharing Arrangement" shall mean the Income Tax Allocation Policy
dated as of January 1, 1997 of Newco relating to Newco and its subsidiaries
(including the Borrower and its subsidiaries).
"Term Borrowing" shall mean a Borrowing comprised of Tranche A Term
Loans or Tranche B Term Loans.
"Termination Date" shall mean the earlier of (a) December 30, 1997 and
(b) the later of (i) the date that is three months after the Unconditional Date
and (ii) the date that is 49 days after the first date on which Bidco acquires
90% of the outstanding Shares to which the Offer relates.
"Term Loan Availability Period" shall mean the period from and
including the Closing Date to and including the Termination Date.
"Term Loan Commitments" shall mean the Tranche A Commitments and the
Tranche B Commitments.
"Term Loan Repayment Dates" shall mean the Tranche A Term Loan
Repayment Dates and the Tranche B Term Loan Repayment Dates.
"Term Loans" shall mean the Tranche A Term Loans and the Tranche B
Term Loans.
"Three-Month Secondary CD Rate" shall mean, for any day, the secondary
market rate for three-month certificates of deposit reported as being in effect
on such day (or, if such day shall not be a Business Day, the next preceding
Business Day) by the Board through the public information telephone line of the
Federal Reserve Bank of New York (which rate will, under the current practices
of the Board, be published in Federal Reserve Statistical Release H.15(519)
during the week following such day), or, if such rate shall not be so reported
on such day or such next preceding Business Day, the average of the secondary
market quotations for three-month certificates of deposit of major money center
banks in New York City received at approximately 10:00 a.m., New York City time,
on such day (or, if such day shall not be a Business Day, on the next preceding
Business Day) by the Paying Agent from three New York City negotiable
certificate of deposit dealers of recognized standing selected by it.
27
"Total Debt" shall mean, as of any date of determination, without
duplication, the aggregate principal amount of Indebtedness of the Borrower and
the Subsidiaries (after giving effect to the transfer of the ▇▇▇▇▇ Subsidiaries
to the Borrower) outstanding as of such date, determined on a consolidated basis
(other than (a) Indebtedness of the type referred to in clause (h) of the
definition of the term "Indebtedness", except to the extent of any unreimbursed
drawings thereunder, and (b) Permitted Junior Indebtedness).
"Total Revolving Credit Commitment" shall mean, at any time, the
aggregate amount of the Revolving Credit Commitments, as in effect at such time.
"TPC" shall mean TPC Corporation, a corporation organized under the
laws of Delaware.
"TPC Contribution" shall mean the indirect contribution of all the
capital stock of TPC by PHI to the Borrower.
"Tranche A Commitment" shall mean, with respect to each Lender, the
commitment of such Lender to make Tranche A Term Loans hereunder as set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such
Lender assumed its Term Loan Commitment, as applicable, as the same may be (a)
reduced from time to time pursuant to Section 2.09 and (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to
Section 9.04.
"Tranche A Maturity Date" shall mean June 12, 2003.
"Tranche A Term Borrowing" shall mean a Borrowing comprised of Tranche
A Term Loans.
"Tranche A Term Loan Repayment Date" shall have the meaning assigned
to such term in Section 2.11(a)(i).
"Tranche A Term Loans" shall mean the term loans made by the Lenders
to the Borrower pursuant to clause (a) of Section 2.01. Each Tranche A Term
Loan shall be either a Eurodollar Term Loan or a Base Rate Term Loan.
"Tranche B Commitment" shall mean with respect to each Lender, the
commitment of such Lender to make Tranche B Term Loans hereunder as set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender
assumed its Term Loan Commitment, as applicable, as the same may be (a) reduced
from time to time pursuant to Section 2.09 and (b) reduced or increased from
time to time pursuant to assignments by or to such Lender pursuant to Section
9.04.
"Tranche B Maturity Date" shall mean June 12, 2005.
"Tranche B Term Borrowing" shall mean a Borrowing comprised of Tranche
B Term Loans.
28
"Tranche B Term Loan Repayment Date" shall have the meaning assigned
to such term in Section 2.11(a)(ii).
"Tranche B Term Loans" shall mean the term loans made by the Lenders
to the Borrower pursuant to clause (b) of Section 2.01. Each Tranche B Term
Loan shall be either a Eurodollar Term Loan or a Base Rate Term Loan.
"Transaction Loan Documents" shall mean (a) the Loan Documents, (b)
the Bidco Facility Agreement and the security documents and guarantees related
thereto, (c) the Energyco Bridge Loan Agreement and the guarantees related
thereto and (d) the PHI Credit Agreement and the security documents related
thereto.
"Transactions" shall mean the Offer, the transactions contemplated
thereby and the transactions contemplated by the Transaction Loan Documents.
"Type", when used in respect of any Loan or Borrowing, shall refer to
the Rate by reference to which interest on such Loan or on the Loans comprising
such Borrowing is determined. For purposes hereof, the term "Rate" shall
include the Adjusted LIBO Rate and the Base Rate.
"Unconditional Date" shall have the meaning assigned to such term in
the Bidco Facility Agreement, as in effect on the Restatement Date.
"wholly owned Subsidiary" of any person shall mean a subsidiary of
such person of which securities (except for directors' qualifying shares) or
other ownership interests representing 100% of the equity or 100% of the
ordinary voting power (other than directors' qualifying shares) or 100% of the
general partnership interests are, at the time any determination is being made,
owned, controlled or held by such person or one or more wholly owned
subsidiaries of such person or by such person and one or more wholly owned
subsidiaries of such person.
"Withdrawal Liability" shall mean liability to a Multiemployer Plan as
a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Terms Generally. The definitions in Section 1.01 shall
apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
All references herein to Articles, Sections, Exhibits and Schedules shall be
deemed references to Articles and Sections of, and Exhibits and Schedules to,
this Agreement unless the context shall otherwise require. Except as otherwise
expressly provided herein, (a) any reference in this Agreement to any
Transaction Loan Document shall mean such document as amended, restated,
supplemented or otherwise modified from time to time and (b) all terms of an
accounting or financial nature shall be construed in accordance with GAAP, as in
effect from time to time; provided, however, that if the Borrower notifies the
Paying Agent that the Borrower wishes to amend any covenant in Article VI or any
related definition (including as such definitions relate to the definition of
"Excess Cash Flow") to eliminate the effect of any change in GAAP occurring
29
after the date of this Agreement on the operation of such covenant (or if the
Paying Agent notifies the Borrower that the Required Lenders wish to amend
Article VI or any related definition for such purpose), then the Borrower's
compliance with such covenant shall be determined on the basis of GAAP in effect
immediately before the relevant change in GAAP became effective, until either
such notice is withdrawn or such covenant or definition is amended in a manner
satisfactory to the Borrower and the Required Lenders. Notwithstanding anything
to the contrary, for purposes of each Financial Definition as used in Sections
6.10, 6.11, 6.12, 6.13 and 6.14 and the definition of "Excess Cash Flow", as
applicable, prior to the Separation Date, each reference to subsidiaries of the
Borrower shall include the ▇▇▇▇▇ Subsidiaries as if the ▇▇▇▇▇ Subsidiaries are
in fact subsidiaries of the Borrower and the Bidco Note has been satisfied.
ARTICLE II
The Credits
SECTION 2.01. Commitments. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, each Lender
agrees, severally and not jointly, (a) to make Tranche A Term Loans to the
Borrower at any time and from time to time on or after the Closing Date and
until the earlier of the expiration of the Term Loan Availability Period and the
termination of the Tranche A Commitment of such Lender in accordance with the
terms hereof, in a principal amount not to exceed its Tranche A Term Commitment,
(b) to make Tranche B Term Loans to the Borrower at any time and from time to
time on or after the Closing Date and until the earlier of the expiration of the
Term Loan Availability Period and the termination of the Tranche B Term
Commitment of such Lender in accordance with the terms hereof, in a principal
amount not to exceed its Tranche B Commitment, and (c) to make Revolving Loans
to the Borrower, at any time and from time to time on or after the Closing Date,
and until the earlier of the Revolving Credit Maturity Date and the termination
of the Revolving Credit Commitment of such Lender in accordance with the terms
hereof, in an aggregate principal amount at any time outstanding that will not
result in such Lender's Revolving Credit Exposure exceeding such Lender's
Revolving Credit Commitment. Within the limits set forth in clause (c) of the
preceding sentence and subject to the terms, conditions and limitations set
forth herein, the Borrower may borrow, pay or prepay and reborrow Revolving
Loans. Amounts paid or prepaid in respect of Term Loans may not be reborrowed.
SECTION 2.02. Loans. (a) Each Loan (other than Swingline Loans)
shall be made as part of a Borrowing consisting of Loans made by the Lenders
ratably in accordance with their Tranche A Commitment, Tranche B Commitment or
Revolving Credit Commitment, as applicable; provided, however, that the failure
of any Lender to make any Loan shall not in itself relieve any other Lender of
its obligation to lend hereunder (it being understood, however, that no Lender
shall be responsible for the failure of any other Lender to make any Loan
required to be made by such other Lender). Except for Loans deemed made pursuant
to Section 2.02(f) and except as provided in the immediately succeeding
sentence, the Loans comprising any Borrowing shall be in an aggregate principal
amount that is (i) an integral multiple of $1,000,000 (except in the case of
Acquisition Borrowings) and not less than $10,000,000 or (ii) equal to the
remaining available balance of the applicable Commitments. Subject to the other
terms and conditions provided for herein, the aggregate principal amount of the
Loans comprising each Acquisition Borrowing shall be an amount sufficient, when
added to the amount of the Newco Equity Contribution as yet unused for such
purpose (and to pay fees and
30
expenses related to the Offer), to enable the Borrower to fund to Bidco under
the Bidco Note the relevant Matching Amount (it being understood and agreed that
substantially the entire Newco Equity Contribution shall be used for such
purpose prior to or simultaneously with the making of any Loan for such purpose
or the payment of fees and expenses related to the Offer).
(b) Subject to Sections 2.08 and 2.15, each Borrowing shall be
comprised entirely of Base Rate Loans or Eurodollar Loans as the Borrower may
request pursuant to Section 2.03. Each Lender may at its option make any
Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such
Lender to make such Loan; provided that any exercise of such option shall not
(i) affect the obligation of the Borrower to repay such Loan or (ii) increase
the costs of the Borrower that would otherwise be payable under Section 2.14 or
2.20 with respect thereto, in each case in accordance with the terms of this
Agreement. Borrowings of more than one Type may be outstanding at the same
time; provided, however, that the Borrower shall not be entitled to request any
Borrowing that, if made, would result in more than 15 Eurodollar Borrowings
outstanding hereunder at any time. For purposes of the foregoing, Borrowings
having different Interest Periods, regardless of whether they commence on the
same date, shall be considered separate Borrowings.
(c) Except with respect to Loans made or deemed made pursuant to
Section 2.02(f), each Lender shall make each Loan to be made by it hereunder on
the proposed date thereof by wire transfer of immediately available funds to
such account in New York City as the Paying Agent may designate not later than
11:00 a.m., New York City time, and the Paying Agent shall by 12:00 (noon), New
York City time, credit the amounts so received (i) with respect to any
Acquisition Borrowing, to the Offer Account, and (ii) with respect to any other
Borrowing, to an account in the name of the Borrower, maintained with the Paying
Agent and designated by the Borrower in the applicable Borrowing Request or, if
a Borrowing shall not occur on such date because any condition precedent herein
specified shall not have been met, return the amounts so received to the
respective Lenders.
(d) Unless the Paying Agent shall have received notice from a Lender
prior to the date of any Borrowing that such Lender will not make available to
the Paying Agent such Lender's portion of such Borrowing, the Paying Agent may
assume that such Lender has made such portion available to the Paying Agent on
the date of such Borrowing in accordance with paragraph (c) above and the Paying
Agent may, in reliance upon such assumption, make available to the Borrower on
such date a corresponding amount. If the Paying Agent shall have so made funds
available then, to the extent that such Lender shall not have made such portion
available to the Paying Agent, such Lender and the Borrower severally agree to
repay to the Paying Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date such amount is made available
to the Borrower until the date such amount is repaid to the Paying Agent at (i)
in the case of the Borrower, the interest rate applicable at the time to the
Loans comprising such Borrowing and (ii) in the case of such Lender, a rate
determined by the Paying Agent to represent its cost of overnight or short-term
funds (which determination shall be conclusive absent manifest error). If such
Lender shall repay to the Paying Agent such corresponding amount, such amount
shall constitute such Lender's Loan as part of such Borrowing for purposes of
this Agreement.
(e) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request any Interest Period with respect to a
Revolving Credit Borrowing, Tranche A Term Borrowing or Tranche B Term Borrowing
that would end after the Revolving Credit Maturity Date, the Tranche A Maturity
Date or the Tranche B Maturity Date, respectively.
31
(f) If the Issuing Bank shall not have received from the Borrower the
payment required to be made by Section 2.23(e) within the time specified in such
Section, the Issuing Bank will promptly notify the Paying Agent of the L/C
Disbursement and the Paying Agent will promptly notify each Revolving Credit
Lender of such L/C Disbursement and its Pro Rata Percentage thereof. Each
Revolving Credit Lender shall pay by wire transfer of immediately available
funds to the Paying Agent not later than 2:00 p.m., New York City time, on such
date (or, if such Revolving Credit Lender shall have received such notice later
than 12:00 (noon), New York City time, on any day, not later than 10:00 a.m.,
New York City time, on the immediately following Business Day), an amount equal
to such Lender's Pro Rata Percentage of such L/C Disbursement (it being
understood that such amount shall be deemed to constitute a Base Rate Revolving
Loan of such Lender and such payment shall be deemed to have reduced the L/C
Exposure), and the Paying Agent will promptly pay to the Issuing Bank amounts so
received by it from the Revolving Credit Lenders. The Paying Agent will
promptly pay to the Issuing Bank any amounts received by it from the Borrower
pursuant to Section 2.23(e) prior to the time that any Revolving Credit Lender
makes any payment pursuant to this paragraph (f); any such amounts received by
the Paying Agent thereafter will be promptly remitted by the Paying Agent to the
Revolving Credit Lenders that shall have made such payments and to the Issuing
Bank, as their interests may appear. If any Revolving Credit Lender shall not
have made its Pro Rata Percentage of such L/C Disbursement available to the
Paying Agent as provided above, such Lender and the Borrower severally agree to
pay interest on such amount, for each day from and including the date such
amount is required to be paid in accordance with this paragraph to but excluding
the date such amount is paid, to the Paying Agent for the account of the
Issuing Bank at (i) in the case of the Borrower, a rate per annum equal to the
interest rate applicable to Revolving Loans pursuant to Section 2.06(a), and
(ii) in the case of such Lender, for the first such day, the Federal Funds
Effective Rate, and for each day thereafter, the Base Rate.
SECTION 2.03. Borrowing Procedure. In order to request a Borrowing
(other than a Swingline Loan or a deemed Borrowing pursuant to Section 2.02(f),
as to which this Section 2.03 shall not apply), the Borrower shall hand deliver
or telecopy to the Paying Agent a duly completed Borrowing Request (a) in the
case of a Eurodollar Borrowing, not later than 11:00 a.m., New York City time,
three Business Days before a proposed Borrowing, and (b) in the case of a Base
Rate Borrowing, not later than 11:00 a.m., New York City time, on the Business
Day of a proposed Borrowing. Each Borrowing Request shall be irrevocable, shall
be signed by or on behalf of the Borrower and shall specify the following
information: (i) whether the Borrowing then being requested is to be a Term
Borrowing or a Revolving Credit Borrowing, whether such Borrowing is to be a
Eurodollar Borrowing or a Base Rate Borrowing and whether such Borrowing is to
be an Acquisition Borrowing; (ii) the date of such Borrowing (which shall be a
Business Day), (iii) the number and location of the account to which funds are
to be disbursed (which shall be an account that complies with the requirements
of Section 2.02(c)); (iv) the amount of such Borrowing; and (v) if such
Borrowing is to be a Eurodollar Borrowing, the Interest Period with respect
thereto; provided, however, that, notwithstanding any contrary specification in
any Borrowing Request, each requested Borrowing shall comply with the
requirements set forth in Section 2.02. Any request for a Term Borrowing by the
Borrower shall be allocated between the Tranche A Commitments and the Tranche B
Commitments pro rata in accordance with the aggregate unused amounts of such
Commitments. If no election as to the Type of Borrowing is specified in any
such notice, then the requested Borrowing shall be a Base Rate Borrowing. If no
Interest Period with respect to any Eurodollar Borrowing is specified in any
such notice, then the Borrower shall be deemed to have selected an Interest
Period of one month's duration. The Paying Agent shall promptly advise the
32
applicable Lenders of any notice given pursuant to this Section 2.03 (and the
contents thereof), and of each Lender's portion of the requested Borrowing.
SECTION 2.04. Evidence of Debt; Repayment of Loans. (a) The Borrower
hereby unconditionally promises to pay to the Paying Agent for the account of
each Lender the then unpaid principal amount of each Swingline Loan, on the
last day of the Interest Period applicable to such Loan or, if earlier, on the
Revolving Credit Maturity Date , the principal amount of each Term Loan of such
Lender as provided in Section 2.11 and the then unpaid principal amount of each
Revolving Loan on the Revolving Credit Maturity Date.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Borrower to such
Lender resulting from each Loan made by such Lender from time to time, including
the amounts of principal and interest payable and paid to such Lender from time
to time under this Agreement.
(c) The Paying Agent shall maintain accounts in which it will record
(i) the amount of each Loan made hereunder, the Type thereof and the Interest
Period applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) the amount of any sum received by the Paying Agent hereunder from the
Borrower or any Guarantor and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraphs (b) and (c) above shall be prima facie evidence of the existence and
amounts of the obligations therein recorded; provided, however, that the failure
of any Lender or the Paying Agent to maintain such accounts or any error therein
shall not in any manner affect the obligations of the Borrower to repay the
Loans in accordance with their terms.
(e) Notwithstanding any other provision of this Agreement, in the
event any Lender shall request and receive a promissory note payable to such
Lender and its registered assigns, the interests represented by such note shall
at all times (including after any assignment of all or part of such interests
pursuant to Section 9.04) be represented by one or more promissory notes payable
to the payee named therein or its registered assigns.
SECTION 2.05. Fees. (a) The Borrower agrees to pay to each Lender,
through the Paying Agent, on the last day of March, June, September and December
in each year and on each date on which any Commitment of such Lender shall
expire or be terminated as provided herein, a commitment fee (a "Commitment
Fee") equal to the Applicable Percentage per annum in effect from time to time
on the average daily unused amount of the Commitments of such Lender (other than
the Swingline Commitment) during the preceding quarter (or other period
commencing with the Closing Date or ending with the Revolving Credit Maturity
Date or the date on which the Commitments of such Lender shall expire or be
terminated). All Commitment Fees shall be computed on the basis of the actual
number of days elapsed in a year of 360 days. The Commitment Fee due to each
Lender shall commence to accrue on the Closing Date and shall cease to accrue on
the date on which the Commitment of such Lender shall expire or be terminated as
provided herein. For purposes of calculating Commitment Fees only, no portion
of the Revolving Credit Commitments shall be deemed utilized under Section 2.17
as a result of outstanding Swingline Loans.
33
(b) The Borrower agrees to pay (i) to each Revolving Credit Lender,
through the Paying Agent, on the last day of March, June, September and December
of each year and on the date on which the Revolving Credit Commitment of such
Lender shall be terminated as provided herein, a fee (an "L/C Participation
Fee") calculated on such Lender's Pro Rata Percentage of the average daily
aggregate L/C Exposure (excluding the portion thereof attributable to
unreimbursed L/C Disbursements) during the preceding quarter (or shorter period
commencing with the date hereof or ending with the Revolving Credit Maturity
Date or the date on which all Letters of Credit have been canceled or have
expired and the Revolving Credit Commitments of all Lenders shall have been
terminated) at a rate equal to the Applicable Percentage from time to time used
to determine the interest rate on Revolving Credit Borrowings comprised of
Eurodollar Loans pursuant to Section 2.06, and (ii) to the Issuing Bank with
respect to each Letter of Credit the standard fronting, issuance and drawing
fees specified from time to time by the Issuing Bank (the "Issuing Bank Fees").
All L/C Participation Fees and Issuing Bank Fees shall be computed on the basis
of the actual number of days elapsed in a year of 360 days.
(c) All Fees shall be paid on the dates due, in immediately available
funds, to the Paying Agent for distribution, if and as appropriate, among the
Lenders, except that the Issuing Bank Fees shall be paid directly to the Issuing
Bank. Once paid, none of the Fees shall be refundable under any circumstances,
absent manifest error.
SECTION 2.06. Interest on Loans. (a) Subject to the provisions of
Section 2.07, the Loans comprising each Base Rate Borrowing, including each
Swingline Loan, shall bear interest (computed on the basis of the actual number
of days elapsed over a year of 365 or 366 days, as the case may be, when the
Base Rate is determined by reference to the Prime Rate and over a year of 360
days at all other times) at a rate per annum equal to (i) in the case of
Revolving Credit Borrowings and Tranche A Term Borrowings, the Base Rate plus
the Applicable Percentage in effect from time to time and (ii) in the case of
Tranche B Term Borrowings, the Base Rate plus the Applicable Tranche B
Percentage in effect from time to time.
(b) Subject to the provisions of Section 2.07, the Loans comprising
each Eurodollar Borrowing shall bear interest (computed on the basis of the
actual number of days elapsed over a year of 360 days) at a rate per annum equal
to (i) in the case of Revolving Credit Borrowings and Tranche A Term Borrowings,
the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus
the Applicable Percentage in effect from time to time and (ii) in the case of
Tranche B Term Borrowings, the Adjusted LIBO Rate for the Interest Period then
in effect for such Borrowing plus the Applicable Tranche B Percentage in effect
from time to time.
(c) Interest on each Loan shall be payable on the Interest Payment
Dates applicable to such Loan except as otherwise provided in this Agreement.
The applicable Base Rate or Adjusted LIBO Rate for each Interest Period or day
within an Interest Period, as the case may be, shall be determined by the Paying
Agent, and such determination shall be conclusive absent manifest error.
SECTION 2.07. Default Interest. If the Borrower shall default in the
payment of the principal of or interest on any Loan or any other amount becoming
due hereunder, by acceleration or otherwise, or under any other Loan Document,
the Borrower shall on demand from time to time pay interest, to the extent
permitted by law, on such defaulted amount to but excluding the date of actual
payment (after as well as before judgment) (a) in the case of overdue principal,
at the rate otherwise applicable
34
to such Loan pursuant to Section 2.06 plus 2.00% per annum and (b) in all other
cases, at a rate per annum (computed on the basis of the actual number of days
elapsed over a year of 365 or 366 days, as the case may be, when determined by
reference to the Prime Rate and over a year of 360 days at all other times)
equal to the sum of the Base Rate plus 2.00%.
