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EXHIBIT 10.1
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COGENTRIX OF RICHMOND, INC.
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AMENDED AND RESTATED
REIMBURSEMENT AND LOAN AGREEMENT
Dated as of June 28, 2000
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BNP PARIBAS
as Agent, as Issuing Bank
and as a Lender
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TABLE OF CONTENTS
SECTION 1. DEFINITIONS........................................................2
SECTION 1.01. Certain Defined Terms..................................2
SECTION 1.02. Other Definitional Provisions.........................27
SECTION 2. [INTENTIONALLY OMITTED]...........................................28
SECTION 3. [INTENTIONALLY OMITTED]...........................................28
SECTION 4. TERM LOANS AND LIQUIDITY LOANS....................................28
SECTION 4.01. The Term Loans........................................28
SECTION 4.02. Liquidity Loans.......................................29
SECTION 4.03. Promissory Notes......................................29
SECTION 4.04. Prepayments...........................................30
SECTION 4.05. [INTENTIONALLY OMITTED]...............................31
SECTION 4.06. Repayment of Liquidity Loans..........................31
SECTION 5. THE BOND LETTERS OF CREDIT........................................31
SECTION 5.01. Issuance of the Bond Letters of Credit;
Participation by Lenders...........................31
SECTION 5.02. Notice of Payments and Reductions under the
Bond Letters of Credit.............................31
SECTION 5.03. Lender Payments in respect of the Bond
Letters of Credit..................................32
SECTION 5.04. Agreement to Reimburse ▇▇▇▇ ▇▇ Disbursements..........33
SECTION 5.05. The Borrower's and each Lender's Agreements...........34
SECTION 5.06. Reduction of Bond Letters of Credit...................35
SECTION 5.07. Extension of Bond Letters of Credit...................35
SECTION 5.08. Borrower to Make Certain Optional
Redemptions of Bonds...............................35
SECTION 6. TERM VP LETTERS OF CREDIT.........................................36
SECTION 6.01. Issuance of and Participation in the
Term VP Letters of Credit..........................36
SECTION 6.02. [INTENTIONALLY OMITTED]...............................36
SECTION 6.03. Extension of Term VP Letters of Credit................36
SECTION 6.04. Issuing Bank's Term VP Account; Notice of Payments
and Reductions under the Term VP
Letters of Credit..................................36
SECTION 6.05. Expiration of the Term VP Letter of Credit............37
SECTION 6.06. Borrower's Obligations in Respect of Term VP
Letters of Credit..................................37
SECTION 6.07. Funding of Term VP Letters of Credit Disbursements....38
SECTION 6.08. Extensions of Term VP Letters of Credit...............40
SECTION 6A. DEBT SERVICE RESERVE LETTER OF CREDIT...................40
SECTION 6A.01 Issuance of the Debt Service Reserve Letter
of Credit..........................................40
SECTION 6A.02 Available Amount......................................41
SECTION 6A.03 Debt Service Reserve Letter of Credit Operations......41
SECTION 6A.04 Agreement To Repay Debt Service Reserve
Letter of Credit Disbursements.....................41
SECTION 6A.05 Application of Payments...............................44
SECTION 6A.06 Effect of Event of Default............................45
SECTION 6A.07 Extension of Debt Service Reserve Letter of Credit....45
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SECTION 7. TERMS APPLICABLE TO LOANS AND LETTERS OF CREDIT...................45
SECTION 7.01. Fees..................................................45
SECTION 7.02. Maximum Interest or Discount..........................47
SECTION 7.03. Computation of Interest...............................47
SECTION 7.04. Conversion/Continuation Options; Minimum
Amount of Loans....................................47
SECTION 7.05. Minimum Amounts of Eurodollar Loans...................48
SECTION 7.06. Interest Rate and Payment Dates; Additional
Interest on Eurodollar Loans.......................48
SECTION 7.07. Inability to Determine Interest Rate..................49
SECTION 7.08. Funding Indemnity.....................................49
SECTION 7.09. Indemnity Regarding Interest Hedging Transactions.....50
SECTION 7.10. [INTENTIONALLY OMITTED]...............................50
SECTION 7.11. Illegality............................................50
SECTION 7.12. Requirements of Law...................................50
SECTION 7.13. Increased Costs of Letters of Credit..................51
SECTION 7.14. Taxes.................................................52
SECTION 7.15. Pro Rata Treatment and Payments.......................53
SECTION 7.16. Obligations Absolute. ...............................54
SECTION 7.17. [INTENTIONALLY OMITTED]...............................54
SECTION 8. REPRESENTATIONS AND WARRANTIES....................................54
SECTION 8.01. Financial Statements..................................54
SECTION 8.02. Corporate Existence and Business; Subsidiaries........55
SECTION 8.03. Compliance with Law...................................55
SECTION 8.04. Power and Authorization; Enforceable Obligations......55
SECTION 8.05. Governmental Approvals and Other Consents
and Approvals......................................56
SECTION 8.06. No Legal Bar..........................................56
SECTION 8.07. No Proceeding or Litigation...........................57
SECTION 8.08. No Default or Event of Loss...........................57
SECTION 8.09. Ownership of Property; Liens..........................57
SECTION 8.10. No Burdensome Restrictions............................57
SECTION 8.11. Taxes.................................................58
SECTION 8.12. Federal Regulations...................................58
SECTION 8.13. ERISA.................................................58
SECTION 8.14. Investment Company Act................................58
SECTION 8.15. Security Documents....................................58
SECTION 8.16. Full Disclosure.......................................59
SECTION 8.17. Power Purchase Agreements, Steam Purchase
Agreement and Other Assigned Agreements............59
SECTION 8.18. Utilities and Other Services, Etc. ...................60
SECTION 8.19. Compliance with Building Codes, Zoning Laws, Etc. ....60
SECTION 8.20. Fuel Supply...........................................60
SECTION 8.21. Principal Place of Business, Etc. ....................60
SECTION 8.22. Description of Property...............................60
SECTION 8.23. Public Utility Status.................................60
SECTION 8.24. Qualifying Facility...................................61
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SECTION 8.25. Material Agreement and Licenses.......................61
SECTION 8.26. Sufficiency and Delivery of Project Documents.........61
SECTION 8.27. Environmental Matters.................................62
SECTION 8.28. Representations and Warranties........................63
SECTION 8.29. Location of Site, Easements and Improvements..........63
SECTION 8.30. No Conflict with Power Purchase Agreement.............63
SECTION 9. CONDITIONS PRECEDENT..............................................63
SECTION 9.01. Conditions to Effectiveness...........................63
SECTION 9.02. [INTENTIONALLY OMITTED]...............................68
SECTION 9.03. Conditions to All Extensions of Credit................68
SECTION 10. AFFIRMATIVE COVENANTS............................................70
SECTION 10.01. [INTENTIONALLY OMITTED]..............................70
SECTION 10.02. Conduct of Business, Maintenance of Existence, Etc. .70
SECTION 10.03. Payment of Obligations...............................70
SECTION 10.04. Performance under Other Agreements...................70
SECTION 10.05. Insurance............................................70
SECTION 10.06. Inspection of Property; Books and Records;
Discussions........................................73
SECTION 10.07. Compliance with Laws.................................73
SECTION 10.08. Financial Statements.................................74
SECTION 10.09. Certificates; Other Information. ....................74
SECTION 10.10. Taxes and Claims.....................................75
SECTION 10.11. Maintenance of Property..............................76
SECTION 10.12. Notices..............................................76
SECTION 10.13. Assignments of Additional Contracts; Maintenance
of Liens of the Security Documents; Future
Project Mortgages..................................77
SECTION 10.14. Annual Opinion of Counsel............................78
SECTION 10.15. Employee Plans.......................................78
SECTION 10.16. Purchase of Allowances...............................78
SECTION 10.17. [INTENTIONALLY OMITTED]..............................79
SECTION 10.18. Fiscal Year..........................................79
SECTION 10.19. [INTENTIONALLY OMITTED]..............................79
SECTION 10.20. Indemnification......................................79
SECTION 10.21. Use of Proceeds......................................80
SECTION 10.22. Coal Supply Agreement - Unit II; ANR Guarantee.......80
SECTION 11. NEGATIVE COVENANTS...............................................80
SECTION 11.01. Merger, Sale of Assets, Purchases, Etc. .............80
SECTION 11.02. Indebtedness.........................................81
SECTION 11.03. Dividends, Etc. .....................................81
SECTION 11.04. Liens, Etc. .........................................82
SECTION 11.05. Nature of Business...................................82
SECTION 11.06. Amendment, Termination or Extension of
Contracts, Etc. ...................................82
SECTION 11.07. Permitted Investments................................82
SECTION 11.08. Qualifying Facility..................................82
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SECTION 11.09. Leases...............................................83
SECTION 11.10. Offering Circular....................................83
SECTION 11.11. Fiscal Year..........................................83
SECTION 11.12. Change of Office.....................................83
SECTION 11.13. Change of Name.......................................83
SECTION 11.14. Compliance with ERISA................................83
SECTION 11.15. Transactions with Affiliates and Others;
Operating Management Fee...........................83
SECTION 11.16. Change of Remarketing Agent or Tender Agent..........84
SECTION 11.17. Tax Exempt Status of Bonds...........................84
SECTION 11.18. Optional Redemption of Bonds.........................84
SECTION 11.19. [INTENTIONALLY OMITTED]..............................84
SECTION 11.20. Term Interest Rate Election..........................84
SECTION 12. EVENTS OF DEFAULT................................................84
SECTION 13. TRANSFER OF LETTERS OF CREDIT....................................90
SECTION 14. SUCCESSORS AND ASSIGNS...........................................90
SECTION 15. EXPENSES.........................................................92
SECTION 16. THE AGENT AND RELATIONS AMONG LENDERS, ETC. .....................93
SECTION 16.01. Appointment of Agent, Powers and Immunities..........93
SECTION 16.02. Reliance by Agent....................................94
SECTION 16.03. Defaults.............................................94
SECTION 16.04. Rights as Lenders....................................94
SECTION 16.05. Indemnification......................................94
SECTION 16.06. Documents............................................95
SECTION 16.07. Non-Reliance on Agents and Other Lenders.............95
SECTION 16.08. Resignation or Removal of Agent......................95
SECTION 16.09. Authorization........................................95
SECTION 16.10. Rescission of Payments...............................96
SECTION 17. MISCELLANEOUS....................................................96
SECTION 17.01. Commercial Practices.................................96
SECTION 17.02. No Waiver; Remedies Cumulative.......................96
SECTION 17.03. Notices..............................................97
SECTION 17.04. Right of Set-off.....................................97
SECTION 17.05. Release of Collateral................................97
SECTION 17.06. Severability.........................................98
SECTION 17.07. Headings.............................................98
SECTION 17.08. Amendments, Etc. ....................................98
SECTION 17.09. GOVERNING LAW........................................98
SECTION 17.10. SUBMISSION TO JURISDICTION; WAIVERS..................99
SECTION 17.11. Limitation of Liability..............................99
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SECTION 17.12. Confidentiality.....................................100
SECTION 17.13. Survival of Representations and Warranties..........100
SECTION 17.14. Amendment and Restatement...........................100
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SCHEDULES
SCHEDULE 1 - Lenders Commitments, Lending Offices, Addresses for Notice,
Commitment Percentages
SCHEDULE 2 - Applicable Margin
SCHEDULE 3 - Description of the Site
SCHEDULE 4 - Governmental Approvals
SCHEDULE 5 - Recordings and Filings
SCHEDULE 6 - Term Loan Amortization Schedule
SCHEDULE 7 - Bond Mandatory Prepayment Schedule
SCHEDULE 8 - Required Allowances
EXHIBITS
EXHIBIT A - Form of Term Note
EXHIBIT B - Form of Liquidity Loan Note
EXHIBIT C - Form of Debt Service Reserve Letter of Credit Note
EXHIBIT D - Form of Bond Letter of Credit
EXHIBIT E - Form of Lender Assignment
EXHIBIT F - Form of Commitment and Loan Transfer Supplement
EXHIBIT G-1 - Form of Opinion of ▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇
EXHIBIT G-2 - Form of Opinion of Virginia counsel to Borrower
EXHIBIT G-3 - Form of Opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
EXHIBIT H - Form of Amended and Restated Security Deposit Agreement
EXHIBIT I - Form of Security Agreement Amendment
EXHIBIT J-1 - Form of Term VP Letter of Credit - Unit I
EXHIBIT J-2 - Form of Term VP Letter of Credit - Unit II
EXHIBIT J-3 - Form of Debt Service Reserve Letter of Credit
EXHIBIT K - Form of CP Side Letter Agreement
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AMENDED AND RESTATED REIMBURSEMENT AND LOAN AGREEMENT, dated as of June
28, 2000, among (i) COGENTRIX OF RICHMOND, INC., a North Carolina corporation
(the "Borrower"), (ii) BNP PARIBAS, as letter of credit issuer (in such
capacity, the "Issuing Bank"), (iii) BNP PARIBAS ("Paribas"), and each other
financial institution which becomes a party hereto pursuant to Section 14(c) by
assignment or purchase from such institution or its assignee or successor
(individually a "Lender", and collectively, the "Lenders"), and (iv) BNP
PARIBAS, as agent for the Issuing Bank and the Lenders (in such capacity, the
"Agent").
W I T N E S S E T H :
WHEREAS, the Borrower, the Issuing Bank, Paribas, ING (U.S.) Capital
LLC, Credit Lyonnais New York Branch, Societe Generale, The Fuji Bank, Limited,
Compagnie Financiere de CIC et de L'Union Europeene, ▇▇▇▇▇▇ Brothers Inc., The
Sanwa Bank Limited, CIBC Inc. and Union Bank of California, N.A. (collectively,
the "Existing Lenders") and the Agent are parties to the Reimbursement and Loan
Agreement, dated as of December 1, 1990, as amended by the First Amendment
thereto dated as of February 1, 1991, the Second Amendment thereto dated as of
December 1, 1991, the Third Amendment thereto dated as of December 15, 1993, the
Fourth Amendment thereto dated as of February 15, 1995, the Fifth Amendment
thereto dated as of June 1, 1995, the Sixth Amendment thereto dated as of March
31, 1996 and the Seventh Amendment thereto dated as of December 1, 1997 (as so
amended, the "Existing Loan Agreement"), pursuant to which the Borrower funded
the costs of construction financing and initial operation of the Project (as
defined herein) with the proceeds of loans made by the Existing Lenders, the
proceeds of the Bonds supported by letters of credit issued by the Issuing Bank
and the proceeds of commercial paper notes supported by a letter of credit (the
"CP Letter of Credit") issued by the Issuing Bank, and the Issuing Bank provided
certain other letters of credit in support of the Project;
WHEREAS, immediately prior to this Agreement's becoming effective
pursuant hereto on the Restatement Effective Date, the Borrower will have
terminated the Commercial Paper Program as contemplated by the CP Side Letter
Agreement (each as defined herein), and the Existing Lenders will have made Term
Loans to the Borrower in an aggregate principal amount outstanding on the date
hereof of $117,119,000 (the "Existing Term Loans"), the proceeds of which are to
be used to satisfy the Borrower's reimbursement obligation in respect of the
draw under the CP Letter of Credit made in connection with the termination of
the Commercial Paper Program;
WHEREAS, immediately prior to this Agreement's becoming effective
pursuant hereto on the Restatement Effective Date, as contemplated by the CP
Side Letter Agreement, the Existing Lenders will have transferred the Existing
Term Loans and any other outstanding extensions of credit made by the Existing
Lenders and all of their rights and obligations relating thereto to Paribas
pursuant to the Lender Assignment (as defined herein);
WHEREAS, the Borrower has requested Paribas make an additional Term
Loan in the principal amount of $25,181,000 (the "Additional Term Loan"), and
Paribas is willing to do so subject to the terms and conditions of this
Agreement;
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WHEREAS, the Borrower desires to extend the expiration date of each of
the Bond Letters of Credit and Term VP Letters of Credit, and the Issuing Bank
and the Lenders are willing to do so subject to the terms and conditions of this
Agreement;
WHEREAS, the parties hereto mutually desire to amend the Existing Loan
Agreement to provide for, among other things, (i) the increase of the aggregate
amount of Term Loans to be made under the Agreement, (iii) the changing of the
principal amortization schedule for the Term Loans, (iv) the extension of the
maturity of the Term Loans, (v) the extensions of the Bond Letters of Credit and
the VP Letters of Credit, (vi) the issuance by the Issuing Bank of the Debt
Service Reserve Letter of Credit in favor of the Security Agent and (vii) the
changing of the interest rates applicable to the Loans, and to restate the
Existing Loan Agreement, as so amended, in its entirety as hereinafter set
forth;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained and for other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, each of the parties hereto
hereby agrees that, from and after the Restatement Effective Date, the Existing
Loan Agreement (including all Exhibits and Schedules thereto) shall be, and the
same hereby is, amended and restated in its entirety to read as follows:
SECTION 1. DEFINITIONS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms have the following meanings (such definitions to be equally
applicable to both singular and plural forms of the terms defined):
"Acceleration Event": as defined in Section 6A.01.
"Accounts": as defined in the Security Deposit Agreement.
"Additional Contract": any contract entered into by the
Borrower after the Restatement Effective Date, providing for (i) the
transmission or sale by the Borrower of any of the Facility's
electrical or steam output or (ii) the supply or transportation of Fuel
to the Facility or (iii) the removal of ash or other by-products from
the Facility or (iv) the supply of goods or services essential to the
operation of the Facility (other than employment contracts and
contracts involving less than $500,000 annually or having a maximum
term (including renewal options) of less than six months).
"Additional Term Loan": as defined in the recitals hereto.
"Administration Fee": as defined in Section 7.01(f).
"Affiliate": of any designated Person, each Person which,
directly or indirectly, controls or is controlled by or is under common
control with such designated Person and, without limiting the
generality of the foregoing, shall include (i) any Person which
beneficially owns or holds 5% or more of any class of voting securities
of such designated
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Person or 5% or more of the equity interest in such designated Person
and (ii) any Person of which such designated Person beneficially owns
or holds 5% or more of any class of voting securities or in which such
designated Person beneficially owns or holds 5% or more of the equity
interest. For the purposes of this definition, "control" (including,
with correlative meanings, the terms "controlled by" and "under common
control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether
through the ownership of voting securities or by contract or otherwise.
"Agreement": this Amended and Restated Reimbursement and Loan
Agreement, dated as of June 28, 2000, among the Borrower, the Lenders,
the Issuing Agent and the Agent, as the same may be amended,
supplemented or otherwise modified and in effect from time to time.
"Allowances": a limited authorization by the EPA or its
delegate under the NOx Budget Trading Program (as specified in 40 CFR
Part 97) to emit up to one ton of nitrogen oxides during the control
period (May 1 - September 30) of the specified year or in any year
thereafter.
"ANR": ANR Coal Company, a Delaware corporation.
"ANR Guarantee": the Guarantee Agreement dated as of January
1, 1990 made by ANR for the benefit of the Borrower, as the same may be
amended, supplemented or otherwise modified in accordance with Section
11.06.
"Applicable Margin": the respective percentages set forth on
Schedule 2.
"Ash Hauling Agreement": the Agreement for Ash Removal
Services dated as of September 30, 1990, as amended by the First
Amendment thereto, dated as of June 1, 1992, and the Consent and
Agreement, dated as of June 28, 2000, between ReUse and the Borrower,
relating to ash hauling and disposal services in respect of the
Facility, as the same may be further amended, supplemented or otherwise
modified in accordance with the provisions of Section 11.06.
"Assigned Agreements": the collective reference to the
Construction Contract, the Project Development Agreement, the Power
Purchase Agreements, the Steam Purchase Agreement, the Coal Supply
Agreements, the ANR Guarantee, the Coal Transportation Agreements, the
Sidetrack Agreement, the Ash Hauling Agreement, the Lime Sales
Agreement, the Engineering Agreement, the Ground Lease, the DuPont
Easement Agreement, the Environmental Indemnification Agreement, the
Car Lease Agreement and, from and after the date an Additional Contract
is entered into by the Borrower, such Additional Contract.
"Assignments": the collective reference to the Assignments of
the Construction Contract, the Project Development Agreement, the Power
Purchase Agreements, the Steam Purchase Agreement, the Coal Supply
Agreements, the ANR Guarantee, the Coal Transportation Agreements, the
Sidetrack Agreement, the Ash Hauling Agreement, the
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Lime Sales Agreement, the Engineering Agreement, the Environmental
Indemnification Agreement, the Car Lease Agreement executed by the
Borrower in favor of the Agent, and, with respect to each Additional
Contract, to the assignment thereof in form similar to such Assignments
to be executed by the Borrower in favor of the Agent.
"Base Rate": for any day with respect to any Lender, the
higher of (i) the prime commercial lending rate announced by Citibank,
N.A. as in effect from time to time at its principal office in New
York, New York, and (ii) 3/4 of 1% above the Federal Funds Rate. Each
change in the Base Rate shall, on the date of such change, result in a
corresponding change in any interest rate provided for herein which is
based on the Base Rate.
"Base Rate Loans": Loans hereunder at such time as they are
made or being maintained at a rate of interest based upon the Base
Rate.
"Bond Documents": the collective reference to (i) the
Indenture, the Sale Agreement, the Sale Agreement Note, the 1990 Bond
Purchase Agreement, the Letter of Representation, the Intercreditor
Agreement, the Remarketing Agreement and (ii) all amendments of or
supplements to the foregoing documents and bond purchase agreements,
remarketing agreements and other documents in connection with the
issuance of the 1991 Bonds.
"Bond Fronting Fee": as defined in Section 7.01(b).
"Bond Issuer": Industrial Development Authority of the City of
Richmond, Virginia.
"▇▇▇▇ ▇▇ Disbursement": as defined in Section 5.02.
"▇▇▇▇ ▇▇ Reduction": as defined in Section 5.02.
"▇▇▇▇ ▇▇ Reimbursement Obligations": as defined in Section
5.04(a).
"▇▇▇▇ ▇▇ Reimbursement Payment": as defined in Section
5.04(a).
"▇▇▇▇ ▇▇ Termination Date": June 1, 2007, as the same may be
extended from time to time pursuant to Section 5.07.
"Bond Letters of Credit": the collective reference to the 1990
Bond Letter of Credit and the 1991 Bond Letters of Credit;
individually, a "Bond Letter of Credit".
"Bond Letter of Credit Fee": as defined in Section 7.01(b).
"Bond Pledge Agent": Bankers Trust Company as bond pledge
agent under each of the Bond Pledge Agreements, and its successors in
such capacity appointed in the manner provided for in each of the Bond
Pledge Agreements.
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"Bond Pledge Agreements": the collective reference to the 1990
Bond Pledge Agreement and the 1991 Bond Pledge Agreements.
"Bond Redemption Amount": for a particular Bond Redemption
Date, the amount set forth in Schedule 7 opposite such Bond Redemption
Date.
"Bond Redemption Date": each date set forth in Schedule 7.
"Bonds": the 1990 Bonds and the 1991 Bonds.
"Borrowing": a borrowing hereunder of one or more Loans.
"Business Day": a day other than a Saturday, a Sunday or any
other day on which commercial banks in New York, New York or, with
respect to matters relating to the Security Deposit Agreement,
Charlotte, North Carolina are authorized or required by law or
executive order to be closed.
"Capital Lease": any lease of property, real or personal,
which, in accordance with GAAP, would be required to be capitalized on
a balance sheet of the lessee.
"Car Lease Agreement": the Car Lease Agreement, dated as of
November 15, 1994, between Diamond May and the Borrower, as the same
may be amended, supplemented or otherwise modified in accordance with
the provisions of Section 11.06.
"Cash Operating Costs": for any period, the sum (without
duplication) of the following for the Borrower: (i) all salaries,
employee benefits and other compensation paid, plus (ii) the cost of
Fuel and the cost of other materials and utilities paid, including the
transportation costs paid for Fuel and such other materials and
utilities, plus (iii) ash disposal costs paid, plus (iv) insurance
premiums paid, plus (v) costs of operating and maintaining the Project
paid, including, without limitation, costs associated with the purchase
by the Borrower of any Allowance, plus (vi) property and other taxes
(except income taxes) paid, plus (vii) fees for accounting, legal and
other professional services paid, plus (viii) general and
administrative expenses paid plus (ix) capital expenditures paid, plus
(x) Operating Management Fees paid, plus (xi) all other cash
expenditures (including payments with respect to the Junior Working
Capital Loans) relating to operating, maintenance and administrative
costs of the Project paid; provided that there shall be excluded from
the foregoing items (i) through (xi) payments with respect to federal,
state and local income taxes, Debt Service and payments of principal,
interest or fees with respect to all other Indebtedness for borrowed
money (other than with respect to the Junior Working Capital Loans) of
the Borrower and payments of allocated regional and central support
costs.
"CHC": Cogentrix Holdings Corporation, a North Carolina
corporation and a wholly-owned Subsidiary of Delaware Holdings.
"CI": Cogentrix, Inc., a North Carolina corporation and a
wholly-owned Subsidiary of CHC.
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"Closing Date": December 1, 1990.
"Coal Supply Agreement - Unit I": the Coal Sales Agreement
dated as of February 15, 1990, as amended by the First Amendment dated
as of December 1, 1990, the Second Amendment dated as of March 17,
1992, the Third Amendment and Clarification dated as of May 1, 1996 and
the Fourth Amendment dated as of July 1, 1998, among the Borrower,
Electric Fuels and Kentucky May relating to the supply of coal to Unit
I, as the same may be further amended, supplemented or otherwise
modified in accordance with the provisions of Section 11.06.
"Coal Supply Agreement - Unit II": the Coal Sales Agreement
dated as of January 1, 1990, as amended by the First Amendment dated as
of December 1, 1990, the Second Amendment dated as of March 22, 1991
and the Third Amendment dated as of June 1, 1992, between the Borrower
and Coastal relating to the supply of coal to Unit II, as the same may
be further amended, supplemented or otherwise modified in accordance
with the provisions of Section 11.06.
"Coal Supply Agreements": the collective reference to the Coal
Supply Agreement - Unit I and the Coal Supply Agreement - Unit II;
individually, a "Coal Supply Agreement."
"Coal Transportation Agreement - Unit I": the Railroad
Transportation Contract (ICC-CSXT-C-04034) dated as of March 1, 1990,
issued April 10, 1990 and effective April 12, 1990, as amended by the
First Amendment issued July 23, 1990 and effective July 25, 1990, the
Second Amendment dated as of December 1, 1990, issued and effective
December 13, 1990, and the Third Amendment issued December 9, 1994 and
effective December 13, 1994, between the Borrower and CSX relating to
the transportation of coal for Unit I, as the same may be further
amended, supplemented or otherwise modified in accordance with the
provisions of Section 11.06.
"Coal Transportation Agreement - Unit II": the Railroad
Transportation Contract (ICC-CSXT-C-04033) dated as of March 1, 1990,
issued April 10, 1990 and effective April 12, 1990, as amended by the
First Amendment issued July 23, 1990 and effective July 25, 1990, the
Second Amendment dated as of December 1, 1990, issued and effective
December 13, 1990, the Third Amendment issued June 30, 1992 and
effective July 2, 1992, the Fourth Amendment issued December 9, 1994
and effective December 13, 1994, the Fifth Amendment applied November
16, 1995, and the Sixth Amendment effective June 9, 1998, between the
Borrower and CSX relating to the transportation of coal for Unit II, as
the same may be further amended, supplemented or otherwise modified in
accordance with the provisions of Section 11.06.
"Coal Transportation Agreements": the collective reference to
the Coal Transportation Agreement - Unit I and the Coal Transportation
Agreement - Unit II; individually, a "Coal Transportation Agreement".
"Coastal": Coastal Coal Sales, Inc., a Delaware corporation
and a wholly-owned subsidiary of ANR.
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"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Cogentrix Energy": Cogentrix Energy, Inc., a North Carolina
corporation.
"Collateral": the collective reference to all real and
personal property, tangible and intangible, and the proceeds thereof,
subjected from time to time to the Liens intended to be created by the
Security Documents and not released by the Lenders.
"Commercial Paper Program": the letter of credit-backed
commercial paper program, established by the Borrower in accordance
with the terms of the Existing Loan Agreement and terminated by the
Borrower on the Restatement Effective Date.
"Commitment": as to any Lender, its obligation to make Loans
to the Borrower pursuant to, and in the amounts set forth in, Sections
4.01, 4.02 and 6A.04; collectively, as to all Lenders, the
"Commitments".
"Commitment and Loan Transfer Supplement": a commitment and
loan transfer supplement substantially in the form of Exhibit F.
"Commitment Percentage": with respect to any Lender, the
percentage set forth next to such Lender's name under the caption
"Commitment Percentage" on Schedule 1, as the same may from time to
time be modified or amended in accordance with Section 14 or otherwise
in accordance with the terms hereof.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Borrower within
the meaning of Section 414(b) or (c) of the Code.
"Consents to Assignment": the collective reference to each of
the Consent and Agreement, dated as of December 1, 1990, to
Construction Contract, among Contractor and the Agent; the Consent and
Agreement, dated as of December 1, 1990, to the Project Development
Agreement, among CI and the Agent; the Consent and Agreement, dated as
of December 13, 1990, to the Power Purchase Agreements, among the
Borrower, Virginia Power and the Agent; the Consent and Agreement,
dated as of December 10, 1990, to the Steam Purchase Agreement, among
the Borrower, DuPont and the Agent; the Consent and Agreement, dated as
of December 1, 1990, to the Coal Supply Agreement - Unit I, among
Electric Fuels, Kentucky May and the Agent; the Consent and Agreement,
dated as of December 1, 1990, to the Coal Supply Agreement - Unit II,
between Coastal and the Agent; the Consent and Agreement, dated as of
December 1, 1990, to the ANR Guarantee, between ANR and the Agent; the
Consent and Agreement, dated as of December 10, 1990, to the Coal
Transportation Agreements, between CSX and the Agent; the Consent and
Agreement, dated as of February 1, 1991, to the Sidetrack Agreement,
between CSX and the Agent; the Consent and Agreement, dated as of
December 1, 1990, to the Ash Hauling Agreement, between ReUse and the
Agent; the Consent and Agreement, dated as of June 15, 1999, to the
Lime Sales Agreement, between Global Stone and the Agent; the Consent
and Agreement, dated as of December 1, 1990, to the Engineering
Agreement, among the Borrower, the Engineer and the Agent; the Consent
and Agreement, dated as of
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December 13, 1990, to the Environmental Indemnification Agreement,
among the Borrower, DuPont and the Agent; the Consent and Agreement,
dated as of December 5, 1994, to the Car Lease Agreement between
Diamond May and the Agent; and to each Consent and Agreement in form
similar to such Consent and Agreements to be executed and delivered by
each party (other than the Borrower) to any Additional Contract.
"Construction Contract": the Amended and Restated Construction
Contract dated as of December 1, 1990 by and between the Borrower and
the Contractor, as the same may be further amended, supplemented or
otherwise modified from time to time in accordance with the provisions
of Section 11.06.
"Contractor": Metric Constructors, Inc., a North Carolina
corporation.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of
its property is bound.