SECTION 2.08. Alternate Rate of Interest. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Borrowing the Paying Agent shall have
determined that dollar deposits in the principal amounts of the Loans comprising
such Borrowing are not generally available in the London interbank market, or
that the rates at which such dollar deposits are being offered will not
adequately and fairly reflect the cost to the Lender or Lenders holding a
majority of the Eurodollar Loans comprising such Eurodollar Borrowing of making
or maintaining such Eurodollar Loan during such Interest Period, or that
reasonable means do not exist for ascertaining the Adjusted LIBO Rate, the
Paying Agent shall, as soon as practicable thereafter, give written or telecopy
notice of such determination to the Borrower and the Lenders. In the event of
any such determination, until the Paying Agent shall have advised the Borrower
and the Lenders that the circumstances giving rise to such notice no longer
exist, any request by the Borrower for a Eurodollar Borrowing pursuant to
Section 2.03 or 2.10 shall be deemed to be a request for a Base Rate Borrowing.
Each determination by the Paying Agent hereunder shall be conclusive absent
manifest error.
SECTION 2.09. Termination and Reduction of Commitments. (a) The Term
Loan Commitments shall automatically terminate at 5:00 p.m., New York City time,
on the Termination Date. The Revolving Credit Commitments, the Swingline
Commitment and the L/C Commitment shall automatically terminate on the Revolving
Credit Maturity Date. Notwithstanding the foregoing, the Revolving Credit
Commitment, the Swingline Commitment and the L/C Commitment shall automatically
terminate at 5:00 p.m., New York City time, on the Termination Date if the
initial Borrowing hereunder shall not have occurred by such time.
(b) Upon at least three Business Days' prior irrevocable written or
telecopy notice to the Paying Agent, the Borrower may at any time in whole
permanently terminate, or from time to time in part permanently reduce, the Term
Loan Commitments or the Revolving Credit Commitments; provided, however, that
(i) each partial reduction of the Term Loan Commitments or the Revolving Credit
Commitments shall be in an integral multiple of $1,000,000 and in a minimum
amount of $10,000,000 and (ii) the Total Revolving Credit Commitment shall not
be reduced to an amount that is less than the Aggregate Revolving Credit
Exposure at the time.
(c) Each reduction in the Term Loan Commitments or the Revolving
Credit Commitments hereunder shall be made ratably among the Lenders in
accordance with their respective applicable Commitments. The Borrower shall pay
to the Paying Agent for the account of the applicable Lenders, on the date of
each termination or reduction, the Commitment Fees on the amount of the
Commitments so terminated or reduced accrued to but excluding the date of such
termination or reduction.
SECTION 2.10. Conversion and Continuation of Borrowings. The
Borrower shall have the right at any time upon prior irrevocable notice to the
Paying Agent (a) not later than 12:00 (noon), New York City time, one Business
Day prior to conversion, to convert any Eurodollar Borrowing into a Base Rate
Borrowing, (b) not later than 11:00 a.m., New York City time, three Business
Days prior
35
to conversion or continuation, to convert any Base Rate Borrowing into a
Eurodollar Borrowing or to continue any Eurodollar Borrowing as a Eurodollar
Borrowing for an additional Interest Period, and (c) not later than 11:00 a.m.,
New York City time, three Business Days prior to conversion, to convert the
Interest Period with respect to any Eurodollar Borrowing to another permissible
Interest Period, subject in each case to the following:
(i) each conversion or continuation shall be made pro rata among
the Lenders in accordance with the respective principal amounts of the
Loans comprising the converted or continued Borrowing;
(ii) if less than all the outstanding principal amount of any
Borrowing shall be converted or continued, then each resulting
Borrowing shall satisfy the limitations specified in Sections 2.02(a)
and 2.02(b) regarding the principal amount and maximum number of
Borrowings of the relevant Type;
(iii) each conversion shall be effected by each Lender and the
Paying Agent by recording for the account of such Lender the new Loan
of such Lender resulting from such conversion and reducing the Loan
(or portion thereof) of such Lender being converted by an equivalent
principal amount; accrued interest on any Eurodollar Loan (or portion
thereof) being converted shall be paid by the Borrower at the time of
conversion;
(iv) if any Eurodollar Borrowing is converted at a time other
than the end of the Interest Period applicable thereto, the Borrower
shall pay, upon demand, any amounts due to the Lenders pursuant to
Section 2.16;
(v) any portion of a Borrowing maturing or required to be repaid
in less than one month may not be converted into or continued as a
Eurodollar Borrowing;
(vi) any portion of a Eurodollar Borrowing that cannot be
converted into or continued as a Eurodollar Borrowing by reason of the
immediately preceding clause shall be automatically converted at the
end of the Interest Period in effect for such Borrowing into a Base
Rate Borrowing;
(vii) no Interest Period may be selected for any Eurodollar Term
Borrowing that would end later than a Term Loan Repayment Date
occurring on or after the first day of such Interest Period if, after
giving effect to such selection, the aggregate outstanding amount of
(A) the Eurodollar Term Borrowings with Interest Periods ending on or
prior to such Term Loan Repayment Date and (B) the Base Rate Term
Borrowings would not be at least equal to the principal amount of Term
Borrowings to be paid on such Term Loan Repayment Date; and
(viii) upon notice to the Borrower from the Paying Agent given
at the request of the Required Lenders, after the occurrence and
during the continuance of a Default or Event of Default, no
outstanding Loan may be converted into, or continued as, a Eurodollar
Loan.
Each notice pursuant to this Section 2.10 shall be irrevocable and
shall refer to this Agreement and specify (i) the identity and amount of the
Borrowing that the Borrower requests be
36
converted or continued, (ii) whether such Borrowing is to be converted to or
continued as a Eurodollar Borrowing or a Base Rate Borrowing, (iii) if such
notice requests a conversion, the date of such conversion (which shall be a
Business Day) and (iv) if such Borrowing is to be converted to or continued as a
Eurodollar Borrowing, the Interest Period with respect thereto. If no Interest
Period is specified in any such notice with respect to any conversion to or
continuation as a Eurodollar Borrowing, the Borrower shall be deemed to have
selected an Interest Period of one month's duration. The Paying Agent shall
advise the Lenders of any notice given pursuant to this Section 2.10 and of each
Lender's portion of any converted or continued Borrowing. If the Borrower shall
not have given notice in accordance with this Section 2.10 to continue any
Borrowing into a subsequent Interest Period (and shall not otherwise have given
notice in accordance with this Section 2.10 to convert such Borrowing), such
Borrowing shall, at the end of the Interest Period applicable thereto (unless
repaid pursuant to the terms hereof), automatically be continued into a new
Interest Period as a Base Rate Borrowing.
SECTION 2.11. Repayment of Term Borrowings. (a) (i) The Borrower
shall pay to the Paying Agent, for the account of the Lenders, on the dates set
forth below under Category 1 if the initial Tranche A Term Borrowing hereunder
occurs on or after September 30, 1997, or under Category 2 if the initial
Tranche A Term Borrowing hereunder occurs prior to September 30, 1997, or if any
such applicable date is not a Business Day, on the next succeeding Business Day
(each such applicable date being a "Tranche A Term Loan Repayment Date"), a
principal amount of the Tranche A Term Loans (as adjusted from time to time
pursuant to Sections 2.11(b), 2.12 and 2.13(h)) equal to the amount set forth
below for such applicable date, together in each case with accrued and unpaid
interest on the principal amount to be paid to but excluding the applicable date
of such payment:
37
Category 1 Category 2
---------- ----------
Date Amount Date Amount
---- ------ ---- ------
December 31, 1997 $ 5,000,000
March 31, 1998 $ 6,250,000 March 31, 1998 $ 5,000,000
June 30, 1998 $ 6,250,000 June 30, 1998 $ 5,000,000
September 30, 1998 $ 6,250,000 September 30, 1998 $ 5,000,000
December 31, 1998 $ 6,250,000 December 31, 1998 $ 5,000,000
March 31, 1999 $12,500,000 March 31, 1999 $12,500,000
June 30, 1999 $12,500,000 June 30, 1999 $12,500,000
September 30, 1999 $12,500,000 September 30, 1999 $12,500,000
December 31, 1999 $12,500,000 December 31, 1999 $12,500,000
March 31, 2000 $12,500,000 March 31, 2000 $12,500,000
June 30, 2000 $12,500,000 June 30, 2000 $12,500,000
September 30, 2000 $12,500,000 September 30, 2000 $12,500,000
December 31, 2000 $12,500,000 December 31, 2000 $12,500,000
March 31, 2001 $12,500,000 March 31, 2001 $12,500,000
June 30, 2001 $12,500,000 June 30, 2001 $12,500,000
September 30, 2001 $12,500,000 September 30, 2001 $12,500,000
December 31, 2001 $12,500,000 December 31, 2001 $12,500,000
March 31, 2002 $12,500,000 March 31, 2002 $12,500,000
June 30, 2002 $12,500,000 June 30, 2002 $12,500,000
September 30, 2002 $12,500,000 September 30, 2002 $12,500,000
December 31, 2002 $12,500,000 December 31, 2002 $12,500,000
March 31, 2003 $12,500,000 March 31, 2003 $12,500,000
Tranche A Maturity $12,500,000 Tranche A $12,500,000
Date Maturity
Date
(ii) The Borrower shall pay to the Paying Agent, for the account of
the Lenders, on the dates set forth below under Category 1 if the initial
Tranche B Term Borrowing hereunder occurs on or after September 30, 1997, or
under Category 2 if the initial Tranche B Term Borrowing hereunder occurs prior
to September 30, 1997, or if any such applicable date is not a Business Day, on
the next succeeding Business Day (each such applicable date being a "Tranche B
Term Loan Repayment Date"), a principal amount of the Tranche B Term Loans (as
adjusted from time to time pursuant to Sections 2.11(b), 2.12 and 2.13(h)) equal
to the amount set forth below for such applicable date, together in each case
with accrued and unpaid interest on the principal amount to be paid to but
excluding the date of such payment:
Category 1 Category 2
---------- ----------
Date Amount Date Amount
---- ------ ---- ------
December 31, 1997 $ 2,000,000
March 31, 1998 $ 2,000,000 March 31, 1998 $ 2,000,000
38
June 30, 1998 $ 2,000,000 June 30, 1998 $ 2,000,000
September 30, 1998 $ 2,000,000 September 30, 1998 $ 2,000,000
December 31, 1998 $ 2,000,000 December 31, 1998 $ 2,000,000
March 31, 1999 $ 2,000,000 March 31, 1999 $ 2,000,000
June 30, 1999 $ 2,000,000 June 30, 1999 $ 2,000,000
September 30, 1999 $ 2,000,000 September 30, 1999 $ 2,000,000
December 31, 1999 $ 2,000,000 December 31, 1999 $ 2,000,000
March 31, 2000 $ 2,000,000 March 31, 2000 $ 2,000,000
June 30, 2000 $ 2,000,000 June 30, 2000 $ 2,000,000
September 30, 2000 $ 2,000,000 September 30, 2000 $ 2,000,000
December 31, 2000 $ 2,000,000 December 31, 2000 $ 2,000,000
March 31, 2001 $ 2,000,000 March 31, 2001 $ 2,000,000
June 30, 2001 $ 2,000,000 June 30, 2001 $ 2,000,000
September 30, 2001 $ 2,000,000 September 30, 2001 $ 2,000,000
December 31, 2001 $ 2,000,000 December 31, 2001 $ 2,000,000
March 31, 2002 $ 2,000,000 March 31, 2002 $ 2,000,000
June 30, 2002 $ 2,000,000 June 30, 2002 $ 2,000,000
September 30, 2002 $ 2,000,000 September 30, 2002 $ 2,000,000
December 31, 2002 $ 2,000,000 December 31, 2002 $ 2,000,000
March 31, 2003 $ 2,000,000 March 31, 2003 $ 2,000,000
June 30, 2003 $ 2,000,000 June 30, 2003 $ 2,000,000
September 30, 2003 $ 2,000,000 September 30, 2003 $ 2,000,000
December 31, 2003 $ 2,000,000 December 31, 2003 $ 2,000,000
March 31, 2004 $ 27,000,000 March 31, 2004 $ 27,000,000
June 30, 2004 $ 27,000,000 June 30, 2004 $ 27,000,000
September 30, 2004 $ 27,000,000 September 30, 2004 $ 27,000,000
December 31, 2004 $ 27,000,000 December 31, 2004 $ 27,000,000
March 31, 2005 $322,000,000 March 31, 2005 $321,000,000
Tranche B Maturity $322,000,000 Tranche B $321,000,000
Date Maturity
Date
(b) In the event and on each occasion that any Term Loan Commitments
shall be reduced or shall expire or terminate other than as a result of the
making of a Term Loan, the installments payable on each Term Loan Repayment Date
shall be reduced pro rata by an aggregate amount equal to the amount of such
reduction, expiration or termination.
(c) To the extent not previously paid, all Tranche A Term Loans and
Tranche B Term Loans shall be due and payable on the Tranche A Maturity Date and
Tranche B Maturity Date, respectively, together with accrued and unpaid interest
on the principal amount to be paid to but excluding the date of payment.
39
(d) All repayments pursuant to this Section 2.11 shall be subject to
Section 2.16, but shall otherwise be without premium or penalty.
SECTION 2.12. Optional Prepayments. (a) The Borrower shall have the
right at any time and from time to time to prepay any Borrowing, in whole or in
part, upon at least three Business Days' prior written or telecopy notice (or
telephone notice promptly confirmed by written or telecopy notice) to the Paying
Agent before 11:00 a.m., New York City time; provided, however, that each
partial prepayment shall be in an amount that is an integral multiple of
$1,000,000 and not less than $10,000,000.
(b) Optional prepayments of Term Loans shall be allocated pro rata
between the then-outstanding Tranche A Term Loans and Tranche B Term Loans and
applied pro rata against the remaining scheduled installments of principal due
in respect of the Tranche A Term Loans and Tranche B Term Loans under Sections
2.11(a)(i) and (ii), respectively.
(c) Each notice of prepayment shall specify the prepayment date and
the principal amount of each Borrowing (or portion thereof) to be prepaid, shall
be irrevocable and shall commit the Borrower to prepay such Borrowing by the
amount stated therein on the date stated therein. All prepayments under this
Section 2.12 shall be subject to Section 2.16 but otherwise without premium or
penalty. All prepayments under this Section 2.12 shall be accompanied by
accrued interest on the principal amount being prepaid to the date of payment.
SECTION 2.13. Mandatory Prepayments. (a) In the event of any
termination of all the Revolving Credit Commitments, the Borrower shall repay or
prepay all its outstanding Revolving Credit Borrowings and all outstanding
Swingline Loans on the date of such termination. In the event of any partial
reduction of the Revolving Credit Commitments, then (i) at or prior to the
effective date of such reduction, the Paying Agent shall notify the Borrower and
the Revolving Credit Lenders of the Aggregate Revolving Credit Exposure after
giving effect thereto and (ii) if the Aggregate Revolving Credit Exposure would
exceed the Total Revolving Credit Commitment after giving effect to such
reduction or termination, then the Borrower shall, on the date of such reduction
or termination, repay or prepay Revolving Credit Borrowings or Swingline Loans
(or a combination thereof) in an amount sufficient to eliminate such excess.
(b) Not later than the fourth Business Day following the receipt of
Net Cash Proceeds from any Asset Sale (except to the extent the Borrower has
notified the Paying Agent of its intention to reinvest the proceeds thereof in
accordance with the definition of the term "Net Cash Proceeds" and such proceeds
are in fact so reinvested or committed to be reinvested within the 180-day or
270-day period referred to in such definition), the Borrower shall apply 100% of
such Net Cash Proceeds received with respect thereto to prepay outstanding Term
Loans in accordance with Section 2.13(h).
(c) In the event and on each occasion that an Equity Issuance occurs,
the Borrower shall, substantially simultaneously with (and in any event not
later than the fourth Business Day next following) the receipt of Net Cash
Proceeds from any such Equity Issuance, apply 100% of such Net Cash Proceeds to
prepay outstanding Term Loans in accordance with Section 2.13(h).
(d) No later than (i) in the case of the fiscal year ending December
31, 1997, the later of (x) 15 days after the Separation Date and (y) April 30,
1998, and (ii) in the case of each fiscal year
40
thereafter, 120 days after the end of such fiscal year, the Borrower shall
prepay outstanding Term Loans in accordance with Section 2.13(h) in an aggregate
principal amount equal to 50% of Excess Cash Flow for the fiscal year then
ended.
(e) In the event that any Loan Party or any subsidiary of a Loan
Party shall receive Net Cash Proceeds from the issuance or other disposition of
Indebtedness for money borrowed of any Loan Party or any subsidiary of a Loan
Party (other than Indebtedness permitted by Section 6.01 (other than
subparagraph (i) thereof)), the Borrower shall, substantially simultaneously
with (and in any event not later than the fourth Business Day next following)
the receipt of such Net Cash Proceeds by such Loan Party or such subsidiary,
apply an amount equal to 100% of such Net Cash Proceeds to prepay outstanding
Term Loans in accordance with Section 2.13(h).
(f) Not later than the fourth Business Day following the completion
of a Permitted Receivables Financing, the Borrower or the applicable Subsidiary
shall apply 100% of the Net Cash Proceeds therefrom to prepay outstanding Term
Loans in accordance with Section 2.13(h).
(g) Not later than the fourth Business Day following the receipt of
any net cash proceeds attributable to any Prepaid Forward Sales Agreement, the
Borrower or the applicable Subsidiary shall apply 100% of such net cash proceeds
to prepay outstanding Term Loans in accordance with Section 2.13(h).
(h) Mandatory prepayments of outstanding Term Loans under this
Agreement shall be allocated pro rata between the then-outstanding Tranche A
Term Loans and Tranche B Term Loans, and applied pro rata against the remaining
scheduled installments of principal due in respect of Tranche A Term Loans and
Tranche B Term Loans under Sections 2.11(a)(i) and (ii), respectively.
(i) The Borrower shall deliver to the Paying Agent, at the time of
each prepayment required under this Section 2.13, (i) a certificate signed by a
Financial Officer of the Borrower setting forth in reasonable detail the
calculation of the amount of such prepayment and (ii) to the extent practicable,
at least four days' prior written notice of such prepayment. Each notice of
prepayment shall specify the prepayment date, the Type of each Loan being
prepaid and the principal amount of each Loan (or portion thereof) to be
prepaid. All prepayments of Borrowings under this Section 2.13 shall be subject
to Section 2.16, but shall otherwise be without premium or penalty.
(j) Amounts to be applied pursuant to this Section 2.13 to the
prepayment of Term Loans and Revolving Loans shall be applied, as applicable,
first to reduce outstanding Base Rate Term Loans and Base Rate Revolving Loans.
Any amounts remaining after each such application shall, at the option of the
Borrower, be applied to prepay Eurodollar Term Loans or Eurodollar Revolving
Loans, as the case may be, immediately and/or shall be deposited in the
Prepayment Account (as defined below). The Paying Agent shall apply any cash
deposited in the Prepayment Account (i) allocable to Term Loans to prepay
Eurodollar Term Loans and (ii) allocable to Revolving Loans to prepay Eurodollar
Revolving Loans, in each case on the last day of their respective Interest
Periods (or, at the direction of the Borrower, on any earlier date) until all
outstanding Term Loans or Revolving Loans, as the case may be, have been prepaid
or until all the allocable cash on deposit with respect to such Loans has been
exhausted. For purposes of this Agreement, the term "Prepayment Account" shall
mean an account established by the Borrower with the Paying Agent and over which
the Paying Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal for
41
application in accordance with this paragraph (j). The Paying Agent will, at the
request of the Borrower, invest amounts on deposit in the Prepayment Account in
Permitted Investments that mature prior to the last day of the applicable
Interest Periods of the Eurodollar Term Borrowings or Euro dollar Revolving
Borrowings to be prepaid, as the case may be; provided, however, that (i) the
Paying Agent shall not be required to make any investment that, in its sole
judgment, would require or cause the Paying Agent to be in, or would result in
any, violation of any law, statute, rule or regulation and (ii) the Paying Agent
shall have no obligation to invest amounts on deposit in the Prepayment Account
if an Event of Default shall have occurred and be continuing. The Borrower
shall indemnify the Paying Agent for any losses relating to the investments so
that the amount available to prepay Eurodollar Borrowings on the last day of the
applicable Interest Period is not less than the amount that would have been
available had no investments been made pursuant thereto. Other than any
interest earned on such investments, the Prepayment Account shall not bear
interest. Interest or profits, if any, on such investments shall be deposited
in the Prepayment Account and reinvested and disbursed as specified above. If
the maturity of the Loans has been accelerated pursuant to Article VII, the
Paying Agent may, in its sole discretion, apply all amounts on deposit in the
Prepayment Account to satisfy any of the Obligations. The Borrower hereby grants
to the Paying Agent, for its benefit and the benefit of the Issuing Bank, the
Swingline Lender and the Lenders, a security interest in the Prepayment Account
to secure the Obligations.
SECTION 2.14. Reserve Requirements; Change in Circumstances. (a)
Notwithstanding any other provision of this Agreement, if after the date of this
Agreement any change in applicable law or regulation or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the force of
law) shall impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of or
credit extended by any Lender or the Issuing Bank (except any such reserve
requirement which is reflected in the Adjusted LIBO Rate) or shall impose on
such Lender or the Issuing Bank or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender or
any Letter of Credit or participation therein, and the result of any of the
foregoing shall be to increase the cost to such Lender or the Issuing Bank of
making or maintaining any Eurodollar Loan or increase the cost to any Lender of
issuing or maintaining any Letter of Credit or purchasing or maintaining a
participation therein or to reduce the amount of any sum received or receivable
by such Lender or the Issuing Bank hereunder (whether of principal, interest or
otherwise) by an amount deemed by such Lender or the Issuing Bank to be
material, then the Borrower will pay to such Lender or the Issuing Bank, as the
case may be, upon demand such additional amount or amounts as will compensate
such Lender or the Issuing Bank, as the case may be, for such additional costs
incurred or reduction suffered.
(b) If any Lender or the Issuing Bank shall have determined that the
adoption after the Closing Date of any law, rule, regulation, agreement or
guideline regarding capital adequacy, or any change after the Closing Date in
any such law, rule, regulation, agreement or guideline (whether or not having
the force of law) or in the interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration
thereof, or compliance by any Lender (or any lending office of such Lender) or
the Issuing Bank or any Lender's or the Issuing Bank's holding company with any
request or directive regarding capital adequacy (whether or not having the force
of law) of any Governmental Authority made or issued after the Closing Date has
or would have the effect of reducing the rate of return on such Lender's or the
Issuing Bank's capital or on the capital of such Lender's or the Issuing Bank's
holding company, if any, as a consequence of this Agreement or
42
the Loans made or participations in Letters of Credit purchased by such Lender
pursuant hereto or the Letters of Credit issued by the Issuing Bank pursuant
hereto to a level below that which such Lender or the Issuing Bank or such
Lender's or the Issuing Bank's holding company could have achieved but for such
applicability, adoption, change or compliance (taking into consideration such
Lender's or the Issuing Bank's policies and the policies of such Lender's or the
Issuing Bank's holding company with respect to capital adequacy) by an amount
deemed by such Lender or the Issuing Bank to be material, then from time to time
the Borrower shall pay to such Lender or the Issuing Bank, as the case may be,
such additional amount or amounts as will compensate such Lender or the Issuing
Bank or such Lender's or the Issuing Bank's holding company for any such
reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or the Issuing Bank or its
respective holding company, as applicable, as specified in paragraph (a) or (b)
above shall be delivered to the Borrower and shall be conclusive absent manifest
error. The Borrower shall pay such Lender or the Issuing Bank the amount shown
as due on any such certificate delivered by it within 10 days after its receipt
of the same.
(d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation for any increased costs or reduction in amounts received or
receivable or reduction in return on capital shall not constitute a waiver of
such Lender's or the Issuing Bank's right to demand such compensation; provided
that neither any Lender nor the Issuing Bank shall be entitled to compensation
under this Section 2.14 for any increased costs or reductions incurred or
suffered with respect to any date unless such Lender or the Issuing Bank, as the
case may be, shall have notified the Borrower under paragraph (c) above, not
more than 90 days after the later of (i) such date and (ii) the date on which
such Lender or Issuing Bank, as applicable, shall have become aware of such
costs or reductions. The protection of this Section shall be available to each
Lender and the Issuing Bank regardless of any possible contention of the
invalidity or inapplicability of the law, rule, regulation, agreement, guideline
or other change or condition that shall have occurred or been imposed.
SECTION 2.15. Change in Legality. (a) Notwithstanding any other
provision of this Agreement, if, after the Closing Date, any change in any law
or regulation or in the interpretation thereof by any Governmental Authority
charged with the administration or interpretation thereof shall make it unlawful
for any Lender to make or maintain any Eurodollar Loan or to give effect to its
obligations as contemplated hereby with respect to any Eurodollar Loan, then, by
written notice to the Borrower and to the Paying Agent:
(i) such Lender may declare that Eurodollar Loans will not
thereafter (for the duration of such unlawfulness) be made by such
Lender hereunder (or be continued for additional Interest Periods and
Base Rate Loans will not thereafter (for such duration) be converted
into Eurodollar Loans), whereupon any request for a Eurodollar
Borrowing (or to convert a Base Rate Borrowing to a Eurodollar
Borrowing or to continue a Eurodollar Borrowing for an additional
Interest Period) shall, as to such Lender only, be deemed a request
for a Base Rate Loan (or a request to continue a Base Rate Loan as
such for an additional Interest Period or to convert a Eurodollar Loan
into a Base Rate Loan, as the case may be), unless such declaration
shall be subsequently withdrawn; and
(ii) such Lender may require that all outstanding Eurodollar
Loans made by it be converted to Base Rate Loans, in which event all
such Eurodollar Loans shall be
43
automatically converted to Base Rate Loans as of the effective date of
such notice as provided in paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal that would otherwise have been applied to
repay the Eurodollar Loans that would have been made by such Lender or the
converted Eurodollar Loans of such Lender shall instead be applied to repay the
Base Rate Loans made by such Lender in lieu of, or resulting from the conversion
of, such Eurodollar Loans.
(b) For purposes of this Section 2.15, a notice to the Borrower by
any Lender shall be effective as to each Eurodollar Loan made by such Lender, if
lawful, on the last day of the Interest Period currently applicable to such
Eurodollar Loan; in all other cases such notice shall be effective on the date
of receipt by the Borrower.
SECTION 2.16. Indemnity. The Borrower shall indemnify each Lender
against any loss or expense that such Lender may sustain or incur as a
consequence of any event, other than a default by such Lender in the performance
of its obligations hereunder, which results in (a) such Lender receiving or
being deemed to receive any amount on account of the principal of any Eurodollar
Loan prior to the end of the Interest Period in effect therefor, (b) the
conversion of any Eurodollar Loan to a Base Rate Loan, or the conversion of the
Interest Period with respect to any Eurodollar Loan, in each case other than on
the last day of the Interest Period in effect therefor, or (c) any Eurodollar
Loan to be made by such Lender (including any Eurodollar Loan to be made
pursuant to a conversion or continuation under Section 2.10) not being made
after notice of such Loan shall have been given by the Borrower hereunder (any
of the events referred to in this sentence being called a "Breakage Event"). In
the case of any Breakage Event, such loss shall include an amount equal to the
excess, as reasonably determined by such Lender, of (i) its cost of obtaining
funds for the Eurodollar Loan (excluding loss of margin) that is the subject of
such Breakage Event for the period from the date of such Breakage Event to the
last day of the Interest Period in effect (or that would have been in effect)
for such Loan over (ii) the amount of interest likely to be realized by such
Lender in redeploying the funds released or not utilized by reason of such
Breakage Event for such period. A certificate of any Lender setting forth any
amount or amounts which such Lender is entitled to receive pursuant to this
Section 2.16 shall be delivered to the Borrower and shall be conclusive absent
manifest error.
SECTION 2.17. Pro Rata Treatment. Except as provided below in this
Section 2.17 with respect to Swingline Loans and as required under Section
2.15, each Borrowing, each payment or prepayment of principal of any Borrowing,
each payment of interest on the Loans, each payment of the Commitment Fees, each
reduction of the Term Loan Commitments or the Revolving Credit Commitments and
each conversion of any Borrowing to or continuation of any Borrowing as a
Borrowing of any Type shall be allocated pro rata among the Lenders in
accordance with their respective applicable Commitments (or, if such Commitments
shall have expired or been terminated, in accordance with the respective
principal amounts of their outstanding Loans). For purposes of determining the
available Revolving Credit Commitments of the Lenders at any time, each
outstanding Swingline Loan shall be deemed to have utilized the Revolving Credit
Commitments of the Lenders (including those Lenders which shall not have made
Swingline Loans) pro rata in accordance with such respective Revolving Credit
Commitments. Each Lender agrees that in computing such Lender's portion of any
Borrowing to be made hereunder, the Paying Agent may, in
44
its discretion, round each Lender's percentage of such Borrowing to the next
higher or lower whole dollar amount.
SECTION 2.18. Sharing of Setoffs. Each Lender agrees that if it
shall, through the exercise of a right of banker's lien, setoff or counterclaim
against the Borrower or any other Loan Party, or pursuant to a secured claim
under Section 506 of Title 11 of the United States Code or other security or
interest arising from, or in lieu of, such secured claim, received by such
Lender under any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means, obtain payment (voluntary or involuntary) in
respect of any Loan or Loans or L/C Disbursement as a result of which the unpaid
principal portion of its Tranche A Term Loans, Tranche B Term Loans and
Revolving Loans and participations in L/C Disbursements shall be proportionately
less than the unpaid principal portion of the Tranche A Term Loans, Tranche B
Term Loans and Revolving Loans and participations in L/C Disbursements of any
other Lender, it shall be deemed simultaneously to have purchased from such
other Lender at face value, and shall promptly pay to such other Lender the
purchase price for, a participation in the Tranche A Term Loans, Tranche B Term
Loans and Revolving Loans and L/C Exposure, as the case may be of such other
Lender, so that the aggregate unpaid principal amount of the Tranche A Term
Loans, Tranche B Term Loans and Revolving Loans and L/C Exposure and
participations in Tranche A Term Loans, Tranche B Term Loans and Revolving Loans
and L/C Exposure held by each Lender shall be in the same proportion to the
aggregate unpaid principal amount of all Tranche A Term Loans, Tranche B Term
Loans and Revolving Loans and L/C Exposure then outstanding as the principal
amount of its Tranche A Term Loans, Tranche B Term Loans and Revolving Loans and
L/C Exposure prior to such exercise of banker's lien, setoff or counterclaim or
other event was to the principal amount of all Tranche A Term Loans, Tranche B
Term Loans and Revolving Loans and L/C Exposure outstanding prior to such
exercise of banker's lien, setoff or counterclaim or other event; provided,
however, that if any such purchase or purchases or adjustments shall be made
pursuant to this Section 2.18 and the payment giving rise thereto shall
thereafter be recovered, such purchase or purchases or adjustments shall be
rescinded to the extent of such recovery and the purchase price or prices or
adjustment restored without interest. The Borrower expressly consents to the
foregoing arrangements and agrees that any Lender holding a participation in a
Term Loan or Revolving Loan or L/C Disbursement deemed to have been so purchased
may exercise any and all rights of banker's lien, setoff or counterclaim with
respect to any and all moneys owing by the Borrower to such Lender by reason
thereof as fully as if such Lender had made a Loan directly to the Borrower in
the amount of such participation.
SECTION 2.19. Payments. (a) The Borrower shall make each payment
(including principal of or interest on any Borrowing or any L/C Disbursement or
any Fees or other amounts) hereunder and under any other Loan Document not later
than 12:00 (noon), New York City time, on the date when due in immediately
available dollars, without setoff, defense or counterclaim. Each such payment
(other than (i) Issuing Bank Fees, which shall be paid directly to the Issuing
Bank, and (ii) principal of and interest on Swingline Loans, which shall be paid
directly to the Swingline Lender except as otherwise provided in Section
2.21(e)) shall be made to the Paying Agent at its offices at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇.
(b) Whenever any payment (including principal of or interest on any
Borrowing or any Fees or other amounts) hereunder or under any other Loan
Document shall become due, or otherwise would occur, on a day that is not a
Business Day, such payment may be made on the next succeeding Busi-
45
ness Day, and such extension of time shall in such case be included in the
computation of interest or Fees, if applicable.
SECTION 2.20. Taxes. (a) Any and all payments by or on behalf of the
Borrower or any Loan Party hereunder and under any other Loan Document shall be
made, in accordance with Section 2.19, free and clear of and without deduction
for any and all current or future taxes, levies, imposts, deductions, charges or
withholdings imposed by the United Kingdom, the United States or any political
subdivision thereof, and all liabilities with respect thereto, excluding all
taxes, levies, imposts, deductions, charges or withholdings imposed by reason of
the Paying Agent or Lender or Issuing Bank (or any transferee or assignee
thereof including a participation holder (any such entity, a "Transferee")), as
the case may be, doing business or being regulated, organized, managed,
controlled or having a lending office in the jurisdiction imposing such tax,
other than solely as a result of this Agreement or any other Loan Document or
any transaction contemplated hereby (all such nonexcluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities, collectively or
individually, being called "Taxes"). If the Borrower or any Loan Party shall be
required to deduct any Taxes from or in respect of any sum payable hereunder or
under any other Loan Document to the Paying Agent, any Lender or the Issuing
Bank (or any Transferee), (i) the sum payable shall be increased by the amount
(an "additional amount") necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.20) the Paying Agent, such Lender or the Issuing Bank (or Transferee), as the
case may be, shall receive an amount equal to the sum it would have received had
no such deductions been made, (ii) the Borrower or such Loan Party shall make
such deductions and (iii) the Borrower or such Loan Party shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) In addition, the Borrower agrees to pay to the relevant
Governmental Authority of the United Kingdom, the United States or any political
subdivision thereof in accordance with applicable law any current or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies (including, without limitation, mortgage recording taxes and
similar fees) that arise from any payment made hereunder or under any other Loan
Document or from the execution, delivery or registration of, or otherwise with
respect to, this Agreement or any other Loan Document ("Other Taxes").
(c) The Borrower will indemnify the Paying Agent, each Lender and the
Issuing Bank (or Transferee) for the full amount of Taxes and Other Taxes paid
by the Paying Agent, such Lender or the Issuing Bank (or Transferee), as the
case may be, and any liability (including penalties, interest and expenses
(including reasonable attorney's fees and expenses)) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability prepared by the Paying Agent, a Lender
or the Issuing Bank (or Transferee), or the Paying Agent on its behalf, absent
manifest error, shall be final, conclusive and binding for all purposes. Such
indemnification shall be made within 30 days after the date the Paying Agent,
any Lender or the Issuing Bank (or Transferee), as the case may be, makes
written demand therefor.
(d) As soon as practicable after the date of any payment of Taxes or
Other Taxes by the Borrower or any other Loan Party to the relevant Governmental
Authority, the Borrower or such other Loan Party will deliver to the Paying
Agent, at its address referred to in Section 9.01 to the extent
46
legally available, the original or a certified copy of a receipt issued by such
Governmental Authority evidencing payment thereof.
(e) Each Lender (or Transferee) that is organized under the laws of a
jurisdiction other than the United States, any State thereof or the District of
Columbia (a "Non-U.S. Lender") shall deliver to the Borrower and the Paying
Agent two copies of either United States Internal Revenue Service Form 1001 or
Form 4224, or, in the case of a Non-U.S. Lender claiming exemption from U.S.
Federal withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of "portfolio interest", a Form W-8, or any subsequent versions
thereof or successors thereto (and, if such Non-U.S. Lender delivers a Form W-8,
a certificate representing that such Non-U.S. Lender is not a bank for purposes
of Section 881(c) of the Code, is not a 10-percent shareholder (within the
meaning of Section 871(h)(3)(B) of the Code) of the Borrower and is not a
controlled foreign corporation related to the Borrower (within the meaning of
Section 864(d)(4) of the Code)), properly completed and duly executed by such
Non-U.S. Lender claiming complete exemption from, or reduced rate of, U.S.
Federal withholding tax on payments by the Borrower under this Agreement and the
other Loan Documents. Such forms shall be delivered by each Non-U.S. Lender on
or before the date it becomes a party to this Agreement (or, in the case of a
Transferee that is a participation holder, on or before the date such
participation holder becomes a Transferee hereunder) and on or before the date,
if any, such Non-U.S. Lender changes its applicable lending office by
designating a different lending office (a "New Lending Office"). In addition,
each Non-U.S. Lender shall deliver such forms promptly upon the obsolescence or
invalidity of any form previously delivered by such Non-U.S. Lender.
Notwithstanding any other provision of this Section 2.20(e), a Non-U.S. Lender
shall not be required to deliver any form pursuant to this Section 2.20(e) that
such Non-U.S. Lender is not legally able to deliver.
(f) The Borrower shall not be required to indemnify any Non-U.S.
Lender or to pay any additional amounts to any Non-U.S. Lender, in respect of
United States Federal withholding tax pursuant to paragraph (a) or (c) above to
the extent that (i) the obligation to withhold amounts with respect to United
States Federal withholding tax existed on the date such Non-U.S. Lender became a
party to this Agreement (or, in the case of a Transferee that is a participation
holder, on the date such participation holder became a Transferee hereunder) or,
with respect to payments to a New Lending Office, the date such Non-U.S. Lender
designated such New Lending Office with respect to a Loan; provided, however,
that this paragraph (f) shall not apply (x) to any Transferee or New Lending
Office that becomes a Transferee or New Lending Office as a result of an
assignment, participation, transfer or designation made at the request of the
Borrower and (y) to the extent the indemnity payment or additional amounts any
Transferee, or any Lender (or Transferee), acting through a New Lending Office,
would be entitled to receive (without regard to this paragraph (f)) do not
exceed the indemnity payment or additional amounts that the person making the
assignment, participation or transfer to such Transferee, or Lender (or
Transferee) making the designation of such New Lending Office, would have been
entitled to receive in the absence of such assignment, participation, transfer
or designation or (ii) the obligation to pay such additional amounts would not
have arisen but for a failure by such Non-U.S. Lender to comply with the
provisions of paragraph (e) above.
(g) Nothing contained in this Section 2.20 shall require any Lender
or the Issuing Bank (or any Transferee) or the Paying Agent to make available
any of its tax returns (or any other information that it deems to be
confidential or proprietary).
47
SECTION 2.21. Assignment of Commitments Under Certain Circumstances;
Duty to Mitigate. (a) In the event (i) any Lender or the Issuing Bank delivers
a certificate requesting compensation pursuant to Section 2.14, (ii) any Lender
or the Issuing Bank delivers a notice described in Section 2.15 or (iii) the
Borrower is required to pay any additional amount to any Lender or the Issuing
Bank or any Governmental Authority on account of any Lender or the Issuing Bank
pursuant to Section 2.20, the Borrower may, at its sole expense and effort
(including with respect to the processing and recordation fee referred to in
Section 9.04(b)), upon notice to such Lender or the Issuing Bank and the Paying
Agent, require such Lender or the Issuing Bank to transfer and assign, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all of its interests, rights and obligations under this Agreement
to an assignee that shall assume such assigned obligations (which assignee may
be another Lender, if a Lender accepts such assignment); provided that (x) such
assignment shall not conflict with any law, rule or regulation or order of any
court or other Governmental Authority having jurisdiction, (y) the Borrower
shall have received the prior written consent of the Paying Agent (and, if a
Revolving Credit Commitment is being assigned, of the Issuing Bank and the
Swingline Lender), which consent shall not unreasonably be withheld, and (z) the
Borrower or such assignee shall have paid to the affected Lender or the Issuing
Bank in immediately available funds an amount equal to the sum of the principal
of and interest accrued to the date of such payment on the outstanding Loans or
L/C Disbursements of such Lender or the Issuing Bank, respectively, plus all
Fees and other amounts accrued for the account of such Lender or the Issuing
Bank hereunder (including any amounts under Section 2.14 and Section 2.16);
provided further that, if prior to any such transfer and assignment the
circumstances or event that resulted in such Lender's or the Issuing Bank's
claim for compensation under Section 2.14 or notice under Section 2.15 or the
amounts paid pursuant to Section 2.20, as the case may be, cease to cause such
Lender or the Issuing Bank to suffer increased costs or reductions in amounts
received or receivable or reduction in return on capital, or cease to have the
consequences specified in Section 2.15, or cease to result in amounts being
payable under Section 2.20, as the case may be (including as a result of any
action taken by such Lender or the Issuing Bank pursuant to paragraph (b)
below), or if such Lender or the Issuing Bank shall waive its right to claim
further compensation under Section 2.14 in respect of such circumstances or
event or shall withdraw its notice under Section 2.15 or shall waive its right
to further payments under Section 2.20 in respect of such circumstances or
event, as the case may be, then such Lender or the Issuing Bank shall not
thereafter be required to make any such transfer and assignment hereunder.
(b) If (i) any Lender or the Issuing Bank shall request compensation
under Section 2.14, (ii) any Lender or the Issuing Bank delivers a notice
described in Section 2.15 or (iii) the Borrower is required to pay any
additional amount to any Lender or the Issuing Bank or any Governmental
Authority on account of any Lender or the Issuing Bank, pursuant to Section
2.20, then such Lender or the Issuing Bank shall use reasonable efforts (which
shall not require such Lender or the Issuing Bank to incur an unreimbursed loss
or unreimbursed cost or expense or otherwise take any action inconsistent with
its internal policies or legal or regulatory restrictions or suffer any
disadvantage or burden deemed by it to be significant) (x) to file any
certificate or document reasonably requested in writing by the Borrower or (y)
to assign its rights and delegate and transfer its obligations hereunder to
another of its offices, branches or affiliates, if such filing or assignment
would reduce its claims for compensation under Section 2.14 or enable it to
withdraw its notice pursuant to Section 2.15 or would reduce amounts payable
pursuant to Section 2.20, as the case may be, in the future. The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender or
the Issuing Bank in connection with any such filing or assignment, delegation
and transfer.
48
SECTION 2.22. Swingline Loans. (a) Swingline Commitment. Subject to
the terms and conditions and relying upon the representations and warranties
herein set forth, the Swingline Lender agrees to make loans to the Borrower at
any time and from time to time on and after the Closing Date and until the
earlier of the Revolving Credit Maturity Date and the termination of the
Revolving Credit Commitments in accordance with the terms hereof, in an
aggregate principal amount at any time outstanding that will not result in (i)
the aggregate principal amount of all Swingline Loans exceeding $50,000,000 in
the aggregate or (ii) the Aggregate Revolving Credit Exposure, after giving
effect to any Swingline Loan, exceeding the Total Revolving Credit Commitment.
Each Swingline Loan shall be in a principal amount that is an integral multiple
of $250,000. The Swingline Commitment may be terminated or reduced from time to
time as provided herein. Within the foregoing limits, the Borrower may borrow,
pay or prepay and reborrow Swingline Loans hereunder, subject to the terms,
conditions and limitations set forth herein.
(b) Swingline Loans. The Borrower shall notify the Paying Agent by
telecopy, or by telephone (confirmed by telecopy), not later than 11:00 a.m.,
New York City time, on the day of a proposed Swingline Loan. Such notice shall
be delivered on a Business Day, shall be irrevocable and shall refer to this
Agreement and shall specify the requested date (which shall be a Business Day)
and amount of such Swingline Loan. The Paying Agent will promptly advise the
Swingline Lender of any notice received from the Borrower pursuant to this
paragraph (b). The Swingline Lender shall make each Swingline Loan available to
the Borrower by means of a credit to the general deposit account of the Borrower
with the Swingline Lender by 3:00 p.m. on the date such Swingline Loan is so
requested.
(c) Prepayment. The Borrower shall have the right at any time and
from time to time to prepay any Swingline Loan, in whole or in part, upon giving
written or telecopy notice (or telephone notice promptly confirmed by written,
or telecopy notice) to the Swingline Lender and to the Paying Agent before 12:00
(noon), New York City time on the date of prepayment at the Swingline Lender's
address for notices specified on Schedule 2.01. All principal payments of
Swingline Loans shall be accompanied by accrued interest on the principal amount
being repaid to the date of payment.
(d) Interest. Each Swingline Loan shall be a Base Rate Loan and,
subject to the provisions of Section 2.07, shall bear interest as provided in
Section 2.06(a).
(e) Participations. The Swingline Lender may by written notice given
to the Paying Agent not later than 10:00 a.m., New York City time, on any
Business Day require the Revolving Credit Lenders to acquire participations on
such Business Day in all or a portion of the Swingline Loans outstanding. Such
notice shall specify the aggregate amount of Swingline Loans in which Revolving
Credit Lenders will participate. The Paying Agent will, promptly upon receipt
of such notice, give notice to each Revolving Credit Lender, specifying in such
notice such Lender's Pro Rata Percentage of such Swingline Loan or Loans. In
furtherance of the foregoing, each Revolving Credit Lender hereby absolutely and
unconditionally agrees, upon receipt of notice as provided above, to pay to the
Paying Agent, for the account of the Swingline Lender, such Revolving Credit
Lender's Pro Rata Percentage of such Swingline Loan or Loans. Each Lender
acknowledges and agrees that its obligation to acquire participations in
Swingline Loans pursuant to this paragraph is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including the occurrence
and continuance of a Default or an Event of Default, and that each such payment
shall be made without any offset, abatement, withholding or reduction
whatsoever. Each Lender shall comply with its
49
obligation under this paragraph by wire transfer of immediately available funds,
in the same manner as provided in Section 2.02(c) with respect to Loans made by
such Lender (and Section 2.02(c) shall apply, mutatis mutandis, to the payment
obligations of the Lenders) and the Paying Agent shall promptly pay to the
Swingline Lender the amounts so received by it from the Lenders. The Paying
Agent shall notify the Borrower of any participations in any Swingline Loan
acquired pursuant to this paragraph and thereafter payments in respect of such
Swingline Loan shall be made to the Paying Agent and not to the Swingline
Lender. Any amounts received by the Swingline Lender from the Borrower (or
other party on behalf of the Borrower) in respect of a Swingline Loan after
receipt by the Swingline Lender of the proceeds of a sale of participations
therein shall be promptly remitted to the Paying Agent; any such amounts
received by the Paying Agent shall be promptly remitted by the Paying Agent to
the Lenders that shall have made their payments pursuant to this paragraph and
to the Swingline Lender, as their interests may appear. The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not relieve
the Borrower (or other party liable for obligations of the Borrower) of any
default in the payment thereof.