"Convert," "Conversion" and "Converted": each refer to a
conversion of Loans of one Type into Loans of another Type.
"CP Letter of Credit": as defined in the recitals hereto.
"CP Side Letter Agreement": the letter agreement dated as of
June 28, 2000, among the Borrower, the Existing Lenders, the Agent and
the Issuing Bank, substantially in the form of Exhibit K.
"Credit Event": as defined in Section 9.03.
"Credit Facility Termination Date": March 31, 2010.
"CSX": CSX Transportation, Inc., a Virginia corporation.
"Custodian": as defined in the Indenture.
"Debt Service": for any period, the sum, without duplication,
of (a) all amounts payable by the Borrower during such period pursuant
to Sections 4.01(e), 4.04(b), 6A.04(e) and 7.06 in respect of principal
of, and interest on, Loans, (b) all amounts payable by the Borrower
pursuant to Section 5.04 in respect of principal of ▇▇▇▇ ▇▇
Reimbursement Obligations (other than payments of ▇▇▇▇ ▇▇ Reimbursement
Obligations that are made with the proceeds of Liquidity Loans) and all
amounts payable during such period in respect of interest on ▇▇▇▇ ▇▇
Reimbursement Obligations, (c) all amounts payable by the Borrower to
the Issuing Bank pursuant to Section 6.06 in respect of Term VP
Reimbursement Obligations, (d) all amounts, if any, payable by the
Borrower (minus the amounts, if any, receivable by the Borrower to the
extent such amounts have actually been received by the Borrower, or may
be set off or applied by the Borrower against amounts payable by the
Borrower) during such period under any Swap Agreement, (e) fees
referred to in Section 7.01, (f) the Trustee Expenses required to be
paid by the Borrower
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during such period and (g) all other amounts in respect of principal,
interest, cash collateral and other fees and expenses payable by the
Borrower during such period to the Secured Parties, the Remarketing
Agent, the Custodian, the Registrar, or the Tender Agent pursuant to
the Project Documents (upon the payment date thereof, by acceleration
or otherwise). For the purpose hereof, if the interest payable on any
Loans for any period is not determinable in advance because the
interest rate is not a fixed rate, it shall be assumed that such Loans
will bear interest during such period at the average interest rate in
effect with respect to outstanding Loans (or, if no Loans are
outstanding, the average interest rate that would have been in effect
if Loans were outstanding) during the six months immediately preceding
such period.
"Debt Service Reserve Deposit": as defined in the Security
Deposit Agreement.
"Debt Service Reserve Expiration Date": as defined in Section
6A.01.
"Debt Service Reserve Letter of Credit": the irrevocable
letter of credit issued by the Issuing Bank in favor of the Security
Agent, on behalf of the Lenders, for the account of the Borrower and in
an amount equal to the Required Stated Amount, substantially in the
form of Exhibit J-3, as the same may be amended or supplemented in
accordance with its terms or extended pursuant to Section 6A.07.
"Debt Service Reserve Letter of Credit Commitment Fee": as
defined in Section 7.01(b).
"Debt Service Reserve Letter of Credit Fee": as defined in
Section 7.01(b).
"Debt Service Reserve Letter of Credit Loan Maturity Date": as
defined in Section 6A.04(e).
"Debt Service Reserve Letter of Credit Loans": as defined in
Section 6A.04(a).
"Debt Service Reserve Letter of Credit Notes": as defined in
Section 6A.04(d).
"Debt Service Reserve Letter of Credit Termination Date": June
1, 2007, as the same may be extended from time to time pursuant to
Section 6A.07.
"Default": any of the events specified in Section 12, whether
or not any requirement for the giving of notice, the lapse of time, or
both, or for the happening of any other condition specified in Section
12, has been satisfied.
"Default Rate": for any day, the Base Rate for such day plus a
margin of 2-1/2%.
"Delaware Holdings": Cogentrix Delaware Holdings, Inc., a
Delaware corporation and a wholly-owned Subsidiary of Cogentrix Energy.
"Diamond May": Diamond May Coal Company, a Kentucky
corporation.
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"Dollars" and "$": dollars in lawful currency of the United
States of America.
"Domestic Lending Office": of a Lender shall mean, initially,
the office of each Lender designated as such in Schedule 1; thereafter,
such other office of such Lender, if any, located within the United
States which shall be making or maintaining Base Rate Loans. Each
Lender shall promptly notify the Borrower of any change in its Domestic
Lending Office.
"DuPont": E.I. du Pont de Nemours and Company, a Delaware
corporation.
"DuPont Easement Agreement": the Easement Agreement dated as
of December 13, 1990, as amended by the First Amendment thereto dated
February 19, 1992 and the Second Amendment thereto, dated August 31,
1992, between the Borrower and DuPont, as the same may be further
amended, supplemented or otherwise modified in accordance with Section
11.06.
"Easements": any easement, license, right-of-way or similar
real property interest or right that is the subject of an Easement
Agreement.
"Easement Agreements": (i) the DuPont Easement Agreement, (ii)
the License Agreement, dated as of April 4, 2000, between the Borrower
and the Commonwealth of Virginia, (iii) the Access Easement Agreement
dated as of December 10, 1990, between Virginia Truck Center of
Richmond, Inc. and DuPont, as assigned to the Borrower by DuPont
pursuant to the Assignment of Easements dated as of December 13, 1990,
(iv) the Access Easement Agreement dated as of October 3, 1991, among
Exxon, DuPont and Plantation Pipe Line Company, a Delaware corporation,
as assigned to the Borrower by DuPont pursuant to the Assignment of
Easements dated as of January 30, 1992, (v) the Easement Agreement
dated as of October 14, 1991, between Exxon and DuPont, as amended by
the First Amendment dated as of January 30, 1992, and assigned to the
Borrower by DuPont pursuant to the Assignment of Easements dated as of
January 30, 1992 and (vi) each other agreement entered into prior to
the Restatement Effective Date granting or assigning to the Borrower
ownership of or other rights in respect of any easement, license,
right-of-way or similar real property interest or right relating to the
Facility or the Site or to the transportation and delivery of Fuel,
lime, water, ash, electricity or steam to or from the Facility or the
Site or to ingress or egress to or from the Facility or the Site, each
such agreement to be satisfactory in form and substance to the Agent.
"Electric Fuels": Electric Fuels Corporation, a Florida
corporation.
"Engineer": Duke/Fluor ▇▇▇▇▇▇, a North Carolina general
partnership.
"Engineering Agreement": the Technical Services Agreement
dated April 26, 1983 between CI (then known as Cogentrix of North
Carolina, Inc.) and Duke Power Company, as the same has been assigned
by Duke Power Company to Duke Engineering & Services Inc. and further
assigned by Duke Engineering & Services Inc. to the Engineer with the
consent of CI pursuant to an Assignment of Contract dated as of
February 1, 1990, and as
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the same may be amended, supplemented or otherwise modified in
accordance with the provisions of Section 11.06, insofar as such
agreement relates to the Project.
"Environmental Indemnification Agreement": the Indemnification
and Remediation Agreement dated as of December 13, 1990, between the
Borrower and DuPont, as the same may be amended, supplemented or
otherwise modified in accordance with the provisions of Section 11.06.
"Environmental Report": the report dated as of February 1991
with respect to the environmental condition of the Site and the
Easements prepared by E.T. ▇▇▇▇▇▇ & Associates for the Agent, including
any reports prepared by other Persons which are attached to said
report.
"EPA": the Environmental Protection Agency.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurocurrency Liabilities": shall have the meaning ascribed
thereto in Regulation D of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Eurodollar Lending Office": of a Lender shall mean,
initially, the office of such Lender designated as such in Schedule 1;
thereafter, such other office of such Lender, if any, which shall be
making or maintaining Eurodollar Loans. Each Lender shall promptly
notify the Borrower of any change in its Eurodollar Lending Office.
"Eurodollar Loans": Loans hereunder at such time as they are
made or maintained at a rate of interest based upon the Eurodollar
Rate.
"Eurodollar Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum at
which deposits in Dollars are offered by Paribas to prime banks in the
London interbank market at 11:00 A.M. (London time) two Working Days
before the first day of such Interest Period for a period equal to such
Interest Period and in an amount substantially equal to the amount of
the Eurodollar Loan to be made by Paribas.
"Event of Default": any of the events specified in Section 12;
provided that any requirement for the giving of notice, the lapse of
time, or both, or for the happening of any other condition, has been
satisfied.
"Event of Loss": (i) the actual or constructive total loss of
all or substantially all of the Facility, or the condemnation,
confiscation or seizure of, or requisition of title to, or requisition
by any Governmental Authority of the use of all or substantially all of
the Facility, or (ii) the loss, destruction or damage of, or
condemnation, confiscation or seizure of, or requisition by any
Governmental Authority of the use of, such material portion of the
Project as shall render the Facility unable to operate at substantially
the same level of
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operation as prior to the occurrence of such event or as a Qualifying
Facility, unless (in the case of this clause (ii)) (x) no Event of
Default shall have occurred and be continuing at the time of occurrence
of any of the events specified in clause (ii) above, (y) it is feasible
to restore, rebuild or replace the affected portion of the Project and
(z) in the opinion of the Agent, the Lenders and the Independent
Engineer, sufficient funds are or will be available to the Borrower (1)
to restore, rebuild or replace the affected portion of the Project so
that the Facility will be able to operate as a Qualifying Facility at
substantially the same level of operation as prior to the occurrence of
such event within eighteen months after the occurrence of such event
and (2) to pay all Debt Service until such restoration, rebuilding or
replacement is completed.
"Excess Project Cash Flow": for the periods of time from one
Installment Payment Date to another, the amount by which Project Cash
Flow for such period exceeds Debt Service for such period.
"Existing Lenders": as defined in the recitals hereto.
"Existing Loan Agreement": as defined in the recitals hereto.
"Existing Term Loans": as defined in the recitals hereto.
"Existing Term VP Letter of Credit - Unit I": the irrevocable
direct pay letter of credit required by the provisions of Section 13.4
of the Petersburg Power Purchase Agreement, dated September 11, 1992,
issued by the Issuing Bank in favor of Virginia Power for the account
of the Borrower initially in a stated amount of $3,150,000.
"Existing Term VP Letter of Credit - Unit II": the irrevocable
direct pay letter of credit required by the provisions of Section 13.4
of the Hydro Power Purchase Agreement, dated September 11, 1992, issued
by the Issuing Bank in favor of Virginia Power for the account of the
Borrower initially in a stated amount of $2,550,000.
"Existing Term VP Letters of Credit": the Existing Term VP
Letter of Credit Unit I and the Existing Term VP Letter of Credit -
Unit II.
"Extensions of Credit": an extension of credit in any of the
following forms: (i) the making of any Loan and (ii) the issuance of
any Letter of Credit.
"Exxon": Exxon Corporation, a New Jersey corporation.
"Facility": the ▇▇▇▇▇▇ coal-fired cogeneration facility having
a nameplate rating of 220 megawatts constructed on the Site pursuant to
the Construction Contract, consisting of the turbines, boilers, coal
conveyors and other equipment and facilities constituting Unit I and
Unit II and including the electrical substation and transmission lines
referred to in the Construction Contract (to the extent owned by the
Borrower) and all other common facilities, equipment, and systems
located on the Site or the Easements.
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"Federal Funds Rate": for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 0.01%) equal to the weighted
average of the rates on overnight Federal funds transactions with
member banks of the Federal Reserve System arranged by Federal Funds
brokers on such day as published by the Federal Reserve Bank of New
York; provided, that (a) if such day is not a Business Day, the Federal
Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding
Business Day and (b) if no such rate is so published on the next
succeeding Business Day, the Federal Funds Rate for such day shall be
the average rate quoted by Citibank, N.A. on such day on such
transactions as determined by the Agent.
"Fee Letter": the Fee Letter dated as of May 26, 2000, between
the Borrower and Paribas.
"FERC": the Federal Energy Regulatory Commission or any
successor or analogous federal Governmental Authority.
"Final Bond Redemption Date": the Credit Facility Termination
Date.
"Fuel": all fuel purchased by the Borrower for the operation
of the Facility, including without limitation all coal purchased
pursuant to the Coal Supply Agreements.
"Fuel Consultant": Pace Global Energy Services, LLC.
"Fuel Suppliers": the collective reference to Coastal, ANR,
Electric Fuels and Kentucky May.
"GAAP": generally accepted accounting principles as in effect
from time to time in the United States.
"Global Stone": Global Stone Chemstone Corporation, a Delaware
corporation.
"Governmental Approvals": authorizations, consents, approvals,
waivers, exemptions, variances, franchises, permissions, permits and
licenses of, and filings and declarations with, any Governmental
Authority.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Ground Lease": the Ground Lease dated as of December 13, 1990
between DuPont and the Borrower, pursuant to which DuPont leases the
Site to the Borrower, as the same may be amended, supplemented or
otherwise modified in accordance with the provisions of Section 11.06.
"Hydro Power Purchase Agreement": the Power Purchase and
Operating Agreement dated as of January 24, 1989 between W.V. Hydro,
Inc. and Virginia Power, as assigned by W.V. Hydro, Inc. to, and
assumed by, the Borrower (then known as Cogentrix
21
14
of Petersburg, Inc.) pursuant to an Assignment and Assumption of Power
Purchase Agreement dated as of June 6, 1989, as amended by the Consent
to Assignment and Amendment to Power Purchase Agreement dated as of
June 21, 1989 among Virginia Power, the Borrower and W.V. Hydro, Inc.
and by Amendment No. 2 dated as of December 10, 1990 between the
Borrower and Virginia Power, as the same may be further amended,
supplemented or otherwise modified from time to time in accordance with
the provisions of Section 11.06.
"Indebtedness": as to any Person, (a) indebtedness of such
Person for borrowed money or for the deferred purchase price of
property or services (other than obligations under agreements for the
purchase of goods (including Fuel) and services in the normal course of
business which are not more than 90 days past due); (b) obligations of
such Person under Capital Leases; (c) obligations of such Person
pursuant to Interest Hedging Transactions; (d) obligations of such
Person under direct or indirect guarantees in respect of, and
obligations (contingent or otherwise) to purchase or otherwise acquire,
or otherwise to assure a creditor against loss in respect of,
indebtedness or obligations of others of the kinds referred to in
clause (a), (b) or (c) above (other than endorsements of negotiable
instruments in the ordinary course of business); and (e) any obligation
of such Person or a Commonly Controlled Entity to a Multiemployer Plan.
"Indenture": the Indenture of Trust, dated as of December 1,
1990 between the Bond Issuer and the Trustee, as the same may be
supplemented, amended or otherwise modified from time to time.
"Independent Engineer": the firm of Black & ▇▇▇▇▇▇,
Corporation, or such other independent engineering firm as the Agent
may engage at any time to examine the plans and specifications of the
Facility, changes in such plans and specifications and cost breakdowns
and estimates, to make periodic inspections, on behalf of the Lenders,
of the work of construction of the Facility and the operation of the
Facility, to advise and render reports to the Lenders concerning the
Project, and to perform such other functions as may be required or
permitted by the terms of this Agreement.
"Initial Debt Service Reserve L/C Drawable Amount":
$4,000,000.
"Installment Payment Date": the last day of each March, June,
September and December commencing on September 30, 2000 and ending on
the Credit Facility Termination Date.
"Insurance Advisor": ▇▇▇▇▇, USA or such other insurance
advisor as the Agent may engage at any time to examine and advise the
Agent and the Lenders with respect to the insurance relating to the
Project.
"Intercreditor Agreement": the Intercreditor Agreement dated
as of December 1, 1990 among the Bond Issuer, the Trustee and the
Agent, as the same may be amended, supplemented or otherwise modified
from time to time.
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"Interest Drawing": with respect to any Bond Letter of Credit,
as defined in such Bond Letter of Credit.
"Interest Hedging Transaction": any interest rate swap
transaction, interest "cap" or "collar" transaction and/or any other
interest rate hedging transaction.
"Interest Payment Date": (a) with respect to any Base Rate
Loan, (i) the last Business Day of each calendar quarter, commencing on
the first of such days to occur after such Base Rate Loan is made or
Eurodollar Loans are converted to Base Rate Loans and (ii) the date on
which such Base Rate Loan is paid or is converted to a Eurodollar Loan;
(b) with respect to any Eurodollar Loan as to which the Borrower has
selected an Interest Period of one, two or three months, the last
Working Day of each Interest Period in respect of such Loan; and (c)
with respect to any Eurodollar Loan as to which the Borrower has
selected an Interest Period of six, nine or twelve months, the date
that is three months after the first day of such Interest Period and
the last day of each successive three month period thereafter, to and
including the last day of such Interest Period.
"Interest Period": with respect to each Eurodollar Loan, a
period beginning on, as the case may be, the date of conversion of a
Base Rate Loan into such Eurodollar Loan or the date of expiration of
the then current Interest Period for such Eurodollar Loan, and ending
one, two, three, six, nine or twelve months thereafter, as selected by
the Borrower in its notice of conversion or continuation as provided in
Section 7.04; provided that all of the foregoing provisions relating to
Interest Periods are subject to the following:
(i) if any Interest Period pertaining to a Eurodollar
Loan would otherwise end on a day which is not a Working Day,
that Interest Period shall be extended to the next succeeding
Working Day unless the result of such extension would be to
carry such Interest Period into another calendar month in
which event such Interest Period shall end on the immediately
preceding Working Day;
(ii) the Borrower shall not select any Interest
Period that will end after the Term Loan Maturity Date, in the
case of the Term Loans;
(iii) the Borrower shall not select any Interest
Period that will end after the applicable Debt Service Reserve
Letter of Credit Loan Maturity Date, in the case of any Debt
Service Reserve Letter of Credit Loan;
(iv) if the Borrower shall fail to give notice as
provided in Section 7.04, the Borrower shall be deemed to have
selected a Base Rate Loan to replace the affected Eurodollar
Loan;
(v) any Interest Period pertaining to a Eurodollar
Loan that begins on the last Working Day of a calendar month
(or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period)
shall end on the last Working Day of a calendar month; and
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(vi) Interest Periods shall be selected by the
Borrower in such manner so that at no time shall the Interest
Periods for all outstanding Eurodollar Loans end on more than
three different dates.
"Issuing Bank's Term VP Account": as defined in Section
6.04(a).
"Junior Working Capital Loans": loans made by Cogentrix Energy
and/or Delaware Holdings to the Borrower from time to time after the
Term Loan Conversion Date (i) in an aggregate principal amount not to
exceed $4,000,000 at any time outstanding, (ii) bearing interest at a
rate equal to or less than the Base Rate, (iii) for the purpose of
financing Cash Operating Costs and (iv) which by the terms of the
agreement or instrument pursuant to which such Junior Working Capital
Loans are made are subordinated in right of payment to the Notes at
least to the extent provided in Section 2 of the Subordination
Agreement (and for the purpose of such subordination the term
"Cogentrix" as used in said Section 2 and in the definition of
"Subordinated Obligations" in Section 1 of the Subordination Agreement
shall be deemed to mean Cogentrix Energy and/or Delaware Holdings, as
the case may be).
"Kentucky May": Kentucky May Coal Company, Inc., a Virginia
corporation.
"Lender Assignment": the Lender Assignment, dated as of June
28, 2000, among the Existing Lenders and Paribas, substantially in the
form of Exhibit E to this Agreement.
"Lenders": Paribas and any other financial institution which,
at the time of reference thereto, is a Lender hereunder.
"Letter of Representation": the Letter of Representation dated
December 13, 1990 among the Borrower, the Bond Issuer and ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Incorporated.
"Letters of Credit": the collective reference to the Bond
Letters of Credit, the Term VP Letters of Credit and the Debt Service
Reserve Letter of Credit; individually, a "Letter of Credit."
"Lien": any mortgage, deed of trust, security interest,
pledge, hypothecation, encumbrance or lien (statutory or other) of any
kind or nature whatsoever (including, without limitation, any agreement
to give any of the foregoing, any conditional sale or other title
retention agreement, any financing lease having substantially the same
economic effect as any such agreement, and the filing of any statement
under the Uniform Commercial Code or comparable law of any
jurisdiction).
"Lime Sales Agreement": the Lime Sales Agreement dated as of
June 15, 1999, between Global Stone and the Borrower relating to the
supply of lime for the Facility, as the same may be amended,
supplemented or otherwise modified in accordance with the provisions of
Section 11.06.
"Liquidity Drawing": with respect to any Bond Letter of
Credit, a Tender Drawing (Principal) or a Tender Drawing (Interest)
under such Bond Letter of Credit, the proceeds
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of which are used to fund tenders of the 1990 Bonds or the 1991 Bonds,
as the case may be, pursuant to the Indenture.
"Liquidity Loan": as defined in Section 4.02.
"Liquidity Loan Commitment Termination Date": the earlier of
(a) the ▇▇▇▇ ▇▇ Termination Date and (b) the date the Commitments are
terminated pursuant to Section 12 hereof.
"Liquidity Loan Notes": as defined in Section 4.03(b).
"Loans": the collective reference to the Term Loans, the
Liquidity Loans and the Debt Service Reserve Letter of Credit Loans.
"Modified Project Cash Flow": for any period, the amount, if
any, by which Project Revenues of the Borrower for such period exceed
Cash Operating Costs (other than those constituting Operating
Management Fees and payments in respect of Junior Working Capital
Loans) for such period.
"Mortgagee": the Person or Persons serving as trustee under
the Project Mortgage.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"1990 Bond Letter of Credit": the irrevocable direct pay
letter of credit, dated December 13, 1990, issued in respect of the
1990 Bonds by the Issuing Bank in favor of the Trustee for the account
of the Borrower, substantially in the form of Exhibit D, initially in
the Stated Amount of $29,024,713, as extended pursuant to a letter
delivered by the Issuing Bank to the Trustee on the Restatement
Effective Date and as the same may be further amended or supplemented
in accordance with its terms or extended pursuant to Section 5.07.
"1990 Bond Pledge Agreement": the Bond Pledge Agreement dated
as of December 1, 1990, among the Borrower, the Agent and the Bond
Pledge Agent, as the same may be amended, supplemented or otherwise
modified from time to time.
"1990 Bond Purchase Agreement": the Bond Purchase Agreement
dated as of December 13, 1990 among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Incorporated, the
Bond Issuer and the Borrower.
"1990 Bonds": the Industrial Development Authority of the City
of Richmond, Virginia, Variable Rate Demand Exempt Facility Revenue
Bonds (Cogentrix of Richmond, Inc. Project) 1990 Series A, to be issued
by the Bond Issuer pursuant to the Indenture in the original aggregate
principal amount of $28,500,000.
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18
"1991 Bond Letters of Credit": the collective reference to the
1991 Series A Bond Letter of Credit and the 1991 Series B Bond Letter
of Credit; individually, a "1991 Bond Letter of Credit."
"1991 Bond Pledge Agreements": the collective reference to the
1991 Series A Bond Pledge Agreement and the 1991 Series B Bond Pledge
Agreement; individually, a "1991 Bond Pledge Agreement."
"1991 Bonds": the collective reference to the 1991 Series A
Bonds and the 1991 Series B Bonds.
"1991 Series A Bond Letter of Credit": the irrevocable direct
pay letter of credit, dated February 22, 1991, issued in respect of the
1991 Series A Bonds by the Issuing Bank in favor of the Trustee for the
account of the Borrower, substantially in the form of Exhibit D,
initially in a Stated Amount of $10,184,110, as extended pursuant to a
letter delivered by the Issuing Bank to the Trustee on the Restatement
Effective Date and as the same may be further amended or supplemented
in accordance with its terms or extended pursuant to Section 5.07.
"1991 Series A Bond Pledge Agreement": the Bond Pledge
Agreement dated as of February 1, 1991, among the Borrower, the Agent
and the Bond Pledge Agent, as the same may be amended, supplemented or
otherwise modified from time to time.
"1991 Series A Bonds": the Industrial Development Authority of
the City of Richmond, Virginia, Variable Rate Demand Exempt Facility
Revenue Bonds (Cogentrix of Richmond, Inc. Project) 1991 Series A,
issued by the Bond Issuer pursuant to the Indenture in the original
aggregate principal amount of $10,000,000.
"1991 Series B Bond Letter of Credit": the irrevocable direct
pay letter of credit, dated December 10, 1991, issued in respect of the
1991 Series B Bonds by the Issuing Bank in favor of the Trustee for the
account of the Borrower, substantially in the form of Exhibit D,
initially in a Stated Amount of $9,674,905, as extended pursuant to a
letter delivered by the Issuing Bank to the Trustee on the Restatement
Effective Date and as the same may be further amended or supplemented
in accordance with its terms or extended pursuant to Section 5.07.
"1991 Series B Bond Pledge Agreement": the Bond Pledge
Agreement dated as of December 1, 1991, among the Borrower, the Agent
and the Bond Pledge Agent, as the same may be amended, supplemented or
otherwise modified from time to time.
"1991 Series B Bonds": the Industrial Development Authority of
the City of Richmond, Virginia, Variable Rate Demand Exempt Facility
Revenue Bonds (Cogentrix of Richmond, Inc. Project) 1991 Series B,
issued by the Bond Issuer pursuant to the Indenture in the original
aggregate principal amount of $9,500,000.
"Non-Drawable Debt Service Reserve L/C Amount": $3,500,000.
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"Notes": the collective reference to the Term Notes, the
Liquidity Loan Notes and the Debt Service Reserve Letter of Credit
Notes.
"Obligations": all of the indebtedness, obligations and
liabilities of the Borrower to the Secured Parties or any of them now
or in the future existing under or in connection with this Agreement,
the Notes, the Bonds, the Letters of Credit or any of the other Project
Documents or any Swap Agreement (as any of the foregoing may from time
to time be amended, modified, substituted, extended or renewed), direct
or indirect, absolute or contingent, due or to become due, now or
hereafter existing.
"Operating Management Fee": a quarterly fee payable by the
Borrower to Cogentrix Energy in an amount equal to the Operating
Management Fee Amount then in effect; provided that in the event any
Operating Management Fee paid by the Borrower for any quarter is less
than the Operating Management Fee Amount for such quarter, the Borrower
may pay the difference between the amount so paid and such Operating
Management Fee Amount from Excess Project Cash Flow for the quarter
with respect to which any subsequent Operating Management Fee is paid.
"Operating Management Fee Amount": on December 31, 1999,
$590,982, and at any time during each calendar year thereafter the sum
of (i) the Operating Management Fee Amount on December 31 of the
previous calendar year ("Previous Year's Operating Management Fee
Amount") and (ii) 5% of the Previous Year's Operating Management Fee
Amount.
"Outstanding Bond Extensions of Credit": at any time the sum
of (a) the aggregate principal amount of the Bonds outstanding at such
time (other than Tendered Bonds (as defined in the Bond Pledge
Agreements)), (b) the aggregate unpaid principal amount of Liquidity
Loans outstanding at such time, and (c) the aggregate amount of any
unpaid ▇▇▇▇ ▇▇ Reimbursement Obligations at such time.
"Paribas": as defined in the recitals hereto.
"Participants": collectively, the Borrower, Delaware Holdings,
Cogentrix Energy, CHC, CI, the Fuel Suppliers, ANR, DuPont, CSX, ReUse,
Global Stone and Virginia Power.
"PBGC": the Pension Benefit Guaranty Corporation.
"Permitted Investments": as defined in the Security Deposit
Agreement.
"Permitted Liens": (i) the Liens created by the Security
Documents; (ii) Liens in favor of any Person, other than Cogentrix
Energy or any Affiliate of Cogentrix Energy, which arise in the
ordinary course of business of the Borrower (including, without
limitation, materialmen's, mechanics', workers', repairmen's and
employees' Liens and similar Liens which arise in connection with any
tax, assessment, governmental charge or levy) but not in connection
with any Indebtedness and which do not in the aggregate materially
impair the use and value of the Borrower's property or assets in the
conduct of
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its business or impair the rights or interests of the Lenders with
respect to the Collateral; provided that if any such Lien arose in
connection with any past due tax, assessment, governmental charge or
levy or any claim referred to in Section 10.10 the Borrower shall be
diligently contesting the same in accordance with, and subject to, the
provisions of Section 10.10; (iii) Liens arising out of judgments or
awards which are bonded or with respect to which at the time an appeal
or proceeding for review is being prosecuted in good faith and for the
payment of which adequate reserves shall have been provided; (iv) any
exceptions to title, acceptable to the Agent, which are contained in
the title insurance policy or any endorsement thereto delivered to the
Agent pursuant to Section 9.01(d); (v) the Right of First Refusal; and
(vi) the purchase options in favor of DuPont contained in the Ground
Lease and in the Steam Purchase Agreement.
"Person": an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"Petersburg Power Purchase Agreement": the Power Purchase and
Operating Agreement dated as of January 24, 1989 between the Borrower
(then known as Cogentrix of Petersburg, Inc.) and Virginia Power, as
amended by Amendment No. 1 dated as of December 10, 1990 between the
Borrower and Virginia Power, and as the same may be further amended,
supplemented or otherwise modified from time to time in accordance with
the provisions of Section 11.06.
"Plan": any pension plan which is covered by Title IV of ERISA
and in respect of which the Borrower or a Commonly Controlled Entity is
an "employer" as defined in Section 3(5) of ERISA.
"Power Purchase Agreements": the collective reference to the
Petersburg Power Purchase Agreement and the Hydro Power Purchase
Agreement; individually, a "Power Purchase Agreement."
"Principal Drawing": with respect to any Bond Letter of
Credit, as defined in such Bond Letter of Credit.
"Project": the Facility, the Site, and all licenses and
permits and all easements and other real property interests and rights
relating to the Facility or the Site which are owned by the Borrower or
in which the Borrower has any rights including, without limitation, the
Easements granted to the Borrower by the Easement Agreements.
"Project Cash Flow": for any period, the amount, if any, by
which Project Revenues of the Borrower for such period exceed the Cash
Operating Costs of the Borrower for such period.
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"Project Development Agreement": the Project Development and
Management Agreement dated as of December 1, 1990, as supplemented by
the Supplemental Agreement dated as of December 15, 1993 and as amended
by the Project Development Agreement Amendment, between CI and the
Borrower, as the same may be further amended, supplemented or otherwise
modified in accordance with the provisions of subsection 11.06.
"Project Development Agreement Amendment": the First Amendment
and Supplement to the Project Development and Management Agreement and
Consent, dated as of June 28, 2000, among CI, Cogentrix Energy and the
Borrower, and consented to by the Agent.
"Project Documents": the collective reference to this
Agreement, the Notes, the Bonds, the Letters of Credit, the Bond
Documents, the Security Documents, the Swap Agreements, the
Subordination Agreement, the Real Estate Documents, the Environmental
Indemnification Agreement, the Construction Contract, the Project
Development Agreement, the Coal Supply Agreements, the ANR Guarantee,
the Power Purchase Agreements, the Steam Purchase Agreement, the Coal
Transportation Agreements, the Sidetrack Agreement, the Ash Hauling
Agreement, the Engineering Agreement, the Car Lease Agreement and the
Lime Sales Agreement.
"Project Mortgage": the Deed of Trust and Security Agreement
made by the Borrower to ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇., as trustee for the
benefit of the Agent and the Secured Parties as Beneficiaries, as
amended by the First Amendment dated April 1, 1992 and the Second
Amendment dated September 1, 1992 and as the same may be further
amended, supplemented or otherwise modified from time to time.
"Project Revenues": for any period, the sum (without
duplication) of (i) all revenues received by the Borrower under the
Power Purchase Agreements and the Steam Purchase Agreement plus (ii)
all other revenues received by the Borrower from the sale of
electricity, heat or steam produced by the Facility or the sale of
by-products produced by the Facility plus (iii) all payments received
by the Borrower from Cogentrix Energy pursuant to Section 5.05 of the
Project Development Agreement plus (iv) the amount of income received
by the Borrower in respect of Permitted Investments during such period.
"Projected Yearly Debt Coverage Ratio": the projected ratio of
Modified Project Cash Flow to Debt Service for each calendar year (or
portion thereof) from the Restatement Effective Date to the Credit
Facility Termination Date.
"Purchasing Lender": as defined in Section 14(c).
"PURPA": the Public Utility Regulatory Policies Act of 1978,
as amended from time to time.
"Qualifying Facility": a cogeneration facility meeting all of
the requirements for a "qualifying cogeneration facility" set forth in
PURPA and in Part 292 of the rules and regulations of FERC under PURPA.
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"Real Estate Documents": the collective reference to the
Easement Agreements, the Ground Lease and the Project Mortgage.
"Registrar": as defined in the Indenture.
"Reimbursement Account": as defined in the Security Deposit
Agreement.
"Reimbursement Cash Collateral": as defined in the Security
Deposit Agreement.
"Remarketing Agent": as defined in the Indenture.
"Remarketing Agreement": the Remarketing Agent's Agreement
dated as of December 1, 1990 between the Borrower and the Remarketing
Agent with respect to the Bonds.
"Reportable Event": any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder.
"Reporting Participant": each of Cogentrix Energy and the
Borrower.
"Required Lenders": at a particular time, the Lenders whose
Commitment Percentages at such time aggregate at least 66-2/3%.
"Required Stated Amount": $7,500,000.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and ByLaws or partnership agreement or other
organizational or governing documents of such Person, and any law,
treaty, rule or regulation, or determination of an arbitrator or a
court or other Governmental Authority, in each case applicable to or
binding upon such Person or any of its properties or to which such
Person or any of its properties is subject.
"Reserve Percentage": of any Lender for any Interest Period
shall mean the reserve percentage applicable during such Interest
Period under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or if more than one such
percentage shall be so applicable, the daily average of such
percentages for those days in such Interest Period during which any
such percentage shall be so applicable) for determining the maximum
reserve requirement (including, without limitation, any marginal
reserve requirement) for such Lender with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities having a
term equal to such Interest Period.
"Responsible Officer": as to any Person, the president or any
vice president of such Person, or with respect to financial matters,
the chief financial officer of such Person.
"Restatement Effective Date": the date on which the conditions
set forth in Section 9 are satisfied and the Letters of Credit are
issued.
"Restricted Payments": as defined in Section 11.03.
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"ReUse": ReUse Technology, Inc., a North Carolina corporation.
"Revenue Account": the Revenue Account established pursuant to
the Security Deposit Agreement.
"Right of First Refusal": the Right of First Refusal Agreement
dated as of the date of the Project Mortgage by and between the
Borrower and Virginia Power.
"Sale Agreement": the Sale Agreement dated as of December 1,
1990 between the Bond Issuer and the Borrower, as the same may be
amended, supplemented or otherwise modified from time to time.
"Sale Agreement Note": the promissory note issued by the
Borrower to the Bond Issuer pursuant to the terms of the Sale
Agreement.
"Secured Parties": the collective reference to the Agent, the
Issuing Bank, the Lenders and the Swap Counterparties.
"Security Agent": First Union National Bank, a national
banking association, or any bank acting as successor security agent
under the Security Deposit Agreement.
"Security Agreement": the Assignment and Security Agreement
dated as of December 1, 1990, by the Borrower in favor of the Agent for
the ratable benefit of the Secured Parties, as amended by the Security
Agreement Amendment and as the same may be further amended,
supplemented or otherwise modified from time to time.
"Security Agreement Amendment": the Amendment to Assignment
and Security Agreement dated as of June 28, 2000, between the Borrower
and the Agent, substantially in the form of Exhibit I.
"Security Deposit Agreement": the Amended and Restated
Security Deposit Agreement dated as of June 28, 2000, among the
Borrower, the Agent and the Security Agent, substantially in the form
of Exhibit H, as the same may be amended, supplemented or otherwise
modified from time to time.
"Security Documents": the collective reference to the Project
Mortgage, the Security Deposit Agreement, the Assignments, the Consents
to Assignment, the Security Agreement, the Bond Pledge Agreements and
any other agreement or instrument hereafter entered into by the
Borrower or any other Person (other than the Indenture) which secures
payment of all or any portion of the Obligations.
"Sidetrack Agreement": the Private Sidetrack Agreement
(ICC-CSXT-C-04181) dated as of December 1, 1990 between the Borrower
and CSX, as the same may be amended, supplemented or otherwise modified
in accordance with the provisions of Section 11.06.
"Single Employer Plan": any Plan which is not a Multiemployer
Plan.
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"Site": the land located in the City of Richmond, Virginia
which is described in Schedule 3, on which the Facility is located.
"Stated Amount": when used with respect to any Letter of
Credit, the Stated Amount of such Letter of Credit as determined from
time to time in accordance with the terms thereof.
"Steam Purchase Agreement": the Steam Purchase Agreement dated
as of May 18, 1990, as amended by the First Amendment dated as of May
31, 1990, the Second Amendment dated as of July 16, 1990 and the Third
Amendment dated as of December 1, 1990 between the Borrower and DuPont,
and as the same may be further amended, supplemented or otherwise
modified in accordance with the provisions of Section 11.06.
"Subordination Agreement": the Subordination Agreement dated
as of December 1, 1990, among the Borrower, CI and the Agent, as
supplemented by the Supplemental Agreement dated as of December 15,
1993 and as the same may be further amended, supplemented or otherwise
modified from time to time.
"Subparticipants": as defined in Section 14(b).
"Subsidiary": as to any Person, a corporation of which shares
of stock having ordinary voting power (other than stock having such
power only by reason of the happening of a contingency) to elect a
majority of the board of directors or other managers of such
corporation are at the time owned, or the management of which is
otherwise controlled, directly, or indirectly through one or more
intermediaries, or both, by such Person.
"Swap Agreement": shall mean any Interest Hedging Transaction
entered into between the Borrower and a Swap Counterparty pursuant to
Section 10.19 hereof.
"Swap Counterparty": shall mean the Agent, the Issuing Bank or
any Lender, in each case in its capacity as a counterparty to a Swap
Agreement.
"Tender Agent": as defined in the Indenture.
"Tender Drawing (Interest)": with respect to any Bond Letter
of Credit, as defined in such Bond Letter of Credit.
"Tender Drawing (Principal)": with respect to any Bond Letter
of Credit, as defined in such Bond Letter of Credit.
"Term Loan Amortization Amount": for any Installment Payment
Date, the amount set forth opposite such Installment Payment Date on
Schedule 6 to this Agreement.
"Term Loan Maturity Date": December 31, 2007.
"Term Loan Period": the period from the Restatement Effective
Date to the Term Loan Maturity Date.
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"Term Loans": as defined in Section 4.01(d).
"Term Notes": as defined in Section 4.03(b).
"Term VP Credit Expiration Date": with respect to each Term VP
Letter of Credit, until each is extended pursuant to Section 6.01,
February 22, 2001, and upon extension, June 1, 2007, as such date may
be extended pursuant to Section 6.08 hereof.
"Term VP Disbursement Date": the date on which any VP Letter
of Credit Disbursement is made.
"Term VP Fronting Fee": as defined in Section 7.01(g).
"Term VP Letter of Credit Disbursements": any payment or
disbursement made by or on behalf of the Issuing Bank under any Term VP
Letter of Credit.
"Term VP Letter of Credit - Unit I": the Existing Term VP
Letter of Credit - Unit I, as extended on or before September 30, 2000
pursuant to Section 6.01, such letter of credit substantially in the
form of Exhibit J-1, as the same may be further amended, modified or
supplemented in accordance with its terms and any replacement thereto
issued pursuant to Section 6.03 and 6.08.
"Term VP Letter of Credit - Unit II": the Existing Term VP
Letter of Credit - Unit II, as extended on or before September 30, 2000
pursuant to Section 6.01, such letter of credit substantially in the
form of Exhibit J-2, and as the same may be further amended, modified
or supplemented in accordance with its terms and any replacement
thereto issued pursuant to Section 6.03 and 6.08.
"Term VP Letters of Credit": the collective reference to the
Term VP Letter of Credit - Unit I and the Term VP Letter of Credit -
Unit II; individually, a "Term VP Letter of Credit."
"Term VP Letters of Credit Fee": as defined in Section
7.01(f).
"Term VP Reimbursement Amount": as defined in Section 6.06(a).
"Term VP Reimbursement Date": as defined in Section 6.06(a).
"Term VP Reimbursement Obligations": as defined in Section
6.06(c).
"Term VP Reimbursement Payment": as defined in Section
6.06(a).
"Title Company": Commonwealth Land Title Insurance Company or
such other title insurance company approved by the Agent to insure the
priority of the Lien of the Project Mortgage.
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"Trustee": The Bank of New York, a national banking
association, as trustee under the Indenture, and its successors in such
capacity appointed in the manner provided for in the Indenture.
"Trustee Expenses": all payments due to the Trustee under the
Indenture other than payments on the Bonds or otherwise made for the
benefit of the holders of the Bonds.
"Twelve-Month Debt Coverage Ratio": as of any date of
determination, the ratio of (a) Twelve-Month Project Cash Flow as
determined on such date to (b) Twelve-Month Debt Service as determined
on such date.
"Twelve-Month Debt Service": for any date of determination
(which shall be the last day of any month), the sum of (a) the Debt
Service for the six-month period ending on such date and (b) the
projected Debt Service for the immediately succeeding six-month period.
"Twelve-Month Project Cash Flow": for any date of
determination (which shall be the last day of any month), the sum of
(a) Modified Project Cash Flow for the six-month period ending on such
date and (b) the projected Modified Project Cash Flow for the
immediately succeeding six-month period. The projected Modified Project
Cash Flow referred to in clause (b) of the preceding sentence shall be
determined by using the same amount for Modified Project Cash Flow for
the immediately preceding six months, and then adjusting such amount
for the effect thereon (if any) of any planned or anticipated changes
during such succeeding six months in the operation or maintenance of
the Facility (as determined in good faith by the Borrower or, if the
Agent shall disagree with the Borrower's determination, by the
Independent Engineer).
"Type": shall mean, as to any Loan, its nature as a Base Rate
Loan or a Eurodollar Loan.
"Unit I": the 110 megawatt cogeneration facility (consisting
of two 55 megawatt turbines) which supplies electricity to Virginia
Power pursuant to the Petersburg Power Purchase Agreement.
"Unit II": the 110 megawatt cogeneration facility (consisting
of two 55 megawatt turbines) which supplies electricity to Virginia
Power pursuant to the Hydro Power Purchase Agreement.
"Units": the collective reference to Unit I and Unit II;
individually, a "Unit."
"Virginia Power": Virginia Electric and Power Company, a
Virginia public service corporation.
"Working Day": any Business Day on which dealings in foreign
currencies and exchange between banks may be carried on in London,
England.
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SECTION 1.02. Other Definitional Provisions. (a) All terms defined in
this Agreement shall have the defined meanings when used in the Notes, the
Letters of Credit or in any certificate or other document made or delivered
pursuant hereto.
(b) As used herein and in any certificate or other document made or
delivered pursuant hereto, accounting terms not defined in Section 1.01, and
accounting terms partly defined in Section 1.01 to the extent not defined, shall
have the respective meanings given to them under GAAP.
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and section, schedule and
exhibit references are to this Agreement unless otherwise specified.
(d) Unless the context requires otherwise, any reference in this
Agreement to any of the Project Documents shall mean any of such documents as
amended, supplemented or modified and in effect from time to time.
SECTION 2. [INTENTIONALLY OMITTED]
SECTION 3. [INTENTIONALLY OMITTED]
SECTION 4. TERM LOANS AND LIQUIDITY LOANS.
SECTION 4.01. The Term Loans. (a) Immediately prior to this Agreement's
becoming effective on the Restatement Effective Date, Paribas shall purchase all
of the Existing Term Loans from the Existing Lenders pursuant to the Lender
Assignment.
(b) On the Restatement Effective Date, subject to the terms and
conditions of this Agreement, including without limitation those set forth in
Section 9.01, Paribas agrees to make the Additional Term Loan to the Borrower.
(c) The Existing Term Loans and the Additional Term Loan made on the
Restatement Effective Date shall initially be Base Rate Loans. Thereafter,
subject to and upon the terms and conditions of this Agreement, the Term Loans
may from time to time be Eurodollar Loans or Base Rate Loans or a combination
thereof, as determined by the Borrower and notified to the Agent in accordance
with Section 7.04.
(d) On the Restatement Effective Date, subject to the terms and
conditions hereof, including without limitation those set forth in Section 9.01,
and without limiting the generality of the next sentence, the interest rate
applicable to the Existing Term Loans shall be changed to the interest rate set
forth in Section 7.06 and the maturity date of such loans shall be extended to
the Term Loan Maturity Date. The Existing Term Loans and the Additional Term
Loan shall be collectively referred to herein as the "Term Loans" and, from and
after the Restatement Effective Date, the characteristics of such loans shall be
identical and shall be the characteristics applicable to Term Loans as specified
in this Section 4, Section 7 and the other provisions of this Agreement.
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(e) The Borrower shall repay the Term Loans in 30 consecutive quarterly
installments on each Installment Payment Date, commencing on September 30, 2000
and ending on the Term Loan Maturity Date, each such installment to be in an
amount equal to such Lender's Commitment Percentage of the Term Loan
Amortization Amount for the Installment Payment Date on which such installment
is payable.
SECTION 4.02. Liquidity Loans. Subject to the terms and conditions of
this Agreement, the Lenders severally agree to make loans to the Borrower during
the period from and including the Restatement Effective Date to but excluding
the Liquidity Loan Commitment Termination Date (each, a "Liquidity Loan") for
the purpose of paying ▇▇▇▇ ▇▇ Reimbursement Obligations arising from time to
time in respect of Liquidity Drawings. Without limiting the obligations of the
Borrower under Section 5.04 hereof, the Lenders severally agree that, unless the
Borrower shall elect otherwise, upon the making of any Liquidity Drawing, each
Lender shall, without any notice or other action on the part of the Borrower or
satisfaction of any of the conditions set forth in Section 9, so long as no
Event of Default shall have occurred and be continuing, make a Liquidity Loan in
an amount equal to such Lender's Commitment Percentage of the ▇▇▇▇ ▇▇
Reimbursement Obligation arising upon such Liquidity Drawing, the proceeds of
which Liquidity Loan shall automatically be applied by each Lender to the
payment in full of the portion of such ▇▇▇▇ ▇▇ Reimbursement Obligation owing to
it as a result of such Lender's payment to the Issuing Bank pursuant to Section
5.03 hereof in respect of such Liquidity Drawing. The Liquidity Loans shall be
made and continued as Base Rate Loans. A Borrowing of Liquidity Loans shall
require no notice by the Borrower hereunder.
SECTION 4.03. Promissory Notes. (a) The Term Loans made by each Lender
shall be evidenced by a promissory note of the Borrower, substantially in the
form of Exhibit A, with appropriate insertions as to payee, date and principal
amount (individually, a "Term Note"; collectively, the "Term Notes"), payable to
the order of such Lender. Each Term Note shall (i) be dated the Restatement
Effective Date, (ii) represent the Borrower's obligation to pay a principal
amount equal to the aggregate unpaid principal amount of the Term Loans made by
such Lender, (iii) be stated to mature on the Term Loan Maturity Date, (iv) bear
interest for the period from the date thereof until paid in full on the unpaid
principal amount thereof from time to time outstanding at the applicable
interest rate per annum provided in, and payable as specified in, Section 7.06,
and (v) be entitled to the benefits of this Agreement and the Security
Documents. Each Lender is hereby authorized to record the date and amount and
Type of each Term Loan made by such Lender, and the date and amount of each
payment or prepayment of principal thereof, on the schedule annexed to and
constituting a part of the Term Note held by such Lender, and any such
recordation shall constitute prima facie evidence of the accuracy of the
information so recorded, it being understood however that failure by such Lender
to make any such recordation shall not affect the obligations of the Borrower
hereunder or under such Note in respect of the Term Loans made by such Lender
hereunder.
(b) The Liquidity Loans made by each Lender shall be evidenced by a
promissory note of the Borrower, substantially in the form of Exhibit B, with
appropriate insertions to payee, date and principal amount (individually a
"Liquidity Loan Note"; collectively, the "Liquidity Loan Notes"), payable to the
order of such Lender. Each Liquidity Loan Note shall (i) be dated the
Restatement Effective Date, (ii) represent the Borrower's obligation to pay a
principal amount equal to the lesser of (x) such Lender's Commitment Percentage
of $48,883,728 and (y) the aggregate unpaid
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principal amount of all Liquidity Loans made by such Lender, (iii) be stated to
mature on the Liquidity Loan Commitment Termination Date, (iv) bear interest
from the period from the date thereof until paid in full on the unpaid principal
amount thereof from time to time outstanding at the interest rate applicable for
Base Rate Loans as provided in Section 7.06(b), payable as specified in Section
7.06, and (v) be entitled to the benefits of this Agreement and the Security
Documents. Each Lender is hereby authorized to record the date and amount of
each Liquidity Loan made by such Lender, and the date and amount of each payment
or prepayment of principal thereof, on the schedule annexed to and constituting
a part of the Liquidity Loan Note held by such Lender, and any such recordation
shall constitute prima facie evidence of the accuracy of the information so
recorded, it being understood however that failure by such Lender to make any
such endorsement shall not affect the obligations of the Borrower hereunder or
under such Note in respect of the Liquidity Loans Notes by such Lender
hereunder.
SECTION 4.04. Prepayments. (a) Optional.
(i) During the Term Loan Period, the Borrower may on any Interest
Payment Date with respect to the Term Loans prepay the Term Loans, without
premium or penalty, in whole or in part, together with accrued interest on the
principal amount prepaid to the date of prepayment (or, in the case of
Eurodollar Loans, to the last day of the then current Interest Period), upon at
least 10 days' irrevocable written notice to the Agent.
(ii) The Borrower may on any Business Day prepay the Liquidity Loans,
without premium or penalty, in whole or in part, together with accrued interest
on the principal amount prepaid to the date of prepayment, upon at least five
Business Days' irrevocable written notice to the Agent.
(iii) Each notice from the Borrower to the Agent pursuant to this
Section 4.04(a) shall specify the date and amount of prepayment and, if such
prepayment is a partial prepayment, whether the prepayment is of Eurodollar
Loans, Base Rate Loans or a combination thereof, and if a combination thereof,
the amount of prepayment allocable to each. Upon receipt of such notice the
Agent shall promptly notify each Lender thereof. If notice from the Borrower is
given pursuant to this Section 4.04(a), the payment amount specified in such
notice shall be due and payable on the date specified therein, together with
interest thereon.
(iv) Any partial prepayment of Term Loans under this Section 4.04(a)
shall be in an integral multiple of $100,000.
(v) Any prepayment of Term Loans under this Section 4.04(a) shall be
subject to the provisions of Section 7.08.
(vi) Partial prepayments of the Term Loans under this Section 4.04(a)
shall be applied to installments of principal pro rata.
(vii) Prepayments permitted pursuant to this Section 4.04(a) may not be
reborrowed.
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(b) Mandatory.
(i) If an Event of Loss shall occur, (x) the Commitments shall
terminate forthwith and (y) on the earlier of (i) the date which is 90 days
after the date of such Event of Loss and (ii) the date on which the insurance
proceeds are received with respect to such Event of Loss, the Borrower shall
prepay in full, without premium or penalty, the unpaid principal amount of the
then outstanding Loans, together with accrued interest thereon to the date of
prepayment (or in the case of Eurodollar Loans, to the last day of the then
current Interest Period) and all unpaid Term VP Reimbursement Obligations
together with all interest accrued thereon to the date of prepayment, shall pay
any unpaid fees accrued hereunder to the date of prepayment and all other
amounts owing hereunder or under the Security Documents, and shall deposit with
the Agent Reimbursement Cash Collateral (to be used to pay the ▇▇▇▇ ▇▇
Reimbursement Obligations) in an amount equal to the Outstanding Bond Extensions
of Credit.
(ii) Prepayments made pursuant to this Section 4.04(b) may not be
reborrowed.
SECTION 4.05. [INTENTIONALLY OMITTED].
SECTION 4.06. Repayment of Liquidity Loans. The Borrower shall (i)
repay any Liquidity Loan (or any part thereof) immediately upon the receipt of
remarketing proceeds in respect of the Bonds purchased with the proceeds of the
related Liquidity Drawing and (ii) repay the then aggregate outstanding
principal amount of the Liquidity Loans on the Liquidity Loan Commitment
Termination Date.
SECTION 5. THE BOND LETTERS OF CREDIT
SECTION 5.01. Issuance of the Bond Letters of Credit; Participation by
Lenders. (a) Subject to the terms and conditions of this Agreement, the Issuing
Bank agrees to extend on the Restatement Effective Date, the 1990 Bond Letter of
Credit and each of the 1991 Bond Letters of Credit. Each Bond Letter of Credit
shall be extended to expire on the ▇▇▇▇ ▇▇ Termination Date.
(b) The Issuing Bank hereby grants to each Lender and each Lender
hereby unconditionally and irrevocably, severally and for itself only, takes an
undivided participating interest in the rights and obligations of the Issuing
Bank under, and in connection with, each of the Bond Letters of Credit, in each
case, in a fraction equal to such Lender's Commitment Percentage. Each Lender
shall be liable to the Issuing Bank for its pro rata share, based upon its
Commitment Percentage, of each amount drawn under any Bond Letter of Credit.
Such liability shall be unconditional and without regard to the occurrence of
any Default or Event of Default or any other circumstance, provided that no
Lender shall be liable for the payment of any portion of such liability directly
resulting from the Issuing Bank's gross negligence or wilful misconduct.
SECTION 5.02. Notice of Payments and Reductions under the Bond Letters
of Credit. The Issuing Bank shall give the Borrower and each Lender prompt oral,
followed by written, notice of each demand for a payment ("▇▇▇▇ ▇▇
Disbursement") under, and of each notice of reduction of the Stated Amount of,
any Bond Letter of Credit ("▇▇▇▇ ▇▇ Reduction") received by the Issuing Bank,
identifying the relevant Bond Letter of Credit and specifying (a) the amount of
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such ▇▇▇▇ ▇▇ Disbursement or ▇▇▇▇ ▇▇ Reduction, (b) the date such ▇▇▇▇ ▇▇
Disbursement is to be made or ▇▇▇▇ ▇▇ Reduction is to take effect and (c) such
Lender's pro rata share of the amount of such ▇▇▇▇ ▇▇ Disbursement or ▇▇▇▇ ▇▇
Reduction based upon its Commitment Percentage; provided that such notice in
respect of any ▇▇▇▇ ▇▇ Disbursement arising under an Interest Drawing shall be
given to each Lender only in the event the Borrower has not paid in full to the
Issuing Bank on the date of such ▇▇▇▇ ▇▇ Disbursement the ▇▇▇▇ ▇▇ Reimbursement
Payment pursuant to Section 5.04 hereof arising in respect of such ▇▇▇▇ ▇▇
Disbursement.
SECTION 5.03. Lender Payments in respect of the Bond Letters of Credit.
(a) Each Lender hereby agrees with the Issuing Bank to make available to the
Issuing Bank, in respect of each ▇▇▇▇ ▇▇ Disbursement made under any Bond Letter
of Credit, an amount equal to such Lender's pro rata share of such ▇▇▇▇ ▇▇
Disbursement based upon such Lender's Commitment Percentage, such payment to be
made not later than 3:00 P.M. (New York City time) on the date on which such
▇▇▇▇ ▇▇ Disbursement is to be made (if such Lender was notified thereof at or
prior to 1:00 P.M. (New York City time) on such date) or not later than 1:00
P.M. on the next Business Day (if such Lender was notified after such time).
Each Lender shall indemnify and hold harmless the Issuing Bank from and against
any and all losses, liabilities (including liabilities for penalties), actions,
suits, judgments, demands, costs and expenses (including reasonable attorneys'
fees and expenses) resulting from any failure on the part of such Lender to
provide, or from any delay in providing, the Issuing Bank with such Lender's pro
rata share of any ▇▇▇▇ ▇▇ Disbursement computed in accordance with its
Commitment Percentage in accordance with the provisions of the preceding
sentence, but no Lender shall be so liable for any such failure on the part of
any other Lender. If a Lender does not make available to the Issuing Bank when
due such Lender's pro rata share of any ▇▇▇▇ ▇▇ Disbursement, such Lender shall
be required to pay interest to the Issuing Bank on such pro rata share of such
▇▇▇▇ ▇▇ Disbursement at the Federal Funds Rate from the date such Lender's
payment is due until the date it is received by the Issuing Bank.
(b) If a Lender fails to make any payments under Section 5.03(a), and
if such payments are not made prior to the expiration of 5 Business Days
following notice of such nonpayment given by the Issuing Bank to such Lender,
then the Agent may acquire, or transfer to a third party, previously approved by
the Borrower, in exchange for the sum or sums due from such Lender, such
Lender's participation interest hereunder and under the Letters of Credit, and
all other rights of such Lender under this Agreement, without, however,
relieving such Lender from any liability for damages, costs and expenses
suffered by the Issuing Bank as a result of such failure. The purchaser of any
such interest (including the Agent) shall be deemed to have acquired an interest
senior to the interest of such Lender and, accordingly, (i) such purchaser shall
be entitled to receive all subsequent payments which the Issuing Bank would
otherwise have made hereunder to such Lender, (ii) such purchaser shall
immediately become a party to this Agreement without the need for any further
amendment hereto and shall execute such assumptions as the Borrower may
reasonably request, (iii) the Borrower shall promptly execute and deliver to
such purchaser a Note substantially in the form of Exhibit A hereto, a Note
substantially in the form of Exhibit B hereto and a Note substantially in the
form of Exhibit C hereto, as the case may be, and (iv) such Lender shall
thereupon cease to be a Lender, shall cease to be a party to this Agreement and
shall cease to have any further rights in respect hereof or in respect of such
Lender's Notes, except that such Lender shall continue to be entitled to be
reimbursed for all amounts previously advanced by it not theretofore reimbursed
and all unpaid Loans theretofore made by it. Following such reimbursements, such
Lender shall forthwith return its Notes to the Borrower for cancellation.
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(c) Subject to the proviso to the last sentence of Section 5.01(b),
each Lender agrees that its obligation to participate in connection with the
Bond Letters of Credit on the terms and subject to the conditions of this
Agreement shall be irrevocable and unconditional.
SECTION 5.04. Agreement to Reimburse ▇▇▇▇ ▇▇ Disbursements. (a) On any
day on which the Issuing Bank makes any ▇▇▇▇ ▇▇ Disbursement with respect to any
Bond Letter of Credit, the Borrower shall make a payment (each such payment
being herein called a "▇▇▇▇ ▇▇ Reimbursement Payment") to the Agent, immediately
after the Issuing Bank has made such ▇▇▇▇ ▇▇ Disbursement, for the account of
the Lenders in accordance with their Commitment Percentages and in an amount
equal to the amount of such ▇▇▇▇ ▇▇ Disbursement (and the Agent shall forthwith
remit to each Lender its pro rata share of the amount of such ▇▇▇▇ ▇▇
Reimbursement Payment computed in accordance with its Commitment Percentage);
provided that any ▇▇▇▇ ▇▇ Reimbursement Payment in respect of any ▇▇▇▇ ▇▇
Disbursement arising under an Interest Drawing shall be made directly by the
Borrower to the Issuing Bank for the account of the Lenders (and the Issuing
Bank shall forthwith remit to the Agent for the account of each Lender such
Lender's pro rata share of the amount of any such ▇▇▇▇ ▇▇ Reimbursement Payment
computed in accordance with its Commitment Percentage, together with any
interest thereon actually paid by the Borrower, to the extent such Lender shall
have theretofore made to the Issuing Bank any payment pursuant to Section 5.03
hereof in respect of the ▇▇▇▇ ▇▇ Disbursement which gave rise to such ▇▇▇▇ ▇▇
Reimbursement Payment) or the Issuing Bank, as the case may be. The Borrower's
obligation to make ▇▇▇▇ ▇▇ Reimbursement Payments under this Section 5.04 (such
obligations being herein collectively called the "▇▇▇▇ ▇▇ Reimbursement
Obligations"), and the right of each Lender to receive the same, are absolute
and unconditional as provided in Section 5.04(b) hereof, and the Borrower agrees
that each ▇▇▇▇ ▇▇ Reimbursement Payment required to be made under this Section
5.04 shall be made without any offset, abatement, withholding or reduction
whatsoever. If the Borrower does not reimburse any ▇▇▇▇ ▇▇ Disbursement in full
on the date when it is made (either directly pursuant to this Section 5.04 or
indirectly pursuant to Section 4.02), the amount thereof that is not reimbursed
shall bear interest from and including the date of the making thereof until
reimbursed by the Borrower in full (but excluding the date of reimbursement) on
the unpaid amount thereof from time to time outstanding at a rate per annum
equal to the Default Rate. Interest on each unpaid ▇▇▇▇ ▇▇ Reimbursement
Obligation accrued under this Section 5.04 shall be payable on demand.
(b) The Borrower's ▇▇▇▇ ▇▇ Reimbursement Obligations under Section
5.04(a) shall be absolute, unconditional and irrevocable, and shall be observed
strictly in accordance with the terms of this Agreement under all circumstances
whatsoever including, without limitation, the following circumstances: (i) any
lack of legality, validity, enforceability or regularity of any Bond Letter of
Credit, this Agreement or any Project Documents; (ii) any amendment or waiver of
or any consent to or departure from all or any of the Project Documents; (iii)
the existence of any claim, set-off, defense, counterclaim or other right which
the Borrower may have at any time against the Trustee, the Remarketing Agent,
the Tender Agent, the Custodian or any beneficiary or any transferee of any Bond
Letter of Credit (or any Person for whom the Trustee, the Remarketing Agent, any
such beneficiary or any such transferee may be acting), the Agent, the Issuing
Bank, the Lenders or any other Person, whether in connection with this
Agreement, the Bond Letters of Credit, the Project Documents or any unrelated
transaction; (iv) any statement or any other document presented under any Bond
Letter of Credit proving to be forged, fraudulent or invalid in any respect
whatsoever; (v) payment by the Issuing Bank under any Bond Letter of Credit
against
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presentation of a sight draft or certificate which does not comply with the
terms of such Bond Letter of Credit; (vi) any failure by the Borrower to receive
all or any part of the proceeds of the sale of Bonds or any non-application or
misapplication of the proceeds of such sale; (vii) any other circumstance or
happening whatsoever, whether or not similar to any of the foregoing; provided
that the Borrower shall not be obligated to reimburse the Issuing Bank for any
▇▇▇▇ ▇▇ Disbursement made as a direct result of the Issuing Bank's gross
negligence or wilful misconduct. The fact that the Borrower shall have made any
payment as required by this Section 5.04(b) shall not, as of itself, constitute
a waiver or release of, or otherwise be deemed to prejudice, any right, claim or
cause of action for damages that the Borrower may have had against the Issuing
Bank, the Agent or the Lenders but for the fact of such payment being made.