SECTION 2.23. Letters of Credit. (a) General. The Borrower may
request the issuance of a Letter of Credit for its own account or the account of
any Subsidiary (including PPM before it becomes a Subsidiary if it shall have
become a Guarantor) (provided that the Borrower shall be a co-applicant and co-
obligor with respect to each Letter of Credit issued for the account of or in
favor of any such Subsidiary), in a form reasonably acceptable to the Paying
Agent and the Issuing Bank, at any time and from time to time while the
Revolving Credit Commitments remain in effect. This Section shall not be
construed to impose an obligation upon the Issuing Bank to issue any Letter of
Credit that is inconsistent with the terms and conditions of this Agreement.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. In order to request the issuance of a Letter of Credit (or to
amend, renew or extend an existing Letter of Credit), the Borrower shall hand
deliver or telecopy to the Issuing Bank and the Paying Agent (reasonably in
advance of the requested date of issuance, amendment, renewal or extension) a
notice requesting the issuance of a Letter of Credit, or identifying the Letter
of Credit to be amended, renewed or extended, the date of issuance, amendment,
renewal or extension, the date on which such Letter of Credit is to expire
(which shall comply with paragraph (c) below), the amount of such Letter of
Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare such Letter of Credit. A Letter of
Credit shall be issued, amended, renewed or extended only if, and upon issuance,
amendment, renewal or extension of each Letter of Credit the Borrower shall be
deemed to represent and warrant that, after giving effect to such issuance,
amendment, renewal or extension (A) the L/C Exposure shall not exceed
$250,000,000 and (B) the Aggregate Revolving Credit Exposure shall not exceed
the Total Revolving Credit Commitment.
(c) Expiration Date. Each Letter of Credit shall expire at the close
of business on the earlier of the date one year after the date of the issuance,
renewal or extension, as applicable, of such Letter of Credit and the date that
is five Business Days prior to the Revolving Credit Maturity Date, unless such
Letter of Credit expires by its terms on an earlier date. Each Letter of Credit
may, upon the request of the Borrower, include a provision whereby such Letter
of Credit shall be renewed automatically for additional consecutive periods of
12 months or less (but not beyond the date that is five Business Days prior to
the Revolving Credit Maturity Date) unless the Issuing Bank notifies the
beneficiary thereof at least 30 days prior to the then-applicable expiration
date that such Letter of Credit will not be renewed.
50
(d) Participations. By the issuance of a Letter of Credit and without
any further action on the part of the Issuing Bank or the Lenders, the Issuing
Bank hereby grants to each Revolving Credit Lender, and each such Lender hereby
acquires from the applicable Issuing Bank, a participation in such Letter of
Credit equal to such Lender's Pro Rata Percentage of the aggregate amount
available to be drawn under such Letter of Credit, effective upon the issuance
of such Letter of Credit. In consideration and in furtherance of the foregoing,
each Revolving Credit Lender hereby absolutely and unconditionally agrees to pay
to the Paying Agent, for the account of the Issuing Bank, such Lender's Pro Rata
Percentage of each L/C Disbursement made by the Issuing Bank and not reimbursed
by the Borrower (or, if applicable, another party pursuant to its obligations
under any other Loan Document) forthwith on the date due as provided in Section
2.02(f). Each Revolving Credit Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect of
Letters of Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and continuance of a Default
or an Event of Default, and that each such payment shall be made without any
offset, abatement, withholding or reduction whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any L/C
Disbursement in respect of a Letter of Credit, the Borrower shall pay to the
Paying Agent an amount equal to such L/C Disbursement not later than 2:00 p.m.
on the day that the Borrower shall have received notice from the Issuing Bank of
such L/C Disbursement, or, if the Borrower shall have received such notice later
than 10:00 a.m., New York City time, on any Business Day, not later than 10:00
a.m., New York City time, on the immediately following Business Day.
(f) Obligations Absolute. The Borrower's obligations to reimburse L/C
Disbursements as provided in paragraph (e) above shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement, under any and all circumstances whatsoever,
and irrespective of:
(i) any lack of validity or enforceability of any Letter of
Credit or any Loan Document, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure from
all or any of the provisions of any Letter of Credit or any Loan
Document;
(iii) the existence of any claim, setoff, defense or other right
that the Borrower, any other party guaranteeing, or otherwise
obligated with, the Borrower, any Subsidiary or other Affiliate
thereof or any other person may at any time have against the
beneficiary under any Letter of Credit, the Issuing Bank, the Paying
Agent or any Lender or any other person, whether in connection with
this Agreement, any other Loan Document or any other related or
unrelated agreement or transaction ;
(iv) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any
respect;
(v) payment by the Issuing Bank under a Letter of Credit
against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit; and
51
(vi) any other act or omission to act or delay of any kind of
the Issuing Bank, the Lenders, the Paying Agent or any other person or
any other event or circumstance whatsoever, whether or not similar to
any of the foregoing, that might, but for the provisions of this
Section, constitute a legal or equitable discharge of the Borrower's
obligations hereunder.
Without limiting the generality of the foregoing, it is expressly
understood and agreed that the absolute and unconditional obligation of the
Borrower hereunder to reimburse L/C Disbursements will not be excused by the
gross negligence or wilful misconduct of the Issuing Bank. However, the
foregoing shall not be construed to excuse the Issuing Bank from liability to
the Borrower to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the Borrower to the
extent permitted by applicable law) suffered by the Borrower that are caused by
the Issuing Bank's gross negligence or wilful misconduct in determining whether
drafts and other documents presented under a Letter of Credit comply with the
terms thereof; it is understood that the Issuing Bank may accept documents that
appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary and, in
making any payment under any Letter of Credit (i) the Issuing Bank's exclusive
reliance on the documents presented to it under such Letter of Credit as to any
and all matters set forth therein, including reliance on the amount of any draft
presented under such Letter of Credit, whether or not the amount due to the
beneficiary thereunder equals the amount of such draft and whether or not any
document presented pursuant to such Letter of Credit proves to be insufficient
in any respect, if such document on its face appears to be in order, and whether
or not any other statement or any other document presented pursuant to such
Letter of Credit proves to be forged or invalid or any statement therein proves
to be inaccurate or untrue in any respect whatsoever and (ii) any noncompliance
in any immaterial respect of the documents presented under such Letter of Credit
with the terms thereof shall, in each case, be deemed not to constitute wilful
misconduct or gross negligence of the Issuing Bank.
(g) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall as promptly
as possible give telephonic notification, confirmed by telecopy, to the Paying
Agent and the Borrower of such demand for payment and whether the Issuing Bank
has made or will make an L/C Disbursement thereunder; provided that any failure
to give or delay in giving such notice shall not relieve the Borrower of its
obligation to reimburse the Issuing Bank and the Revolving Credit Lenders with
respect to any such L/C Disbursement in accordance with paragraph (e) above.
The Paying Agent shall promptly give each Revolving Credit Lender notice
thereof.
(h) Interim Interest. If the Issuing Bank shall make any L/C
Disbursement in respect of a Letter of Credit, then, unless the Borrower shall
reimburse such L/C Disbursement in full on such date, the unpaid amount thereof
shall bear interest for the account of the Issuing Bank, for each day from and
including the date of such L/C Disbursement, to but excluding the earlier of the
date of payment by the Borrower or the date on which interest shall commence to
accrue thereon as provided in Section 2.02(f), at the rate per annum that would
apply to such amount if such amount were a Base Rate Loan.
52
(i) Resignation or Removal of the Issuing Bank. The Issuing Bank may
resign at any time by giving 180 days' prior written notice to the Paying Agent,
the Lenders and the Borrower, and may be removed at any time by the Borrower by
notice to the Issuing Bank, the Paying Agent and the Lenders. Upon the
acceptance of any appointment as the Issuing Bank hereunder by a Lender that
shall agree to serve as successor Issuing Bank, such successor shall succeed to
and become vested with all the interests, rights and obligations of the retiring
Issuing Bank and the retiring Issuing Bank shall be discharged from its
obligations to issue additional Letters of Credit hereunder. At the time such
removal or resignation shall become effective, the Borrower shall pay all
accrued and unpaid fees pursuant to Section 2.05(b)(ii). The acceptance of any
appointment as the Issuing Bank hereunder by a successor Lender shall be
evidenced by an agreement entered into by such successor, in a form satisfactory
to the Borrower and the Paying Agent, and, from and after the effective date of
such agreement, (i) such successor Lender shall have all the rights and
obligations of the previous Issuing Bank under this Agreement and the other Loan
Documents and (ii) references herein and in the other Loan Documents to the term
"Issuing Bank" shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the resignation or removal of the Issuing Bank
hereunder, the retiring Issuing Bank shall remain a party hereto and shall
continue to have all the rights and obligations of an Issuing Bank under this
Agreement and the other Loan Documents with respect to Letters of Credit issued
by it prior to such resignation or removal, but shall not be required to issue
additional Letters of Credit.
(j) Cash Collateralization. If (i) any Event of Default shall occur
and be continuing or (ii) to the extent and so long as the L/C Exposure exceeds
the Total Revolving Credit Commitments, the Borrower shall, on the Business Day
it receives notice from the Paying Agent or the Required Lenders (or, if the
maturity of the Loans has been accelerated, Revolving Credit Lenders holding
participations in outstanding Letters of Credit representing greater than 50% of
the aggregate undrawn amount of all outstanding Letters of Credit) thereof and
of the amount to be deposited, deposit in an account with the Collateral Agent,
for the benefit of the Revolving Credit Lenders, an amount in cash equal to the
L/C Exposure (or in the case of clause (ii) of this sentence, the excess of the
L/C Exposure over the Total Revolving Credit Commitment) as of such date. Such
deposit shall be held by the Collateral Agent as collateral for the payment and
performance of the Obligations. The Collateral Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal, over such
account. Other than any interest earned on the investment of such deposits in
Permitted Investments, which investments shall be made as selected by the
Collateral Agent, such deposits shall not bear interest. Interest or profits, if
any, on such investments shall accumulate in such account. Moneys in such
account shall (i) automatically be applied by the Paying Agent to reimburse the
Issuing Bank for L/C Disbursements for which it has not been reimbursed, (ii) be
held for the satisfaction of the reimbursement obligations of the Borrower for
the L/C Exposure at such time and (iii) if the maturity of the Loans has been
accelerated (but subject to the consent of Revolving Credit Lenders holding
participations in outstanding Letters of Credit representing greater than 50% of
the aggregate undrawn amount of all outstanding Letters of Credit), be applied
to satisfy the Obligations. If the Borrower is required to provide an amount of
cash collateral pursuant to clause (i) of the first sentence of this paragraph
(j), such amount (to the extent not applied as aforesaid) shall be returned to
the Borrower within three Business Days after all Events of Default have been
cured or waived. If the Borrower is required to provide an amount of cash
collateral pursuant to clause (ii) of the first sentence of this paragraph (j),
such amount shall be returned to the Borrower from time to time to the extent
that the amount of such cash collateral held by the Collateral Agent exceeds the
excess, if any, of the
53
L/C Exposure over the Total Revolving Credit Commitment so long as no Event of
Default shall have occurred and be continuing.
ARTICLE III
Representations and Warranties
The Borrower represents and warrants to the Paying Agent, the
Collateral Agent, the Issuing Bank and each of the Lenders that:
SECTION 3.01. Organization. Each of the Borrower and the
Subsidiaries is duly incorporated or organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation or organization, as
the case may be, and has all organizational powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted, except, in each case, where the failure to satisfy
any of the above could not be reasonably expected to result in a Material
Adverse Effect.
SECTION 3.02. Corporate and Governmental Authorization; No
Contravention. The execution and delivery by the Borrower of this Agreement and
by the Borrower and each other Loan Party of the other Loan Documents to which
it is or will be a party and the performance by each Loan Party of its
obligations under each Loan Document to which it is or will be a party are
within such Loan Party's organizational powers and have been duly authorized by
all necessary organizational action. This Agreement has been duly executed and
delivered by the Borrower, and each other Loan Document has (as of the date of
execution thereof by the relevant Loan Party) been duly executed and delivered
by the Loan Parties party thereto. No registration, recordation or filing with
or consent, approval or other action by any regulatory or other governmental
body, agency or official is required in connection with the execution or
delivery of this Agreement and the other Loan Documents by the Borrower and the
other Loan Parties party thereto, except where the failure to register, record
or file could not reasonably be expected to result in a Material Adverse Effect,
or is necessary for the validity or enforceability hereof or thereof, and the
Transactions and the execution, delivery, performance and enforcement of this
Agreement and the other Loan Documents do not and will not contravene, or
constitute a default under, any provision of applicable law or regulation, or of
the certificate of incorporation or by-laws of the Borrower or any of the
Subsidiaries, except where such contravention or default could not be reasonably
expected to result in a Material Adverse Effect, or of any agreement, judgment,
injunction, order, decree or other instrument binding upon the Borrower or
result in the creation or imposition of any material Lien upon any asset of the
Borrower or any of the Subsidiaries (other than any Lien created under the Loan
Documents).
SECTION 3.03. Enforceability. This Agreement constitutes (and, upon
execution and delivery thereof as contemplated thereby, the other Loan Documents
will constitute) a valid and binding agreement of the Borrower and each Loan
Party thereto, in each case enforceable in accordance with its terms, except as
the foregoing may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium, or other similar laws affecting the rights of
creditors generally and by general principles of equity, including those
limiting the availability of specific performance, injunctive relief, and other
equitable remedies and those providing for defenses based on fairness and
reasonableness, regardless of whether considered in a proceeding in equity or at
law.
54
SECTION 3.04. Financial Statements. (a) The Borrower has heretofore
furnished to the Lenders the consolidated balance sheet and statements of income
and retained earnings and cash flows of (i) the ▇▇▇▇▇ Group and (ii) TPC and its
subsidiaries, in each case as of and for the fiscal year most recently ended, as
applicable. Such financial statements present fairly the financial condition
and results of operations and cash flows of the ▇▇▇▇▇ Subsidiaries and TPC and
its subsidiaries as of such dates and for such periods. The Borrower has also
heretofore delivered to the Lenders an unaudited balance sheet for PPM. The
balance sheets (and, in the case of the ▇▇▇▇▇ Group and TPC, the notes thereto)
disclose all material liabilities, direct or contingent, of the ▇▇▇▇▇ Group, TPC
and its subsidiaries and PPM as of the dates thereof. Such financial statements
were prepared in accordance with GAAP applied on a consistent basis (except for
the absence of footnote disclosure).
(b) The Borrower has heretofore delivered to the Lenders its
unaudited pro forma consolidating balance sheet as of December 31, 1996 (the
"Pro Forma Financial Statements"), prepared giving effect to the Transactions
(including the transfer of the ▇▇▇▇▇ Subsidiaries) as if they had occurred on
such date and consolidating income statement for the year ended December 31,
1996, assuming the Transactions (including the transfer of the ▇▇▇▇▇
Subsidiaries) had actually occurred on January 1, 1996. Such pro forma balance
sheet and income statement have been prepared in good faith by the Borrower
based on reasonable assumptions, are based on the best information available to
the Borrower as of the date of delivery thereof, accurately reflect all material
adjustments required to be made to give effect to the Transactions (including
the transfer of the ▇▇▇▇▇ Subsidiaries) and present fairly on a pro forma basis
the estimated consolidated financial position of the Borrower as of December 31,
1996, assuming that the Transactions (including the transfer of the ▇▇▇▇▇
Subsidiaries) had actually occurred at December 31, 1996, and present fairly on
a pro forma basis the estimated consolidated results of operations of the
Borrower for the year ended December 31, 1996, assuming that the Transactions
(including the transfer of the ▇▇▇▇▇ Subsidiaries) had actually occurred on
January 1, 1996.
SECTION 3.05. No Material Adverse Change. (a) Prior to the
Separation Date, there has been no material adverse change in the business,
assets, operations, condition, financial or otherwise, or material agreements of
(i) the Borrower, since December 31, 1996, or (ii) the ▇▇▇▇▇ Subsidiaries, taken
as a whole, from the position reflected in the Pro Forma Financial Statements.
(b) On and after the Separation Date, there has been no material
adverse change in the business, assets, operations, condition, financial or
otherwise, or material agreements of the Borrower and the Subsidiaries, taken as
a whole, from the position reflected in the Pro Forma Financial Statements.
SECTION 3.06. Title to Properties; Possession Under Leases. (a)
Each of the Borrower and the Subsidiaries has good and marketable title to, or
valid leasehold interests in, all its material properties and assets, except for
defects that could not reasonably be expected to result in a Material Adverse
Effect. All such material properties and assets are free and clear of Liens,
other than Liens permitted by Section 6.02.
(b) Except as set forth in Schedule 3.06(b), each of the Borrower and
the Subsidiaries has complied with all obligations under all material leases to
which it is a party and all such leases are in full force and effect, except
where such noncompliance or failure to be in full force and effect, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse
55
Effect. Each of the Borrower and the Subsidiaries enjoys peaceful and
undisturbed possession under all such leases, other than Liens permitted by
Section 6.02.
SECTION 3.07. Subsidiaries. (a) Schedule 3.07(a) sets forth as of the
Closing Date a list of all Subsidiaries and the percentage ownership interest of
the Borrower therein. The shares of capital stock or other ownership interests
so indicated in Schedule 3.07(a) are fully paid and non-assessable and are owned
by the Borrower, directly or indirectly, free and clear of all Liens, except for
Liens permitted by Section 6.02.
(b) Schedule 1.01(c) sets forth as of the Closing Date a list of all
▇▇▇▇▇ Subsidiaries and the percentage ownership interest of the Borrower
therein, after giving effect to the transfer of the ▇▇▇▇▇ Subsidiaries to the
Borrower. On and after the Separation Date, the shares of capital stock or
other ownership interests so indicated in Schedule 1.01(c) of the ▇▇▇▇▇
Subsidiaries will be fully paid and non-assessable and will be owned by the
Borrower, directly or indirectly, free and clear of all Liens, except for Liens
permitted by Section 6.02.
SECTION 3.08. Litigation; Compliance with Laws; Reserves. (a) Except
as set forth in Schedule 3.08, there are not any actions, suits or proceedings
at law or in equity or by or before any Governmental Authority now pending or,
to the knowledge of the Borrower, threatened against or affecting the Borrower
or any Subsidiary (after giving effect to the transfer of the ▇▇▇▇▇ Subsidiaries
to the Borrower) or any business, property or rights of any such person (i) that
expressly involve any Loan Document or the Transactions or (ii) as to which
there is a reasonable possibility of an adverse determination and that, in
either case could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect.
(b) The Borrower and the Subsidiaries (after giving effect to the
transfer of the ▇▇▇▇▇ Subsidiaries to the Borrower) maintain adequate reserves
for (i) future costs associated with any lung disease claim alleging
pneumococcosis or silicosis or arising out of exposure or alleged exposure to
coal dust or the coal mining environment and (ii) future costs associated with
reclamation costs of disturbed acreage, removal of facilities and other closing
costs in connection with its mining operations. Such reserves are not
materially less than is required by GAAP.
(c) None of the Borrower or any of the Subsidiaries (after giving
effect to the transfer of the ▇▇▇▇▇ Subsidiaries to the Borrower and taking into
account reserves reflected in the Pro Forma Financial Statements or the
financial statements delivered by the Borrower and its Subsidiaries pursuant to
Section 5.04) or any of its respective material properties or assets is in
violation of, nor will the continued operation of its material properties and
assets as currently conducted violate, any law, rule or regulation (including
any zoning, building, Environmental Law, ordinance, code or approval or any
building permits), or is in default with respect to any judgment, writ,
injunction, decree or order of any Governmental Authority, where such violation
or default could reasonably be expected to result in a Material Adverse Effect.
SECTION 3.09. Agreements. (a) Neither the Borrower nor any of the
Subsidiaries is a party to any agreement or instrument or subject to any
corporate or other organizational restriction that has resulted or could
reasonably be expected to result in a Material Adverse Effect.
56
(b) Neither the Borrower nor any of the Subsidiaries (after giving
effect to the transfer of the ▇▇▇▇▇ Subsidiaries to the Borrower) is in default
in any manner under any provision of any indenture or other agreement or
instrument evidencing Indebtedness, or any other material agreement or
instrument to which it is a party or by which it or any of its properties or
assets are or may be bound, where such default could reasonably be expected to
result in a Material Adverse Effect.
SECTION 3.10. Federal Reserve Regulations. No part of the proceeds
of any Loan or any Letter of Credit will be used, whether directly or
indirectly, and whether immediately, incidentally or ultimately, for any purpose
that entails a violation of, or that is inconsistent with, the provisions of the
Regulations of the Board, including Regulation G, T, U or X.
SECTION 3.11. Investment Company Act; Public Utility Holding Company
Act. Neither the Borrower nor any Subsidiary (after giving effect to the
transfer of the ▇▇▇▇▇ Subsidiaries to the Borrower) is (a) an "investment
company" as defined in, or subject to regulation under, the Investment Company
Act of 1940 or (b) a "holding company" as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935.
SECTION 3.12. Use of Proceeds. The Borrower will use the proceeds of
the Loans and will request the issuance of Letters of Credit only for the
purposes specified in the preamble to this Agreement.
SECTION 3.13. Tax Returns. Each of the Borrower and the Subsidiaries,
and any other affiliate with joint and several liability for taxes (after giving
effect to the transfer of the ▇▇▇▇▇ Subsidiaries to the Borrower), has filed or
caused to be filed all Federal, state, local and other material tax returns or
materials required to have been filed by it and has paid or caused to be paid
all taxes due and payable by it pursuant thereto and all assessments received by
it, except where the failure to do any of the foregoing could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 3.14. No Material Misstatements. None of (a) the Confidential
Information Memorandum or (b) any other information, report, financial statement
(including forecasts and projections), exhibit or schedule furnished by or on
behalf of the Borrower to the Paying Agent or any Lender in connection with the
negotiation of any Loan Document or included therein or delivered pursuant
thereto, when taken as a whole, contained, contains or will contain any material
misstatement of fact or omitted, omits or will omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were, are or will be made, not misleading; provided that to the
extent any such information, report, financial statement, exhibit or schedule
was based upon or constitutes a forecast or projection, the Borrower represents
only that it acted in good faith and utilized reasonable assumptions and due
care in the preparation of such information, report, financial statement,
exhibit or schedule.
SECTION 3.15. Employee Benefit Plans. Each of the Borrower and its
ERISA Affiliates is in compliance in all material respects with the applicable
provisions of ERISA and the Code and the regulations and published
interpretations thereunder, except where the failure to comply could not be
reasonably expected to result in a Material Adverse Effect. None of the
Borrower or any ERISA Affiliate has (i) sought a waiver of the minimum funding
standard under Section 412 of the Code in respect of any Plan, (ii) failed to
make any contribution or payment to any Plan or Multiemployer Plan or made any
amendment to any Plan which has resulted or could result in the imposition of a
Lien or
57
the posting of a bond or other security under ERISA or the Code or (iii)
incurred any material liability under Title IV of ERISA other than a liability
to the PBGC for premiums under Section 4007 of ERISA.
SECTION 3.16. Environmental Matters. Except as set forth in Schedule
3.16:
(a) The properties (the "Properties") owned or operated by the
Borrower and the Subsidiaries (after giving effect to the transfer of the ▇▇▇▇▇
Subsidiaries to the Borrower) do not contain any Hazardous Materials in amounts
or concentrations which (i) constitute a violation of, (ii) require Remedial
Action under, or (iii) could give rise to liability under, Environmental Laws,
which violations, Remedial Actions and liabilities, in the aggregate, could
result in a Material Adverse Effect;
(b) The Properties and all operations of the Borrower and the
Subsidiaries (after giving effect to the transfer of the ▇▇▇▇▇ Subsidiaries to
the Borrower) are in compliance with all Environmental Laws and all necessary
Environmental Permits have been obtained and are in effect, except to the extent
that such non-compliance or failure to obtain any necessary permits, in the
aggregate, could not result in a Material Adverse Effect;
(c) There have been no Releases or threatened Releases at, from, or
under the Properties or otherwise in connection with the operations of the
Borrower or the Subsidiaries (after giving effect to the transfer of the ▇▇▇▇▇
Subsidiaries to the Borrower), which Releases or threatened Releases, in the
aggregate, could result in a Material Adverse Effect;
(d) Neither the Borrower nor any of the Subsidiaries (after giving
effect to the transfer of the ▇▇▇▇▇ Subsidiaries to the Borrower) has received
any notice of an Environmental Claim in connection with the Properties or the
operations of the Borrower or such Subsidiaries or with regard to any person
whose liabilities for environmental matters the Borrower or such Subsidiaries
has retained or assumed, in whole or in part, contractually, by operation of law
or otherwise, which, in the aggregate, could result in a Material Adverse
Effect, nor do the Borrower or such Subsidiaries have reason to believe that any
such notice will be received or is being threatened; and
(e) Hazardous Materials have not been transported from the Properties,
nor have Hazardous Materials been generated, treated, stored or disposed of at,
on or under any of the Properties in a manner that could give rise to liability
under any Environmental Law, nor have the Borrower or the Subsidiaries (after
giving effect to the transfer of the ▇▇▇▇▇ Subsidiaries to the Borrower)
retained or assumed any liability, contractually, by operation of law or
otherwise, with respect to the generation, treatment, storage or disposal of
Hazardous Materials, which transportation, generation, treatment, storage or
disposal, or retained or assumed liabilities, in the aggregate, could result in
a Material Adverse Effect.
SECTION 3.17. Insurance. Schedule 3.17 sets forth a true, complete
and correct description of all material insurance maintained by the Borrower or
by the Borrower for its Subsidiaries as of the Closing Date and the Separation
Date. As of each such date, such insurance is in full force and effect and all
premiums have been duly paid. The Borrower and its Subsidiaries (after giving
effect to the transfer of the ▇▇▇▇▇ Subsidiaries to the Borrower) have (or will
have, as the case may be) insurance
58
in such amounts and covering such risks and liabilities as are in accordance
with normal industry practice.
SECTION 3.18. Security Documents. (a) The Pledge Agreement is
effective to create in favor of the Collateral Agent, for the ratable benefit of
the Secured Parties, a legal, valid and enforceable security interest in the
Collateral (as defined in the Pledge Agreement) and, when the Collateral is
delivered to the Collateral Agent, the Pledge Agreement shall constitute a duly
perfected first priority Lien on, and security interest in, all right, title and
interest of the pledgors thereunder in such Collateral, in each case prior and
superior in right to any other person.
(b) The Security Agreement is effective to create in favor of the
Collateral Agent, for the ratable benefit of the Secured Parties, a legal, valid
and enforceable security interest in the Collateral (as defined in the Security
Agreement) and, when financing statements in appropriate form are filed in the
offices specified on Schedule 6 to the Perfection Certificate, the Security
Agreement shall constitute (to the extent such security interest can be
perfected under applicable uniform commercial codes) a duly perfected Lien on,
and security interest in, all right, title and interest of the grantors
thereunder in such Collateral, in each case prior and superior in right to any
other person, other than with respect to Liens expressly permitted by Section
6.02.
(c) The Collateral Assignment is effective to create in favor of the
Collateral Agent, for the ratable benefit of the Secured Parties, a legal, valid
and enforceable security interest in the Collateral (as defined in the
Collateral Assignment) and, when the Bidco Note is delivered to the Collateral
Agent and financing statements in appropriate form are filed in appropriate
filing offices, the Collateral Assignment shall constitute (to the extent such
security interest can be perfected by filing under applicable uniform commercial
codes) a duly perfected Lien on, and security interest in, all right, title and
interest of the Borrower in such Collateral, in each case prior and superior in
right to any other person, other than with respect to Liens expressly permitted
by Section 6.02.
SECTION 3.19. Location of Real Property and Leased Premises. (a)
Schedule 3.19(a) lists completely and correctly as of the Closing Date all
material real property owned by the Borrower and the Subsidiaries (after giving
effect to the transfer of the ▇▇▇▇▇ Subsidiaries to the Borrower) and the
addresses thereof. As of the Closing Date, the Borrower and the Subsidiaries
own in fee all the real property set forth on Schedule 3.19(a) not designated
therein as "▇▇▇▇▇ Owned Property". As of the Separation Date, the Borrower and
the Subsidiaries own in fee all the real property designated as "▇▇▇▇▇ Owned
Property" on Schedule 3.19(a).
(b) Schedule 3.19(b) lists completely and correctly as of the Closing
Date all material real property leased by the Borrower and the Subsidiaries
(after giving effect to the transfer of the ▇▇▇▇▇ Subsidiaries to the Borrower)
and the addresses thereof. As of the Closing Date, the Borrower and the
Subsidiaries have valid leases in all the real property set forth on Schedule
3.19(b) not designated therein as "▇▇▇▇▇ Leased Property". As of the Separation
Date, the Borrower and the Subsidiaries have valid leases in all real property
designated as "▇▇▇▇▇ Leased Property" on Schedule 3.19(b).
SECTION 3.20. Labor Matters. As of the Closing Date, there are no
strikes, lockouts or slowdowns against the Borrower or any Subsidiary (after
giving effect to the transfer of the ▇▇▇▇▇ Subsidiaries to the Borrower)
pending or, to the knowledge of the Borrower, threatened, except where any such
strike, lockout or slowdown could not reasonably be expected to result in a
Material Adverse
59
Effect. The hours worked by and payments made to employees of the Borrower and
such Subsidiaries have not been in material violation of the Fair Labor
Standards Act or any other applicable Federal, state, local or foreign law
dealing with such matters. All payments due from the Borrower or any such
Subsidiary, or for which any claim may be made against the Borrower or any such
Subsidiary, on account of wages and employee health and welfare insurance and
other benefits, have been paid or accrued as a liability on the books of the
Borrower or such Subsidiary. The consummation of the Transactions will not give
rise to any right of termination or right of renegotiation on the part of any
union under any collective bargaining agreement to which the Borrower or any
such Subsidiary is bound.
SECTION 3.21. Solvency. Immediately after the consummation of the
Transactions and immediately following the making of each Loan and after giving
effect to the application of the proceeds of such Loans, and taking into account
all rights of indemnity, subrogation and contribution of the Loan Parties under
applicable law and the Indemnity, Subrogation and Contribution Agreement, (a)
the fair value of the assets of each Loan Party, at a fair valuation, will
exceed its debts and liabilities, subordinated, contingent or otherwise; (b) the
present fair saleable value of the property of each Loan Party will be greater
than the amount that will be required to pay the probable liability of its debts
and other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (c) each Loan Party will be able
to pay its debts and liabilities, subordinated, contingent or otherwise, as such
debts and liabilities become absolute and matured; and (d) each Loan Party will
not have unreasonably small capital with which to conduct the business in which
it is engaged as such business is now conducted and is proposed to be conducted
following the Closing Date.
ARTICLE IV
Conditions
SECTION 4.01. Effective Date. The effectiveness of this Agreement
shall be subject to the satisfaction of each of the following conditions:
(a) The Paying Agent shall have received, on behalf of itself,
the Lenders and the Issuing Bank, a favorable written opinion of Stoel
Rives LLP, counsel for the Borrower, substantially to the effect set
forth in Exhibit K-1, and a favorable written opinion of ▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇▇, special counsel for the Borrower, substantially to the
effect set forth in Exhibit K-2.
(b) The Paying Agent shall have received (i) a copy of the
certificate or articles of incorporation, including all amendments
thereto, of each Loan Party, certified as of a recent date by the
Secretary of State of the state of its organization, and a certificate
as to the good standing of each Loan Party as of a recent date, from
such Secretary of State; (ii) a certificate of the Secretary or
Assistant Secretary of each Loan Party dated the Closing Date and
certifying (A) that attached thereto is a true and complete copy of
the by-laws of such Loan Party as in effect on the Closing Date and at
all times since a date prior to the date of the resolutions described
in clause (B) below, (B) that attached thereto is a true and complete
copy of resolutions duly adopted by the Board of Directors of such
Loan Party authorizing
60
the execution, delivery and performance of the Loan Documents to which
such person is a party and, in the case of the Borrower, the
borrowings hereunder, and that such resolutions have not been
modified, rescinded or amended and are in full force and effect, (C)
that the certificate or articles of incorporation of such Loan Party
have not been amended since the date of the last amendment thereto
shown on the certificate of good standing furnished pursuant to clause
(i) above, and (D) as to the incumbency and specimen signature of each
officer executing any Loan Document or any other document delivered in
connection herewith on behalf of such Loan Party; (iii) a certificate
of another officer as to the incumbency and specimen signature of the
Secretary or Assistant Secretary executing the certificate pursuant to
clause (ii) above.
(c) The Paying Agent shall have received a certificate, signed
by a Financial Officer of the Borrower, dated the Closing Date and
confirming that the representations and warranties set forth in
Article III hereof are true and correct in all material respects,
except to the extent such representation and warranty relates to a
later date.
(d) The Paying Agent and the Initial Lenders shall have
received all fees and other amounts due and payable on the Closing
Date in connection with the Offer.
(e) The Pledge Agreement shall have been duly executed by the
parties thereto and delivered to the Collateral Agent and shall be in
full force and effect.
(f) The Security Agreement shall have been duly executed by
the Loan Parties party thereto and shall have been delivered to the
Collateral Agent and shall be in full force and effect.
(g) The Collateral Assignment shall have been duly executed by
the parties thereto and shall have been delivered to the Collateral
Agent and shall be in full force and effect.
SECTION 4.02. Borrowings. (a) The obligation of any Lender to make a
Loan or of the Issuing Bank to issue a Letter of Credit (each, a "Credit Event")
on the occasion of any Credit Event, the proceeds of which are to be used,
directly or indirectly (i) in the case of a Loan, to finance the Offer or to pay
costs and expenses related thereto or for any other purpose set forth in Clause
3.1(a)(i) of the Bidco Facility Agreement, as in effect on the Restatement Date,
or (ii) in the case of a Letter of Credit, to replace a letter of credit issued
for the account of a ▇▇▇▇▇ Subsidiary and included as ▇▇▇▇▇ Refinanced
Indebtedness, is subject to the satisfaction of the following conditions:
(i) The Paying Agent shall have received a notice of such
Credit Event as required by Section 2.03 (or such notice shall have
been deemed given in accordance with Section 2.03) or, in the case of
the issuance of a Letter of Credit, the Issuing Bank and the Paying
Agent shall have received a notice requesting the issuance of such
Letter of Credit as required by Section 2.23(b).
(ii) At the time of and immediately after such Credit Event,
no Event of Default described in clause (g), (h) or (o) of Article VII
shall have occurred and be continuing with respect to the Borrower.
61
(iii) The representations and warranties set forth in Sections
3.01, 3.02 and 3.03, as they relate to the Borrower, shall be true and
correct in all material respects on the date of any such Credit Event
with the same effect as though made on such date.
(iv) Each of the Offer Conditions Precedent, unless waived in
writing by the Required Lenders (such waiver being conclusively
evidenced by written notice from the Paying Agent to the Borrower and,
in the case of paragraph 1 of such Offer Conditions Precedent, not to
be unreasonably withheld or delayed), shall have been satisfied.
(v) Each of the TPC Contribution, the PHI Equity Contribution
and the Newco Equity Contribution shall have been completed.
(vi) Each of the applicable conditions precedent with respect
to a borrowing to finance the Offer set forth in the PHI Credit
Agreement, the Energyco Bridge Loan Agreement and the Bidco Facility
Agreement (other than any condition in any such agreement requiring
that borrowings shall have been made under this or any other such
agreement and/or the proceeds of such borrowings have been made
available directly or indirectly to Bidco) shall have been satisfied
or waived in accordance with the terms thereof, and each of such
agreements shall be in full force and effect.
Each Credit Event hereunder of the type described in this Section 4.02(a) shall
be deemed to be a representation and warranty by the Borrower on the date of
such Credit Event as to the facts specified in clauses (ii), (iii), (iv), (v)
and (vi) of this Section 4.02(a).
(b) The obligation of any Lender or of the Issuing Bank on the
occasion of any Credit Event other than (i) a Credit Event of the type described
in Section 4.02(a) or (ii) a continuation or conversion of a Borrowing of the
type described in Section 2.10 is subject to the satisfaction of the following
conditions:
(i) The Paying Agent shall have received a notice of such
Credit Event as required by Section 2.03 (or such notice shall have
been deemed given in accordance with Section 2.03) or, in the case of
the issuance of a Letter of Credit, the Issuing Bank and the Paying
Agent shall have received a notice requesting the issuance of such
Letter of Credit as required by Section 2.23(b) or, in the case of the
Borrowing of a Swingline Loan, the Swingline Lender and the Paying
Agent shall have received a notice requesting such Swingline Loan as
required by Section 2.22(b).
(ii) The representations and warranties set forth in Article
III hereof shall be true and correct in all material respects on and
as of the date of such Credit Event with the same effect as though
made on and as of such date, except to the extent such representations
and warranties expressly relate to an earlier date.
(iii) At the time of and immediately after such Credit Event,
no Event of Default or Default shall have occurred and be continuing.
62
Each Credit Event hereunder of the type described in this Section 4.02(b) shall
be deemed to constitute a representation and warranty by the Borrower on the
date of such Credit Event as to the matters specified in paragraphs (i) and (ii)
of this Section 4.02(b).
ARTICLE V
Affirmative Covenants
The Borrower covenants and agrees with each Lender that so long as
this Agreement shall remain in effect and until the Commitments have been
terminated and the principal of and interest on each Loan, all Fees and all
other expenses or amounts then due and payable under any Loan Document shall
have been paid in full and all Letters of Credit have been canceled or have
expired and all amounts drawn thereunder have been reimbursed in full, unless
the Required Lenders shall otherwise consent in writing, the Borrower will, and
will cause each of the Subsidiaries to:
SECTION 5.01. Existence; Businesses and Properties. (a) Do or cause
to be done all things necessary to preserve, renew and keep in full force and
effect the legal existence of the Borrower and each Significant Subsidiary,
except as otherwise expressly permitted under Section 6.05.
(b) Do or cause to be done all things necessary to obtain, preserve,
renew, extend and keep in full force and effect the rights, licenses, permits,
franchises, authorizations, patents, copyrights, trademarks and trade names
material to the conduct of its business; except as contemplated by this
Agreement, maintain and operate such business in substantially the manner in
which it is presently conducted and operated; at all times maintain and preserve
all property material to the conduct of such business and keep such property in
good repair, working order and condition and from time to time make, or cause to
be made, all needful and proper repairs, renewals, additions, improvements and
replacements thereto necessary in order that the business carried on in
connection therewith may be properly conducted in all material respects at all
times, in each case, where the failure to do so could reasonably be expected to
have a Material Adverse Effect.
(c) Without limiting the generality of the foregoing, operate in all
material respects, and cause each of its Subsidiaries to operate in all material
respects, its mines in accordance with sound coal mining practices and all
applicable Federal, state and local laws, rules and regulations, including,
without limitation, laws and regulations relating to land reclamation, pollution
control and mine safety, and maintain and develop the coal reserves included in
the mining plans of the Borrower and the Subsidiaries made available to the
Lenders pursuant to Section 5.06.
SECTION 5.02. Insurance. (a) Keep its insurable properties
adequately insured at all times by financially sound and reputable insurers;
maintain such other insurance (including self insurance), to such extent and
against such risks, including fire and other risks insured against by extended
coverage, as is customary with companies in the same or similar businesses
operating in the same or similar locations, including public liability insurance
against claims for personal injury or death or property damage occurring upon,
in, about or in connection with the use of any properties owned, occupied or
controlled by it; and maintain such other insurance as may be required by law.
63
(b) Notify the Paying Agent and the Collateral Agent immediately
whenever any material separate insurance concurrent in form or contributing in
the event of loss with that required to be maintained under this Section 5.02 is
taken out by the Borrower; and promptly deliver to the Paying Agent and the
Collateral Agent a duplicate original copy of such policy or policies.
SECTION 5.03. Obligations and Taxes. Pay its Indebtedness and other
material obligations promptly and in accordance with their terms and pay and
discharge promptly when due all material taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits or in respect of
its property, before the same shall become delinquent or in default, as well as
all material lawful claims for labor, materials and supplies or otherwise that,
if unpaid, might give rise to a Lien upon such properties or any part thereof;
provided, however, that such payment and discharge shall not be required with
respect to any such tax, assessment, charge, levy or claim so long as the
validity or amount thereof shall be contested in good faith by appropriate
proceedings and the Borrower shall have set aside on its books adequate reserves
with respect thereto in accordance with GAAP and such contest operates to
suspend collection of the contested obligation, tax, assessment or charge and
enforcement of a Lien.
SECTION 5.04. Financial Statements, Reports, etc. In the case of the
Borrower, furnish to the Paying Agent and each Lender:
(a) within 120 days after the end of each fiscal year, its
consolidated balance sheets and related statement of income and
retained earnings and cash flows showing the financial condition of
(i) the Borrower and its consolidated subsidiaries and (ii) prior to
the transfer of the ▇▇▇▇▇ Subsidiaries to the Borrower, the ▇▇▇▇▇
Subsidiaries as of the close of such fiscal year and the results of
its operations and the operations of such subsidiaries during such
year, in each case audited by independent public accountants of
recognized national standing and accompanied by an opinion of such
accountants (which shall not be qualified in any material respect) to
the effect that such consolidated financial statements fairly present
the financial condition and results of operations of the Borrower and
its consolidated subsidiaries and the ▇▇▇▇▇ Subsidiaries, as
applicable, on a consolidated basis in accordance with GAAP
consistently applied (except as otherwise provided in the notes
thereto);
(b) within 60 days after the end of each of the first three
fiscal quarters of each fiscal year beginning with the first fiscal
quarter ending after the initial Acquisition Borrowing (provided that
prior to such date, the Borrower shall furnish to the Paying Agent and
each Lender any information made publicly available relating thereto),
its consolidated balance sheets and related statements of income and
retained earnings and cash flows showing the financial condition of
(i) the Borrower and its consolidated subsidiaries and (ii) prior to
the transfer of the ▇▇▇▇▇ Subsidiaries to the Borrower, the ▇▇▇▇▇
Subsidiaries as of the close of such fiscal quarter and the results of
its operations and the operations of such subsidiaries during such
fiscal quarter and the then elapsed portion of the fiscal year, in
each case certified by a Financial Officer or independent public
accountant as fairly presenting the financial condition and results of
operations of the Borrower and its consolidated subsidiaries and the
▇▇▇▇▇ Subsidiaries, as applicable, on a consolidated basis in
accordance with GAAP consis tently applied (except for the absence of
footnote disclosure), subject to normal year-end audit adjustments;
64
(c) within 60 days after the end of each of the first three
fiscal quarters of each fiscal year beginning with January 1, 1997 and
ending on the Separation Date, its unaudited pro forma consolidating
balance sheet as of the close of such fiscal quarter, and as of
December 31, 1997, as the case may be, prepared giving effect to the
Transactions (including the transfer of the ▇▇▇▇▇ Subsidiaries) as if
they had occurred on such date, and consolidating income statement for
the applicable period, assuming the Transactions (including the
transfer of the ▇▇▇▇▇ Subsidiaries) had actually occurred at the
beginning of each such period. Such pro forma balance sheets and
income statements will be prepared in good faith by the Borrower based
on reasonable assumptions, will be based on the best information
available to the Borrower as of the date of delivery thereof, will
accurately reflect all material adjustments required to be made to
give effect to the Transactions (including the transfer of the ▇▇▇▇▇
Subsidiaries) and will present fairly on a pro forma basis the
estimated consolidated financial position of the Borrower as of the
end of the applicable period, assuming that the Transactions
(including the transfer of the ▇▇▇▇▇ Subsidiaries) had actually
occurred at such date, and will present fairly on a pro forma basis
the estimated consolidated results of operations of the Borrower for
such period, assuming that the Transactions (including the transfer of
the ▇▇▇▇▇ Subsidiaries) had actually occurred on the first day of such
period;
(d) concurrently with any delivery of financial statements
under paragraph (a) or (b) above, (i) a certificate of the applicable
accounting firm or Financial Officer opining on or certifying such
statements (which certificate, when furnished by an accounting firm,
may be limited to accounting matters and disclaim responsibility for
legal interpretations) and certifying that no Event of Default has
occurred and that no Default has occurred and is continuing or, if
such an Event of Default has occurred or Default has occurred and is
continuing, specifying the nature and extent thereof and any
corrective action taken or proposed to be taken with respect thereto
and (ii) a certificate of a Financial Officer of the Borrower setting
forth the Net Termination Value as of the date of such financial
statements;
(e) promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other
materials filed by the Borrower or any Subsidiary with the Securities
and Exchange Commission, or any Governmental Authority succeeding to
any or all of the functions of said Commission, or with any national
securities exchange, or distributed to public shareholders, as the
case may be;
(f) promptly, from time to time, such other information
regarding the operations, business affairs and financial condition of
the Borrower or any Subsidiary, or compliance with the terms of any
Loan Document, as the Paying Agent or any Lender may reasonably
request; and
(g) as soon as available but in any event no later than 60
days after the beginning of each fiscal year, a copy of the annual
business plan of the Borrower and the Subsidiaries and forecasts
(prepared by management of the Borrower) of the Borrower's
consolidated balance sheets and related statements of operations and
cash flows on a monthly basis for such fiscal year and on an annual
basis for each of the following four fiscal years.