SECTION 5.05. The Borrower's and each Lender's Agreements. Without
limiting the effect of Section 5.04(b) or 17.01, the Borrower and each Lender
agrees with the Issuing Bank that:
(a) The Issuing Bank is authorized to make payments under each Bond
Letter of Credit upon the presentation of the documents provided for therein and
without regard to whether the Borrower has failed to fulfill any of its
obligations with respect to any Project Document or any other default has
occurred thereunder or hereunder.
(b) The Issuing Bank is authorized to take such action on its behalf
under the provisions of this Agreement and to exercise such powers and perform
such duties as are specifically delegated to or required of the Issuing Bank by
the terms hereof, together with such powers as are reasonably indicated thereto.
(c) The Issuing Bank shall be entitled to rely upon any certificate,
notice, demand or other communication (whether by cable, telegram, telex or
other written communication), including, without limitation, any thereof from or
purporting to be from the Trustee or the Remarketing Agent, believed by it to be
genuine and to have been signed or sent by the proper Person or Persons (and no
such reliance or failure shall place the Issuing Bank under any liability to the
Borrower or any Lender or limit or otherwise affect the Borrower or any Lender's
obligations under this Agreement).
(d) Any action, inaction or omission on the part of the Issuing Bank
under or in connection with any Bond Letter of Credit or the related instruments
or documents, if in good faith and in conformity with such laws, regulations or
customs as the Issuing Bank may reasonably deem to be applicable, shall be
binding upon the Borrower and each Lender (and shall not place the Issuing Bank
under any liability to the Borrower or any Lender or limit or otherwise affect
the Borrower's or any Lender's obligations under this Agreement).
(e) Notwithstanding any change or modification, with or without the
consent of the Borrower, in any instruments or documents called for in any Bond
Letter of Credit, including waiver of noncompliance of any such instruments or
documents with the terms of any Bond Letter of Credit, this Agreement shall be
binding on the Borrower with regard to each Bond Letter of Credit and to any
action taken by the Issuing Bank relative thereto.
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SECTION 5.06. Reduction of Bond Letters of Credit. (a) The Trustee may,
at the request of the Borrower, without penalty, upon at least 5 Business Days'
prior written notice to the Issuing Bank, reduce the Stated Amount of any Bond
Letter of Credit; provided that (i) each partial reduction of the Stated Amount
of a Bond Letter of Credit in respect of the principal amount of Bonds supported
by such Bond Letter of Credit shall be in an amount not less than $500,000 and
(ii) the Stated Amount as so reduced shall not be less than the sum of the
aggregate unpaid principal amount of the Bonds supported by such Bond Letter of
Credit that are outstanding, plus interest thereon in the aggregate amount
required by ▇▇▇▇▇'▇ Investors Service, Inc., (if it is rating the Bonds) and
Standard & Poor's Corporation (if it is rating the Bonds).
(b) On any date on which pursuant to the Indenture, any of the Bonds
are redeemed and canceled, the Stated Amount of the 1990 Bond Letter of Credit,
the Stated Amount of the 1991 Series A Bond Letter of Credit or the Stated
Amount of the 1991 Series B Bond Letter of Credit, as the case may be, shall be
reduced as provided in such Bond Letter of Credit. The Borrower is required to
redeem Bonds on each Bond Redemption Date pursuant to the provisions of Section
5.08.
SECTION 5.07. Extension of Bond Letters of Credit. The Borrower, by
written notice to the Issuing Bank and to the Agent (which shall promptly notify
each Lender) at least 180 days prior to the ▇▇▇▇ ▇▇ Termination Date for any
Bond Letter of Credit, may request the Issuing Bank to amend such Bond Letter of
Credit to extend the ▇▇▇▇ ▇▇ Termination Date then in effect with respect to
such Bond Letter of Credit to the Final Bond Redemption Date. Any such extension
shall be made by the Issuing Bank in its sole discretion, and must be consented
to by each Lender in its sole discretion, at least 90 days prior to the ▇▇▇▇ ▇▇
Termination Date then in effect. The Agent shall promptly notify the Lenders,
the Borrower and the Trustee of such extension. If any Lender shall not have
consented to an extension of the ▇▇▇▇ ▇▇ Termination Date at least 120 days
prior to the ▇▇▇▇ ▇▇ Termination Date then in effect, the Borrower may require
such Lender to transfer all of its rights and obligations under this Agreement
in accordance with the provisions of Section 14(c) hereof to a Purchasing Lender
selected by the Borrower that is willing to become a Lender under this Agreement
and to consent to such extension.
SECTION 5.08. Borrower to Make Certain Optional Redemptions of Bonds.
The Borrower shall on each Bond Redemption Date cause an optional redemption of
the Bonds to be made on such date in an amount equal to the Bond Redemption
Amount for such Bond Redemption Date. Upon any such redemption (i) the Borrower
shall immediately, out of its own funds, make a ▇▇▇▇ ▇▇ Reimbursement Payment to
the Agent for the account of the Lenders in an amount equal to the payment made
under the relevant Bond Letter(s) of Credit in order to effect such redemption
and (ii) the Stated Amount of such Bond Letter(s) of Credit shall be reduced in
accordance with the terms thereof by an amount equal to the amount of Bonds
supported by such Bond Letter of Credit which are redeemed on such Bond
Redemption Date plus the interest attributable thereto.
SECTION 6. TERM VP LETTERS OF CREDIT
SECTION 6.01. Issuance of and Participation in the Term VP Letters of
Credit. (a) Under Section 13.4 of each of the Power Purchase Agreements, the
Borrower is obligated to provide Virginia Power with an unconditional and
irrevocable direct pay letter of credit to ensure the continued availability of
the Project. Pursuant to the Existing Loan Agreement, the Issuing
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Bank issued the Existing Term VP Letters of Credit. Upon the terms and subject
to the conditions of this Agreement and upon no less than 10 days prior written
notice from the Borrower to the Agent and the Issuing Bank, the Issuing Bank
agrees to extend each of the Existing Term VP Letter of Credit - Unit I and the
Existing Term VP Letter of Credit - Unit II on or before September 30, 2000,
pursuant to a letter delivered by the Issuing Bank to Virginia Power. Each of
the Term VP Letters of Credit shall be stated to expire on the Term VP Credit
Expiration Date. At the time of any payment under any Term VP Letter of Credit,
the amount available to be drawn under such Term VP Letter of Credit shall be
reduced by the amount of such payment.
(b) Effective upon the Restatement Effective Date, without further
action by the Issuing Bank, the Agent or any Lender, the Issuing Bank grants to
each Lender and each Lender unconditionally and irrevocably, severally and for
itself only, takes an undivided participating interest in the rights and
obligations of the Issuing Bank under, and in connection with, such Term VP
Letter of Credit in a fraction equal to such Lender's Commitment Percentage.
SECTION 6.02. [INTENTIONALLY OMITTED]
SECTION 6.03. Extension of Term VP Letters of Credit. Upon any
extension of the Term VP Credit Expiration Date with respect to any Term VP
Letter of Credit pursuant to Section 6.08, the Issuing Bank shall issue and
deliver a new Term VP Letter of Credit in exchange for the Term VP Letter of
Credit that is being replaced to reflect the extension of the Term VP Credit
Expiration Date with respect to such Term VP Letter of Credit. The terms of such
new Term VP Letter of Credit shall be identical to those of the Term VP Letter
of Credit for which it is being exchanged, except that (i) such new Term VP
Letter of Credit shall be dated the date of issuance, (ii) the Term VP Credit
Expiration Date for such replacement Term VP Letter of Credit shall be such date
as so extended and (iii) such new Term VP Letter of Credit may contain such
changes as the Issuing Bank, the Agent, the Borrower and Virginia Power may
agree upon.
SECTION 6.04. Issuing Bank's Term VP Account; Notice of Payments and
Reductions under the Term VP Letters of Credit. (a) The Borrower shall establish
and maintain an account with the Security Agent designated the "Cogentrix
Richmond Term VP Letters of Credit Reimbursement Account" (the "Issuing Bank's
Term VP Account") and from time to time the Security Agent shall cause funds to
be deposited therein in amounts sufficient to satisfy the Borrower's obligations
to make Term VP Reimbursement Payments as such amounts become due and payable,
as provided in Section 4.03 of the Security Deposit Agreement. The right of
withdrawal from the Issuing Bank's Term VP Account shall be vested solely in the
Issuing Bank and the Security Agent. The Security Agent shall at all times, and
the Borrower hereby authorizes the Security Agent to, direct that all
withdrawals from the Issuing Bank's Term VP Account be made for reimbursement of
Term VP Letter of Credit Disbursements.
(b) The Issuing Bank shall give the Borrower and each Lender prompt
cable or tested telex notice of each demand for a Term VP Letter of Credit
Disbursement received by the Issuing Bank, specifying (a) the amount of such
Term VP Letter of Credit Disbursement, (b) the date such Term VP Letter of
Credit Disbursement is to be made and (c) such Lender's pro rata share of the
amount of such Term VP Letter of Credit Disbursement based on its Commitment
Percentage.
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SECTION 6.05. Expiration of the Term VP Letter of Credit. Each of the
Term VP Letters of Credit shall expire upon the earliest to occur of (i) receipt
by the Issuing Bank of a notice in the form of Annex 3 to such Term VP Letter of
Credit purporting to be signed by an authorized officer of Virginia Power, (ii)
the surrender to the Issuing Bank by Virginia Power of such Term VP Letter of
Credit for cancellation, (iii) the Issuing Bank's honoring of drafts presented
under such Term VP Letter of Credit that in the aggregate equal the stated
amount of such Letter of Credit and (iv) the close of business at the office of
the Issuing Bank specified in such Term VP Letter of Credit on the Term VP
Credit Expiration Date.
SECTION 6.06. Borrower's Obligations in Respect of Term VP Letters of
Credit. (a) Each Term VP Letter of Credit Disbursement shall be reimbursed by
the Borrower in equal installments (the total amount of such reimbursement
obligation referred to herein as the "Term VP Reimbursement Amount" and each
payment in respect of such amount herein referred to as a "Term VP Reimbursement
Payment"), the first such payment to be made on the third Installment Payment
Date to occur after the date of such Term VP Letter of Credit Disbursement, and
the remaining installments to be paid on each of the following nine Installment
Payment Dates (or, if there are less than nine Installment Payment Dates
remaining, in equal installments on each of the remaining Installment Payment
Dates to and including the Credit Facility Termination Date); provided, however,
that if a Term VP Letter of Credit Disbursement occurs on or after June 30,
2009, the full amount of the Term VP Reimbursement Payment with respect thereto
shall be due and payable on the Credit Facility Termination Date. Each such Term
Credit Facility Payment Date on which a Term VP Reimbursement Payment is due and
owing herein referred to as a "Term VP Reimbursement Date". Each Term VP
Reimbursement Amount shall bear interest at the rate of interest applicable to
Base Rate Loans hereunder payable on each Term VP Reimbursement Date.
(b) If any Term VP Reimbursement Payment is not made on the date when
it is due in accordance with the provisions of Section 6.06(a), then the amount
thereof which is not so paid (including, to the extent permitted by applicable
law, accrued interest thereon) shall bear interest from and including the date
on which such payment was due until paid in full at a rate per annum equal to
the Default Rate, such interest being payable on demand of the Issuing Bank.
(c) The Borrower's obligation to make Term VP Reimbursement Payments
and payments of interest in respect thereof under this Section 6.06 (such
obligations being herein collectively referred to as the "Term VP Reimbursement
Obligations") shall be absolute, unconditional and irrevocable, and shall be
observed strictly in accordance with the terms of this Agreement under all
circumstances whatsoever including, without limitation, the following
circumstances: (i) any lack of legality, validity, enforceability or regularity
of any Term VP Letter of Credit, this Agreement or any Project Document; (ii)
any amendment or waiver of or any consent to or departure from all or any of the
Project Documents; (iii) the existence of any claim, set-off, defense,
counterclaim or other right which the Borrower may have at any time against
Virginia Power, the Agent, the Issuing Bank, the Lenders or any other Person,
whether in connection with this Agreement, any Term VP Letter of Credit, the
Project Documents or any unrelated transaction; (iv) any statement or any other
document presented under any Term VP Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect whatsoever; (v) payment by the Issuing Bank under any
Term VP Letter of Credit against presentation of a sight draft or certificate
which does not comply with the terms of such Term VP Letter of Credit; and (vi)
any other circumstance or happening whatsoever, whether or
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not similar to any of the foregoing; provided that the Borrower shall not be
obligated to reimburse the Issuing Bank for any Term VP Letter of Credit
Disbursement made as a result of the Issuing Bank's gross negligence or wilful
misconduct. The fact that the Borrower shall have made any payment as required
by this Section 6.06(b) shall not, of itself, constitute a waiver or release of,
or otherwise be deemed to prejudice, any right, claim or cause of action for
damages that the Borrower may have had against Virginia Power, the Issuing Bank,
the Agent or the Lenders but for the fact of such payment being made. The
Borrower and each Lender agrees with the Issuing Bank that the provisions of
Section 5.05 shall be applicable with respect to the Term VP Letters of Credit
to the same extent as such provisions apply to the Bond Letters of Credit.
SECTION 6.07. Funding of Term VP Letters of Credit Disbursements. (a)
Effective upon the issuance of each Term VP Letter of Credit and without further
action on the part of the Agent, the Issuing Bank or any Lender, each Lender
shall automatically acquire a participation in the Issuing Bank's liability
under such Term VP Letter of Credit in an amount equal to such Lender's
Commitment Percentage. Subject to the limitations set forth below, each Lender
shall be liable to the Issuing Bank for its pro rata share, based upon its
Commitment Percentage, of any and all amounts drawn under any Term VP Letter of
Credit and honored by the Issuing Bank. Such liability shall be unconditional
and without regard to the occurrence of any Default or Event of Default;
provided that no Lender shall be liable for the payment of any portion of such
liability directly resulting from the Issuing Bank's gross negligence or wilful
misconduct.
(b) On the Term VP Disbursement Date for any Term VP Letter of Credit
Disbursement, the Issuing Bank shall notify the Agent, which shall notify each
Lender by telex, telecopy or telephone (promptly confirmed by telex or telecopy)
of its pro rata share of such Term VP Letter of Credit Disbursement, based upon
such Lender's Commitment Percentage, and forthwith upon receipt of such notice
each Lender shall make available its pro rata share of such Term VP Letter of
Credit Disbursement based on its Commitment Percentage to the Issuing Bank at
its office indicated on Schedule 1 in immediately available funds not later than
11:00 A.M., New York City time. Each Lender shall indemnify and hold harmless
the Issuing Bank from and against any and all losses, liabilities (including
liabilities for penalties), actions, suits, judgments, demands, costs and
expenses (including, without limitation, reasonable attorneys' fees and
expenses) resulting from any failure on the part of such Lender to provide, or
from any delay in providing, the Issuing Bank with its pro rata share computed
in accordance with its Commitment Percentage of the amount of any Term VP Letter
of Credit Disbursement in accordance with the provisions of the preceding
sentence but no Lender shall be so liable for any such failure on the part of or
caused by any other Lender. If a Lender does not make available to the Issuing
Bank on the Term VP Disbursement Date such Lender's pro rata share computed in
accordance with its Commitment Percentage of any Term VP Letter of Credit
Disbursement, such Lender shall be required to pay interest to the Issuing Bank
on such pro rata share of such Term VP Letter of Credit Disbursement at the
Federal Funds Rate from the date such Lender's payment is due until the date it
is received by the Issuing Bank.
(c) Whenever the Issuing Bank receives any Term VP Reimbursement
Payment or any payment of interest in respect thereof under this Section 6.06,
the Issuing Bank will pay to each Lender in immediately available funds such
Lender's pro rata share, computed in accordance with its Commitment Percentage,
of such payment (i) before the close of business on the day such payment is
received, if such payment is received at or prior to 12:00 noon, New York City
time,
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on such day or (ii) before 2:00 P.M., New York City time, on the next succeeding
Business Day if such payment is received after 12:00 noon, New York City time,
on such day. Any amounts received by the Issuing Bank that are due and owing to
the Lenders and remain unpaid to the Lenders after the times for payment set
forth in the preceding sentence shall bear interest, payable by the Issuing Bank
at the Federal Funds Rate.
(d) Each Lender hereby irrevocably authorizes the Issuing Bank to issue
the Term VP Letters of Credit under and in accordance with this Agreement, to
pay the amount set forth in any draft or certificate presented under any Term VP
Letter of Credit upon presentation of documents which, upon their face, conform
to the terms of such Term VP Letter of Credit, to receive from the Borrower
reimbursement for Term VP Letter of Credit Disbursements, to receive from the
Borrower payment of all fees, charges and interest in respect of the Term VP
Letters of Credit and Term VP Letter of Credit Disbursements, and to take such
action on such Lender's behalf under the provisions of this Agreement and to
exercise such powers and to perform such duties hereunder as are specifically
delegated to or required of the Issuing Bank by the terms hereof, together with
such powers as are reasonably incidental thereto.
(e) If a Lender fails to make any payments under this Section 6.07, and
if any such payments are not made prior to the expiration of 5 Business Days
following notice of such nonpayment given by the Issuing Bank to such Lender,
then the Agent may acquire, or transfer to a third party, previously approved by
the Borrower, in exchange for the sum or sums due from such Lender, such
Lender's participation interest hereunder and under the Letters of Credit, and
all other rights of such Lender under this Agreement, without, however,
relieving such Lender from any liability for damages, costs and expenses
suffered by the Issuing Bank as a result of such failure. The purchaser of any
such interest (including the Agent) shall be deemed to have acquired an interest
senior to the interest of such Lender and, accordingly, (i) such purchaser shall
be entitled to receive all subsequent payments which the Issuing Bank would
otherwise have made hereunder to such Lender, (ii) such purchaser shall
immediately become a party to this Agreement without the need for any further
amendment hereto and shall execute such assumptions as the Borrower may
reasonably request, (iii) the Borrower shall promptly execute and deliver to
such purchaser a Note substantially in the form of Exhibit A hereto, a Note
substantially in the form of Exhibit B hereto and a Note substantially in the
form of Exhibit C hereto, as the case may be, (iv) such Lender shall thereupon
cease to be a Lender, shall cease to be a party to this Agreement and shall
cease to have any further rights in respect hereof or in respect of such
Lender's Notes, except that such Lender shall continue to be entitled to be
reimbursed for all amounts previously advanced by it not theretofore reimbursed
and all unpaid Loans theretofore made by it. Following such reimbursements, such
Lender shall forthwith return its Notes to the Borrower for cancellation.
(f) Subject to the proviso to the last sentence of paragraph (a) of
this Section 6.07, each Lender agrees that its obligation to participate in
connection with the Term VP Letters of Credit on the terms and subject to the
conditions of this Agreement shall be irrevocable and unconditional.
SECTION 6.08. Extensions of Term VP Letters of Credit. Except as
provided in Section 6.01, if the Borrower wishes to extend the Term VP Credit
Expiration Date for any Term VP Letter of Credit for an additional period, it
shall give written notice to the Issuing Bank and to the Agent (which shall
promptly notify each Lender) of such requested extension and the period thereof
at least 180 days prior to such Term VP Credit Expiration Date, together with
evidence that Virginia
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Power has required such extension. Any such extension shall be made by the
Issuing Bank in its sole discretion, and must be consented to by each Lender in
its sole discretion, at least 90 days prior to the scheduled Term VP Credit
Expiration Date. The Agent shall promptly notify the Lenders, the Borrower and
Virginia Power of such extension. If any Lender shall not have consented to a
requested extension of the Term VP Credit Expiration Date for a Term VP Letter
of Credit at least 120 days prior to the scheduled Term VP Credit Expiration
Date, the Borrower may require such Lender to transfer all of its rights and
obligations under this Agreement in accordance with the provisions of Section
14(c) hereof to a Purchasing Lender selected by the Borrower that is willing to
become a Lender under this Agreement and to consent to such extension.
SECTION 6A. DEBT SERVICE RESERVE LETTER OF CREDIT
SECTION 6A.01 Issuance of the Debt Service Reserve Letter of Credit. On
the Restatement Effective Date, subject to the terms and conditions of this
Agreement, the Issuing Bank agrees to issue the Debt Service Reserve Letter of
Credit in favor of the Security Agent for the benefit of the Secured Parties.
The Debt Service Reserve Letter of Credit shall expire upon the first to occur
(the "Debt Service Reserve Expiration Date") of (a) the Debt Service Reserve
Letter of Credit Termination Date, (b) the payment in full of the Obligations
and all accrued and unpaid interest thereon, (c) the Issuing Bank's receipt of
written notice from the Agent to the effect that the Agent has accepted a letter
of credit or an alternate form of security provided by the Borrower and
acceptable to the Agent as a substitute for the Debt Service Reserve Letter of
Credit, (d) any drawing of the Debt Service Reserve Letter of Credit subsequent
to the occurrence of an Acceleration Event, and (e) such earlier time and date
as the Agent, the Issuing Bank and the Borrower shall otherwise agree.
"Acceleration Event" shall mean any event resulting in the acceleration of the
maturity of the entire unpaid principal amount of the Obligations, causing all
such principal and all accrued and unpaid interest thereon to become immediately
due and payable, pursuant to the provisions of Section 12 of this Agreement.
SECTION 6A.02 Available Amount. It is understood and agreed that the
Issuing Bank shall not have any obligation to pay any draft presented by the
Agent under the Debt Service Reserve Letter of Credit to the extent the amount
of such draft exceeds the Available Amount (as defined below) as of the date of
payment of such draft. It is further understood and agreed that upon any
prepayment of the Debt Service Reserve Letter of Credit Loans contemplated by
Section 6A.04(f) or (g), the Debt Service Reserve Letter of Credit shall be
reinstated in an amount equal to such prepayment. "Available Amount" shall mean,
as of any date, an amount equal to (i) (x) for the period from and including the
Restatement Effective Date to but excluding January 1, 2001, the Initial Debt
Service Reserve L/C Drawable Amount and (y) on or after January 1, 2001, the
Required Stated Amount, less (ii) the aggregate amount of all drawings made
under the Debt Service Reserve Letter of Credit as of such date, plus (iii) the
aggregate amount of principal of Debt Service Reserve Letter of Credit Loans
prepaid pursuant to Section 6A.04(f) or (g) of this Agreement as of such date.
SECTION 6A.03 Debt Service Reserve Letter of Credit Operations. The
Issuing Bank shall, as soon as practicable following its receipt of any draft
and accompanying documents purporting to represent a demand for payment under
the Debt Service Reserve Letter of Credit, (a) examine such draft and
accompanying documents to confirm that the same appear on their face
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to comply with the terms and conditions of the Debt Service Reserve Letter of
Credit and (b) give written or telecopy notice to the Borrower (i) of such
demand for payment and the determination by the Issuing Bank as to whether such
demand for payment was in accordance with the terms and conditions of the Debt
Service Reserve Letter of Credit and (ii) if such demand was so in accordance,
that the Issuing Bank will make a disbursement under the Debt Service Reserve
Letter of Credit on the date of such receipt or, if permitted by the Debt
Service Reserve Letter of Credit, the next Business Day thereafter; provided,
however, that the failure to give such notice shall not relieve the Borrower of
its obligation to reimburse the Issuing Bank for such disbursement.
SECTION 6A.04 Agreement To Repay Debt Service Reserve Letter of Credit
Disburse ments. (a) (i) Each payment by the Issuing Bank of any drawing under
the Debt Service Reserve Letter of Credit shall constitute the making of, and
each Lender agrees to make, a term loan (each, a "Debt Service Reserve Letter of
Credit Loan") by such Lender to the Borrower on the date of such payment in a
principal amount equal to such Bank's Commitment Percentage of the amount of
such drawing. Each Debt Service Reserve Letter of Credit Loan shall be a Base
Rate Loan on the date made. Thereafter, subject to and upon the terms hereof,
the Debt Service Reserve Letter of Credit Loans may from time to time be
Eurodollar Loans, Base Rate Loans or any combination thereof, as determined by
the Borrower and notified to the Administrative Agent in accordance with the
provisions of Section 7.04.
(ii) Each Lender unconditionally and irrevocably agrees with the
Issuing Bank that, if a drawing is made under the Debt Service Reserve Letter of
Credit, such Lender shall pay to the Issuing Bank at the Issuing Bank's address
for notices specified in Schedule 1 an amount equal to such Lender's Commitment
Percentage of the amount of such drawing, such payment to be made not later than
3:00 P.M. (New York City time) on the date on which such drawing is to be made
(if such Lender was notified thereof at or prior to 1:00 P.M. (New York City
time) on such date) or not later than 1:00 P.M. on the next Business Day (if
such Lender was notified after such time). Each Lender shall indemnify and hold
harmless the Issuing Bank from and against any and all losses, liabilities
(including liabilities for penalties), actions, suits, judgments, demands, costs
and expenses (including reasonable attorneys' fees and expenses) resulting from
any failure on the part of such Lender to provide, or from any delay in
providing, the Issuing Bank with such Lender's pro rata share of any drawing
made under the Debt Service Reserve Letter of Credit computed in accordance with
its Commitment Percentage in accordance with the provisions of the preceding
sentence, but no Lender shall be so liable for any such failure on the part of
any other Lender. If any such Lender's pro rata share of any drawing made under
the Debt Service Reserve Letter of Credit is not paid to the Issuing Bank when
due, such Lender shall be required to pay interest to the Issuing Bank on such
amount at the Federal Funds Rate from the date such Lender's payment is due
until the date it is received by the Issuing Bank. A certificate of the Issuing
Bank submitted to any Lender with respect to any amounts owing under this
Section 6A.04(a)(ii) shall be conclusive in the absence of manifest error.
(iii) If a Lender fails to make any payments under Section
6A.04(a)(ii), and if such payments are not made prior to the expiration of 5
Business Days following notice of such nonpayment given by the Issuing Bank to
such Lender, then the Agent may acquire, or transfer to a third party,
previously approved by the Borrower, in exchange for the sum or sums due from
such Lender, such Lender's participation interest hereunder and under the
Letters of Credit, and all other rights of such Lender under this Agreement,
without, however, relieving such Lender from
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any liability for damages, costs and expenses suffered by the Issuing Bank as a
result of such failure. The purchaser of any such interest (including the Agent)
shall be deemed to have acquired an interest senior to the interest of such
Lender and, accordingly, (i) such purchaser shall be entitled to receive all
subsequent payments which the Issuing Bank would otherwise have made hereunder
to such Lender, (ii) such purchaser shall immediately become a party to this
Agreement without the need for any further amendment hereto and shall execute
such assumptions as the Borrower may reasonably request, (iii) the Borrower
shall promptly execute and deliver to such purchaser a Note substantially in the
form of Exhibit A hereto, a Note substantially in the form of Exhibit B hereto
and a Note substantially in the form of Exhibit C hereto, as the case may be,
and (iv) such Lender shall thereupon cease to be a Lender, shall cease to be a
party to this Agreement and shall cease to have any further rights in respect
hereof or in respect of such Lender's Notes, except that such Lender shall
continue to be entitled to be reimbursed for all amounts previously advanced by
it not theretofore reimbursed and all unpaid Loans theretofore made by it.
Following such reimbursements, such Lender shall forthwith return its Notes to
the Borrower for cancellation.
(b) Interest on the outstanding Debt Service Reserve Letter of Credit
Loans shall be calculated as provided for in Section 7.03 and shall accrue as
provided for and at the rates specified in Section 7.06, in each case as though
such Debt Service Reserve Letter of Credit Loan were a Term Loan. In addition to
being payable on each date as specified as an Interest Payment Date in
accordance with Section 7.06(d), accrued interest on outstanding Debt Service
Reserve Letter of Credit Loans shall also be payable (i) upon any prepayment or
repayment of such Debt Service Reserve Letter of Credit Loans and (ii) on the
Debt Service Reserve Expiration Date.
(c) If the Borrower shall fail to make any payment due hereunder to the
Issuing Bank or under the Debt Service Reserve Letter of Credit Notes when due,
it shall, on demand from time to time, pay interest on such defaulted amount to
the date of actual payment (after as well as before judgment) at the applicable
rate as specified in Section 7.06(c).
(d) The Debt Service Reserve Letter of Credit Loans made by each Lender
shall be evidenced by this Agreement and, if requested by such Lender, by a
promissory note of the Borrower, substantially in the form of Exhibit C, with
appropriate insertions as to payee, date and principal amount(individually, a
"Debt Service Reserve Letter of Credit Note"; collectively, the "Debt Service
Reserve Letter of Credit Notes"), payable to the order of such Lender. Each Debt
Service Reserve Letter of Credit Note shall: (i) be dated the date of the
applicable drawing under the Debt Service Reserve Letter of Credit and (ii) be
in the principal amount of such Lender's Commitment Percentage of the amount of
such drawing. The Borrower shall duly execute and deliver a Debt Service Reserve
Letter of Credit Note payable to the order of any requesting Lender immediately
following a drawing under the Debt Service Reserve Letter of Credit. Each Bank
is hereby authorized to record the date, Type and amount of the Debt Service
Reserve Letter of Credit Loan made by such Bank, each continuation thereof, each
conversion of all or a portion thereof to another Type, the date and amount of
each payment or prepayment of principal thereof and, in the case of Eurodollar
Loans, the length of each Interest Period with respect thereto, on the schedules
annexed to and constituting part of any of its Debt Service Reserve Letter of
Credit Notes or on other appropriate records of such Bank, and any such
recordation shall constitute prima facie evidence of the accuracy of the
information so recorded in the absence of manifest error; provided that the
failure by any Bank to make any such recordation or any error therein shall
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not limit or otherwise affect the obligations of the Borrower hereunder or under
the Debt Service Reserve Letter of Credit Notes in respect of the Debt Service
Reserve Letter of Credit Loans.
(e) Each Debt Service Reserve Letter of Credit Loan shall be due and
payable on the date (each such date, a "Debt Service Reserve Letter of Credit
Loan Maturity Date") that is the earlier of (x) the date which is the third
anniversary of the making of such Debt Service Reserve Letter of Credit Loan and
(y) the Debt Service Reserve Letter of Credit Termination Date, and the Borrower
shall pay the entire outstanding principal amount of such Debt Service Reserve
Letter of Credit Loan, together with all accrued and unpaid interest thereon, on
such date.