65
SECTION 5.05. Litigation and Other Notices. Furnish to the Paying
Agent, the Issuing Bank and each Lender prompt written notice of the following:
(a) any Event of Default or Default, specifying the nature and
extent thereof and the corrective action (if any) taken or proposed to
be taken with respect thereto;
(b) the filing or commencement of, or any threat or notice of
intention of any person to file or commence, any action, suit or
proceeding, whether at law or in equity or by or before any
Governmental Authority, against the Borrower or any Affiliate thereof
that could reasonably be expected to result in a Material Adverse
Effect; and
(c) any development of which a Responsible Officer is aware
that has resulted in, or which such Responsible Officer has reasonably
concluded will result in, a Material Adverse Effect.
SECTION 5.06. Maintaining Records; Access to Properties and
Inspections. Keep proper books of record and account in which full, true and
correct entries in conformity with GAAP and all requirements of law are made of
all dealings and transactions in relation to its business and activities. Each
Loan Party will, and will cause each of its Subsidiaries to, permit any
representatives designated by the Paying Agent or any Lender to visit and
inspect the financial records (including any mining plans with respect to any
material mines owned or operated by the Borrower or any Subsidiary) and the
properties of the Borrower or any Subsidiary at reasonable times and as often as
reasonably requested and to make extracts from and copies of such financial
records, and permit any representatives designated by the Paying Agent or any
Lender to discuss (in the presence of the Borrower, unless a Default or Event of
Default shall have occurred and is continuing) the affairs, finances and
condition of the Borrower or any Subsidiary with the officers thereof and
independent accountants therefor.
SECTION 5.07. Use of Proceeds. Use the proceeds of the Loans and
request the issuance of Letters of Credit only for the purposes set forth in the
preamble to this Agreement.
SECTION 5.08. Compliance with Laws. Comply in all respects with all
applicable laws, ordinances, rules, regulations and requirements of Governmental
Authorities (including Environmental Laws and ERISA and the rules and
regulations thereunder), except where the necessity of compliance therewith is
contested in good faith by appropriate proceedings or where noncompliance
therewith could not reasonably be expected to have a Material Adverse Effect.
SECTION 5.09. Preparation of Environmental Reports. If a Default
caused by reason of a breach of Section 3.16 or 5.08 (with respect to compliance
with Environmental Laws) shall have occurred and be continuing, at the request
of the Required Lenders through the Paying Agent, provide to the Lenders within
45 days after such request, at the expense of the Borrower, an environmental
site assessment report for the Properties which are the subject of such default
prepared by an environmental consulting firm reasonably acceptable to the Paying
Agent and indicating the presence or absence of Hazardous Materials and the
estimated cost of any compliance or Remedial Action in connection with such
Properties.
66
SECTION 5.10. Further Assurances. Upon the reasonable request of the
Required Lenders or the Paying Agent, from time to time, execute any and all
further documents, financing statements, agreements and instruments, and take
all further action (including filing Uniform Commercial Code and other financing
statements, mortgages and deeds of trust) in order to effectuate the
transactions contemplated by the Loan Documents and in order to grant, preserve,
protect and perfect the validity and priority of the security interests created
or intended to be created by the Security Documents. The Borrower will cause
any subsequently acquired or organized Domestic Subsidiary (including the ▇▇▇▇▇
Subsidiaries, but excluding any Receivables Subsidiary and any Single Purpose
Entity) to execute a Guarantee Agreement, Indemnity, Subrogation and
Contribution Agreement and each applicable Security Document in favor of the
Collateral Agent. Upon the reasonable request of the Required Lenders or the
Paying Agent, from time to time, the Borrower will, at its cost and expense,
promptly secure the Obligations by pledging or creating, or causing to be
pledged or created, perfected security interests with respect to such of its
assets and properties as the Paying Agent or the Required Lenders shall
designate (it being understood that it is the intent of the parties that the
Obligations shall be secured by, among other things, substantially all the
assets of the Borrower (including real and other properties acquired subsequent
to the Closing Date, including the assets of the ▇▇▇▇▇ Subsidiaries, but
excluding any Receivables Subsidiary and any Single Purpose Entity)). Such
security interests and Liens will be created under the Security Documents and
other security agreements, mortgages, deeds of trust and other instruments and
documents in form and substance satisfactory to the Collateral Agent, and the
Borrower shall deliver or cause to be delivered to the Lenders all such
instruments and documents (including legal opinions, title insurance policies
and lien searches) as the Collateral Agent shall reasonably request to evidence
compliance with this Section. The Borrower agrees to provide such evidence as
the Collateral Agent shall reasonably request as to the perfection and priority
status of each such security interest and Lien. Without limiting the generality
of the foregoing, (a) upon the reasonable request of the Paying Agent or the
Required Lenders, the Borrower shall execute, or cause the appropriate
Subsidiary to execute, a mortgage (collectively, the "Mortgages") in form
reasonably satisfactory to the Collateral Agent and deliver other instruments
and documents (including legal opinions, title insurance policies and lien
searches) reasonably requested by the Paying Agent or the Required Lenders in
connection with creating a security interest in favor of the Collateral Agent
for the benefit of the Secured Parties with respect to any real property
interest of the Borrower or any Subsidiary and (b) the Borrower shall use its
reasonable efforts to ensure that the applicable security interests created
under this Section 5.10 with respect to property acquired in connection with an
exchange contemplated by clause (vii) of the definition of "Asset Sale" or in
connection with a reinvestment contemplated by clause (y) to the proviso of the
definition of "Net Cash Proceeds" shall be substantially similar as the
applicable security interests with respect to the property that is transferred
or sold.
SECTION 5.11. Interest Rate Protection Agreements. As promptly as
practicable and in any event within 180 days after the date of the initial
Borrowing hereunder, enter into, and thereafter maintain in full force and
effect through the third anniversary of the date of such initial Borrowing, one
or more Interest Rate Protection Agreements in form reasonably satisfactory to
the Paying Agent, the effect of which shall be to set at fixed rates the
interest cost to the Borrower and its Subsidiaries with respect to at least 50%
of the aggregate average outstanding principal amount of Term Loans and deliver
evidence of the execution and delivery thereof to the Paying Agent.
SECTION 5.12. Concentration and Disbursement Accounts. As promptly
as practicable and in any event within (i) 180 days after the date of the
initial Borrowing hereunder with respect to the
67
Borrower and its Subsidiaries other than the ▇▇▇▇▇ Subsidiaries and (ii) 30 days
after the Separation Date with respect to the ▇▇▇▇▇ Subsidiaries (if later than
180 days after the date of the initial Acquisition Borrowing), maintain their
material concentration and disbursement accounts with one or more financial
institutions that are Lenders.
SECTION 5.13. ▇▇▇▇▇ Subsidiaries; PPM Contribution. As soon as
practicable, but in any event not later than 270 days after the initial
Acquisition Borrowing, use its best efforts to (a) (i) cause each ▇▇▇▇▇
Subsidiary to be transferred to the Borrower and (ii) cause each ▇▇▇▇▇
Subsidiary to comply with Section 5.10 after completion of such transfer and (b)
cause the PPM Contribution to be effected.
ARTICLE VI
Negative Covenants
The Borrower covenants and agrees with each Lender that, so long as
this Agreement shall remain in effect and until the Commitments have been
terminated and the principal of and interest on each Loan, all Fees and all
other expenses or amounts due and payable under any Loan Document have been paid
in full and all Letters of Credit have been canceled or have expired and all
amounts drawn thereunder have been reimbursed in full, unless the Required
Lenders shall otherwise consent in writing, the Borrower will not, and will not
cause or permit any of the Subsidiaries (other than any Receivables Subsidiary,
except in the case of Sections 6.01, 6.02 and 6.08) to:
SECTION 6.01. Indebtedness. Incur, create, assume or permit to exist
any Indebtedness, except:
(a) Indebtedness outstanding on the Closing Date, or available
under debt instruments existing on the Closing Date, and set forth in
Schedule 6.01(a);
(b) Indebtedness created hereunder and under the other Loan
Documents;
(c) the ▇▇▇▇▇ Indebtedness;
(d) Guarantees in respect of Indebtedness permitted pursuant
to this Section 6.01; (provided that any Guarantees in respect of
Indebtedness that is subordinated to the Obligations shall be
subordinated to the Obligations to the same extent as such
Indebtedness is subordinated to the Obligations);
(e) Indebtedness of the Borrower or any wholly owned
Subsidiary to any other wholly owned Subsidiary or the Borrower, so
long as, with respect to any Indebtedness, the obligee of which is not
a Loan Party, such Indebtedness is subordinated to all Indebtedness
incurred pursuant hereto and pursuant to the Guarantee Agreement;
(f) Indebtedness of the Borrower or the Subsidiaries
(including tax exempt financings and Capital Lease Obligations) to
purchase, construct, develop or improve assets in the
68
ordinary course of business after the Closing Date or incurred in the
ordinary course of business after the Closing Date to finance Capital
Expenditures permitted under Section 6.10;
(g) Indebtedness incurred pursuant to any Permitted
Receivables Financing;
(h) Indebtedness in respect of surety and appeal bonds,
performance bonds, reclamation bonds and other obligations of a like
nature incurred in the ordinary course of business;
(i) Permitted Junior Indebtedness;
(j) Indebtedness of a Subsidiary (other than any ▇▇▇▇▇
Subsidiary) acquired after the Closing Date and Indebtedness of a
corporation (other than any ▇▇▇▇▇ Subsidiary) merged or consolidated
with or into the Borrower or a Subsidiary after the Closing Date,
which Indebtedness in each case exists at the time of such
acquisition, merger, consolidation or conversion into a Subsidiary and
is not created in contemplation of such event and where such
acquisition, merger or consolidation is permitted by this Agreement;
provided that the Borrower and the Subsidiaries shall comply with the
provisions of Section 5.10 with respect to such acquired or newly
formed Subsidiary;
(k) extensions, renewals or refinancings of Indebtedness under
paragraphs (a), (c), (d), (f), (g), (i) and (j) so long as (i) such
Indebtedness (the "Refinancing Indebtedness") is in an aggregate
principal amount not greater than the aggregate principal amount of
the Indebtedness being extended, renewed or refinanced plus the amount
of any premiums required to be paid thereon and fees and expenses
associated therewith, (ii) such Refinancing Indebtedness has a later
or equal final maturity and a longer or equal weighted average life
than the Indebtedness being extended, renewed or refinanced, (iii) the
interest rate applicable to such Refinancing Indebtedness shall be a
market interest rate (as determined in good faith by the Board of
Directors of the Borrower) as of the time of such extension, renewal
or refinancing, (iv) if the Indebtedness being extended, renewed or
refinanced is subordinated to the Obligations, such Refinancing
Indebtedness is subordinated to the Obligations to the extent of the
Indebtedness being extended, renewed or refinanced, (v) the covenants,
events of default and other provisions thereof (including any
Guarantees thereof), taken as a whole, shall be no less favorable to
the Lenders than those contained in the Indebtedness being refinanced
and (vi) at the time and after giving effect to such extension,
renewal or refinancing, no Default or Event of Default shall have
occurred and be continuing; and
(l) unsecured Indebtedness in addition to that permitted by
paragraphs (a) through (k) above in an aggregate principal amount
outstanding not to exceed at any time $50,000,000.
69
SECTION 6.02. Liens. Create, incur, assume or permit to exist any
Lien on any property or assets (including stock or other securities of any
person, including any Subsidiary) now owned or hereafter acquired by it or on
any income or revenues or rights in respect of any thereof, except:
(a) Liens on property or assets of the Borrower and its
Subsidiaries existing on the Closing Date; provided that such Liens
shall secure only those obligations which they secure on the Closing
Date;
(b) any Lien created under the Loan Documents;
(c) any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower or any Subsidiary; provided that
(i) such Lien is not created in contemplation of or in connection with
such acquisition and (ii) such Lien does not apply to any other
property or assets of the Borrower or any Subsidiary;
(d) Liens for taxes not yet due or which are being contested
in compliance with Section 5.03;
(e) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, landlord's or other like Liens arising in the ordinary
course of business and securing obligations that are not due and
payable or which are being contested in compliance with Section 5.03;
(f) pledges and deposits made in the ordinary course of
business in compliance with workmen's compensation, unemployment
insurance and other social security laws or regulations;
(g) deposits to secure the performance of bids, trade
contracts (other than for Indebtedness), leases (other than Capital
Lease Obligations), statutory obligations, surety and appeal bonds,
performance bonds, reclamation bonds and other obligations of a like
nature incurred in the ordinary course of business;
(h) Liens created by or relating to any legal proceeding which
at the time is being contested in good faith by appropriate
proceedings; provided that, in the case of a Lien consisting of an
attachment or judgment Lien, the judgment it secures shall, within 60
days of entry thereof, have been discharged or execution thereof
stayed pending appeal, or discharged within 60 days after the
expiration of any such stay;
(i) zoning restrictions, easements, rights-of-way,
restrictions on use of real property and other similar encumbrances
incurred in the ordinary course of business which, in the aggregate,
are not substantial in amount and do not materially detract from the
value of the property subject thereto or interfere with the ordinary
conduct of the business of the Borrower or any of its Subsidiaries;
(j) purchase money security interests in real property,
improvements thereto, equipment or other fixed assets hereafter
acquired (or, in the case of improvements, equipment or other fixed
assets, constructed) by the Borrower or any Subsidiary; provided that
(i) such security interests secure Indebtedness permitted by Section
6.01, (ii) such
70
security interests are incurred, and the Indebtedness secured thereby
is created, no later than 90 days after such acquisition (or
completion of such construction), (iii) the Indebtedness secured
thereby does not exceed the cost of such real property, improvements
or equipment at the time of such acquisition (or construction) and
(iv) such security interests do not apply to any other property or
assets of the Borrower or any Subsidiary (other than the proceeds of
the real property, improvements, equipment or other fixed assets
subject to such Lien);
(k) Liens securing Refinancing Indebtedness, to the extent
that the Indebtedness being refinanced was originally secured in
accordance with this Section 6.02; provided that such Lien does not
apply to any additional property or assets of the Borrower or any
Subsidiary (other than the proceeds of the property or asset subject
to such Lien);
(l) Liens on accounts receivables and related assets financed
in connection with any Permitted Receivables Financing;
(m) Liens arising out of Indebtedness permitted under Section
6.01(f), so long as such Liens (i) attach only to the property subject
to such Indebtedness and (ii) do not interfere with the business of
the Borrower or any of the Subsidiaries in any material respect;
(n) Production Payments, royalties, dedication of reserves
under supply agreements or similar rights or interests granted, taken
subject to, or otherwise imposed on properties consistent with normal
practices in the mining industry;
(o) Liens on cash and cash equivalents securing obligations
under Hedging Agreements; provided that the aggregate amount of cash
and cash equivalents subject to such Liens shall not exceed at any
time $10,000,000; and
(p) Liens in addition to those permitted by paragraphs (a)
through (o); provided, however, that the aggregate principal amount of
the Indebtedness and amount of other liabilities that is secured by
such Liens do not exceed at any time $50,000,000.
SECTION 6.03. Sale and Lease-Back Transactions. Enter into any
arrangement, directly or indirectly, with any person whereby it shall sell or
transfer any property, real or personal, used or useful in its business, whether
now owned or hereafter acquired, and thereafter rent or lease such property or
other property which it intends to use for substantially the same purpose or
purposes as the property being sold or transferred; provided that the Borrower
and the Subsidiaries may enter into any such transaction to the extent the
Capital Lease Obligation and Liens associated therewith would be permitted by
Sections 6.01(f) and 6.02(m), respectively.
SECTION 6.04. Investments, Loans and Advances. Purchase, hold or
acquire any capital stock, evidences of indebtedness or other securities of,
make or permit to exist any loans or advances from the Borrower or any
Subsidiary to, or make or permit to exist any investment or any other interest
in, any other person, except:
(a) investments by the Borrower and the Subsidiaries in the
capital stock of the Subsidiaries (including after the Separation
Date, the ▇▇▇▇▇ Subsidiaries);
71
(b) Permitted Investments;
(c) investments existing on the Closing Date and set forth on
Schedule 6.04(c) or pursuant to commitments set forth in Schedule
6.04(c);
(d) investments constituting Capital Expenditures permitted
under Section 6.10;
(e) investments constituting non-cash consideration received
in connection with a sale of assets not prohibited by Section 6.05;
(f) loans or advances by the Borrower or any wholly owned
Subsidiary to the Borrower or any wholly owned Subsidiary that are
permitted under Section 6.01(e);
(g) investments in Hedging Agreements that are permitted
under this Agreement;
(h) the Borrower or any Subsidiary may transfer accounts
receivable and related assets to a Receivables Subsidiary pursuant to
any Permitted Receivables Financing;
(i) investments that are sale and lease-back transactions
permitted by Section 6.03;
(j) investments, loans or advances made from the proceeds of
equity contributions to the Borrower from its parents;
(k) investments of the type contemplated in clause (vii) of
the definition of "Asset Sale";
(l) the Powercoal/Bidco Loans;
(m) investments in the nature of production payments,
royalties, dedications of reserves under supply agreements or similar
rights or interests granted, taken subject to, or otherwise imposed on
properties consistent with normal practices in the mining industry;
(n) investments, loans or advances in an amount not to exceed
the portion of Excess Cash Flow from the preceding fiscal year not
required to be used to prepay Term Loans in accordance with Section
2.13(d);
(o) investments that do not constitute Capital Expenditures
and that are made in connection with the purchase, construction,
development or improvement of assets in the ordinary course of
business after the Closing Date; and
(p) investments, loans or advances in addition to those
permitted by paragraphs (a) through (o) not exceeding in the aggregate
$50,000,000 at any time outstanding;
provided, however, that to the extent any investment permitted by this Section
6.04 results in the acquisition of a Subsidiary, the Borrower shall, and shall
cause such Subsidiary to, comply with the applicable provisions of Section 5.10.
72
SECTION 6.05. Mergers, Consolidations, Sales of Assets and
Acquisitions. (a) Merge into or consolidate with any other person, or permit
any other person to merge into or consolidate with it, or sell, transfer, lease
or otherwise dispose of (in one transaction or in a series of transactions) all
or any substantial part of the assets of the Borrower and its Subsidiaries
(taken as a whole) (whether now owned or hereafter acquired) or any capital
stock of any Subsidiary, or sell, transfer, lease or otherwise dispose of (in
one transaction or a series of related transactions) all or substantially all of
the assets or capital stock of any Subsidiary set forth in Schedule 6.05(a), or
purchase, lease or otherwise acquire (in one transaction or a series of
transactions) all or any substantial part of the assets of any other person,
except:
(i) if at the time thereof and immediately after giving effect
thereto no Event of Default or Default shall have occurred and be
continuing (A) any wholly owned Subsidiary may merge into or
consolidate with, or sell or transfer all or substantially all its
assets to, the Borrower in a transaction in which, in the case of a
merger or consolidation, the Borrower is the surviving corporation and
(B) any wholly owned Subsidiary may merge into or consolidate with, or
sell or transfer all or substantially all its assets to, any other
wholly owned Subsidiary in a transaction in which, in the case of a
merger or consolidation, the surviving entity is a wholly owned
Subsidiary and no person other than the Borrower or a wholly owned
Subsidiary receives any consideration;
(ii) the Borrower may acquire the ▇▇▇▇▇ Subsidiaries;
(iii) acquisitions constituting Capital Expenditures permitted
by Section 6.10; and
(iv) acquisitions constituting investments permitted by
Section 6.04.
(b) Notwithstanding Section 6.05(a), no Asset Sale shall be permitted
under this Agreement unless (i) the consideration received in connection
therewith is at least equal to the fair market value of the assets or property
sold, transferred or otherwise disposed of (as determined in good faith by a
Financial Officer of the Borrower), (ii) except with respect to any Asset Sale
that results in an investment permitted by Section 6.04(p), in the case of an
Asset Sale of property having a value of (x) more than $25,000,000 but less than
$100,000,000, such Asset Sale shall be for consideration at least 50% of which
is cash and (y) $100,000,000 or more, such Asset Sale shall be for consideration
at least 80% of which is cash, and (iii) to the extent required, the Net Cash
Proceeds thereof are applied in accordance with Section 2.13(b); provided,
however, that for purposes of this Section 6.05(b), the right to receive
Production Payments, royalty payments and other similar rights that are
contingent on the performance of the assets sold in such Asset Sale shall be
deemed not to be consideration for such Asset Sale.
SECTION 6.06. Dividends and Distributions; Restrictions on Ability of
Subsidiaries to Pay Dividends. (a) Declare or pay, directly or indirectly, any
dividend or make any other distribution (by reduction of capital or otherwise),
whether in cash, property, securities or a combination thereof, with respect to
any shares of its capital stock or directly or indirectly redeem, purchase,
retire or otherwise acquire for value (or permit any Subsidiary to purchase or
acquire) any shares of any class of its capital stock or set aside any amount
for any such purpose; provided, however, that (i) any Subsidiary may declare and
pay dividends or make other distributions to the Borrower or another Subsidiary
and (ii) if no Event of Default shall have occurred and be continuing or would
occur as a consequence
73
thereof, (A) the Borrower and its Subsidiaries may make payments required to be
made under the Tax Sharing Arrangement so long as the payment thereunder by the
Borrower and its Subsidiaries shall not exceed the amount the Borrower and its
Subsidiaries would be required to pay under such arrangement as in effect on the
Closing Date and (B) the Borrower may pay dividends to Newco not in excess of
the Permitted Dividend Amount.
(b) Permit its subsidiaries to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any such subsidiary to (i) pay any dividends or
make any other distributions on its capital stock or any other interest or (ii)
make or repay any loans or advances to the Borrower or the parent of such
subsidiary (subclauses (i) and (ii) are collectively referred to as an "Upstream
Payment"); provided, however, that the foregoing shall not restrict any
encumbrances or restrictions:
(i) existing on the Closing Date under Indebtedness set forth on
Schedule 6.01(a);
(ii) contained in any debt instrument relating to a person acquired
after the Closing Date; provided that (A) such encumbrances and restrictions are
not applicable to any person other than such person or property or assets
acquired, (B) such instrument was in existence at the time of such acquisition
and was not created in contemplation of or in connection with such acquisition,
and (C) the Borrower reasonably believes at the time of such acquisition that
the terms of such instrument will not encumber or restrict the ability of such
acquired person to make an Upstream Payment in a manner that would adversely
affect the Borrower's ability to perform its obligations under the Loan
Documents when due;
(iii) incurred in connection with any Indebtedness permitted pursuant
to Section 6.01 (including any extension, refinancing, renewal or replacement of
Indebtedness contemplated by clauses (i) and (ii) above); provided that, (A) the
Borrower reasonably believes at the time such Indebtedness is incurred that the
terms of such Indebtedness will not restrict the ability of the person incurring
such Indebtedness to make an Upstream Payment in a manner that would adversely
affect the Borrower's ability to perform its obligations under the Loan
Documents when due and (B) such Indebtedness contains no express encumbrances or
restrictions on the ability of such person to make an Upstream Payment;
(iv) imposed on any Receivables Subsidiary or Single Purpose Entity;
(v) existing under, or by reason of, applicable law; and
(vi) any encumbrance or restriction on the transfer of any property or
asset in an agreement relating to the acquisition or creation or disposition of
such property or asset or any Lien on such property or asset that is otherwise
permitted by the terms of this Agreement.