(f) The Borrower shall cause any amount to be distributed to the Agent
on any date pursuant to clause "sixth" of Section 4.03 of the Security Deposit
Agreement to be applied forthwith to prepay the Debt Service Reserve Letter of
Credit Loans. Any such prepayment shall be without premium or penalty.
(g) The Borrower shall have the right at any time and from time to time
to prepay the Debt Service Reserve Letter of Credit Loans in the order of their
maturity, in whole or in part, upon at least five Business Days' prior written
notice to the Agent; provided that no such notice shall be required for
prepayments in accordance with Section 6A.04(f). Except for prepayments in
accordance with Section 6A.04(f), any partial prepayment of Debt Service Reserve
Letter of Credit Loans shall be in an amount that is an integral multiple of
$25,000 and not less than $100,000. Each notice of prepayment shall specify the
prepayment date and the principal amount of the Debt Service Reserve Letter of
Credit Loan (or portion thereof) to be prepaid, shall be irrevocable and shall
commit the Borrower to prepay such amount on such prepayment date. All
prepayments under this paragraph (g) shall be accompanied by all accrued and
unpaid interest on the principal amount being prepaid to the date of prepayment.
Any such prepayment shall be without premium or penalty.
(h) The Borrower's obligation to repay the Issuing Bank and the Lenders
for all payments and disbursements made by the Issuing Bank and the Lenders
under or with respect to the Debt Service Reserve Letter of Credit and to pay
all interest, fees and other amounts payable hereunder shall be absolute,
unconditional and irrevocable, and shall be observed strictly in accordance with
the terms of this Agreement under any and all circumstances whatsoever
including, without limitation, the following circumstances: (i) any lack of
legality, validity, enforceability or regularity of the Debt Service Reserve
Letter of Credit, this Agreement or any Project Document; (ii) any amendment or
waiver of, or consent to departure from all or any of the Debt Service Reserve
Letter of Credit, this Agreement or any Project Document; (iii) the existence of
any claim, setoff, defense, counterclaim or other right which the Borrower or
any other Person may at any time have against the Agent, the Issuing Bank, the
Lenders or any other Person, whether in connection with this Agreement, the Debt
Service Reserve Letter of Credit, any Project Document or any other agreement or
transaction; (iv) any statement or other document presented under the Debt
Service Reserve 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 whatsoever; (v) payment by the Issuing Bank under the Debt
Service Reserve Letter of Credit against presentation of a sight draft or other
certificate which does not comply with the terms of the Debt Service Reserve
Letter of Credit; and (vi) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing; provided that the Borrower shall
not be obligated to
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reimburse the Issuing Bank for any Debt Service Reserve Letter of Credit
disbursement made as a result of the Issuing Bank's gross negligence or wilful
misconduct. The fact that the Borrower shall have made any payment as required
by this Section 6A.04 shall not, of itself, constitute a waiver or release of,
or otherwise be deemed to prejudice, any right, claim or cause of action for
damages that the Borrower may have had against the Issuing Bank, the Agent or
the Lenders but for the fact of such payment being made. The Borrower and each
Lender agrees with the Issuing Bank that the provisions of Section 5.05 shall be
applicable with respect to the Debt Service Reserve Letter of Credit to the same
extent as such provisions apply to the Bond Letters of Credit.
SECTION 6A.05 Application of Payments. Each cash payment received
pursuant to this Section 6A by the Issuing Bank and any Lender shall be applied
in the following order of priority:
(a) first, to the payment of (i) any fee (including the Debt Service
Reserve Letter of Credit Fee) or expense of the Issuing Bank required to be paid
or reimbursed by the terms hereof, (ii) accrued and unpaid interest on the Debt
Service Reserve Letter of Credit Loans and (iii) any amount (other than amounts
referred to in clause (b) below) required to be paid or reimbursed by the terms
hereof; and
(b) second, to the payment of the principal of the Debt Service Reserve
Letter of Credit Loans.
SECTION 6A.06 Effect of Event of Default. The Debt Service Reserve
Letter of Credit shall not be terminated or accelerated as a result of an Event
of Default, and the Issuing Bank shall continue to honor demands for payment
made by the Security Agent under the Debt Service Reserve Letter of Credit in
accordance with its terms. The exercise of remedies by the Issuing Bank pursuant
to this Agreement shall not affect the Security Agent's ability to demand
payments under the Debt Service Reserve Letter of Credit or the Issuing Bank's
obligations thereunder in respect of such demands.
SECTION 6A.07 Extension of Debt Service Reserve Letter of Credit. The
Borrower, by written notice to the Issuing Bank and to the Agent (which shall
promptly notify each Lender) at least 180 days prior to the Debt Service Reserve
Letter of Credit Termination Date, may request the Issuing Bank to amend the
Debt Service Reserve Letter of Credit to extend the Debt Service Reserve Letter
of Credit Termination Date to the Credit Facility Termination Date. Any such
extension shall be made by the Issuing Bank in its sole discretion and must be
consented to by each Lender in its sole discretion, at least 90 days prior to
the Debt Service Reserve Letter of Credit Termination Date then in effect. The
Agent shall promptly notify the Lenders and the Borrower of such extension. If
any Lender shall not have consented to an extension of the Debt Service Reserve
Letter of Credit Termination Date at least 120 days prior to the Debt Service
Reserve Letter of Credit Termination Date then in effect, the Borrower may
require such Lender to transfer all of its rights and obligations under this
Agreement in accordance with the provisions of Section 14(c) hereof to a
Purchasing Lender selected by the Borrower that is willing to become a Lender
under this Agreement and to consent to such extension.
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SECTION 7. TERMS APPLICABLE TO LOANS AND LETTERS OF CREDIT
SECTION 7.01. Fees. (a) Bond Fronting Fee and Bond Letter of Credit
Fee. So long as any Bond Letter of Credit shall be in effect, the Borrower
agrees to pay (i) to the Issuing Bank, for its own account, a fronting fee with
respect to such Bond Letter of Credit (the "Bond Fronting Fee") in an amount set
forth in, and computed in accordance with, the Fee Letter, and (ii) to the
Agent, for the account of the Lenders in accordance with their respective
Commitment Percentages, a letter of credit commission with respect to such Bond
Letter of Credit (the "Bond Letter of Credit Fee") in an amount equal to the
percentage per annum which is the Applicable Margin from time to time for
Eurodollar Loans (as set forth in Schedule 2) on the Stated Amount from time to
time of such Bond Letter of Credit, computed on the basis of a 360-day year and
actual days elapsed. The Bond Fronting Fee and the Bond Letter of Credit Fee for
each Bond Letter of Credit shall be payable quarterly in arrears on the last
Business Day of each calendar quarter, commencing June 30, 2000.
(b) Debt Service Reserve Letter of Credit Fronting Fee, Debt Service
Reserve Letter of Credit Fee and Debt Service Reserve Letter of Credit
Commitment Fee. So long as the Debt Service Reserve Letter of Credit shall be in
effect, the Borrower agrees to pay (i) to the Issuing Bank, for its own account,
a fronting fee with respect to the Debt Service Reserve Letter of Credit (the
"Debt Service Reserve Letter of Credit Fronting Fee") in an amount set forth in,
and computed in accordance with, the Fee Letter, provided that for the period
from and including the Restatement Effective Date to but excluding January 1,
2001, such fee shall be payable assuming the face amount is the Initial Debt
Service Reserve L/C Drawable Amount; (ii) to the Agent, for the account of the
Lenders in accordance with their respective Commitment Percentages, a letter of
credit commission with respect to such Debt Service Reserve Letter of Credit
(the "Debt Service Reserve Letter of Credit Fee") in an amount equal to the
percentage per annum which is the Applicable Margin from time to time for
Eurodollar Loans (as set forth in Schedule 2) on the Stated Amount from time to
time of such Debt Service Reserve Letter of Credit, computed on the basis of a
360-day year and actual days elapsed and (iii) to the Agent, for the account of
the Lenders in accordance with their respective Commitment Percentages, a debt
service reserve letter of credit commitment fee (the "Debt Service Reserve
Letter of Credit Commitment Fee") for the period from and including the
Restatement Effective Date to but excluding January 1, 2001, computed at the
rate of 0.375% per annum on the Non-Drawable Debt Service Reserve L/C Amount.
The Debt Service Reserve Letter of Credit Fronting Fee, the Debt Service Reserve
Letter of Credit Fee and the Debt Service Reserve Letter of Credit Commitment
Fee, if any, shall be payable quarterly in arrears on the last Business Day of
each calendar quarter, commencing June 30, 2000.
(c) Letter of Credit Service Fees. The Borrower agrees to pay to the
Issuing Bank, for its own account, a service fee ("Service Fee") in the amount
of $1,000 for each amendment of any Letter of Credit payable on the date of such
amendment.
(d) Up-front Fee. The Borrower agrees to pay to the Agent on the
Restatement Effective Date, for the Agent's own account, an up-front fee in an
amount set forth in, and in accordance with, the Fee Letter.
(e) Administration Fee. The Borrower agrees to pay to the Agent, for
the Agent's own account, an administration fee in an amount set forth in, and
computed in accordance with, the Fee Letter (the "Administration Fee") for its
administration of this Agreement.
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(f) Term VP Letters of Credit and Term VP Letter of Credit Fee. So long
as any Term VP Letter of Credit shall be in effect, the Borrower agrees to pay
(i) to the Issuing Bank, for its own account, a fronting fee with respect to
such Term VP Letter of Credit (the "Term VP Fronting Fee") in an amount set
forth in, and computed in accordance with, the Fee Letter, and (ii) to the
Agent, for the account of the Lenders in accordance with their respective
Commitment Percentages, a letter of credit commission with respect to such Term
VP Letter of Credit (the "Term VP Letters of Credit Fee") in an amount equal to
the percentage per annum which is the Applicable Margin from time to time for
Eurodollar Loans (as set forth in Schedule 2) on the Stated Amount from time to
time of such Term VP Letter of Credit, computed on the basis of a 365/366-day
year and actual days elapsed. The Term VP Fronting Fee and the Term VP Letter of
Credit Fee for each Term VP Letter of Credit shall be payable quarterly in
arrears on the last Business Day of each calendar quarter, commencing June 30,
2000.
SECTION 7.02. Maximum Interest or Discount. Anything in this Agreement,
the Notes or the Letters of Credit to the contrary notwithstanding, the interest
rate on any Loan, any ▇▇▇▇ ▇▇ Reimbursement Obligation, any Term VP
Reimbursement Obligation or any other amount payable under this Agreement or any
Security Document shall in no event be in excess of the maximum permitted by
applicable law; provided that, to the extent permitted by applicable law, in the
event that interest is not collected as a result of the operation of this
Section 7.02 and interest thereafter payable pursuant to this Agreement or the
Notes shall be less than such maximum amount, then such interest thereafter
payable shall be increased up to such maximum amount to the extent necessary to
recover the amount of interest, if any, theretofore uncollected as a result of
the operation of this Section 7.02. In determining whether or not any interest
payable under this Agreement or the Notes exceeds the maximum rate permitted by
applicable law, any non-principal payment, except payments specifically stated
to be "interest," shall be deemed, to the extent permitted by applicable law, to
be a fee, expense reimbursement or premium rather than interest.
SECTION 7.03. Computation of Interest. (a) Interest in respect of
Eurodollar Loans shall be calculated on the basis of a 360-day year for the
actual days elapsed and in respect of Base Rate Loans on the basis of a year of
365 (366) days for the actual days elapsed. The Agent shall as soon as
practicable notify the Borrower and the Lenders of each determination of a
Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the Base Rate or in the applicable reserve requirements shall become
effective as of the opening of business on the day on which such change in the
Base Rate is announced, or such change in the reserve requirement shall become
effective, as the case may be. The Agent shall as soon as practicable notify the
Borrower and the Lenders of the effective date and the amount of each such
change.
(b) Each determination of an interest rate by the Agent pursuant to any
provision of this Agreement shall be conclusive and binding on the Borrower and
the Lenders in the absence of manifest error. The Agent shall, at the request of
the Borrower, deliver to the Borrower a statement showing the quotations used by
the Agent in determining any interest rate pursuant to Section 7.06(a).
SECTION 7.04. Conversion/Continuation Options; Minimum Amount of Loans.
(a) The Borrower may elect from time to time to convert Loans which are
Eurodollar Loans to Base Rate Loans by giving the Agent at least three Working
Days' prior irrevocable notice of such election; provided that, any such
conversion of Eurodollar Loans shall only be made on the last day of an
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Interest Period with respect thereto or if other than on the last day
of an Interest Period, subject to Section 7.08. The Borrower may elect from time
to time to convert Loans (other than Liquidity Loans) which are Base Rate Loans
to Eurodollar Loans by giving the Agent at least three Working Days prior
irrevocable notice of such election (each such notice shall specify the Interest
Period selected with respect thereto). Upon receipt of such notice, the Agent
shall promptly notify each Lender thereof. All or any part of outstanding Loans
which are Eurodollar Loans and Base Rate Loans may be converted as provided
herein; provided that (i) no Loan may be converted into a Eurodollar Loan when
any Default or Event of Default has occurred and is continuing, (ii) any Loan
which is a Liquidity Loan may not be converted into a Eurodollar Loan and (iii)
partial conversions shall be in an aggregate principal amount of at least
$500,000.
(b) Any Loans which are Eurodollar Loans may be continued as such upon
the expiration of an Interest Period with respect thereto by notification to the
Agent by the Borrower at least three Working Days prior to the expiration of
such Interest Period, which notice shall specify the new Interest Period with
respect to such Loans; provided that no Eurodollar Loan may be continued as such
when any Default or Event of Default has occurred and is continuing, but shall
be automatically converted to a Base Rate Loan on the last day of the then
current Interest Period with respect thereto. The Agent shall notify the Lenders
promptly that such automatic conversion contemplated by this Section 7.04(b)
will occur. If the Borrower shall fail to give notice of continuation as
provided in this paragraph, the affected Eurodollar Loan shall be deemed to have
been converted to a Base Rate Loan.
SECTION 7.05. Minimum Amounts of Eurodollar Loans. All borrowings,
conversions, payments, prepayments and selection of Interest Periods with
respect to Loans shall be in such amounts and be made pursuant to such elections
so that, after giving effect thereto, the aggregate principal amount of any such
Loan which is a Eurodollar Loan shall not be less than $500,000.
SECTION 7.06. Interest Rate and Payment Dates; Additional Interest on
Eurodollar Loans. Loans shall bear interest as follows:
(a) Eurodollar Loans shall bear interest during each Interest Period
with respect thereto on the unpaid principal amount thereof at a rate per annum
equal to the Eurodollar Rate determined for such Interest Period in accordance
with the terms hereof plus the Applicable Margin.
(b) Base Rate Loans shall bear interest for the period from and
including the date thereof until maturity or conversion pursuant to Section
7.04(a) hereof on the unpaid principal amount thereof at a rate per annum equal
to the Base Rate plus the Applicable Margin.
(c) If all or a portion of the principal amount of any of the Loans
shall not be paid when due (whether at the stated maturity, by acceleration or
otherwise), (i) each such Loan, if a Eurodollar Loan, shall be converted to a
Base Rate Loan at the end of the last day of the Interest Period with respect
thereto and (ii) such overdue principal amount and any overdue interest amount
with respect thereto shall bear interest at a rate per annum which is 2 1/2%
above the rate which would otherwise be applicable pursuant to this Section 7.06
from the date of such non-payment until paid in full (as well after as before
judgment), which interest shall be payable on demand.
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(d) Interest shall be payable in arrears on each Interest Payment Date.
(e) So long as any Lender shall be required under regulations of the
Board of Governors to maintain reserves with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities, such Lender may require the
Borrower to pay, but only in respect of any period during which such reserves
shall actually be maintained by such Lender, additional interest on the unpaid
principal amount of each Eurodollar Loan of such Lender, at a rate per annum
equal at all times during each Interest Period for such Eurodollar Loan to the
difference obtained by subtracting (i) the Eurodollar Rate for such Interest
Period from (ii) the rate obtained by dividing such Eurodollar Rate referred to
in clause (i) above by that percentage equal to 100% minus the Reserve
Percentage of such Lender for such Interest Period, payable on each date on
which interest is payable on such Eurodollar Loan. If any Lender shall claim
entitlement to any additional amount pursuant to this Section 7.06(e), then such
Lender shall deliver to the Borrower a certificate setting forth the basis for
the determination thereof as promptly as practicable. More than one such
certificate may be so delivered. Each such certificate shall be conclusive and
binding for all purposes as to the amount due absent manifest error.
SECTION 7.07. Inability to Determine Interest Rate. In the event that:
(i) the Agent shall have determined (which determination shall be
conclusive and binding upon the Borrower) that, by reason of circumstances
affecting the interbank eurodollar market, adequate and reasonable means do not
exist for ascertaining the Eurodollar Rate for any Interest Period; or
(ii) the Agent shall have received notice prior to the first day of
such Interest Period from Lenders constituting the Required Lenders that the
interest rate determined pursuant to Section 7.06(a) for such Interest Period
does not accurately reflect the cost to such Lenders of making or maintaining
their Eurodollar Loans during such Interest Period;
THEN, with respect to (a)Eurodollar Loans that will result from the requested
conversion of Base Rate Loans into Eurodollar Loans or (b) the continuation of
Loans as Eurodollar Loans beyond the expiration of the then current Interest
Period with respect thereto, the Agent shall forthwith give facsimile or
telephonic notice of such determination to the Borrower (including an
explanation in reasonable detail of any circumstances referred to in clause (i)
above) and the Lenders at least one day prior to, as the case may be, the
conversion date of such Base Rate Loans into Eurodollar Loans or the last day of
such Interest Period. If such notice is given (x) any Base Rate Loans that were
to have been converted to Eurodollar Loans shall be continued as Base Rate Loans
and (y) any Loans outstanding as Eurodollar Loans shall be converted, on the
last day of the then current Interest Period with respect thereto, to Base Rate
Loans. Until such notice has been withdrawn by the Agent, no further Loans shall
be made as Eurodollar Loans, nor shall the Borrower have the right to convert
Base Rate Loans to Eurodollar Loans.
SECTION 7.08. Funding Indemnity. The Borrower agrees to indemnify each
Lender and to hold each Lender harmless from any actual loss or out-of-pocket
expense which such Lender may sustain or incur as a consequence of (a) default
by the Borrower in payment when due of the principal amount of or interest on
any Eurodollar Loan of such Lender, (b) default by the Borrower in conversion of
any Base Rate Loan to a Eurodollar Loan after the Borrower has given a notice of
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conversion pursuant to Section 4.05, (c) default by the Borrower in
making any prepayment of any Eurodollar Loan after the Borrower has given a
notice in accordance with Section 4.04 or 7.04 or (d) the making of a payment or
prepayment of a Eurodollar Loan on a day which is not the last day of an
Interest Period with respect thereto, including, without limitation, in each
case, any such loss or expense arising from the reemployment of funds obtained
by it to maintain its Eurodollar Loans hereunder or from fees payable to
terminate the deposits from which such funds were obtained. This covenant shall
survive the termination of this Agreement and payment of the Notes and the other
Obligations.
SECTION 7.09. Indemnity Regarding Interest Hedging Transactions. The
Borrower agrees to indemnify each Lender and the Agent, and to hold each Lender
and the Agent harmless from any loss or out-of-pocket expense which such Person
may sustain or incur as a result of the early termination of any Interest
Hedging Transaction or any modification to or amendment of any Interest Hedging
Transaction. This covenant shall survive the termination of this Agreement and
payment of the Notes and the other Obligations.
SECTION 7.10. [INTENTIONALLY OMITTED]
SECTION 7.11. Illegality. (a) Notwithstanding any other provision of
this Agreement, if any Requirement of Law or any change therein or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain Eurodollar Loans as contemplated by this Agreement, the
commitment of each Lender to make and maintain Eurodollar Loans and to convert
Base Rate Loans to Eurodollar Loans shall forthwith be canceled and such
Lender's Loans then outstanding as Eurodollar Loans, if any, shall be converted
automatically to Base Rate Loans on the respective last days of the then current
Interest Periods for such Loans or within such earlier period as required by
law.
(b) If any prepayment or conversion of a Eurodollar Loan occurs
pursuant to this Section 7.11 on a day which is not the last day of the current
Interest Period with respect thereto, the Borrower shall pay to such Lender such
amounts, if any, as shall be required pursuant to Section 7.08.
SECTION 7.12. Requirements of Law. (a) In the event that any
Requirement of Law or any change therein or in the interpretation or application
thereof or compliance by any Lender with any request or directive (whether or
not having the force of law) from any central bank or other Government
Authority:
(i) does or shall subject any Lender to any tax (except to the extent
such tax is the subject of the agreements set forth in Section 7.14) of any kind
whatsoever with respect to this Agreement, any Note or any Eurodollar Loans made
by it, or change the basis of taxation of payments to such Lender of principal,
fees, interest or any other amount payable hereunder (except for changes in the
rate of tax on the overall net income of such Lender);
(ii) does or shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets held by,
or deposits or other liabilities in or for the account of, advances or loans by,
or other credit extended by, or any other acquisition of
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funds by, any office of such Lender which are not otherwise included in the
determination of the Eurodollar Rate; or
(iii) does or shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by any amount which such Lender deems to be material, of making, renewing or
maintaining advances or extensions of credit or to reduce any amount receivable
hereunder, in each case in respect of its Eurodollar Loans, then, in any such
case, the Borrower shall promptly pay such Lender, within 10 Business Days after
demand, any additional amounts necessary to compensate such Lender for such
additional cost or reduced amount receivable. If a Lender becomes entitled to
claim any additional amounts pursuant to this Section 7.12(a), it shall promptly
notify the Borrower, through the Agent, of the event by reason of which it has
become so entitled. A certificate of such Lender setting forth in reasonable
detail the calculation of any such additional amounts payable pursuant to the
foregoing sentence submitted by such Lender, through the Agent, to the Borrower
shall be conclusive in the absence of manifest error. This covenant shall
survive the termination of this Agreement and payment of the Notes and the other
Obligations. If any additional amount with respect to Eurodollar Loans of a
Lender becomes payable to such Lender pursuant to this Section 7.12, such Lender
agrees to use reasonable efforts to designate a new lending office with respect
to its Eurodollar Loans with a view to mitigating the consequences of such an
occurrence if the designation of a new lending office is practicable consistent
with customary practices of such Lender, unless in the sole judgment of such
Lender such designation at such time or in the future might be disadvantageous
to it.
(b) In the event that any Lender shall have determined that the
adoption after the date hereof of any law, rule, guideline or regulation
regarding capital adequacy, or any change after the date hereof in any existing
or future law, rule, guideline or regulation regarding capital adequacy or in
the interpretation or application thereof, or compliance by any Lender or any
corporation controlling such Lender with any request or directive made or
adopted after the date hereof regarding capital adequacy (whether or not having
the force of law) from any central bank or Government Authority, does or shall
have the effect of reducing the rate of return on such Lender's or such
corporation's capital as a consequence of its obligations hereunder to a level
below that which such Lender or such corporation could have achieved but for
such adoption, change or compliance (taking into consideration such Lender's or
such corporation's policies with respect to capital adequacy) by an amount
deemed by such Lender to be material, then from time to time, within 10 Business
Days after submission by such Lender to the Borrower (with a copy to the Agent)
of a written request therefor (accompanied by an explanation in reasonable
detail of the basis thereof), the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender for such reduction.
SECTION 7.13. Increased Costs of Letters of Credit. In the event that
after the date hereof the implementation of or any change in any law or
regulation, or any guideline or directive (whether or not having the force of
law) or the interpretation or administration thereof by any court, central bank
or administrative or Government Authority charged with the administration
thereof, or compliance by the Issuing Bank with any of the foregoing, shall:
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(i) subject the Issuing Bank to any tax of any kind whatsoever with
respect to this Agreement, any Letter of Credit, the Project Documents or the
transactions contemplated hereby or thereby or change the basis of taxation of
the Issuing Bank (other than a change in the rate of tax based on the overall
net income of the Issuing Bank); or
(ii) impose, modify or deem applicable any reserve, special deposit,
capital adequacy or similar requirement (including without limitation a request
or requirement which affects the manner in which the Issuing Bank allocates
capital resources to its commitments, including its obligations hereunder); or
(iii) impose on the Issuing Bank any other condition;
and as a result of any of the foregoing, in the sole opinion of the Issuing
Bank, (x) the cost to the Issuing Bank of issuing or maintaining any Letter of
Credit is increased, (y) any amounts payable by the Borrower hereunder are
reduced or (z) the rate of return on the Issuing Bank's capital as a consequence
of its obligations hereunder or its issuance and maintenance of any such Letter
of Credit is reduced to a level below that which the Issuing Bank could have
achieved but for such circumstances, then and in each such case upon demand from
time to time the Borrower shall pay to the Issuing Bank any additional amount or
amounts as shall compensate the Issuing Bank for such increased cost or
reduction in payment or in rate of return. A certificate of the Issuing Bank
setting forth in reasonable detail the calculation of any such additional amount
or amounts, in the absence of manifest error, shall be final and conclusive. In
determining such amount, the Issuing Bank may use any reasonable averaging and
attribution methods, provided that the Issuing Bank shall use such methods in
good faith and such methods shall be in accordance with those generally used by
the Issuing Bank for this purpose.
SECTION 7.14. Taxes. (a) All payments made by the Borrower under this
Agreement shall be made free and clear of, and without reduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Government
Authority excluding, in the case of the Agent and each Lender, net income and
franchise taxes imposed on the Agent or such Lender by the jurisdiction under
the laws of which the Agent or such Lender is organized or any political
subdivision or taxing authority thereof or therein, or by any jurisdiction in
which such Lender's Domestic Lending Office or Eurodollar Lending Office, as the
case may be, is located or any political subdivision or taxing authority thereof
or therein (all such non-excluded taxes, levies, imposts, deductions, charges or
withholdings being hereinafter called "Taxes"). If any Taxes are required to be
withheld from any amounts payable to the Agent or any Lender hereunder or under
the Notes, the amounts so payable to the Agent or such Lender shall be increased
to the extent necessary to yield to such Agent or such Lender (after payment of
all Taxes) interest or any such other amounts payable hereunder at the rates or
in the amounts specified in this Agreement and the Notes. Whenever any Taxes are
payable by the Borrower, as promptly as possible thereafter, the Borrower shall
send to the Agent for its own account a certified copy of an original official
receipt received by the Borrower showing payment thereof. If the Borrower fails
to pay any Taxes when due to the appropriate taxing authority or fails to remit
to the Agent the required receipts or other required documentary evidence, the
Borrower shall indemnify the Agent and the Lenders for any incremental taxes,
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interest or penalties that may become payable by the Agent or any Lender as a
result of the such failure.
(b) Upon becoming a party to this Agreement, each Lender that is not
incorporated under the laws of the United States of America or a state thereof
agrees that it will deliver to the Borrower and the Agent (i) two duly completed
copies of United States Internal Revenue Service Form 1001 or 4224 or successor
applicable form, as the case may be, certifying in each case that such Lender is
entitled to receive payments under this Agreement and the Notes payable to it
without deduction or withholding of any United States federal income taxes, and
(ii) an Internal Revenue Service Form W-8 or W-9 or successor applicable form,
as the case may be, to establish an exemption from United States backup
withholding tax. Each Lender which delivers to the Borrower and the Agent a Form
1001 or 4224 and Form W-8 or W-9 pursuant to the next preceding sentence further
undertakes to deliver to the Borrower and the Agent two further copies of Form
1001 or 4224 and Form W-8 or W-9, or successor applicable forms, or other manner
of certification, as the case may be, on or before the date that any such form
expires or becomes obsolete or after the occurrence of any event requiring a
change in the most recent form previously delivered by it to the Borrower, and
such extensions or renewals thereof as may reasonably be requested by the
Borrower, certifying in the case of a Form 1001 or 4224 that such Lender is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, unless in any such cases
an event (including without limitation any change in treaty, law or regulation)
has occurred prior to the date on which any such delivery would otherwise be
required which renders any such form inapplicable or which would prevent such
Lender from duly completing and delivering any such form with respect to it and
such Lender advises the Borrower that it is not capable of receiving payments
without deduction or withholding of United States federal income tax, or in the
case of a Form W-8 or W-9, without an exemption from United States backup
withholding tax.
(c) The agreements in Section 7.14(a) shall survive the termination of
this Agreement and the payment of the Notes and the other Obligations.
SECTION 7.15. Pro Rata Treatment and Payments. Each Borrowing of Loans
by the Borrower from the Lenders, each payment by the Borrower on account of any
Bond Letter of Credit Fee, Term VP Letters of Credit Fee, Debt Service Reserve
Letter of Credit Fee or Debt Service Reserve Letter of Credit Commitment Fee
shall be made pro rata according to the respective Commitment Percentages of the
Lenders. Each payment (including each prepayment) by the Borrower on account of
any principal of and interest on the Loans and each payment in respect of Term
VP Reimbursement Obligations shall be made pro rata according to the respective
amounts thereof owed to each Lender. All payments (including prepayments) to be
made by the Borrower on account of principal, interest, the Bond Letter of
Credit Fee, the Debt Service Reserve Letter of Credit Fee, the Debt Service
Reserve Letter of Credit Commitment Fee and the Term VP Letters of Credit Fee,
shall be made without set off or counterclaim and shall be made to the Agent,
for the account of the Lenders to which such payments are owed, at the Agent's
office set forth in Schedule 1 in lawful money of the United States of America
and in immediately available funds. All payments on account of any Bond Fronting
Fee, Debt Service Reserve Fronting Fee, Term VP Fronting Fee or Service Fee
shall be made without set off or counterclaim to the Issuing Bank at its office
set forth in Schedule 1 in lawful money of the United States of America and in
immediately available funds. All payments on account of the Administration Fee
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or the up-front fee payable to the Agent shall be made without set off or
counterclaim to the Agent at its office set forth in Schedule 1 in lawful money
of the United States of America and in immediately available funds. All deposits
with the Agent or the Security Agent of Reimbursement Cash Collateral or other
amounts which are required pursuant to this Agreement shall be made by the
Borrower without set off or counterclaim in lawful money of the United States of
America and in immediately available funds. If any payment hereunder (other than
payments on the Eurodollar Loans) becomes due and payable on a day other than a
Business Day, such payment shall be extended to the next succeeding Business
Day, and, with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension. If any payment on a
Eurodollar Loan becomes due and payable on a day other than a Working Day, the
maturity thereof shall be extended to the next succeeding Working Day unless the
result of such extension would be to extend such payment into another calendar
month in which event such payment shall be made on the immediately preceding
Working Day and, with respect to payments of principal, interest thereon shall
be payable at the then applicable rate during any such extension.