SECTION 6.07. Transactions with Affiliates. Make any material
payment to, or sell, lease, transfer or otherwise dispose of any material
properties or assets to, or purchase any material property or assets from, or
enter into or make or amend any material transaction, contract, agreement,
understanding, loan, advance or guarantee with, or for the benefit of, any
Affiliate (each of the foregoing, an "Affiliate Transaction"), unless such
Affiliate Transaction is on terms that are not less favorable to the Borrower or
the relevant Subsidiary than those that would have been obtained in a
74
comparable transaction by the Borrower or such Subsidiary with an unrelated
person; provided, however, that (a) payments that are permitted by Section 6.01,
6.04 or 6.06(a) shall not be deemed to be Affiliate Transactions and (b) the
foregoing restriction shall not apply to (i) any Permitted Receivables Financing
and (ii) transactions among the Loan Parties or any other Subsidiary that the
Required Lenders have agreed is not to be a Loan Party.
SECTION 6.08. Business of Borrower and Subsidiaries. (a) In the case
of the Borrower and the Subsidiaries (other than any Receivables Subsidiary),
engage to any material extent in any business or business activity other than
the mining or energy business and business activities reasonably incidental or
related thereto and (b) in the case of each Receivables Subsidiary, engage to
any material extent in any business or business activity other than the purpose
for which such Subsidiary was formed and business activities reasonably
incidental or related thereto.
SECTION 6.09. Other Indebtedness and Agreements. (a) Except to the
extent permitted by Section 6.06(b), permit any waiver, supplement,
modification, amendment, termination or release of any indenture, instrument or
agreement pursuant to which any Indebtedness or preferred stock of the Borrower
or any Subsidiary is outstanding or any other agreement (including the Tax
Sharing Arrangement) that is material to the conduct and operations of the
Borrower or any Subsidiary, or modify its charter or by-laws, in each case to
the extent that any such waiver, supplement, modification, amendment,
termination or release would be adverse to the Lenders in any material respect.
(b) Make any payment, whether in cash, property, securities or a
combination thereof, other than scheduled (or with respect to senior
indebtedness held by a person that is not an Affiliate of the obligor,
mandatory) payments of principal and interest as and when due (to the extent not
prohibited by applicable subordination provisions), in respect of, or pay, or
offer or commit to pay, or directly or indirectly redeem, repurchase, retire or
otherwise acquire for consideration, or set apart any sum for the aforesaid
purposes, any Indebtedness for borrowed money of the Borrower or any Subsidiary,
except for (i) the Loans; (ii) the ▇▇▇▇▇ Refinanced Indebtedness; (iii)
Indebtedness that is refinanced by Refinancing Indebtedness; and (iv) any other
Indebtedness that is not subordinated to the Obligations, provided that the
amount that may be prepaid in respect of such other senior Indebtedness shall
not exceed $25,000,000 in any fiscal year.
SECTION 6.10. Capital Expenditures. Incur or make Capital
Expenditures (a) during the period from the date of the initial Borrowing
hereunder through December 31, 1997, in excess of $50,000,000 and (b) during any
fiscal year thereafter in excess of the amount of Permitted Capital Expenditures
for such fiscal year; provided, however, that the amount of Permitted Capital
Expenditures in any fiscal year ending after December 31, 1997, shall be
increased by the total amount of unused Permitted Capital Expenditures for the
immediately preceding year (less an amount equal to any unused Permitted Capital
Expenditures carried forward to such preceding year pursuant to this proviso)
(it being understood that such increased amount that is carried forward shall be
deemed to be expended for purposes of this Agreement only after the amount of
Permitted Capital Expenditures, without giving effect such increase, are
expended).
75
SECTION 6.11. Leverage Ratio. Permit the Leverage Ratio as of the end
of any fiscal quarter falling in any period set forth below to be in excess of
the ratio set forth below for such quarter.
Period Ratio
------ -----
From and including the Closing Date through 5.00 to 1.00
and including December 30, 1998
From and including December 31, 1998 4.25 to 1.00
through and including December 30, 1999
From and including December 31, 1999 4.00 to 1.00
through and including December 30, 2000
From and including December 31, 2000 3.75 to 1.00
through and including December 30, 2002
Thereafter 3.50 to 1.00
SECTION 6.12. Interest Expense Coverage Ratio. Permit the Interest
Expense Coverage Ratio as of the end of any fiscal quarter falling in any period
set forth below to be less than the ratio set forth below for such quarter.
Period Ratio
------ -----
From and including the Closing Date 2.75 to 1.00
through and including December 30, 1998
From and including December 31, 1998 3.00 to 1.00
through and including December 30, 1999
From and including December 31, 1999 3.25 to 1.00
through and including December 30, 2001
From and including December 31, 2001 3.50 to 1.00
through and including December 30, 2002
Thereafter 3.75 to 1.00
SECTION 6.13. Net Worth. Permit Consolidated Net Worth at any date
following the date of initial Borrowing hereunder to be less than the sum of (a)
$675,000,000, plus (b) 50% of Consolidated Net Income for each fiscal quarter
with positive Consolidated Net Income ending on or after the Closing Date and on
or prior to the date as to which compliance with this Section 6.13 is being
determined, plus (c) 75% of Net Cash Proceeds in respect of Equity Issuances
received on or after the Closing Date and on or prior to the date as to which
compliance with this Section 6.13 is being determined.
SECTION 6.14. Current Ratio. Permit the ratio of (a) Consolidated
Current Assets to (b) Consolidated Current Liabilities as of the end of any
fiscal quarter to be less than 1.00 to 1.00;
76
provided, however, that for purposes of this Section 6.14, Consolidated Current
Assets shall include cash and cash equivalents and the unused remaining
available balance of the Total Revolving Credit Commitment as of the end of such
fiscal quarter.
SECTION 6.15. Fiscal Year. In the case of the Borrower, change the
end of its fiscal year from December 31 to any other date.
ARTICLE VII
Events of Default
In case of the happening of any of the following events ("Events of
Default"):
(a) any representation or warranty made or deemed made in or in
connection with any Loan Document or the borrowings or issuances of
Letters of Credit hereunder, or any representation, warranty,
statement or information contained in any report, certificate,
financial statement or other instrument furnished in connection with
or pursuant to any Loan Document, shall prove to have been false or
misleading in any material respect when so made, deemed made or
furnished;
(b) default shall be made in the payment of any principal of any
Loan when and as the same shall become due and payable, whether at the
due date thereof or at a date fixed for prepayment thereof or by
acceleration thereof or otherwise;
(c) default shall be made in the payment of any interest on any
Loan or any Fee or any other amount (other than an amount referred to
in (b) above) due under any Loan Document, when and as the same shall
become due and payable, and such default shall continue unremedied for
a period of three Business Days;
(d) default shall be made in the due observance or performance by
the Borrower or any Subsidiary of any covenant, condition or agreement
contained in Section 5.01(a), 5.05(a) or 5.07 or in Article VI;
(e) default shall be made in the due observance or performance by
the Borrower or any Subsidiary of any covenant, condition or agreement
contained in any Loan Document (other than those specified in (b), (c)
or (d) above) and such default shall continue unremedied for a period
of 30 days after notice thereof from the Paying Agent or any Lender to
the Borrower;
(f) the Borrower or any Subsidiary shall (i) fail to pay any
principal or interest, regardless of amount, due in respect of any
Indebtedness (other than Non-Recourse Indebtedness) in a principal
amount in excess of $50,000,000, when and as the same shall become due
and payable, (ii) fail to observe or perform any other term, covenant,
condition or agreement contained in any agreement or instrument
evidencing or governing any such Indebtedness if the effect of any
failure referred to in this clause (ii) is to cause, or to permit the
holder or holders of such Indebtedness or a trustee on its or their
behalf to cause, such
77
Indebtedness to become due prior to its stated maturity or (iii) fail
to make any payment in respect of any Material Hedging Obligations
when due;
(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking (i) relief in respect of the Borrower or any
Significant Subsidiary (or any group of subsidiaries of the Borrower
which, if considered in the aggregate as a single subsidiary, would
constitute a Significant Subsidiary), or of a substantial part of the
property or assets of the Borrower, such Significant Subsidiary or
such group of subsidiaries of the Borrower, under Title 11 of the
United States Code, as now constituted or hereafter amended, or any
other Federal, state or foreign bankruptcy, insolvency, receivership
or similar law, (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the
Borrower or any Significant Subsidiary (or any group of subsidiaries
of the Borrower which, if considered in the aggregate as a single
subsidiary, would constitute a Significant Subsidiary) or for a
substantial part of the property or assets of the Borrower a
Significant Subsidiary or such group of subsidiaries of the Borrower
or (iii) the winding-up or liquidation of the Borrower or any
Significant Subsidiary (or any group of subsidiaries of the Borrower
which, if considered in the aggregate as a single subsidiary, would
constitute a Significant Subsidiary); and such proceeding or petition
shall continue undismissed for 60 days or an order or decree approving
or ordering any of the foregoing shall be entered;
(h) the Borrower or any Significant Subsidiary (or any group of
subsidiaries of the Borrower which, if considered in the aggregate as
a single subsidiary, would constitute a Significant Subsidiary) shall
(i) voluntarily commence any proceeding or file any petition seeking
relief under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other Federal, state or foreign bankruptcy,
insolvency, receivership or similar law, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner,
any proceeding or the filing of any petition described in (g) above,
(iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the
Borrower or any Significant Subsidiary (or any group of subsidiaries
of the Borrower which, if considered in the aggregate as a single
subsidiary, would constitute a Significant Subsidiary) or for a
substantial part of the property or assets of the Borrower, any
Significant Subsidiary or any such group of subsidiaries of the
Borrower, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general
assignment for the benefit of creditors, (vi) become unable, admit in
writing its inability or fail generally to pay its debts as they
become due or (vii) take any action for the purpose of effecting any
of the foregoing;
(i) a Bidco Note Payment Default shall have occurred;
(j) one or more judgments for the payment of money in an
aggregate amount in excess of $50,000,000 shall be rendered against
the Borrower, any Subsidiary or any combination thereof and the same
shall remain undischarged for a period of 30 consecutive days during
which execution shall not be effectively stayed, or any action shall
be legally taken by a judgment creditor to levy upon assets or
properties of the Borrower or any Subsidiary to enforce any such
judgment;
78
(k) an ERISA Event shall have occurred that, in the opinion of
the Required Lenders, when taken together with all other such ERISA
Events, could reasonably be expected to have a Material Adverse
Effect.
(l) any security interest purported to be created by any Security
Document shall cease to be, or shall be asserted by the Borrower or
any other Loan Party not to be, a valid, perfected, first priority
(except as otherwise expressly provided in this Agreement or such
Security Document) security interest in the securities, assets or
properties covered thereby with respect to a material portion of the
Collateral, except to the extent that any such loss of perfection or
priority results from the failure of the Collateral Agent to maintain
possession of certificates representing securities pledged under the
Pledge Agreement;
(m) any Loan Document shall not for any reason, or shall be
asserted by any Loan Party not to be, in full force and effect and
enforceable in accordance with its terms; or
(n) the ▇▇▇▇▇ Subsidiaries shall not have become Subsidiaries of
the Borrower on or prior to the 270th day following the date of the
initial Acquisition Borrowing;
(o) there shall have occurred a Change in Control;
then, at any time during the continuance of such event (other than an event with
respect to the Borrower described in paragraph (g) or (h) above), the Paying
Agent may, and at the request of the Required Lenders shall, by notice to the
Borrower, take either or both of the following actions, at the same or different
times: (i) terminate forthwith the Commitments and (ii) declare the Loans then
out standing to be forthwith due and payable in whole or in part, whereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and any unpaid accrued Fees and all other liabilities of the
Borrower accrued hereunder and under any other Loan Document, shall become
forthwith due and payable, without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived by the Borrower,
anything contained herein or in any other Loan Document to the contrary
notwithstanding; provided that, (A) in any event with respect to the Borrower
described in paragraph (g) or (h) above, the Commitments shall automatically
terminate and the principal of the Loans then outstanding, together with accrued
interest thereon and any unpaid accrued Fees and all other liabilities of the
Borrower accrued hereunder and under any other Loan Document, shall
automatically become due and payable, without presentment, demand, protest or
any other notice of any kind, all of which are hereby expressly waived by the
Borrower, anything contained herein or in any other Loan Document to the
contrary notwithstanding and (B) except as described in the immediately
preceding clause (A), during the period commencing with the Closing Date and
ending on the Termination Date the Paying Agent and the Lenders shall not be
entitled to terminate the Commitments, rescind this Agreement or seek to enjoin
any use of proceeds of the Loans permitted hereby without the consent of the
Borrower.
Notwithstanding anything to the contrary in the preceding paragraph, during
the Clean-up Period, none of the Paying Agent, the Collateral Agent or any
Lender may declare that an Event of Default has occurred, or terminate the
Commitments or declare the Loans to be due and payable as a result solely of one
or more Defaults described in paragraph (a), (d) (except for a Default in
respect of Section 5.07, 6.11, 6.12, 6.13 or 6.14) or (e) of this Article VII,
or paragraph (f)(ii) of this Article VII insofar as it involves Indebtedness of
the ▇▇▇▇▇ Subsidiaries to the extent such
79
Indebtedness is refinanced as part of the Offer; provided that the event or
circumstance giving rise to such Default, or the result of such Default, (i)
directly relates to the ▇▇▇▇▇ Subsidiaries (or any of their businesses, assets
or liabilities), (ii) is capable of being cured or remedied during the Clean-up
Period and (iii) except to the extent it involves Indebtedness of the ▇▇▇▇▇
Subsidiaries to the extent such Indebtedness is refinanced as part of the Offer,
was not known by a Responsible Officer of PHI, Newco or the Borrower prior to
the Closing Date; provided, further, that the Paying Agent, the Collateral Agent
and the Lenders shall be entitled to exercise any and all rights and remedies
granted to them hereunder and under the Loan Documents with respect to an
occurrence or continuation of an Event of Default after the Clean-up Period.
ARTICLE VIII
The Paying Agent and the Collateral Agent
In order to expedite the transactions contemplated by this Agreement,
▇▇▇▇▇▇ is hereby appointed to act as Paying Agent and Collateral Agent on behalf
of the Lenders and the Issuing Bank (for purposes of this Article VIII, the
Paying Agent and the Collateral Agent are referred to collectively as the
"Agents"). Each of the Lenders and each assignee of any such Lender, hereby
irrevocably authorizes the Agents to take such actions on behalf of such Lender
or assignee or the Issuing Bank and to exercise such powers as are specifically
delegated to the Agents by the terms and provisions hereof and of the other Loan
Documents, together with such actions and powers as are reasonably incidental
thereto. The Paying Agent is hereby expressly authorized by the Lenders and the
Issuing Bank, without hereby limiting any implied authority, (a) to receive on
behalf of the Lenders and the Issuing Bank all payments of principal of and
interest on the Loans, all payments in respect of L/C Disbursements and all
other amounts due to the Lenders hereunder, and promptly to distribute to each
Lender or the Issuing Bank its proper share of each payment so received; (b) to
give notice on behalf of each of the Lenders to the Borrower of any Event of
Default specified in this Agreement of which the Paying Agent has actual
knowledge acquired in connection with its agency hereunder; and (c) to
distribute to each Lender copies of all notices, financial statements and other
materials delivered by the Borrower or any other Loan Party pursuant to this
Agreement or the other Loan Documents as received by the Paying Agent. Without
limiting the generality of the foregoing, the Agents are hereby expressly
authorized (a) to execute any and all documents (including releases) with
respect to the Collateral and the rights of the Secured Parties with respect
thereto, as contemplated by and in accordance with the provisions of this
Agreement and the Security Documents and (b) to execute the Intercreditor
Agreement on behalf of the Lenders and the Issuing Bank, and each of the Lenders
and the Issuing bank agrees to be bound thereby as if it were a signatory
thereto.
Neither the Agents nor any of their respective directors, officers,
employees or agents shall be liable as such for any action taken or omitted by
any of them except for its or his own gross negligence or wilful misconduct, or
be responsible for any statement, warranty or representation herein or the
contents of any document delivered in connection herewith, or be required to
ascertain or to make any inquiry concerning the performance or observance by the
Borrower or any other Loan Party of any of the terms, conditions, covenants or
agreements contained in any Loan Document. The Agents shall not be responsible
to the Lenders for the due execution, genuineness, validity, enforceability or
effectiveness of this Agreement or any other Loan Documents, instruments or
agreements. The Agents shall in all cases be fully protected in acting, or
refraining from acting, in
80
accordance with written instructions signed by the Required Lenders and, except
as otherwise specifically provided herein, such instructions and any action or
inaction pursuant thereto shall be binding on all the Lenders. Each Agent
shall, in the absence of knowledge to the contrary, be entitled to rely on any
instrument or document believed by it in good faith to be genuine and correct
and to have been signed or sent by the proper person or persons. Neither the
Agents nor any of their respective directors, officers, employees or agents
shall have any responsibility to the Borrower or any other Loan Party on account
of the failure of or delay in performance or breach by any Lender or the Issuing
Bank of any of its obligations hereunder or to any Lender or the Issuing Bank on
account of the failure of or delay in performance or breach by any other Lender
or the Issuing Bank or the Borrower or any other Loan Party of any of its
obligations hereunder or under any other Loan Document or in connection herewith
or therewith. Each of the Agents may execute any and all duties hereunder by or
through agents or employees and shall be entitled to rely upon the advice of
legal counsel selected by it with respect to all matters arising hereunder and
shall not be liable for any action taken or suffered in good faith by it in
accordance with the advice of such counsel.
The Lenders hereby acknowledge that neither Agent shall be under any
duty to take any discretionary action permitted to be taken by it pursuant to
the provisions of this Agreement unless it shall be requested in writing to do
so by the Required Lenders.
Subject to the appointment and acceptance of a successor Agent as
provided below, either Agent may resign at any time by notifying the Lenders and
the Borrower. Upon any such resignation, the Required Lenders shall have the
right to appoint a successor, subject to the prior consent of the Borrower (not
to be unreasonably withheld). If no successor shall have been so appointed by
the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Agent gives notice of its resignation, then the retiring
Agent may, on behalf of the Lenders, appoint a successor Agent, subject to the
prior consent of the Borrower (not to be unreasonably withheld), which shall be
a bank with an office in New York, New York, having a combined capital and
surplus of at least $500,000,000 or an Affiliate of any such bank. Upon the
acceptance of any appointment as Agent hereunder by a successor bank, such
successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent and the retiring Agent shall be
discharged from its duties and obligations hereunder. After the Agent's
resignation hereunder, the provisions of this Article VIII and Section 9.05
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Agent.
With respect to the Loans made by it hereunder, each Agent in its
individual capacity and not as Agent shall have the same rights and powers as
any other Lender and may exercise the same as though it were not an Agent, and
the Agents and their Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrower or any Subsidiary or
other Affiliate thereof as if it were not an Agent.
Each Lender agrees (a) to reimburse the Agents, on demand, in the
amount of its pro rata share (based on its Commitments hereunder) of any
expenses incurred for the benefit of the Lenders by the Agents, including
counsel fees and compensation of agents and employees paid for services rendered
on behalf of the Lenders, that shall not have been reimbursed by the Borrower
and (b) to indemnify and hold harmless each Agent and any of its directors,
officers, employees or agents, on demand, in the amount of such pro rata share,
from and against any and all liabilities, taxes, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
81
of any kind or nature whatsoever that may be imposed on, incurred by or asserted
against it in its capacity as Agent or any of them in any way relating to or
arising out of this Agreement or any other Loan Document or any action taken or
omitted by it or any of them under this Agreement or any other Loan Document, to
the extent the same shall not have been reimbursed by the Borrower or any other
Loan Party, provided that no Lender shall be liable to an Agent or any such
other indemnified person for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or wilful
misconduct of such Agent or any of its directors, officers, employees or agents.
Each Revolving Credit Lender agrees to reimburse the Issuing Bank and its
directors, employees and agents, in each case, to the same extent and subject to
the same limitations as provided above for the Agents.
Each Lender acknowledges that it has, independently and without
reliance upon the Agents or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the Intercreditor Agreement. Each
Lender also acknowledges that it will, independently and without reliance upon
the Agents or any other Lender and based on such documents and information as it
shall from time to time deem appropriate, continue to make its own decisions in
taking or not taking action under or based upon this Agreement or any other Loan
Document, any related agreement or any document furnished hereunder or
thereunder.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopy, as follows:
(a) if to the Borrower, to it at ▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇--Vice
President and Treasurer (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇), with a copy to
Stoel Rives LLP at ▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇, Attention of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq. (Telecopy No. (503) 230-
1907);
(b) if to the Paying Agent, to ▇▇▇▇▇▇ Guaranty Trust Company of
New York, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇
▇. ▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇, with a copy to ▇▇▇▇▇▇ Guaranty
Trust Company of New York, c/o ▇.▇. ▇▇▇▇▇▇ Services Inc., ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
(Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇); and
(c) if to a Lender, to it at its address (or telecopy number) set
forth on Schedule 2.01 or in the Assignment and Acceptance pursuant to
which such Lender shall have become a party hereto.
82
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy or on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 9.01 or in accordance with
the latest unrevoked direction from such party given in accordance with this
Section 9.01.
SECTION 9.02. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrower herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and the Issuing Bank and shall survive the
making by the Lenders of the Loans and the issuance of Letters of Credit by the
Issuing Bank, regardless of any investigation made by the Lenders or the Issuing
Bank or on their behalf, and shall continue in full force and effect as long as
the principal of or any accrued interest on any Loan or any Fee or any other
amount payable under this Agreement or any other Loan Document is outstanding
and unpaid or any Letter of Credit is outstanding and so long as the Commitments
have not been terminated. The provisions of Sections 2.14, 2.16, 2.20 and 9.05
shall remain operative and in full force and effect regardless of the expiration
of the term of this Agreement, the consummation of the transactions contemplated
hereby, the repayment of any of the Loans, the expiration of the Commitments,
the expiration of any Letter of Credit, the invalidity or unenforceability of
any term or provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of the Paying Agent, the Collateral Agent,
any Lender or the Issuing Bank.