SECTION 7.16. Obligations Absolute. All sums payable by the Borrower to
the Issuing Bank, the Agent or any Lender with respect to any Letter of Credit
shall be paid without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived, anything contained herein or in any
Liquidity Loan Note or Debt Service Reserve Letter of Credit Note or in any of
the other documents to the contrary notwithstanding. The obligations and
liabilities of the Borrower to the Issuing Bank, the Agent and the Lenders
hereunder shall in no way be released, discharged or otherwise affected (except
as may be expressly provided herein) for any reason, including without
limitation: (a) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to the
Issuing Bank, the Borrower, the Agent or any other Person, or any action taken
with respect to this Agreement by any trustee or receiver of the Issuing Bank,
the Borrower, the Agent or any other Person, or by any court; (b) any default or
failure on the part of the Issuing Bank, the Agent or the Lenders to perform or
comply with any of the terms hereof or of any other agreement; or (c) any other
occurrence whatsoever, whether similar or dissimilar to the foregoing, whether
or not the Borrower shall have notice or knowledge of any of the foregoing.
Except as expressly provided herein, the Borrower, to the extent permitted by
law, waives all rights now or hereafter conferred by statute or otherwise to any
abatement, suspension, deferment, diminution or reduction of any sum payable by
the Borrower hereunder.
SECTION 7.17. [INTENTIONALLY OMITTED]
SECTION 8. REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents and warrants to each Lender, the Issuing
Bank and the Agent as follows:
SECTION 8.01. Financial Statements. (a) The financial statements of the
Borrower for the fiscal year ended December 31, 1999 and for the three-month
period ended March 31, 2000, copies of which have been delivered to the Agent
and the Lenders, are true and correct in all material respects, have been
prepared in accordance with GAAP applied on a consistent basis and fairly
present the financial condition of the Borrower on such dates and the results of
its operations
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and cash flows for the respective fiscal periods ended on such dates. All
material liabilities, direct or indirect, absolute or contingent, of the
Borrower as at such dates are either disclosed in such balance sheets or have
been disclosed in writing by the Borrower to the Agent prior to the execution
and delivery of this Agreement.
(b) Since December 31, 1999 no material adverse change has occurred in
(i) the financial condition of the Borrower, (ii) the properties, business,
operations, prospects or financial condition of the Borrower or (iii) the
Borrower's ability to perform its obligations under this Agreement, the Notes
and the other Project Documents to which it is or is to be a party, and on the
Restatement Effective Date no additional Indebtedness will have been incurred by
the Borrower.
SECTION 8.02. Corporate Existence and Business; Subsidiaries. (a) The
Borrower is a corporation duly organized, validly existing and in good standing
under the laws of the State of North Carolina, and is duly qualified to do
business and is in good standing in the Commonwealth of Virginia, the only
jurisdiction in which the conduct of its business or the ownership or lease of
its assets requires such qualification. Prior to the date hereof, the Borrower
has engaged in no business other than the development, construction and
operation of the Project and the negotiation, execution, delivery and
performance of the Project Documents to which it is a party, and the Borrower
has no obligations or liabilities other than those directly related to the
conduct of such business. The Borrower is and will be engaged solely in the
business of owning and operating the Project.
(b) The Borrower is an indirect Subsidiary of Cogentrix Energy. The
Borrower does not now have, nor will the Borrower in the future have, any
Subsidiaries.
SECTION 8.03. Compliance with Law. The Borrower is in compliance with
all Requirements of Law except to the extent that the failure to comply
therewith (i) would not, in the aggregate, have a material adverse effect on the
properties, business, operations, or financial condition of the Borrower and
(ii) would not materially adversely affect the ability of the Borrower to
perform its obligations under this Agreement, the Notes and the other Project
Documents to which it is a party.
SECTION 8.04. Power and Authorization; Enforceable Obligations. The
Borrower has full corporate power and corporate authority to own and operate the
Project, to conduct its business as now conducted and as proposed to be
conducted by it, to execute, deliver and perform this Agreement, the Notes and
the other Project Documents to which it is or is to become a party, to take all
action as may be necessary to complete the transactions contemplated hereunder
and thereunder, to grant the liens and security interests provided for in the
Security Documents to which it is a party and to borrow hereunder. The Borrower
has taken all necessary corporate and legal action to authorize the borrowings
hereunder on the terms and conditions of this Agreement, the Notes and the other
Project Documents to which it is a party, to grant the liens and security
interests provided for in the Security Documents to which it is a party and to
authorize the execution, delivery and performance of this Agreement, the Notes
and the other Project Documents to which it is a party. No consent or
authorization of, filing with, or other act by or in respect of any other Person
is required in connection with the borrowings hereunder or with the execution,
delivery or performance by the Borrower or the validity or enforceability as to
the Borrower of this Agreement, the Notes and the other Project Documents except
the Governmental Approvals
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and other consents and approvals referred to in Section 8.05. Each of this
Agreement and the other Project Documents to which the Borrower is a party has
been duly executed and delivered by the Borrower and constitutes, and each of
the Notes and the other Project Documents to which the Borrower is to become a
party will upon execution and delivery thereof by the Borrower and the other
parties thereto (if any) constitute, a legal, valid and binding obligation of
the Borrower enforceable against the Borrower in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of creditors
generally and by general principles of equity (regardless of whether enforcement
thereof is sought in a proceeding at law or in equity). Except as otherwise
disclosed in writing to the Agent by the Borrower prior to the Restatement
Effective Date, none of the Project Documents to which the Borrower is a party
has been amended or modified except in accordance with Section 11.06, and all
such Project Documents are in full force and effect.
SECTION 8.05. Governmental Approvals and Other Consents and Approvals.
No Governmental Approvals are required in connection with (a) the participation
by the Borrower in the transactions contemplated by this Agreement and the other
Project Documents, (b) the use, ownership or operation of the Project in
accordance with the applicable provisions of the Project Documents and in
compliance with all Requirements of Law (including, without limitation, all
applicable environmental laws and regulations), (c) the validity and
enforceability of the Power Purchase Agreements, the Coal Supply Agreements and
the other Project Documents as to the Borrower or CI, as the case may be, the
Power Purchase Agreements as to Virginia Power, the Steam Purchase Agreement as
to DuPont, and, to the best of the Borrower's knowledge, the other Project
Documents as to any Participant which is a party thereto, (d) the transportation
of Fuel to the Facility and the use of the Fuel for operation of the Facility,
(e) the transportation and disposal of ash generated by the Facility or (f) the
grant by the Borrower of the Liens created pursuant to the Security Documents,
the perfection of such Liens, the validity and enforceability of such Liens and
the Security Documents and the exercise by the Agent and any Secured Party of
its rights and remedies under the Security Documents, except for those
Governmental Approvals which are set forth in Schedule 4. Each of the
Governmental Approvals set forth in Schedule 4 has been duly obtained or made,
is in full force and effect and is not the subject of any pending or threatened
judicial or administrative proceedings, and if the applicable statute, rule or
regulation provides for a fixed period for judicial or administrative appeal or
review thereof, such period has expired. All consents and approvals (other than
Governmental Approvals) required to be obtained by the Borrower or Cogentrix
Energy or any Affiliate of any thereof in connection with any of the matters
referred to in clauses (a) through (f) of the first sentence of this Section
8.05 have been duly obtained or made and are in full force and effect.
SECTION 8.06. No Legal Bar. The execution, delivery and performance of
this Agreement, the Notes and the other Project Documents and the borrowings by
the Borrower hereunder will not violate any Requirement of Law applicable to, or
any Contractual Obligation of, the Borrower and will not result in, or require,
the creation or imposition of any Lien on any of the properties or revenues of
the Borrower pursuant to any Requirement of Law or Contractual Obligation,
except for Permitted Liens and certain general utility easements which have no
material adverse affect on the value or use of the Project. No approvals or
consents of any trustee or any holder of any indebtedness, obligations or
securities of the Borrower or, to the best knowledge of the Borrower, any other
Participant are required in connection with the execution, delivery and
performance by the Borrower or any other Participant of any Project Document to
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which it is or is to become a party, except such as have been duly obtained and
are in full force and effect.
SECTION 8.07. No Proceeding or Litigation. No litigation, investigation
or proceeding of or before any arbitrator or Governmental Authority is pending
or, to the best knowledge of the Borrower, threatened against or affecting the
Borrower, Cogentrix Energy or CI, or against or affecting any of their
respective properties, rights, revenues or assets, or the Project, (a) which
could reasonably be expected to have a material adverse effect on the
properties, business, operations or financial condition of the Borrower, (b)
which could reasonably be expected to have a material adverse effect on the
operation of the Project as contemplated by the Project Documents or the ability
of the Borrower to perform its obligations under this Agreement, the Notes or
any of the Project Documents to which it is a party or (c) which could
reasonably be expected to impair the value of the security granted to the
Lenders pursuant to the Security Documents.
SECTION 8.08. No Default or Event of Loss. The Borrower is not in
default in any material respect under or with respect to any Contractual
Obligation, including without limitation, any Project Document; and no notice of
default has been given to the Borrower under any of the Project Documents. To
the best knowledge of the Borrower, no other party to a Project Document is in
default thereunder. No Default or Event of Default has occurred and is
continuing; and no Event of Loss has occurred.
SECTION 8.09. Ownership of Property; Liens. The Borrower has good and
marketable title to all Collateral owned by it (including without limitation,
the Facility as and to the extent that the Borrower acquires title thereto from
time to time), in each case free and clear of all Liens except Permitted Liens
and certain general utility easements which have no material adverse affect on
the value or use of the Project. No mortgage or financing statement or other
instrument of recordation covering all or any part of the Collateral which has
been executed by, or with the permission of, the Borrower is on file in any
recording office, except (i) such as has been filed in favor of the Agent or the
Mortgagee, (ii) the Right of First Refusal and (iii) the purchase option in the
Facility in favor of DuPont. The Easement Agreements grant to the Borrower all
easements and other property rights required for access to, and operation of,
the Facility, including (without limitation) all easements and other property
rights necessary to deliver Fuel from the point of delivery of the Fuel to the
Site and all easements and other property rights necessary to satisfy the
Borrower's obligations under the Power Purchase Agreements and the Steam
Purchase Agreement.
SECTION 8.10. No Burdensome Restrictions. No Contractual Obligation of
the Borrower and no Requirement of Law applicable to or binding upon the
Borrower materially adversely affects, or insofar as the Borrower may reasonably
foresee, could reasonably be expected to materially adversely affect the
properties, business, operations or financial condition of the Borrower.
SECTION 8.11. Taxes. (a) The Borrower has filed or caused to be filed
all tax returns which are required to be filed by it, and has paid or caused to
be paid all taxes shown to be due and payable on such returns or on any
assessments made against it or any of its property and all other taxes, fees or
other charges imposed on it or any of its property by any Governmental Authority
which have become due and payable, except taxes, fees and other charges arising
after the Closing Date which are being contested in accordance with the
provisions of Section 10.10.
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(b) Except for (i) taxes and registration, recordation and other
miscellaneous fees payable in connection with the recordation of the Project
Mortgage and the filing of financing statements required to perfect the Agent's
and the Secured Parties' rights under the Security Documents, all of which taxes
and fees will have been paid in full by the Borrower on or before the
Restatement Effective Date, (ii) other taxes or fees, if any, which are
indemnified against by the Borrower pursuant to Section 7.06 and (iii) income,
capital, receipts or franchise taxes imposed with respect to each Lender by the
jurisdiction in which such Lender is organized or in which an office of such
Lender is located or any political subdivision or taxing authority thereof or
therein, neither the Agent nor any Lender will be subject to any tax (other than
income taxes), levy, impost, duty, charge or withholding imposed by the United
States or any agency or taxing authority thereof, or by the Commonwealth of
Virginia or any political subdivision or taxing authority thereof or therein
solely as a result of the execution and delivery of this Agreement, the Notes,
the Letters of Credit or any other Project Document, or the consummation of any
of the transactions contemplated hereby or thereby.
SECTION 8.12. Federal Regulations. The Borrower is not engaged nor will
engage in the business of extending credit for the purpose of "purchasing" or
"carrying" any "margin stock" within the respective meanings of each of the
quoted terms under Regulations G, U and X of the Board of Governors of the
Federal Reserve System as now and from time to time hereafter in effect. No part
of the proceeds of any Extension of Credit will be used for "purchasing" or
"carrying" any "margin stock" as so defined or for any purpose which violates,
or which would be inconsistent with, the provisions of the Regulations of such
Board of Governors.
SECTION 8.13. ERISA. The Borrower is not in violation of applicable
provisions of ERISA and the regulations and published interpretations
thereunder. The Borrower does not maintain, nor is the Borrower required under
ERISA to maintain, any Plan.
SECTION 8.14. Investment Company Act. The Borrower is not an
"investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended.
SECTION 8.15. Security Documents. The Security Documents to which the
Borrower is a party create, in favor of the Agent and the Lenders, legal, valid
and enforceable liens on and security interests in all right, title, estate and
interest of the Borrower in and to the Collateral and all necessary and
appropriate recordings and filings have been duly effected in all appropriate
public offices so that the liens and security interests created by each of the
Security Documents to which the Borrower is a party constitute perfected first
liens on and prior perfected security interests in all right, title, estate and
interest of the Borrower in and to the Collateral described therein, prior and
superior to all other Liens, existing or future, except Permitted Liens and
certain general utility easements which have no material adverse affect on the
value or use of the Project. The recordings and filings shown on Schedule 5 are
all the recordings, filings and other action necessary and appropriate in order
to establish, protect and perfect the Agent's and the Lenders' lien on and
security interest in the right, title, estate and interest of the Borrower in
and to the Collateral.
SECTION 8.16. Full Disclosure. No representation, warranty or other
statement made by the Borrower, Cogentrix Energy or CI in this Agreement or any
other Project Document or in any
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certificate, written statement or other document furnished to the Agent or any
Lender by or on behalf of the Borrower, Cogentrix Energy or CI pursuant to this
Agreement or any other Project Document, contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained herein or therein, in light of the circumstances under
which they were made, not misleading. There is no fact known to the Borrower
which the Borrower has not disclosed to the Agent and the Lenders in writing
prior to the Restatement Effective Date which materially adversely affects, or
which could reasonably be expected in the future to materially adversely affect,
the Project or the properties, business, operations or financial condition of
the Borrower or Cogentrix Energy or the ability of the Borrower or CI to perform
its obligations under any Project Document to which it is or is to be a party.
SECTION 8.17. Power Purchase Agreements, Steam Purchase Agreement and
Other Assigned Agreements. To the best knowledge of the Borrower, (i) the Power
Purchase Agreements have been duly executed and delivered by Virginia Power and
constitute the legal, valid and binding obligations of Virginia Power,
enforceable against Virginia Power in accordance with its terms except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of creditors
generally and by general principles of equity, and (ii) the Steam Purchase
Agreement, the Environmental Indemnification Agreement, the Ground Lease and the
DuPont Easement Agreement have been duly executed and delivered by DuPont and
constitute the legal, valid and binding obligations of DuPont, enforceable
against DuPont in accordance with their respective terms except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of creditors
generally and by general principles of equity. All Governmental Approvals
required in connection with the execution, delivery and performance of the Power
Purchase Agreements by the Borrower and Virginia Power and of the Ground Lease,
the Environmental Indemnification Agreement, the Steam Purchase Agreement and
the DuPont Easement Agreement by the Borrower and DuPont have been duly obtained
or made, are in full force and effect and are not the subject of any pending or
threatened judicial or administrative proceedings, and any statutory or
regulatory fixed period for judicial or administrative appeal or review thereof
has expired. To the best knowledge of the Borrower, each of the other Assigned
Agreements has been duly executed and delivered by the party or parties thereto
other than the Borrower and constitutes the legal, valid and binding obligation
of such party or parties, enforceable against such party or parties in
accordance with its terms except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
rights of creditors generally and by general principles of equity. No consent or
authorization need be obtained by the Borrower from any other party to any
Assigned Agreement in connection with the execution and delivery of the Amended
and Restated Loan and Reimbursement Agreement, or of any other Project Document
(including any amendment thereto) being executed and delivered on the
Restatement Effective Date. On each date on which an Extension of Credit is
made, the Borrower will have duly performed and complied with all agreements and
conditions then required to be performed or complied with by it under the
Assigned Agreements.
SECTION 8.18. Utilities and Other Services, Etc. All utility and other
services (other than Fuel), means of transportation, facilities and other
materials that can reasonably be expected to be necessary for the operation of
the Facility in accordance with the obligations of the Borrower under the Power
Purchase Agreements for a period of at least 20 years from the commercial
operations date of each of the Power Purchase Agreements (including, without
limitation,
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electrical, water and sewage services and facilities) are available or expected
to be available to the Facility or, to the extent appropriate, arrangements have
been made to provide such services, means of transportation, facilities and
other materials to the Facility.
SECTION 8.19. Compliance with Building Codes, Zoning Laws, Etc. The
Project complies in all material respects with all applicable zoning,
environmental protection (except as disclosed in the Environmental Report), use
and building codes, laws, regulations and ordinances. Except as disclosed in the
Environmental Report, the Borrower has no knowledge of any violations of any
laws, ordinances, codes, requirements or orders of any Governmental Authority
affecting the Project.
SECTION 8.20. Fuel Supply. The amount and quality of coal which the
Fuel Suppliers are obligated to deliver to the Facility pursuant to the Coal
Supply Agreements satisfy the requirements of Section 6.1 of the Power Purchase
Agreements and are sufficient to permit the operation of the Facility in
accordance with the obligations of the Borrower under the Power Purchase
Agreements with respect to the Coal Supply Agreement - Unit I through May 1,
2012 and with respect to Coal Supply Agreement - Unit II through August 1, 2007.
SECTION 8.21. Principal Place of Business, Etc. The principal place of
business and chief executive office of the Borrower and the office where the
Borrower keeps its records concerning the Project and all contracts relating
thereto, is located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇.
SECTION 8.22. Description of Property. The descriptions set forth in
the Project Mortgage of the Site, the Easements and the Facility are true and
accurate in all material respects, and are adequate for the purpose of
establishing, preserving, protecting and perfecting the interests, rights and
Liens intended to be created and provided in such property by the Project
Mortgage.
SECTION 8.23. Public Utility Status. (a) The Borrower will not, solely
by reason of (i) the ownership of the Facility or the operation thereof by the
Borrower, or (ii) any other transaction contemplated by this Agreement or any of
the other Project Documents, be deemed by any Governmental Authority having
jurisdiction to be (A) subject to regulation as a public utility under Parts II
and III of the Federal Power Act (except for certain provisions relating to
interconnection, wheeling, and reporting interlocking directorates) or
considered an electric utility company under the Public Utility Holding Company
Act of 1935; or (B) subject to any state law or regulation respecting (i) the
rates of electric utilities, or (ii) the financial and organizational regulation
of electric utilities.
(b) Neither the Agent nor any Lender will, solely by reason of (i) the
ownership of the Facility or the operation thereof by the Borrower, (ii) the
making of the Loans or the issuance of the Letters of Credit or any other
Extension of Credit hereunder, (iii) the securing of the Obligations by Liens on
the Project and the Assigned Agreements or (iv) any other transaction
contemplated by this Agreement or any of the other Project Documents, be deemed
by any Governmental Authority having jurisdiction to be, or to be subject to
regulation as, an "electric utility," "electric corporation," "electrical
company," "public utility holding company," "public service company," "public
service corporation" or a corporation carrying on the services of or
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exercising any of the powers or functions of, a "public service enterprise" or
organized to conduct the business of a "public service business" under any
existing law, rule or regulation of any Governmental Authority; and neither the
Agent nor any Lender will, solely by reason of the Agent's or the Lenders'
ownership or operation of the Facility upon the exercise of remedies under the
Security Documents and without regard to any other activities of the Agent or
any Lender, be deemed by any Governmental Authority having jurisdiction to be
(A) subject to regulation as a public utility under Parts II and III of the
Federal Power Act (except for certain provisions relating to interconnection,
wheeling, and reporting interlocking directorates) or considered an electric
utility company under the Public Utility Holding Company Act of 1935; or (B)
subject to any state law or regulation respecting (i) the rates of electric
utilities, or (ii) the financial and organizational regulation of electric
utilities, provided that neither the Agent nor the Lender is otherwise an
electric utility, electric utility holding company, or a subsidiary or affiliate
of either, or any combination thereof.
SECTION 8.24. Qualifying Facility. The Facility is a Qualifying
Facility, and FERC has issued final orders granting the Borrower's application
for certification as a Qualifying Facility, which orders are in full force and
effect and are not the subject of any pending or, to the Borrower's knowledge,
threatened administrative or judicial proceedings.
SECTION 8.25. Material Agreement and Licenses. No licenses, trademarks,
patents or agreements with respect to the usage of technology (other than any
thereof the absence of which will not have a material adverse effect on the
Project or which have been obtained and are in full force and effect and have
been assigned to the Agent) are necessary for the ownership, operation and
maintenance of the Project.
SECTION 8.26. Sufficiency and Delivery of Project Documents. The
services to be performed, the materials to be supplied and the property
interests, easements and other rights granted pursuant to the Project Documents:
(a) comprise substantially all of the services, materials and property
interests required for the operation and maintenance of the Project in
accordance with all material Requirements of Law and the Project Documents; and
(b) provide adequate ingress and egress from the Site for any
reasonable purpose in connection with the operation and maintenance of the
Facility (including, without limitation, access for transportation of Fuel to,
and electricity and steam from, the Site).
There are no services, materials or rights required for the operation or
maintenance of the Facility in accordance with the Project Documents, other than
(x) those granted to or to be provided to the Borrower pursuant to the Project
Documents or (y) those that can reasonably be expected to be commercially
available at the Site when required.
Each Lender has received (or will have received on or prior to the
Restatement Effective Date) a complete copy of each Project Document (including
all amendments, supplements, modifications, exhibits, schedules and disclosure
letters referred to therein or delivered pursuant thereto, if any). None of the
Project Documents which has been executed and delivered has been further amended
or modified or terminated other than in accordance with the provision of Section
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11.06, and all of the Project Documents which have been executed and delivered
are in full force and effect.
SECTION 8.27. Environmental Matters.
(i) Except as disclosed in the Environmental Report, to the best
knowledge of the Borrower, the Site and the Easements do not contain and have
not previously contained any hazardous or toxic waste or substance or
underground storage tanks.
(ii) Except as disclosed in the Environmental Report, to the best
knowledge of the Borrower, the Site and the Easements are in compliance with all
applicable federal, state and local environmental standards and requirements
affecting the Site, the Easements or the Facility and there are no environmental
conditions which could materially interfere with the continued commercial
operation of the Facility.
(iii) Except as disclosed in the Environmental Report, the Borrower has
not received any notice of violation or advisory action by regulatory agencies
since May 1, 1992, the date on which the commencement of commercial operations
occurred with respect to the Petersburg Power Purchase Agreement, regarding
environmental control matters or permit compliance.
(iv) To the best knowledge of the Borrower, hazardous waste has not
been transferred from the Site or the Easements to any other location, except by
DuPont in compliance with its obligations under the Environmental
Indemnification Agreement or in any volume sufficient to incur liability under
any Requirement of Law.
(v) With respect to the Site and the Easements, there are no
proceedings, governmental administrative actions or judicial proceedings pending
or, to the best of the Borrower's knowledge, contemplated under any federal,
state or local law regulating hazardous or toxic materials or substances or the
discharge thereof into the environment, to which the Borrower is named as a
party.
SECTION 8.28. Representations and Warranties. The representations and
warranties of the Borrower contained in the Project Documents other than this
Agreement were true and correct on and as of the dates when made.
SECTION 8.29. Location of Site, Easements and Improvements. Except as
indicated on the survey provided in accordance with Section 9.01(d), with
respect to the Site, and, except as indicated on the surveys delivered pursuant
to the terms of the Existing Loan Agreement with respect to the Easements, the
Site and the Easements do not lie within an area identified by the Secretary of
Housing and Urban Development as an area having special flood hazards. None of
the improvements constructed or to be constructed on the Site or the Easements
are or will be located, in whole or in part, within any zone of such an area
other than Zone C (as usually set forth on Flood Insurance Rate Maps published
by the Federal Emergency Management Agency), except for improvements constructed
on Easements identified as flood hazard areas on the surveys delivered pursuant
to the terms of the Existing Loan Agreement.
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SECTION 8.30. No Conflict with Power Purchase Agreements. The
Borrower's obligation to supply electric power produced by the Facility to
Virginia Power pursuant to the Power Purchase Agreements does not and will not
conflict with the Borrower's obligations to supply steam to DuPont under the
Steam Purchase Agreement or the Borrower's obligations under the other Project
Documents to which it is a party.
SECTION 9. CONDITIONS PRECEDENT
SECTION 9.01. Conditions to Effectiveness. This Amended and Restated
Loan Agreement shall become effective on the date (such date being herein called
the "Restatement Effective Date") each of the following conditions precedent
have been fulfilled in a manner satisfactory to the Agent (except those
conditions, if any, that are specifically waived in writing by the Agent):
(a) Agreement. The Agent shall have received counterparts of
this Agreement, duly executed and delivered by each party hereto.
(b) Term Notes. Each Lender shall have received a Term Note
conforming to the requirements of Section 4.03(a), dated the
Restatement Effective Date and duly executed and delivered by the
Borrower.
(c) Liquidity Loan Notes. Each Lender shall have received a
Liquidity Loan Note conforming to the requirements of Section 4.03(b),
dated the Restatement Effective Date and duly executed and delivered by
the Borrower.
(d) Title Insurance; Survey. The Agent shall have received (i)
a policy of title insurance issued by the Title Company, in form and
substance satisfactory to the Agent, with such endorsements and
affirmative coverage as the Agent may reasonably request and with such
reinsurance (with direct access provisions) as the Agent may request,
(A) insuring the Agent and the Lenders in the amount of $204,400,000,
that the Project Mortgage constitutes a valid first mortgage lien on
the Borrower's interest in the Site and the Easements, subject only to
Permitted Liens and (B) providing full coverage against all mechanics'
and materialmen's liens; and (ii) a survey of the Site by a licensed
surveyor satisfactory to the Agent and the Title Company, certified to
the Agent and the Title Company, showing no state of facts
unsatisfactory to the Agent. The Agent shall also have received
evidence that the premium in respect of such policy has been paid.
(e) Legal Opinions. The Agent shall have received, with a
counterpart for each Lender, the following opinions of counsel, each
dated the Restatement Effective Date:
(i) a favorable opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Battle &
▇▇▇▇▇▇, special Virginia counsel to the Lenders, as to such
matters relating to the transactions contemplated by this
Agreement as the Agent and the Lenders may reasonably request;
(ii) the opinion of ▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇, PLLC, counsel
to the Borrower, substantially in the form of Exhibit G-1;
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(iii) the opinion of ▇▇▇▇▇▇▇▇▇▇▇ Black LLP special
Virginia counsel to the Borrower, substantially in the form of
Exhibit G-2; and
(iv) the opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special New
York counsel to the Borrower, substantially in the form of
Exhibit G-3.
Such opinions also shall cover such other matters incident to the
transactions contemplated by this Agreement and the other Project
Documents as the Agent may reasonably request.
(f) Authorizing Actions. All corporate, partnership, and other
proceedings in connection with the transactions contemplated by this
Agreement and the other Project Documents (including all amendments
thereto), and all documents and instruments incident thereto, shall be
satisfactory in form and substance to the Agent and its special
counsel; and the Agent and its special counsel shall have received such
counterpart originals or certified or other copies of all such
documents and instruments and of all records of corporate and
partnership proceedings in connection with such transactions, and such
incumbency and signature certificates of officers of the Borrower, as
the Agent or its special counsel may reasonably request.
(g) Security Deposit Agreement. The Agent shall have received,
with a counterpart for each Lender, the Security Deposit Agreement,
duly executed and delivered by each party thereto and dated no later
than the Restatement Effective Date.
(h) Security Agreement Amendment. The Agent shall have
received, with a counterpart for each Lender, the Security Agreement
Amendment, duly executed and delivered by each party thereto and dated
no later than the Restatement Effective Date.
(i) Assigned Contracts; Consents. The Agent shall have
received, with a copy for each Lender, a true and complete copy of each
Assigned Contract, each Assignment and each Consent to Assignment,
certified as such on the Restatement Effective Date by a Responsible
Officer of the Borrower.
(j) Projections. The Agent shall have received from the
Borrower, with a copy for each Lender, pro forma projections, in form
and substance satisfactory to the Agent, of (i) operating expenses and
cash flow for the Project and (ii) an average Projected Yearly Debt
Coverage Ratio during the period from the Restatement Effective Date to
the Credit Facility Termination Date of at least 1.35 to 1.00 and a
minimum Projected Yearly Debt Coverage Ratio during such period of at
least 1.30 to 1.00, and a pro-forma opening balance sheet of the
Borrower reflecting the transactions to be consummated on the
Restatement Effective Date and prepared in accordance with GAAP. Such
projections have been computed assuming (1) a 7.25% interest rate with
respect to Eurodollar Rate and (2) a price per ton of the coal
commodity under the coal supply agreement that shall extend or replace
the existing Coal Supply Agreement - Unit II in accordance with Section
10.22 herein that is ten percent (10%) greater than price assumed for
the Coal Supply Agreement - Unit I.
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(k) Independent Engineer's Report. The Agent shall have
received, with a copy for each Lender, a report of the Independent
Engineer with respect to the operation of the Facility, covering such
matters with respect to the Project as the capital budget and
environmental matters, which report shall be satisfactory in form and
substance to the Agent.
(l) Fuel Consultant's Report. The Agent shall have received,
with a copy for each Lender, a report of the Fuel Consultant with
respect to the terms, conditions and pricing for an extension or
replacement of the Coal Supply Agreements, which report shall be
satisfactory in form and substance to the Agent.
(m) Existing Interest Hedging Transactions. The Agent shall
have received evidence satisfactory to it that the Borrower shall have
either (x) terminated, or otherwise been relieved of all of its
obligations under, or (y) continued in a manner reasonably satisfactory
to the Agent, all Interest Hedging Transactions (as defined in the
Existing Loan Agreement) in effect on the Restatement Effective Date,
and, in the case of any such termination, shall have paid in full all
amounts owing by it thereunder.
(n) Perfection of Liens and Security Interests. All filings,
recordings and other actions that are necessary in order to establish,
protect, preserve and perfect the Secured Parties' lien on and
perfected security interest in all right, title, estate and interest of
the Borrower in and to the Collateral, prior and superior to all other
Liens, existing or future, except Permitted Liens, shall have been duly
made or taken and all fees, taxes and other charges relating to such
filings and recordings and other actions shall have been paid by the
Borrower. The Agent, for the benefit of the Secured Parties, shall have
a first lien on and prior perfected security interest in all right,
title, estate and interest of the Borrower in and to the Collateral
prior and superior to all other Liens including mechanics' and
materialmens' liens, except Permitted Liens. The Agent shall have
received authenticated copies, with a copy for each Lender, or other
evidence of all filings, recordings and other actions obtained or made
in order to create and perfect such first lien on and perfected
security interest in the right, title, estate and interest of the
Borrower in and to the Collateral.
(o) Insurance Coverage. The Agent shall have received, with a
copy for each Lender, and found satisfactory, certificates of or
binders for, each policy of insurance required hereunder and under the
other Project Documents, accompanied by a certification of the
Insurance Advisor stating that all insurance required hereunder and
under the other Project Documents has been obtained, such insurance
satisfies the requirements hereof and thereof, and is in full force and
effect, and that all currently due premiums therefor have been paid in
full.
(p) Fees. The Agent and the Issuing Bank shall have received
the fees payable to each of them on the Restatement Effective Date
including pursuant to Section 7.01 and the Fee Letter.
(q) Governmental Approvals and Other Consents and Approvals.
All Governmental Approvals and other consents and approvals referred to
in Section 8.05
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shall have been duly obtained or made and shall be in full force and
effect, and a copy of each such Governmental Approval, consent and
approval shall have been delivered to the Agent, together with a
certificate of a Responsible Officer of the Borrower certifying as to
the foregoing.
(r) No Default. No Default or Event of Default shall have
occurred and be continuing as of the Restatement Effective Date.
(s) Representations and Warranties. The representations and
warranties made by the Borrower herein, or which are contained in any
certificate, document, financial or other statement furnished by the
Borrower hereunder or in connection herewith, shall be true and correct
on and as of the Restatement Effective Date as if made on and as of
such date.
(t) Responsible Officer's Certificate. The Agent shall have
received a certificate, dated the Restatement Effective Date, of a
Responsible Officer of the Borrower to the effect set forth in
paragraphs (r) and (s) above.
(u) No Force Majeure, Cancellation, Suspension, Termination,
Etc. No event of force majeure or other event or condition shall exist
which permits or requires any party to any of the Project Documents to
cancel, suspend or terminate its performance thereunder in accordance
with the terms thereof or which could excuse any such party from
liability for non-performance thereunder, unless (i) the parties to
such Project Document shall have effectively waived such right or
requirement with respect to such cancellation, suspension, termination
or release from liability, or (ii) in the judgment of the Required
Lenders, such cancellation, suspension, termination or release from
liability would not have a material adverse effect on the economic
viability of the Project.
(v) Lender Assignment. The Lender Assignment shall have been
duly executed and delivered by the parties thereto effecting the
transfers of the Existing Term Loans contemplated thereby.
(w) Debt Service Reserve Letter of Credit. The Agent shall
have received the Debt Service Reserve Letter of Credit, dated no later
than the Restatement Effective Date.
(x) Termination of Commercial Paper Program. The Commercial
Paper Program shall have been terminated and the CP Letter of Credit
canceled and all other transactions contemplated by the CP Side Letter
Agreement shall have been consummated in accordance with the terms
thereof.
(y) Extension of Bond Letters of Credit. The Agent shall have
received evidence satisfactory to it that each of the existing Bond
Letters of Credit issued under the Existing Loan Agreement have been
extended.
(z) Cancellation of Notes. The Agent shall have received
evidence satisfactory to it that all Notes issued pursuant to the
Existing Loan Agreement and in connection with the Commercial Paper
Program have been canceled.
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(aa) Payment of Interest and Fees. All interest on the
Existing Term Loans, if any, outstanding under the Existing Loan
Agreement which is accrued and unpaid to and including the Restatement
Effective Date, and all commissions, fees and other amounts payable by
the Borrower under the Existing Loan Agreement (whether or not then due
and payable) shall have been paid in full (including any amounts
payable to any of the Existing Lenders as a result of the transactions
contemplated under the Lender Assignment).
(ab) Annual Budget. The Agent shall have received a monthly
forecasted operating and capital expenditure budget for the Borrower's
fiscal year ending December 31, 2000, in form and substance
satisfactory to the Agent.
(ac) Allowances Report. The Agent shall have received a report
from Pace Global Energy Services regarding Allowances required to be
purchased by the Borrower, in form and substance satisfactory to the
Agent.
(ad) Project Development Agreement Amendment. The Agent shall
have received the Project Development Agreement Amendment, in form and
substance satisfactory to the Agent.
(ae) Additional Matters. All other documents and legal matters
in connection with the transactions contemplated hereby shall be
satisfactory in form and substance to the Agent and its special
counsel.
SECTION 9.02. [INTENTIONALLY OMITTED].
SECTION 9.03. Conditions to All Extensions of Credit. The obligations
of each Lender to make or participate in, as the case may be, each Extension of
Credit, other than Debt Service Reserve Letter of Credit Loans and the extension
of each of the Term VP Letters of Credit pursuant to Section 6.01 (each, a
"Credit Event") is subject to, in addition to the appropriate conditions set
forth elsewhere in this Section 9, the satisfaction, on the date of such Credit
Event, of the following conditions precedent:
(a) Governmental Approvals and Other Consents and Approvals.
All Governmental Approvals and other consents and approvals referred to
in Section 8.05 shall have been duly obtained or made and shall be in
full force and effect, and a copy of each such Governmental Approval,
consent and approval shall have been delivered to the Agent.
(b) Qualifying Facility. The Facility shall be a Qualifying
Facility and FERC shall have certified that the Facility is a
Qualifying Facility with the Borrower as owner, which certification
shall be in full force and effect on the date of such Credit Event; and
the operation of the Facility shall be proceeding in accordance with
such certification.
(c) No Change in Law. No change shall have occurred after the
date hereof in any applicable law or regulation or in the
interpretation thereof by any Governmental Authority charged with the
administration or interpretation thereof (i) which, in the opinion of
any Lender, would make such Lender's participation in the transactions
contemplated hereby
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illegal or subject such Lender or any of its Affiliates to any
burdensome governmental regulation in connection with such transactions
or (ii) which, in the opinion of the Required Lenders, would require
the cancellation, suspension or termination of any of the Project
Documents, which cancellation, suspension or termination, in the
opinion of the Required Lenders, could reasonably be expected to have a
material adverse effect on the economic viability of the Project.
(d) No Public Utility. Neither the Agent nor any Lender nor
the Borrower nor any of their respective Affiliates shall, in the
opinion of the Agent and its special counsel or any Lender and its
counsel, solely by reason of (i) the ownership of the Facility or the
operation thereof by the Borrower, (ii) the making of the Loans or the
issuance of the Letters of Credit or any other Extension of Credit,
(iii) the securing of the Obligations by Liens on the Project and the
Assigned Agreements, (iv) the potential exercise by the Agent or any
Lender of any remedies under the Security Documents including, without
limitation, the acquisition of the Borrower's right, title and interest
in and to the Facility through foreclosure, or (v) any other
transaction contemplated by this Agreement or any of the other Project
Documents, be deemed by any Governmental Authority having jurisdiction
to be, or be subject to regulation as, an "electric utility," "electric
corporation," "electrical company," "public utility," "public utility
holding company," "public service company," "public service
corporation" or a corporation carrying on the services of or exercising
any of the powers or functions of, a "public service enterprise" or
organized to conduct the business of a "public service business" under
any existing law, rule or regulation of any Governmental Authority; and
neither the Agent or Lender nor any of its Affiliates shall, in the
opinion of the Agent and its special counsel or any Lender and its
counsel, solely by reason of its ownership or operation of the Facility
upon the exercise of any Agent's or any Lender's remedies under the
Security Documents, be deemed by any Governmental Authority having
jurisdiction to be (A) subject to regulation as a public utility under
Parts II and III of the Federal Power Act (except for certain
provisions relating to interconnection, wheeling, and reporting
interlocking directorates) or considered an electric utility company
under the Public Utility Holding Company Act of 1935; or (B) subject to
any state law or regulation respecting (i) the rates of electric
utilities, or (ii) the financial and organizational regulation of
electric utilities, provided that neither the Agent nor the Lender is
otherwise an electric utility, electric utility holding company, or a
subsidiary or affiliate of either, or any combination thereof.
(e) No Material Adverse Change, Etc. In the opinion of the
Agent and the Required Lenders, (i) no material adverse change in the
financial condition, business, operations or prospects of the Borrower,
Cogentrix Energy or the Project (including, without limitation, no
material adverse change in the Project's budget or in its cash flow
projections) shall have occurred since the date hereof, and (ii) no
other event (including, without limitation, a material adverse change
in the financial condition, business, operations or prospects of any
Participant) shall have occurred since the date hereof which might
reasonably be expected to have a material adverse effect on (A) the
ability of the Borrower or any other Participant to perform its
obligations under any of the Project Documents to which it is a party
or (B) the financial condition, business, operations or prospects of
the Project.
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(f) Representations and Warranties. The representations and
warranties made by the Borrower herein (other than those contained in
Section 8.21) or by the Borrower or any other Reporting Participant in
any other Project Document to which such Person is a party, or which
are contained in any certificate, document, financial or other
statement furnished by the Borrower or any other Reporting Participant
hereunder or thereunder or in connection herewith or therewith, shall
be true and correct on and as of the date of such Credit Event as if
made on and as of such date, except to the extent that such
representations and warranties relate solely to an earlier date.
(g) No Default or Event of Default. No Default or Event of
Default shall be in existence on the date of such Credit Event, or
shall occur after giving effect to the Extensions of Credit to be made
on such date.
(h) Additional Matters. All other documents with respect to
the Borrower and the Project as the Agent may reasonably request and
all such documents and legal matters in connection with the
transactions contemplated hereby shall be satisfactory in form and
substance to the Agent and its special counsel.
SECTION 10. AFFIRMATIVE COVENANTS
So long as any Letter of Credit shall remain outstanding and until
payment in full of the Loans, the Notes, the Bonds and all other Obligations of
the Borrower hereunder or under any of the Security Documents the Borrower
hereby agrees that:
SECTION 10.01. [INTENTIONALLY OMITTED].
SECTION 10.02. Conduct of Business, Maintenance of Existence, Etc. The
Borrower shall at all times (i) engage solely in the business of owning and
operating the Project, (ii) preserve and maintain in full force and effect its
existence as a corporation under the laws of the State of North Carolina, its
qualification to do business in the Commonwealth of Virginia and in each other
jurisdiction in which the conduct of its business requires such qualification,
and all of its rights, privileges and franchises necessary for the ownership and
operation of the Project, (iii) obtain and maintain in full force and effect all
Governmental Approvals and other consents and approvals required at any time in
connection with the ownership or operation of the Project, (iv) maintain the
Facility as a Qualifying Facility, and (v) remain an indirect wholly-owned
Subsidiary of Cogentrix Energy.
SECTION 10.03. Payment of Obligations. The Borrower will pay, discharge
or otherwise satisfy at or before maturity or before they become delinquent, as
the case may be, all of its Indebtedness and other obligations of whatever
nature, except for any Indebtedness or other obligations which are being
contested in good faith and by appropriate proceedings if (i) adequate reserves
with respect thereto are maintained on the books of the Borrower, and (ii) such
contest does not involve any risk of the sale, forfeiture or loss of any of the
right, title, estate and interest of the Borrower in the Collateral.
SECTION 10.04. Performance under Other Agreements. The Borrower shall
duly perform and observe all of the covenants, agreements and conditions on its
part to be performed
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and observed hereunder and under the Notes, the Sale Agreement and the Security
Documents, and shall duly perform and observe in all material respects all of
the covenants, agreements and conditions on its part to be performed and
observed under the other Project Documents to which it is a party. The Borrower
shall diligently enforce all of its rights under each Assigned Agreement unless
failure to enforce such rights would not have a material adverse effect on its
rights or remedies as a whole under such Assigned Agreement.
SECTION 10.05. Insurance.
(a) Insurance Against Loss or Damage. Without cost to any Secured
Party, the Borrower shall maintain or cause to be maintained in effect at all
time insurance with respect to the Facility against all risks of physical loss
in such amount as the Borrower would, in the prudent management of its property,
maintain, or as would be maintained by others similarly situated in respect of
property similar to the Facility; provided that the amount of such insurance
shall not be less than the replacement cost of the Facility. All insurance
policies shall be on a "no co-insurance/replacement cost" basis, in such form
(including the form of the loss payable clauses to be endorsed as to all
property, delayed opening and business interruption policies), of such type and
scope of coverage and with such insurers as shall at all times be reasonably
satisfactory to the Required Lenders. On or prior to the Restatement Effective
Date, the Borrower shall procure or cause to be procured at its own expense and
maintain in full force and effect, with responsible insurers approved to do
business in the Commonwealth of Virginia rated A-1 or better, with a minimum
size rating of "IX," by Best's Rating Service (except for policies underwritten
by Lloyd's of London and approved companies, acceptable to the Agent), the
following types of insurance:
(i) Workers' Compensation Insurance: Workers' Compensation
insurance as required by Virginia state law, including, without
limitation, (x) employer's liability insurance in the amount of
$500,000 per occurrence (the policies with respect to which shall
include all states' coverage) and (y) Longshoremen's and Harbor
Workers' Compensation Act Insurance.
(ii) General Liability Insurance: Insurance against claims for
personal injury (including bodily injury and death) and property
damage. Such insurance shall provide coverage for products, completed
operations, blanket contractual, explosion, collapse and underground
coverage and broad form property damage with a $1,000,000 minimum limit
per occurrence for combined bodily injury and property damage and a
$2,000,000 aggregate annual limit.
(iii) Automobile Liability Insurance: Insurance against claims
of personal injury (including bodily injury and death) and property
damage covering all owned, leased, non-owned and hired vehicles with a
$1,000,000 minimum limit per occurrence for combined bodily injury and
property damage liability.
(iv) Excess Insurance: Excess liability insurance on an
"occurrence" basis covering claims in excess of the underlying
insurance described in the foregoing clauses (i), (ii) and (iii) with a
minimum limit of $19,000,000 per occurrence and a $19,000,000 aggregate
annual limit.
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(v) Physical Damage Insurance: Property damage insurance on an
"all risk" basis including coverage against damage or loss caused by
earth movement and flood including the remainder of testing exposures
and providing (1) coverage for the Project in a minimum aggregate
amount equal to the "full insurable value" of the Project, (2) transit
coverage, including ocean marine coverage, with sub-limits sufficient
to insure the full replacement value of all property or equipment
removed from the Project, and (3) coverage for the steam and electrical
transmission lines and related equipment for which the insured has an
insurable interest. For purposes of this Section 10.05, "full insurable
value" shall mean the full replacement value of the Project, including
any improvements and equipment and supplies, without deduction for
physical depreciation; all such policies may have deductibles of not
greater than $100,000 except for earth movement which will have the
lowest deductible available (in the good faith judgment of the Agent)
on commercially reasonable terms in the insurance market place. Such
insurance shall include an "agreed amount" clause or no co-insurance
clause.
(vi) Boiler and Machinery Insurance: Boiler and Machinery
insurance coverage to be written on a "comprehensive form" basis for
all insurable objects, including but not limited to pressure vessels,
electrical turbines and equipment, motors, air tanks, boilers,
machinery, pressure piping or any other similar objects located on or
adjacent to the Site in a minimum aggregate amount equal to the maximum
foreseeable loss (with losses to be adjusted on a full replacement
values); all such policies may have deductibles of not greater than
$100,000 except for damage or loss to the turbine which will have a
deductible of not greater than $100,000 or such lesser amount as shall
(in the good faith judgment of the Agent) be available on commercially
reasonable terms.
(vii) Business Interruption Insurance: Business interruption
insurance covering fixed expenses and Debt Service for a minimum period
of 12 months; such policy may provide that insurance proceeds will not
be paid in respect of the first 30 days of such business interruption.
(viii) Such insurance as required in this Section 10.05(a)
shall be continued in force until such time as the Letters of Credit
shall have been terminated and the Obligations shall have been paid in
full.
(b) Loss Payee. All insurance policies required hereby covering loss or
damage to the Facility shall name the Agent on behalf of the Secured Parties as
loss payee with standard mortgagee endorsement, and shall provide that any
payment thereunder for any loss or damage shall be made to the Agent for the
benefit of the Secured Parties.
(c) Special Policy Provisions. All policies (other than policies with
respect to workers' compensation, occupational disability benefits or similar
insurance) shall insure the interests of the Agent and the Secured Parties
regardless of any breach or violation by the Borrower of warranties,
declarations or conditions contained in such policies or any action or inaction
of the Borrower or any other Person; each liability policy shall expressly
provide that all provisions thereof, except the limits of liability (which shall
be applicable to all insureds as a group) and liability for premiums,
commissions, assessments or calls (which shall be solely a liability of the
Borrower) shall operate in the same manner as if there were a separate policy
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covering each such insured; each policy (except Workers' Compensation) shall
waive any right of subrogation of the insurers to any set-off or counterclaim or
any other deduction, whether by attachment or otherwise, in respect of any
liability of the Borrower; and each such policy shall provide that, if such
insurance is to be canceled or terminated for any reason whatsoever the insurers
will promptly notify the Borrower and the Agent, and any such cancellation or
termination shall not be effective as to the Agent and the Secured Parties for
60 days after receipt of such notice by the Agent, and that appropriate
certification shall be made to the Borrower by each insurer with respect
thereto. Liability insurance as required in Section 10.05(a)(ii), (iii) and (iv)
shall be primary and not excess to or contributing with any insurance or self
insurance maintained by the Secured Parties, or their respective officers and
employees (and such other persons as may be required by the Project Documents).
(d) Additional Requirements. In addition to the other requirements of
this Section 10.05, the Borrower shall comply in all respects with any insurance
requirements contained in any other Project Document to which it is a party.
(e) Certificates of Insurance. The Borrower shall deliver to the Agent
prior to the expiration date of each insurance policy required to be maintained
by it pursuant to this Section 10.05, a certificate executed by the insurer or
its duly authorized agent evidencing the continuance of such insurance policy
(or, upon request, a certified copy of such portions of such insurance policy
which concern the Project).
(f) Application of Payments. All payments received by any Secured Party
or the Borrower under any business interruption insurance policy shall promptly
be deposited in the Revenue Account for application in accordance with the
provisions of Section 4.02 and 4.03 of the Security Deposit Agreement. All
payments received by any Secured Party or the Borrower from any insurer with
respect to loss or damage to the Facility or other Collateral shall promptly be
deposited in the Insurance and Condemnation Proceeds Account for application in
accordance with the provisions of Section 4.10 of the Security Deposit
Agreement.
(g) No Duty of any Agent or any Lender to Verify. No provision of this
Section 10.05 or any provision of any other Project Document shall impose on the
Agent or any Lender any duty or obligation to verify the existence or adequacy
of the insurance coverage maintained by the Borrower, nor shall the Agent or any
Lender be responsible for any representations or warranties made by or on behalf
of the Borrower to any insurance company or underwriter.
SECTION 10.06. Inspection of Property; Books and Records; Discussions.
The Borrower shall keep proper books of record and account in which full, true
and correct entries shall be made of all of its transactions in accordance with
sound accounting practice, and the Borrower shall permit representatives of the
Agent and the Lenders and the Independent Engineer to visit and inspect its
properties, to examine its books of record and account and to discuss its
affairs, finances and accounts with its principal officers, engineers and
independent accountants, all at such times during business hours and at such
intervals as the Agent or the Independent Engineer reasonably may request. The
Independent Engineer and representatives of the Agent and the Lenders shall have
the right to inspect the Project from time to time upon notice to a
representative of the Borrower and to witness and verify all tests,
investigations and inspections
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referred to in the Power Purchase Agreements. The Borrower shall at all times
cause an accurate and complete set of the "as built" plans and specifications
relating to the Project to be maintained at the Facility and available for
inspection by the Independent Engineer, the Agent and the Lenders, which plans
and specifications shall be amended and supplemented from time to time to
reflect on a current basis all improvements, additions and modifications to the
Project.
SECTION 10.07. Compliance with Laws. The Borrower shall comply with all
laws, rules, regulations and orders, and shall from time to time obtain and
comply with all Governmental Approvals as shall now or hereafter be necessary
under applicable law or regulation, in connection with the ownership, operation
or maintenance of the Project (except any thereof the non-compliance with which
would not have a material adverse effect on the Borrower or the Project, the
Borrower's ability to perform its obligations under the Project Documents or the
rights or interests of the Agent or the Lenders) or the making and performance
by the Borrower of any of the Project Documents to which it is a party.
SECTION 10.08. Financial Statements. The Borrower shall furnish or
cause to be furnished to the Agent and each Lender:
(a) as soon as available, but in any event within 120 days
after the end of each fiscal year of each Reporting Participant, a copy
of the balance sheet of such Reporting Participant as of the end of
such fiscal year and the related statements of income, retained
earnings and changes in cash flow of such Reporting Participant for
such fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, certified without qualification
or exception as to the scope of its audit by independent public
accountants of national standing reasonably acceptable to the Agent;
and
(b) as soon as available, but in any event within 45 days
after the end of each quarterly period of each fiscal year of each
Reporting Participant, the unaudited balance sheet of such Reporting
Participant as of the end of such quarterly period and the related
unaudited statements of income and retained earnings and changes in
cash flow of such Reporting Participant for such quarterly period and
for the portion of the fiscal year then ended, setting forth in each
case in comparative form the figures for the previous period, certified
by the chief executive officer or chief financial officer of such
Reporting Participant (subject to normal year-end audit adjustments);
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein (except for
changes approved or required by the independent public accountants certifying
such statements and disclosed therein).
SECTION 10.09. Certificates; Other Information. The Borrower shall
furnish or cause to be furnished to the Agent:
(a) concurrently with the delivery of the financial statements
of the Borrower referred to in Section 10.08(a), a certificate of the
independent public accountants that certified such financial statements
stating that in making the examination necessary for the
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audit thereof no knowledge was obtained of any Default or Event of
Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements
of the Borrower referred to in Section 10.08(b), a certificate of a
Responsible Officer of the Borrower stating that, to the best of his
knowledge after due inquiry, the Borrower during the period covered by
such financial statements has observed and performed all of its
covenants and other agreements, and satisfied every condition,
contained in this Agreement and the other Project Documents to be
observed, performed or satisfied by it, and that such Responsible
Officer has obtained no knowledge of any Default or Event of Default
hereunder at any time during such period or on the date of such
certificate and no knowledge of any default or event which with the
giving of notice or the lapse of time or both would constitute a
default under any of the other Project Documents at any time during
such period or on the date of such certificate (or, if any such Default
or Event of Default or default or event shall have occurred, a
statement setting forth the nature thereof and the steps being taken by
the Borrower to remedy the same);
(c) with respect to any Single Employer Plan adopted or
amended by the Borrower or any Commonly Controlled Entity on or after
the Closing Date, any determination letters received from the Internal
Revenue Service with respect to the qualification of such Plan, as
initially adopted or amended under Section 401(a) of the Code;
(d) promptly after delivery or receipt thereof, a copy of each
material notice, demand or other communication delivered by or received
by the Borrower pursuant to any Project Document;
(e) copies of each Governmental Approval or other consent or
approval obtained or made by the Borrower;
(f) within 15 days after each Installment Payment Date, a
certificate of the chief financial officer of the Borrower setting
forth the information necessary to determine the Borrower's
Twelve-Month Debt Coverage Ratio as at such Installment Payment Date
and its Excess Project Cash Flow for the three-month period ended on
such Installment Payment Date;
(g) within 15 days after the end of each month, a certificate
of the chief financial officer of the Borrower setting forth the
information necessary to determine the Modified Project Cash Flow for
the one-month period then ended;
(h) concurrently with the delivery thereof to the Security
Agent, a copy of each certificate, request, direction or notice
delivered by the Borrower to the Security Agent pursuant to the
Security Deposit Agreement.
(i) promptly after any material interruption in the supply of
Fuel to the Project, a notice describing the circumstances of such
interruption; and
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(j) promptly, such additional financial and other information
with respect to the Borrower, Delaware Holdings, Cogentrix Energy, CI,
the Project and, to the extent such information can reasonably be
obtained by the Borrower, the Fuel Suppliers, DuPont, ReUse, Global
Stone, CSX and Virginia Power, as the Agent or any Lender may from time
to time reasonably request.
SECTION 10.10. Taxes and Claims. The Borrower shall pay and discharge
all taxes, assessments and governmental charges or levies imposed on it or on
its income or profits or on any of its property prior to the date on which
penalties attach thereto, and all lawful claims which, if unpaid, might become a
Lien upon the property of the Borrower. The Borrower shall have the right,
however, to contest in good faith the validity or amount of any such tax,
assessment, charge, levy or claim by proper proceedings timely instituted, and
may permit the taxes, assessments, charges, levies or claims so contested to
remain unpaid during the period of such contest (but in any event not longer
than the period permitted by the applicable provisions of the Ground Lease or
the Power Purchase Agreements) if: (a) the Borrower diligently prosecutes such
contest, (b) the Borrower sets aside on its books adequate reserves with respect
to the contested items, (c) during the period of such contest the enforcement of
any contested item is effectively stayed and (d) in the reasonable opinion of
the Agent, such contest does not involve any substantial danger of the sale,
forfeiture or loss of any part of the Project, title thereto or any interest
therein and does not interfere with the operation of the Facility. The Borrower
will promptly pay or cause to be paid any valid, final judgment enforcing any
such tax, assessment, charge, levy or claim and cause the same to be satisfied
of record.
SECTION 10.11. Maintenance of Property. (a) The Borrower, at its
expense, shall keep the Facility in good working order and condition and make
all repairs, replacements and renewals with respect thereto and all additions
and betterments thereto, in each case (i) in compliance with the terms of the
Power Purchase Agreements, the Steam Purchase Agreement (including, without
limitation, the provisions of Section 2.8 thereof) and the Coal Supply
Agreements and in compliance with all Requirements of Law affecting the Project
and all requirements of the appropriate Board of Fire Underwriters or other
similar body acting in and for the locality in which the Project is located,
(ii) in compliance with the maintenance procedures prescribed or recommended by,
and sufficient to keep in effect the warranties of, manufacturers and/or vendors
of the various components of the Facility, and (iii) in accordance with the
practices, standards and procedures customary in the cogeneration industry with
respect to coal-fired cogeneration facilities.
(b) If, after any loss, destruction or damage with respect to the
Project referred to in the definition of "Event of Loss," the conditions
specified in subclauses (x), (y) and (z) of said definition are satisfied, the
Borrower at all times thereafter will proceed diligently with all work necessary
to replace and/or repair such loss, destruction or damage.
SECTION 10.12. Notices. The Borrower will, promptly upon obtaining
knowledge of any of the following, give notice to the Agent and the Lenders:
(a) of the occurrence of any Default or Event of Default;
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(b) of the occurrence of any default or event of default under
any Assigned Agreement;
(c) of any litigation, investigation or proceeding which may
exist at any time between the Borrower and any Governmental Authority;
(d) of any litigation or proceeding affecting the Borrower in
which the amount involved is $100,000 or more or in which injunctive or
similar relief is sought;
(e) of the following events, as soon as possible and in any
event within 30 days after the Borrower knows or has reason to know
thereof: (i) the occurrence or expected occurrence of any Reportable
Event with respect to any Plan, or (ii) the institution of proceedings
or the taking or expected taking of any other action by PBGC or the
Borrower to terminate, withdraw or partially withdraw from any Plan, or
(iii) the reorganization or insolvency of any Multiemployer Plan, and,
in addition to such notice, deliver to the Agents and the Lenders
whichever of the following may be applicable: (A) a certificate of the
chief financial officer of the Borrower setting forth the details as to
such Reportable Event and the action that the Borrower proposes to take
with respect thereto, together with a copy of any notice of such
Reportable Event that may be required to be filed with PBGC, or (B) any
notice delivered by PBGC evidencing its intent to institute such
proceedings or any notice to PBGC that such Plan is to be terminated,
or (C) any notice of the reorganization or insolvency of a
Multiemployer Plan received by the Borrower;
(f) of any material adverse change in the properties,
business, operations, or financial or other condition of the Borrower
and of any change of law, rule or regulation which has or would have
such a material adverse effect;
(g) of any loss or damage to the Collateral in excess of
$200,000;
(h) of any event or condition which would change any matter
represented to in Section 8.23;
(i) of the execution and delivery of any Additional Contract;
and
(j) of any material event constituting force majeure under any
of the Project Documents.
Each notice pursuant to this Section 10.12 shall be accompanied by a statement
of a Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the Borrower proposes to take with
respect thereto and, with respect to a notice given pursuant to clause (j),
shall be accompanied by a copy of the Additional Contract. For all purposes of
clause (e) of this Section 10.12, the Borrower shall be deemed to have all
knowledge or knowledge of all facts attributable to the administrator of such
Plan.
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SECTION 10.13. Assignments of Additional Contracts; Maintenance of
Liens of the Security Documents; Future Project Mortgages. The Borrower will:
(a) after the execution and delivery of any Additional
Contract, and promptly upon the request of the Agent, execute and
deliver to the Agent, with a copy for each Lender, an Assignment with
respect to such Additional Contract and cause the other party or
parties to such Additional Contract to execute and deliver to the Agent
and the Lenders a Consent to Assignment with respect to such
Assignment;
(b) promptly upon the request of the Agent and at the
Borrower's expense, execute and deliver, or cause the execution and
delivery of, and thereafter register, file or record in each
appropriate governmental office, any document or instrument
supplemental to or confirmatory of the Security Documents or otherwise
deemed by the Agent to be necessary or desirable for the creation or
perfection of the liens and security interests purported to be created
by the Security Documents; and
(c) if the Borrower shall at any time acquire any real
property or leasehold or other interest in real property not covered by
the Project Mortgage, promptly upon such acquisition (or on the
Restatement Effective Date, if such acquisition occurred prior thereto)
execute, deliver and record a supplement to the Project Mortgage,
satisfactory in form and substance to the Agent, subjecting such real
property or leasehold or other interest to the lien and security
interest created by the Project Mortgage.
SECTION 10.14. Annual Opinion of Counsel. The Borrower shall furnish to
the Agent and the Lenders within 90 days after the end of each fiscal year of
the Borrower, beginning with the fiscal year ending December 31, 2001, an
opinion of counsel addressed to the Agent and each Lender (a) stating that such
action has been taken with respect to the filing, recording, re-filing and
re-recording of the Security Documents and/or financing statements and
continuation statements with respect thereto as is necessary to protect and
preserve the rights and interests of the Borrower in and to the Collateral and
the liens on and security interests in the rights and interests of the Borrower
in and to the Collateral created by the Security Documents to which the Borrower
is a party, and reciting the details of such action or referring to prior
opinions of counsel in which such details are given and (b) stating what, if
any, action of the foregoing nature may reasonably be expected to become
necessary during the next succeeding twelve months in order to protect and
preserve the rights and interests of the Borrower in and to the Collateral and
the liens on and security interests in the Collateral created by the Security
Documents to which the Borrower is a party.
SECTION 10.15. Employee Plans. For each Plan adopted by the Borrower,
the Borrower shall (a) use its best efforts to seek and receive determination
letters from the Internal Revenue Service to the effect that such Plan is
qualified within the meaning of Section 401(a) of the Code; and (b) from and
after the date of adoption of any Plan, cause such Plan to be qualified within
the meaning of Section 401(a) of the Code and to be administered in all material
respects in accordance with the requirements of ERISA and Section 401(a) of the
Code.
SECTION 10.16. Purchase of Allowances. (a) In addition to the 508 NOx
emissions credits allocated to the Borrower by the EPA, the Borrower shall
acquire the quantity of
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Allowances set forth in Column X of Schedule 8 for each calendar year set forth
in Column Y of such Schedule, commencing in the year 2003 to and including the
year 2010, as Schedule 8 may be amended or otherwise modified pursuant to
Section 10.16(b). Such acquisition by the Borrower shall occur on or before May
1st of each such year and, no later than May 1st of each such year, the Borrower
shall provide to the Agent evidence reasonably satisfactory to the Agent that
such required Allowances have been acquired, including the amounts paid for each
such Allowance.