SECTION 9.03. Binding Effect. This Agreement shall become effective
(a) when it shall have been executed by the Borrower and the Paying Agent and
when the Paying Agent shall have received counterparts hereof which, when taken
together, bear the signatures of each of the other parties hereto, and (b) when
each of the conditions set forth in Section 4.01 shall have been satisfied or
waived in writing, and thereafter shall be binding upon and inure to the benefit
of the parties hereto and their respective permitted successors and assigns. By
its execution and delivery of the amendment and restatement of this Agreement,
the Borrower hereby confirms that the representations and warranties set forth
in Article III are true and correct in all material respects on the date of this
amendment and restatement with the same effect as though made on such date.
SECTION 9.04. Successors and Assigns. (a) Whenever in this Agreement
any of the parties hereto is referred to, such reference shall be deemed to
include the permitted successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of the Borrower, the Paying Agent, the
Issuing Bank or the Lenders that are contained in this Agreement shall bind and
inure to the benefit of their respective successors and assigns.
(b) Each Lender may assign to one or more assignees all or a portion
of its interests, rights and obligations under this Agreement (including all or
a portion of its Commitment and the Loans at the time owing to it); provided,
however, that (i) except in the case of an assignment to a Lender or an
Affiliate of such Lender, (x) the Borrower (unless an Event of Default shall
have occurred and is continuing) and the Paying Agent (and, in the case of any
assignment of a Revolving Credit Commitment, the Issuing Bank and the Swingline
Lender) must give their prior written consent to such assignment (which consent
shall not be unreasonably withheld) and (y) the amount of the Commitment of the
assigning Lender subject to each such assignment (determined as of the date the
83
Assignment and Acceptance with respect to such assignment is delivered to the
Paying Agent) shall not be less than $5,000,000 (or, if less, the entire
remaining amount of such Lender's Commitment), (ii) the parties to each such
assignment shall execute and deliver to the Paying Agent an Assignment and
Acceptance, together with a processing and recordation fee of $3,500 (except for
assignments by any Initial Lender or as otherwise agreed to by the Paying Agent)
and (iii) the assignee, if it shall not be a Lender, shall deliver to the Paying
Agent an Administrative Questionnaire. Upon acceptance and recording pursuant
to paragraph (e) of this Section 9.04, from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be at
least five Business Days after the execution thereof, (A) the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement and (B) the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Acceptance, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto but shall continue to be entitled to the benefits of Sections 2.14, 2.16,
2.20 and 9.05, as well as to any Fees accrued for its account and not yet paid).
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim and that
its Term Loan Commitment and Revolving Credit Commitment, and the outstanding
balances of its Term Loans and Revolving Loans, in each case without giving
effect to assignments thereof which have not become effective, are as set forth
in such Assignment and Acceptance; (ii) except as set forth in (i) above, such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement,
any other Loan Document or any other instrument or document furnished pursuant
hereto, or the financial condition of the Borrower or any Subsidiary or the
performance or observance by the Borrower or any Subsidiary of any of its
obligations under this Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto; (iii) such assignee represents
and warrants that it is legally authorized to enter into such Assignment and
Acceptance; (iv) such assignee confirms that it has received a copy of this
Agreement and the Intercreditor Agreement (unless the Intercreditor Agreement is
no longer in effect), together with copies of the most recent financial
statements or delivered pursuant to Section 5.04 and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (v) such assignee will
independently and without reliance upon the Paying Agent, the Collateral Agent,
such assigning Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement; (vi) such
assignee appoints and authorizes the Paying Agent and the Collateral Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement (and as are delegated to the Paying Agent and the Collateral Agent,
respectively, by the terms hereof, together with such powers as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.
84
(d) The Paying Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices in The City of New York a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register shall be
conclusive and the Borrower, the Paying Agent, the Issuing Bank, the Collateral
Agent and the Lenders may treat each person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower, the Issuing Bank, the Collateral Agent
and any Lender, at any reasonable time and from time to time upon reasonable
prior notice.
(e) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, an Administrative Questionnaire
completed in respect of the assignee (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) above and, if required, the written consent of the Borrower, the Swingline
Lender, the Issuing Bank and the Paying Agent to such assignment, the Paying
Agent shall (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Lenders, the Issuing Bank and the Swingline Lender. No assignment
shall be effective unless it has been recorded in the Register as provided in
this paragraph (e).
(f) Each Lender may without the consent of the Borrower, the Swingline
Lender, the Issuing Bank or the Paying Agent sell participations to one or more
banks or other entities in all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans owing
to it); provided, however, that (i) such Lender's obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) the participating banks or other entities shall be entitled to the benefit
of the cost protection provisions contained in Sections 2.14, 2.16 and 2.20 to
the same extent as if they were Lenders (provided that a participant shall not
be entitled to receive any greater payment under Sections 2.14, 2.16 and 2.20
than the applicable Lender would have been entitled to receive with respect to
the participation sold to such participant, unless the sale of such
participation is made with the Borrower's prior written consent) and (iv) the
Borrower, the Paying Agent, the Issuing Bank and the Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement, and such Lender shall retain the
sole right to enforce the obligations of the Borrower relating to the Loans or
L/C Disbursements and to approve any amendment, modification or waiver of any
provision of this Agreement (other than amendments, modifications or waivers
decreasing any fees payable hereunder or the amount of principal of or the rate
at which interest is payable on the Loans, extending any scheduled principal
payment date or date fixed for the payment of interest on the Loans or
increasing or extending the Commitments).
(g) Any Lender or participant may, in connection with any assignment
or participation or proposed assignment or participation pursuant to this
Section 9.04, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrower furnished to such Lender by
or on behalf of the Borrower; provided that, prior to any such disclosure of
information designated by the Borrower as confidential, each such assignee or
participant or proposed assignee or participant shall execute an agreement
whereby such assignee or participant shall agree
85
(subject to customary exceptions) to preserve the confidentiality of such
confidential information on terms no less restrictive than those applicable to
the Lenders pursuant to Section 9.17.
(h) Any Lender may at any time assign all or any portion of its rights
under this Agreement to a Federal Reserve Bank to secure extensions of credit by
such Federal Reserve Bank to such Lender; provided that no such assignment shall
release a Lender from any of its obligations hereunder or substitute any such
Bank for such Lender as a party hereto. In order to facilitate such an
assignment to a Federal Reserve Bank, the Borrower shall, at the request of the
assigning Lender, duly execute and deliver to the assigning Lender a promissory
note or notes evidencing the Loans made to the Borrower by the assigning Lender
hereunder.
(i) The Borrower shall not assign or delegate any of its rights or
duties hereunder without the prior written consent of the Paying Agent, the
Issuing Bank and each Lender, and any attempted assignment without such consent
shall be null and void.
(j) In the event that Standard & Poor's Ratings Group, ▇▇▇▇▇'▇
Investors Service, Inc., and ▇▇▇▇▇▇▇▇'▇ BankWatch (or InsuranceWatch Ratings
Service, in the case of Lenders that are insurance companies (or Best's
Insurance Reports, if such insurance company is not rated by Insurance Watch
Ratings Service)) shall, after the date that any Lender becomes a Revolving
Credit Lender, downgrade the long-term certificate deposit ratings of such
Lender, and the resulting ratings shall be below BBB-, Baa3 and C (or BB, in the
case of a Lender that is an insurance company (or B, in the case of an insurance
company not rated by InsuranceWatch Ratings Service)), then the Issuing Bank
shall have the right (subject to the Borrower's consent not to be unreasonably
withheld), but not the obligation, at its own expense, upon notice to such
Lender and the Paying Agent, to replace (or to request the Borrower to use its
reasonable efforts to replace) such Lender with an assignee (in accordance with
and subject to the restrictions contained in paragraph (b) above), and such
Lender hereby agrees to transfer and assign without recourse (in accordance with
and subject to the restrictions contained in paragraph (b) above) all its
interests, rights and obligations in respect of its Revolving Credit Commitment
to such assignee; provided, however, that (i) no such assignment shall conflict
with any law, rule and regulation or order of any Governmental Authority and
(ii) the Issuing Bank or such assignee, as the case may be, shall pay to such
Lender in immediately available funds on the date of such assignment the
principal of and interest accrued to the date of payment on the Loans made by
such Lender hereunder and all other amounts accrued for such Lender's account or
owed to it hereunder.
SECTION 9.05. Expenses; Indemnity. (a) The Borrower agrees to pay all
out-of-pocket expenses incurred by the Initial Lenders, the Paying Agent, the
Collateral Agent, the Issuing Bank and the Swingline Lender in connection with
the arrangement of the credit facilities provided for herein and the preparation
and administration of this Agreement and the other Loan Documents or in
connection with any amendments, modifications or waivers of the provisions
hereof or thereof (whether or not the transactions hereby or thereby
contemplated shall be consummated) or incurred by the Initial Lenders, the
Paying Agent, the Collateral Agent or (after the occurrence and during the
continuance of an Event of Default) any other Lender in connection with the
enforcement or protection of its rights in connection with this Agreement and
the other Loan Documents or in connection with the Loans made or Letters of
Credit issued hereunder, including the reasonable fees, charges and
disbursements of Cravath, Swaine & ▇▇▇▇▇, counsel for the Paying Agent and the
86
Collateral Agent, and, in connection with any such enforcement, the reasonable
fees, charges and disbursements of any other counsel for the Paying Agent, the
Collateral Agent or any Lender.
(b) The Borrower agrees to indemnify the Initial Lenders, the Paying
Agent, the Collateral Agent, each other Lender and the Issuing Bank, each
Affiliate of any of the foregoing persons and each of their respective
directors, partners, officers, employees and agents (each such person being
called an "Indemnitee") against, and to hold each Indemnitee harmless from, any
and all losses, claims, damages, liabilities and related expenses, including
reasonable counsel fees, charges and disbursements, incurred by or asserted
against any Indemnitee arising out of, in any way connected with, or as a result
of any claim, litigation, investigation or proceeding (whether or not an
Indemnitee is a party thereto) relating to (i) the execution or delivery of this
Agreement or any other Loan Document or any agreement or instrument contemplated
thereby, the performance by the parties thereto of their respective obligations
thereunder or the consummation of the Transactions and the other transactions
contemplated thereby, the use of the proceeds of the Loans or issuance of
Letters of Credit, whether or not any Indemnitee is a party thereto, or (ii) any
actual or alleged presence or Release of Hazardous Materials on any property
owned or operated by the Borrower or any of the Subsidiaries, or any
Environmental Claim related in any way to the Borrower or the Subsidiaries;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or wilful misconduct of such
Indemnitee.
(c) The provisions of this Section 9.05 shall remain operative and in
full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the expiration of the Commitments, the expiration
of any Letter of Credit, the invalidity or unenforceability of any term or
provision of this Agreement or any other Loan Document, or any investigation
made by or on behalf of the Paying Agent, the Collateral Agent, any Lender or
the Issuing Bank. All amounts due under this Section 9.05 shall be payable on
written demand therefor.
SECTION 9.06. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, except to the extent prohibited by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender to or
for the credit or the account of the Borrower against any of and all the
obligations of the Borrower now or hereafter existing under this Agreement and
other Loan Documents held by such Lender, irrespective of whether or not such
Lender shall have made any demand under this Agreement or such other Loan
Document and although such obligations may be unmatured. Promptly after
exercising its rights under this Section 9.06, the applicable Lender shall
notify the Paying Agent and the Borrower of the exercise of such rights. The
rights of each Lender under this Section 9.06 are in addition to other rights
and remedies (including other rights of setoff) which such Lender may have.
SECTION 9.07. APPLICABLE LAW. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS (OTHER THAN LETTERS OF CREDIT AND AS EXPRESSLY SET FORTH IN OTHER LOAN
DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK. EACH LETTER OF CREDIT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED IN ACCORDANCE WITH, THE
87
LAWS OR RULES DESIGNATED IN SUCH LETTER OF CREDIT, OR IF NO SUCH LAWS OR RULES
ARE DESIGNATED, THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS (1993
REVISION), INTERNATIONAL CHAMBER OF COMMERCE, PUBLICATION NO. 500 (THE "UNIFORM
CUSTOMS") AND, AS TO MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF
THE STATE OF NEW YORK.
SECTION 9.08. Waivers; Amendment. (a) No failure or delay of the
Paying Agent, the Collateral Agent, any Lender or the Issuing Bank in exercising
any power or right hereunder or under any other Loan Document shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Paying Agent, the
Collateral Agent, the Issuing Bank and the Lenders hereunder and under the other
Loan Documents are cumulative and are not exclusive of any rights or remedies
that they would otherwise have. No waiver of any provision of this Agreement or
any other Loan Document or consent to any departure by the Borrower or any other
Loan Party therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) below, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice or demand on the Borrower in any case shall entitle the Borrower to any
other or further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders; provided, however, that
no such agreement shall (i) decrease the principal amount of, or extend the
maturity of or any scheduled principal payment date or date for the payment of
any interest on any Loan or any date for reimbursement of an L/C Disbursement,
or waive or excuse any such payment or any part thereof, or decrease the rate of
interest on any Loan or L/C Disbursement, without the prior written consent of
each Lender affected thereby, (ii) change or extend the Commitment or decrease
or extend the date for payment of the Commitment Fees of any Lender without the
prior written consent of such Lender, (iii) amend or modify the pro rata
requirements of the provisions of Section 2.17, amend or modify the provisions
of Section 9.04(i), the provisions of this Section 9.08, the definition of the
term "Required Lenders" or release any Guarantor or all or any substantial part
of the Collateral (except for any release expressly permitted by the Loan
Documents), without the prior written consent of each Lender or (iv) change the
allocation between Tranche A Term Loans and Tranche B Term Loans of any
prepayment pursuant to Section 2.12 or 2.13 without the prior written consent of
(A) Lenders holding a majority of the aggregate outstanding principal amount of
the Tranche A Term Loans and (B) Lenders holding a majority of the aggregate
outstanding principal amount of the Tranche B Term Loans; provided further that
no such agreement shall amend, modify or otherwise affect the rights or duties
of the Paying Agent, the Collateral Agent, the Issuing Bank or the Swingline
Lender hereunder or under any other Loan Document without the prior written
consent of the Paying Agent, the Collateral Agent, the Issuing Bank or the
Swingline Lender.
SECTION 9.09. Interest Rate Limitation. Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to any Loan
or participation in any L/C Disbursement, together with all fees, charges and
other amounts which are treated as interest on such Loan or participation in
such L/C Disbursement under applicable law (collectively the "Charges"), shall
exceed the maximum lawful rate (the "Maximum Rate") which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan or
participation in accordance with applicable
88
law, the rate of interest payable in respect of such Loan or participation
hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan or participation but were
not payable as a result of the operation of this Section 9.09 shall be cumulated
and the interest and Charges payable to such Lender in respect of other Loans or
participations or periods shall be increased (but not above the Maximum Rate
therefor) until such cumulated amount, together with interest thereon at the
Federal Funds Effective Rate to the date of repayment, shall have been received
by such Lender.
SECTION 9.10. Entire Agreement. This Agreement and the other Loan
Documents constitute the entire contract between the parties relative to the
subject matter hereof. Any other previous agreement among the parties with
respect to the subject matter hereof is superseded by this Agreement and the
other Loan Documents. Nothing in this Agreement or in the other Loan Documents,
expressed or implied, is intended to confer upon any party other than the
parties hereto and thereto any rights, remedies, obligations or liabilities
under or by reason of this Agreement or the other Loan Documents.
SECTION 9.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS
APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 9.11.
SECTION 9.12. Severability. In the event any one or more of the
provisions contained in this Agreement or in any other Loan Document should be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby (it being understood that
the invalidity of a particular provision in a particular jurisdiction shall not
in and of itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 9.13. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original but all of which when taken together shall
constitute a single contract, and shall become effective as provided in Section
9.03. Delivery of an executed signature page to this Agreement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Agreement.
SECTION 9.14. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
89
SECTION 9.15. Jurisdiction; Consent to Service of Process. (a) The
Borrower hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the
Paying Agent, the Collateral Agent, the Issuing Bank or any Lender may otherwise
have to bring any action or proceeding relating to this Agreement or the other
Loan Documents against the Borrower or its properties in the courts of any
jurisdiction.
(b) The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the other Loan Documents in any
New York State or Federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 9.16. Judgment Currency. (a) The obligations of the Borrower
and the other Loan Parties hereunder and under the other Loan Documents to make
payments in dollars (the "Obligation Currency") shall not be discharged or
satisfied by any tender or recovery pursuant to any judgment expressed in or
converted into any currency other than the Obligation Currency, except to the
extent that such tender or recovery results in the effective receipt by the
Paying Agent or a Lender or the Issuing Bank of the full amount of the
Obligation Currency expressed to be payable to the Paying Agent or such Lender
or the Issuing Bank under this Agreement or the other Loan Documents. If, for
the purpose of obtaining or enforcing judgment against the Borrower or any other
Loan Party or in any court or in any jurisdiction, it becomes necessary to
convert into or from any currency other than the Obligation Currency (such other
currency being hereinafter referred to as the "Judgment Currency") an amount due
in the Obligation Currency, the conversion shall be made at the rate of exchange
(as quoted by the Paying Agent or if the Paying Agent does not quote a rate of
exchange on such currency, by a known dealer in such currency designated by the
Paying Agent) determined, in each case, as of the date immediately preceding the
day on which the judgment is given (such Business Day being hereinafter referred
to as the "Judgment Currency Conversion Date").
(b) If there is a change in the rate of exchange prevailing between
the Judgment Currency Conversion Date and the date of actual payment of the
amount due, the Borrower covenants and agrees to pay, or cause to be paid, as a
separate obligation and notwithstanding any judgment, such additional amounts,
if any (but in any event not a lesser amount), as may be necessary to ensure
that the amount paid in the Judgment Currency, when converted at the rate of
exchange prevailing on the date of payment, will produce the amount of the
Obligation Currency which could have been
90
purchased with the amount of Judgment Currency stipulated in the judgment or
judicial award at the rate of exchange prevailing on the Judgment Currency
Conversion Date.
(c) For purposes of determining the rate of exchange for this Section
9.16, such amounts shall include any premium and costs payable in connection
with the purchase of the Obligation Currency.
SECTION 9.17. Confidentiality. The Paying Agent, the Collateral Agent,
the Issuing Bank and each of the Lenders agree to keep confidential (and to use
its best efforts to cause its respective (agents and representatives to keep
confidential) the Information (as defined below) and all copies thereof,
extracts therefrom and analyses or other materials based thereon, except that
the Paying Agent, the Collateral Agent, the Issuing Bank or any Lender shall be
permitted to disclose Information (a) to such of its respective officers,
directors, employees, agents, affiliates and representatives as need to know
such Information, (b) to the extent requested by any regulatory authority, (c)
to the extent otherwise required by applicable laws and regulations or by any
subpoena or similar legal process, (d) in connection with any suit, action or
proceeding relating to the enforcement of its rights hereunder or under the
other Loan Documents or (e) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section 9.17 or (ii)
becomes available to the Paying Agent, the Issuing Bank, any Lender or the
Collateral Agent on a nonconfidential basis from a source other than the
Borrower. For the purposes of this Section, "Information" shall mean all
financial statements, certificates, reports, agreements and information
(including all analyses, compilations and studies prepared by the Paying Agent,
the Collateral Agent, the Issuing Bank or any Lender based on any of the
foregoing) that are received from the Borrower and related to the Borrower, any
shareholder of the Borrower or any employee, customer or supplier of the
Borrower, other than any of the foregoing that were available to the Paying
Agent, the Collateral Agent, the Issuing Bank or any Lender on a nonconfidential
basis prior to its disclosure thereto by the Borrower, and which are in the case
of Information provided after the Closing Date, clearly identified at the time
of delivery as confidential. The provisions of this Section 9.17 shall remain
operative and in full force and effect regardless of the expiration of this
Agreement.
SECTION 9.18. Intercreditor Agreement. Notwithstanding anything to the
contrary contained in this Agreement or any other Loan Document, prior to the
Separation Date, to the extent the terms of this Agreement conflict with the
terms of the Intercreditor Agreement, the terms of the Intercreditor Agreement
shall be controlling as if such terms of the Intercreditor Agreement replaced
the conflicting terms of this Agreement mutatis mutandis.
SECTION 9.19. Additional Borrowers. The Borrower may designate any ▇▇▇▇▇
Subsidiary reasonably satisfactory to the Initial Lenders as an additional
borrower (an "Additional Borrower") under this Agreement by delivering a written
notice to the Initial Lenders to such effect; provided that on or prior to the
initial borrowing by such Additional Borrower, (a) such Additional Borrower will
enter into an agreement in writing in form and substance satisfactory to the
Initial Lenders pursuant
91
to which it will agree to be bound by (and will be entitled to the benefits of)
this Agreement, (b) the Borrower shall execute a guarantee agreement in form and
substance reasonably satisfactory to the Initial Lenders guaranteeing the
obligations of such Additional Borrower and (c) the subsidiaries of such
Additional Borrower shall execute security and guarantee agreements in form and
substance reasonably satisfactory to the Initial Lenders securing and
guaranteeing the obligations of such Additional Borrower. The parties hereto
agree that upon such designation, this Agreement shall be modified as
appropriate to account for such designation in a manner to be agreed upon by the
Initial Lenders and the Borrower. Notwithstanding anything to the contrary,
this Section 9.19 shall not, nor shall it be construed as providing for any,
increase in the Total Commitments.
SECTION 9.20. Margin Regulations. Notwithstanding any other provision
contained in this Agreement or the other Loan Documents, including Section
2.13(b), Section 6.02 and Section 6.05, the pledge or sale of the Shares by
Bidco shall be permitted hereunder until the Depositary Shares have been
delisted from the New York Stock Exchange (and the Shares shall not otherwise be
"margin stock" as defined in Regulations G and U of the Board); provided that
until such time the Borrower shall use its reasonable efforts to cause Bidco not
to:
(i) incur any Indebtedness other than (A) its obligations under the
Offer, (B) its obligations under the Powercoal/Bidco Loans and (C) its
obligations under or permitted under the Bidco Facility Agreement;
(ii) engage in any business other than (A) acquiring and holding the
Shares and (B) engaging in activities reasonably related to the Offer; or
(iii) sell or otherwise dispose of the Shares, unless (A) such Shares
are sold for cash, (B) fair value is received for such Shares and (C) the
proceeds of such sale are either held as cash or invested in certificates
of deposit, U.S. government securities, commercial paper, other money
market instruments that are exempted securities under the United States
federal securities laws or Cash Investment Equivalents (as defined in the
Bidco Facility Agreement).
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
PACIFICORP POWERCOAL LLC,
by PacifiCorp Group Holdings
Company, its Member,
by
/s/ W. E. ▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Treasurer
92
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK,
individually as an Initial Lender and as Paying
Agent, Collateral Agent, Swingline Lender and
Issuing Bank,
by
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇
Title: Vice President
CITIBANK N.A., individually as an Initial Lender,
by
/s/ ▇▇▇▇▇▇ ▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇
Title: Managing Director/Attorney-in/Fact
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P., individually
as an Initial Lender,
by
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Authorized Signatory