(b) Adjustment to Schedule 8. Upon receipt on or before April 15 of any
calendar year set forth in Column Y of Schedule 8, of a certificate signed by a
Responsible Officer of the Borrower, and confirmed in writing by the Agent and
the Independent Engineer, certifying that (i) the current operation of the
Facility demonstrates to the satisfaction of the Independent Engineer that the
Facility can achieve lower emissions levels such that the quantity of Allowances
set forth in Schedule 8 required to be obtained by the Borrower may be reduced
by the amount equal to the difference between the quantity of Allowances set
forth in Column X of Schedule 8 with respect to such year and the quantity of
Allowances required to achieve such lower emissions levels as set forth in such
certificate (such difference referred to as the "Reduction Amount") and remain
in compliance with all environmental laws and regulations and (ii) after giving
effect to any Cash Operating Costs attributable to the reduction in emissions
levels (which Cash Operating Costs have not been funded by Cogentrix Energy),
the Projected Yearly Debt Coverage Ratio for such year is at least 1.35 to 1
(and attaching pro forma projections in form and substance reasonably
satisfactory to the Agent demonstrating such ratio), the number of Allowances
set forth in Column X in Schedule 8 for such calendar year shall be reduced by
the Reduction Amount set forth in such certificate.
SECTION 10.17. [INTENTIONALLY OMITTED].
SECTION 10.18. Fiscal Year. The fiscal year of the Borrower shall be
the twelve-month period ending on December 31 of each year.
SECTION 10.19. [INTENTIONALLY OMITTED].
SECTION 10.20. Indemnification. The Borrower shall pay, and protect,
indemnify and save harmless the Agent, the Issuing Bank and the Lenders and, in
their capacity as such, their officers, directors, shareholders, controlling
persons, employees, agents (including without limitation the Independent
Engineer, the Fuel Consultant and the Insurance Advisor) and servants
(individually an "Indemnified Party," collectively the "Indemnified Parties")
from and against, all liabilities, losses, claims, damages, penalties, causes of
action, suits, costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses) or judgments of any nature arising from (i) the
offering and sale of the Bonds, or (ii) default by the Borrower in the
performance of its respective agreements, rights or obligations contained in
this Agreement or the Project Documents, or any other instrument or agreement
entered into by the Borrower in connection herewith or therewith; provided that
the Borrower will not be liable to any Indemnified Party for such liabilities,
losses, claims, damages, penalties, causes of action, suits, costs and expenses
(including, without limitation, attorneys' fees) or judgments arising from (x)
such Indemnified Party's gross negligence or wilful misconduct or (y) such
Indemnified Party's default hereunder or (z) any untrue statement of a material
fact in the material relating to such Indemnified
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Party, in any offering circular used in the sale of Bonds if such material was
approved in writing by such Indemnified Party prior to its inclusion in such
offering circular. Each of the Agent, the Issuing Bank and the Lenders agree
with respect to any action, suit or proceeding against it, or any of its
officers, directors, shareholders, controlling persons, employees, agents and
servants, in respect of which indemnity may be sought hereunder, that it will
give written notice of the commencement of such action to the Borrower within a
reasonable time after it is made a party to such action; but the omission to so
notify the Borrower will not relieve the Borrower from any liability which it
might have to the Indemnified Party which failed to give such notice otherwise
than under this Section 10.20 nor affect any rights the Borrower may have
otherwise than under this Section 10.20 to participate in or assume the defense
of any action brought against such indemnified party. Upon receipt of any such
notice by the Borrower, the Borrower shall be entitled to assume the defense of
such action, including the employment of counsel and the payment of all expenses
in connection with such defense, and shall have the right to negotiate and
consent to settlement. Any Indemnified Party shall have the right to employ
separate counsel in any such action against it and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party unless (i) the employment of such counsel shall have been
specifically authorized in writing by the Borrower or (ii) the Borrower shall
have elected not to assume the defense of such action or (iii) such Indemnified
Party has been advised by its own counsel that there are legal defenses
available to such Indemnified Party which are different from, additional to or
in conflict with the defenses available to the Borrower. The Borrower shall not
be liable for any settlement of any such action effected without its consent;
but if any such action is settled with the consent of the Borrower or if there
is a final judgment for the plaintiff in any such action (of which the Borrower
shall have been notified), the Borrower shall indemnify and hold harmless each
Indemnified Party from and against any losses, claims, damages, liabilities or
expenses incurred or suffered by reason of such settlement or judgment. This
covenant shall survive the termination of this Agreement and the payment of the
Bonds, the Loans and the other Obligations.
SECTION 10.21. Use of Proceeds. The proceeds of Additional Term Loans
shall be used to pay a dividend to Borrower's parent and to pay any transaction
costs and expenses incurred in connection with this Agreement, including
Interest Hedge Transaction termination fees, if any. The proceeds of any drawing
under any Letter of Credit shall be applied as provided in such Letter of
Credit.
SECTION 10.22. Coal Supply Agreement - Unit II; ANR Guarantee. On or
prior to June 5, 2005, the Borrower shall extend or replace the existing Coal
Supply Agreement - Unit II for an additional term expiring no earlier than
September 30, 2010, such agreement as extended or replaced to be on terms no
less favorable to the Borrower than those contained in the Coal Supply Agreement
- Unit I for the period from 2005 through 2010 and otherwise in form and
substance satisfactory to the Agent.
SECTION 11. NEGATIVE COVENANTS
So long as any Letter of Credit shall remain outstanding and until
payment in full of the Loans, the Notes, the Bonds and all other Obligations of
the Borrower hereunder or under any of the Security Documents, the Borrower
hereby agrees that:
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SECTION 11.01. Merger, Sale of Assets, Purchases, Etc. The Borrower
shall not merge into or consolidate with any other Person, change its form of
organization or its business, or liquidate or dissolve itself (or suffer any
liquidation or dissolution) or sell, lease, transfer or otherwise dispose of any
assets other than (a) sales of electric power pursuant to the Power Purchase
Agreements, sales of steam pursuant to the Steam Purchase Agreement and sales of
any other by-products of the fuel combustion process of the Facility; (b) any
merger, consolidation or disposition (i) which does not have a material adverse
effect upon the financial condition or net worth of the Borrower and (ii) after
which the Borrower remains a wholly-owned direct or indirect subsidiary of
Cogentrix Energy, (c) any sale, transfer or disposition of assets permitted
under Section 17.05, (d) sales of Permitted Investments for cash or other
Permitted Investments, (e) sales of Bonds by the Remarketing Agent on its behalf
and (f) any sale for cash of any Allowance owned by the Borrower; provided that
the Borrower receives fair market value for such Allowance. The Borrower will
not purchase or acquire any assets other than (w) the purchase of assets in
connection with the acquisition and construction of the Project, (x) the
purchase of assets in the ordinary course of business reasonably required in
connection with the operation and maintenance of the Facility, including,
without limitation, the purchase of any Allowances pursuant to Section 10.16,
(y) Permitted Investments and (z) the purchase of Bonds pursuant to Sections
2.09 and 2.10 of the Indenture.
SECTION 11.02. Indebtedness. The Borrower shall not create, incur or
assume any Indebtedness other than Indebtedness of the Borrower hereunder or in
respect of the Sale Agreement and other Obligations, except that the Borrower
may be and become obligated in connection with (a) an Interest Hedging
Transaction pursuant to Section 10.19, (b) Junior Working Capital Loans from
Cogentrix Energy and/or Delaware Holdings and (c) Capital Leases to the extent
permitted by Section 11.09.
SECTION 11.03. Dividends, Etc. The Borrower shall not (i) declare or
pay any dividends (other than dividends payable solely in common stock of the
Borrower) nor make any other payment on account of, or purchase, redeem, retire
or otherwise acquire, any shares of any class of stock or other interest in the
Borrower, whether in cash or other property, or make any other distribution in
respect thereof, (ii) pay any income taxes on the taxable income of the
Borrower, (iii) make any payments in respect of interest on or principal of the
Junior Working Capital Loans from Cogentrix Energy or Delaware Holdings, whether
in cash or other property, or make any other payment in respect thereof, (iv)
pay any Operating Management Fee, (v) pay any amounts in respect of allocated
regional and central support costs of the Borrower or (vi) make any loan to
Cogentrix Energy or any of its Affiliates (other than any loan permitted by
Section 11.07(b)) (payments or distributions pursuant to such clauses (i), (ii),
(iii), (iv), (v) or (vi), "Restricted Payments"), except that the Borrower may
(1) pay a cash dividend on its outstanding Capital Stock on the Restatement
Effective Date pursuant to and in accordance with Section 10.21, (2) pay any
cash dividend on its outstanding Capital Stock with amounts disbursed to the
Borrower from the Accounts on the Restatement Effective Date pursuant to Section
4.16 of the Security Deposit Agreement, (3) pay a cash dividend on its
outstanding Capital Stock on January 1, 2001, in the amount of $3,500,000, which
represents the Debt Service Reserve Deposit and (4) after any Installment
Payment Date pay in accordance with the Security Deposit Agreement, Restricted
Payments in an aggregate amount not exceeding the Borrower's Excess Project Cash
Flow for the three-month period ended on such Installment Payment Date if at the
time thereof with respect to any payment under this clause (4), and immediately
after giving effect thereto, (i) the
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Twelve-Month Debt Coverage Ratio as of such Installment Payment Date is at least
1.15 to 1, (ii) all Accounts have been funded to the levels required pursuant to
the Security Deposit Agreement and (iii) no Default or Event of Default shall
have occurred and be continuing. Prior to paying any such Restricted Payment
under clause (4) in the immediately preceding sentence, the Borrower shall have
furnished to the Agent and the Lenders the certificate required by Section
10.09(f).
SECTION 11.04. Liens, Etc. The Borrower shall not create or suffer to
exist any Lien securing any Indebtedness or other obligation of the Borrower or
any other Person, other than Permitted Liens.
SECTION 11.05. Nature of Business. The Borrower shall not engage in any
business other than the operation of the Project.
SECTION 11.06. Amendment, Termination or Extension of Contracts, Etc.
(a) The Borrower shall not, without the prior written consent of the Required
Lenders, agree to or permit (a) the cancellation, suspension or termination of
any Project Document (except upon the expiration of the stated term thereof),
(b) the assignment of the rights or obligations of any party to any Project
Document except (x) as contemplated by this Agreement or the Security Documents
or (y) as permitted without the consent of the Borrower by the terms of such
Project Document, or (c) any amendment, supplement or modification of, or waiver
with respect to any of the provisions of, any Project Document to which the
Borrower is a party or with respect to which the consent of the Borrower is
required; provided that the Borrower may, upon prior written notice to the
Agent, amend, supplement, waive or otherwise modify any Project Document to
which it is a party (other than the Construction Contract, the Project
Development Agreement, the Power Purchase Agreements, the Steam Purchase
Agreement, the ANR Guarantee, the Coal Supply Agreements, the Environmental
Indemnity Agreement, the Ground Lease, the Easement Agreements or any Project
Document to which the Agent is a party or any Project Document which is
expressly for the benefit of the Agent or any Secured Party as a named third
party beneficiary) in any manner which does not alter in any material respect
the rights or obligations of the respective parties thereto.
(b) The Borrower shall not, without the prior written consent of the
Required Lenders, enter into any Additional Contract.
(c) The Lenders hereby agree to use their best efforts to provide the
Borrower with any consent requested pursuant to this Section 11.06, or
notification that such consent will not be forthcoming, within 30 days of
written request thereof from the Borrower.
SECTION 11.07. Permitted Investments. The Borrower shall not make any
investments (whether by purchase of stock, bonds, notes or other securities,
loan, advance or otherwise) other than (a) Permitted Investments and (b) loans
to Cogentrix Energy or any of its Affiliates made (i) with amounts disbursed to
the Borrower from the Accounts on the Restatement Effective Date pursuant to
Section 4.16 of the Security Deposit Agreement or (ii) on January 1, 2001, in
the amount of $3,500,000, which represents the Debt Service Reserve Deposit.
SECTION 11.08. Qualifying Facility. The Borrower shall not (x) take any
action which would cause the Facility to cease to be a Qualifying Facility, or
(y) omit to take any action necessary to cause the Facility to be a Qualifying
Facility.
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SECTION 11.09. Leases. The Borrower shall not enter into, or be or
become liable under, any agreement for the lease, hire or use of any real
property or of any personal property, except for leases of personal property,
the aggregate annual rental under which shall not exceed $2,500,000 in any
fiscal year of the Borrower and which will not reduce the Projected Yearly Debt
Coverage Ratios of the Borrower to a level below those Projected Yearly Debt
Coverage Ratios of the Borrower as furnished by the Borrower to the Agent on or
prior to the Restatement Effective Date pursuant to Section 9.01(j); provided,
that any such agreement in respect of real or personal property that is integral
to the continuing operation of the Project in the reasonable opinion of the
Agent, shall be assigned to the Agent as security for the Obligations.
SECTION 11.10. Offering Circular. The Borrower shall not include any
material relating to the Issuing Bank or any Bond Letter of Credit in any
offering circular used in the offering or sale of the Bonds or remarketing of
the Bonds unless such material is approved in writing by the Issuing Bank prior
to its inclusion in the offering circular.
SECTION 11.11. Fiscal Year. The Borrower shall not change its fiscal
year except on 60 day's prior written notice to the Agent.
SECTION 11.12. Change of Office. The Borrower shall not change the
location of its chief executive office or principal place of business or the
office where it keeps its records concerning the Project and all contracts
relating thereto from that existing on the date of this Agreement and specified
in Section 8.21, unless the Borrower shall have given the Agent at least 30
days' prior written notice thereof and all action necessary or advisable in the
Agent's opinion to protect and perfect the liens and security interests with
respect to the right, title, estate and interest of the Borrower in and to the
Collateral created by the Security Documents to which the Borrower is a party
shall have been taken.
SECTION 11.13. Change of Name. The Borrower shall not change its name
except on 60 days' prior written notice to the Agent.
SECTION 11.14. Compliance with ERISA. The Borrower shall not (a)
terminate any Single Employer Plan so as to result in any material liability to
PBGC, (b) engage in or permit any Affiliate to engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan which would subject the Borrower to any material tax, penalty
or other liability, (c) incur or suffer to exist any material "accumulated
funding deficiency" (as defined in Section 302 of ERISA), whether or not waived,
involving any Plan subject to Section 412 of the Code or Part 3 of Title I(b) of
ERISA, (d) allow or permit to exist any event (including a Reportable Event) or
condition which represents a material risk of incurring a material liability to
PBGC or (e) permit the present value of all benefits vested under all Single
Employer Plans subject to Title IV of ERISA, based on those assumptions used to
fund the Plans, as of any valuation date with respect to such Plans to exceed
the value of the assets of the Plans allocable to such benefits.
SECTION 11.15. Transactions with Affiliates and Others; Operating
Management Fee. The Borrower shall not, directly or indirectly, purchase,
acquire, exchange or lease any property from, or sell, transfer or lease any
property to, or borrow any money from, or enter into any management or similar
fee arrangement with, any Affiliate or any officer, director or employee
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of the Borrower or Cogentrix Energy, except for (a) the transactions
contemplated by the Project Documents, (b) sales of the Borrower's common stock
to CHC, and (c) transactions in the ordinary course of business (including,
without limitation, the allocation of regional and central support costs among
the Borrower and other Subsidiaries of Cogentrix Energy) and upon fair and
reasonable terms substantially no less favorable than the Borrower could obtain,
or could become entitled to, in an arm's-length transaction with a Person which
is not an Affiliate. Notwithstanding the foregoing, (i) Cogentrix Energy and/or
Delaware Holdings may make Junior Working Capital Loans to the Borrower and (ii)
so long as no Default or Event of Default shall have occurred and be continuing,
the Borrower may, after receipt by the Agent and the Lenders of the certificate
required by Section 10.09(g), pay to Cogentrix Energy the Operating Management
Fee, such Operating Management Fee to be paid no more frequently than monthly.
SECTION 11.16. Change of Remarketing Agent or Tender Agent. The
Borrower shall not appoint any successor or additional Remarketing Agent or
Tender Agent pursuant to the Indenture, or give any notice to effectuate such
appointment, without the prior written consent of the Agent, which consent shall
not be unreasonably withheld.
SECTION 11.17. Tax Exempt Status of Bonds. The Borrower shall not (a)
take any action that would cause interest on any Bonds to cease to be excluded
from gross income for federal income tax purposes, or (b) omit to take any
action necessary to cause interest on any Bonds to remain excluded from gross
income for federal income tax purposes.
SECTION 11.18. Optional Redemption of Bonds. Other than with respect to
redemptions required to be made pursuant to the provisions of Section 5.08, the
Borrower shall not cause any Bonds to be optionally redeemed or defeased
pursuant to Section 10.01 of the Indenture, or give any notice in respect of any
optional redemption of any Bonds, pursuant to the Indenture without the prior
written consent of the Required Lenders.
SECTION 11.19. [INTENTIONALLY OMITTED].
SECTION 11.20. Term Interest Rate Election. The Borrower shall not
elect to have any Bonds bear interest at a Term Interest Rate (as defined in the
Indenture) without the prior written consent of the Required Lenders and the
Issuing Bank.
SECTION 12. EVENTS OF DEFAULT
If any of the Events of Default listed below in this Section 12 shall
occur the Agent may, and if requested by the Required Lenders, the Agent shall,
(i) by notice to the Borrower, declare the obligation of the Issuing Bank to
issue any or all of the Letters of Credit terminated, whereupon the same shall
forthwith terminate; and/or (ii) either directly or through the Issuing Bank
give notice to the Trustee pursuant to Section 7.01 of the Indenture requiring
the Trustee to declare the principal of and accrued and unpaid interest on the
Bonds to be due and payable, and/or give notice to the Trustee pursuant to
Section 2.10(a)(5) of the Indenture requiring the Bonds to be mandatorily
tendered and/or give notice pursuant to Paragraph 6 of each Bond Letter of
Credit stating that there will be no reinstatement of the Available Amount (as
defined in each Bond Letter of Credit) with respect to any Interest Drawing,
and/or give notice to the Remarketing Agent pursuant to Section 8.15(e) of the
Indenture stating that there will be no further remarketing
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of the Bonds; and/or (iii) declare the Commitments terminated and declare the
entire unpaid principal amount of the Loans and Notes, all unpaid ▇▇▇▇ ▇▇
Reimbursement Obligations and Term VP Reimbursement Obligations, all interest
accrued and unpaid thereon, and all other amounts payable hereunder to be
forthwith due and payable, whereupon the Commitments shall terminate and such
unpaid principal amount of the Loans and Notes, all unpaid ▇▇▇▇ ▇▇ Reimbursement
Obligations and Term VP Reimbursement Obligations, all interest accrued and
unpaid thereon, and all such other amounts shall become and be forthwith due and
payable, without presentment, demand, protest, or notice of any kind, all of
which are hereby expressly waived by the Borrower; and/or (iv) demand that the
Borrower immediately pay to the Agent an amount equal to the full amount that
can then be drawn under the Term VP Letters of Credit, whereupon the Borrower
shall immediately make such payment to the Agent, which shall hold such payment
as collateral security for the Obligations; and/or (v) demand that the Borrower
immediately pay to the Agent an amount equal to the full amount that can then be
drawn under the Bond Letters of Credit, whereupon the Borrower shall immediately
make such payment to the Agent, which shall hold such payment as collateral
security for the Obligations; and/or (vi) foreclose on any or all of the
Collateral; and/or (vii) proceed to enforce all other remedies available to it
under this Agreement, the Security Documents or applicable law including,
without limitation, elsewhere in this Section 12. Notwithstanding the foregoing,
if an Event of Default referred to in paragraph (g) or (h) below shall occur
with respect to CI, Delaware Holdings, Cogentrix Energy or the Borrower,
automatically and without notice the actions described in clauses (i) through
(iii) above shall be deemed to have occurred. If any of the Events of Default
listed below in this Section 12 shall occur and be continuing, the Issuing Bank
may, in its sole discretion, by notice to the Borrower, declare the obligation
of the Issuing Bank to issue any or all of the Letters of Credit terminated,
whereupon the same shall forthwith terminate. No such action taken by the Agent
shall have the effect of terminating, reducing or altering in any respect the
terms of (x) the Bond Letters of Credit with respect to Bonds outstanding at the
time, (y) the Term VP Letters of Credit outstanding at the time or (z) the Debt
Service Reserve Letter of Credit outstanding at the time. Simultaneously with
its giving of any notice to the Borrower under this Section 12 or its
declaration of acceleration pursuant to clause (iii) above, the Agent or the
Issuing Bank, as the case may be, shall notify each Lender of such action.
Such Events of Default are the following:
(a) (i) Any principal of any Loan or of any unreimbursed ▇▇▇▇
▇▇ Reimbursement Payment or Term VP Reimbursement Payment shall not be
paid or prepaid when due and shall remain unpaid for five or more
Business Days; (ii) any interest on any Loan or on any unreimbursed
▇▇▇▇ ▇▇ Reimbursement Payment or Term VP Reimbursement Amount shall not
be paid when due and shall remain unpaid for ten or more Business Days;
or (iii) any Bond Letter of Credit Fee, Bond Fronting Fee, Term VP
Letter of Credit Fee, Term VP Fronting Fee, Debt Service Reserve Letter
of Credit Fronting Fee, Debt Service Reserve Letter of Credit Fee, Debt
Service Reserve Letter of Credit Commitment Fee, Administration Fee,
Service Fee or any other fee, commission or amount payable by the
Borrower to the Issuing Bank, any Lender or the Agent hereunder or
under any other Project Document shall not be paid when due and shall
remain unpaid for a period of ten Business Days after notice to the
Borrower by the party to whom such payment was due (or the Agent on
behalf of such party); or
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(b) Any representation or warranty made by the Borrower herein
or by the Borrower, Cogentrix Energy, Delaware Holdings or CI in any
Project Document to which the Borrower, Cogentrix Energy, Delaware
Holdings or CI is a party, or any representation, warranty or statement
in any certificate, financial statement or other document furnished to
the Agent or any Lender by or on behalf of the Borrower hereunder or by
or on behalf of the Borrower, Cogentrix Energy, Delaware Holdings or CI
under any other Project Document, shall prove to have been false or
misleading as of the time made or deemed made in any respect which
adversely affects the Agent, the Issuing Bank or any of the Lenders; or
(c) (i) The Borrower shall fail to perform or observe any of
its covenants contained in Section 10.05, 10.16 or Section 11 of this
Agreement; or (ii) the Borrower shall fail to perform or observe any
other of its covenants contained in this Agreement (other than those
referred to in paragraph (a) and (b) above and in clause (i) of this
paragraph (c)) and such failure shall continue unremedied for a period
of 30 days after written notice thereof from the Agent or any Lender to
the Borrower, provided that such 30-day period shall be extended to 90
days if the Borrower is proceeding with due diligence to cure such
failure and such failure is capable of cure and none of the Collateral
is in any way materially impaired at the time of the extension of the
cure period; or
(d) The Borrower, Cogentrix Energy, Delaware Holdings or CI
shall fail to perform or observe any of its material covenants or
obligations contained in any of the Project Documents (other than the
covenants and obligations referred to in paragraphs (a), (b) and (c)
above) within the grace period, if any, provided for in such Project
Document and such failure shall continue unremedied and unwaived for a
period of 30 days after receipt of written notice thereof by the Agent
or any Lender to the Borrower; or
(e) The Borrower shall (A) default in any payment when due, at
the stated maturity thereof, by acceleration or otherwise, of any
amount in respect of any Indebtedness (other than Indebtedness referred
to in paragraph (a), Indebtedness in respect of the Junior Working
Capital Loans from Cogentrix Energy or Delaware Holdings) in excess of
$500,000 beyond the period of grace, if any, provided in the instrument
or agreement under which such Indebtedness was created; or (B) default
in the observance or performance of any other agreement or condition
relating to any such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which default or other
event or condition is to cause or to permit such Indebtedness to become
due prior to its stated maturity or to or to permit the holder of such
Indebtedness to realize upon any collateral given as security therefor;
or
(f) Any Participant shall fail to perform or observe any of
its covenants or obligations contained in any of the Project Documents
(other than the covenants and obligations referred to in paragraphs
(a), (b) (c), (d) and (e) above) within the grace period, if any,
provided for in such Project Documents, and which failure could
reasonably be expected to materially adversely affect (i) the interest
of the Agent or any Lender under such Project Document or any other
Project Document, (ii) the ability of Virginia Power, DuPont, CI,
Cogentrix Energy or Delaware Holdings to perform its obligations under
any
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Project Document to which it is a party or (iii) the ability of the
Borrower to perform its obligations under any of the Project Documents
to which it is a party; or
(g) Any Participant (other than CI) or CHC shall (i) apply for
or consent to the appointment of, or the taking of possession by, a
receiver, custodian, trustee or liquidator of itself or of all or a
substantial part of its property, (ii) admit in writing its inability,
or be generally unable, to pay its debts as such debts become due,
(iii) make a general assignment for the benefit of its creditors, (iv)
commence a voluntary case under the Bankruptcy Reform Act of 1978, as
in effect from time to time (the "Federal Bankruptcy Code") (as now or
hereafter in effect), (v) file a petition seeking to take advantage of
any other law relating to bankruptcy, insolvency, reorganization,
winding up, or composition or readjustment of debts, (vi) fail to
controvert in a timely and appropriate manner, or acquiesce in writing
to, any petition filed against such Participant (other than CI) or CHC
in an involuntary case under the Federal Bankruptcy Code, or (vii) take
any corporate action for the purpose of effecting any of the foregoing;
provided that it shall not be an Event of Default under this subsection
12(g) if, within 60 days after the occurrence of any of the foregoing
events with respect to a Participant (other than the Borrower, Delaware
Holdings, Cogentrix Energy, DuPont or Virginia Power), such Participant
shall have been replaced by another Person acceptable to the Required
Lenders who shall have entered into Project Document(s) similar to, and
in the judgment of the Agent at least as favorable to the Lenders as,
the Project Document(s) to which such Participant was a party and such
replacement Project Document(s) shall have been assigned to the Agent
to the same extent as the Project Document(s) being replaced; or
(h) A proceeding or case shall be commenced without the
application or consent of any Participant (other than CI) or CHC in any
court of competent jurisdiction, seeking (i) its liquidation,
reorganization, dissolution, winding-up, or the composition or
readjustment of debts, (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like of such Participant (other than CI)
or CHC under any law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts or
(iii) a warrant of attachment, execution or similar process against
assets of such Participant (other than CI) or CHC having a value in
excess of $100,000, in the case of the Borrower, $1,000,000, in the
case of CHC, Delaware Holdings or Cogentrix Energy, or $10,000,000 in
the case of any other Participant, and such proceeding or case shall
continue undismissed, or any order, judgment or decree approving or
ordering any of the foregoing shall be entered and continue unstayed
and in effect, for a period of 60 or more days, or any order for relief
against such Participant (other than CI) or CHC shall be entered in an
involuntary case under the Federal Bankruptcy Code (as now or hereafter
in effect); provided that it shall not be an Event of Default under
this Subsection 12(h) if, within 60 days after the occurrence of any of
the foregoing events with respect to a Participant (other than the
Borrower, DuPont or Virginia Power), such Participant shall have been
replaced by another Person acceptable to the Required Lenders who shall
have entered into Project Documents(s) similar to, and in the judgment
of the Agent at least as favorable to the Lenders as, the Project
Document(s) to which such Participant was a party and such replacement
Project Document(s) shall have been assigned to the Agent to the same
extent as the Project Document(s) being replaced; or
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(i) A judgment or judgments for the payment of money in
excess of $500,000 shall be rendered against the Borrower and such
judgment or judgments shall remain in effect and unstayed and unbonded
for a period of 30 or more consecutive days; or
(j) Any material provision of any Project Document shall at
any time for any reason cease to be valid and binding or in full force
and effect (other than as a result of any action by the Agent or any
Lender) or any party thereto (other than the Agent or any Lender) shall
so assert in writing; or any material provision of any Project Document
shall be declared to be null and void (other than as a result of any
action by the Agent or any Lender) or the validity or enforceability
thereof shall be contested by any party thereto (other than the Agent
or any Lender) or any Governmental Authority; or any Participant shall
deny that it has any further liability or obligation under any Project
Document to which it is a party or any Project Document shall be
terminated prior to the scheduled expiration date thereof for any
reason whatsoever; provided that the termination of a Project Document
(other than the Power Purchase Agreements and the Steam Purchase
Agreement) shall not be an Event of Default under this Section 12(j) if
such Project Document is replaced within 60 days of the date of such
termination with a substitute Project Document in form and substance
satisfactory to the Agent and the Required Lenders and such Project
Document shall have been assigned to the Agent to the same extent as
the Project Document that terminated; or
(k) Any Security Document shall cease, for any reason, to be
in full force and effect (other than as a result of any action by the
Agent or any Lender) or any party thereto (other than the Agent or any
Lender) shall so assert in writing; any Security Document shall cease
to be effective to grant a perfected Lien to the Agent for the benefit
of the Secured Parties (other than as a result of any action by the
Agent or any Secured Party) on Collateral described therein with the
priority purported to be created thereby; or
(l) Cogentrix Energy shall cease at any time to be the owner,
directly or indirectly through one or more wholly- owned Subsidiaries,
of all the outstanding shares of stock of the Borrower of each class
having ordinary voting power (other than stock having such power only
by reason of the happening of a contingency); or
(m) The Borrower shall abandon the Project for a period longer
than 30 consecutive days; or
(n) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan, or (iii) a Reportable Event shall occur with
respect to, or proceedings shall commence to have a trustee appointed,
or a trustee shall be appointed, to administer or to terminate any
Single Employer Plan, which Reportable Event or institution of
proceedings is, in the reasonable opinion of the Agent or any Lender,
likely to result in the termination of such Plan for purposes of Title
IV of ERISA, or (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA, or (v) the Borrower or any Commonly
Controlled Entity shall, or is, in the reasonable opinion of the Agent
or any Lender, likely to incur any liability in connection with a
withdrawal from, or
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the insolvency or reorganization of, a Multiemployer Plan, or (vi) any
other event or condition shall occur or exist with respect to a Plan;
and in each case in clauses (i) through (vi) above, such event or
condition, together with all other such events or conditions, if any,
could subject the Borrower to any tax, penalty or other liabilities in
the aggregate material in relation to the business, operations,
property or financial or other condition of the Borrower; or
(o) (A) any Participant shall fail to obtain, renew, maintain
or comply in all material respects with all such Government Approvals
which shall at the time be necessary (i) for the execution, delivery or
performance by each of the Participants of its respective rights and
obligations under the Project Documents, (ii) for the operation of the
Project as contemplated by the Project Documents or (iii) for the grant
by the Borrower of the Liens created under the Security Documents or
for the validity and enforceability or for the perfection of or the
exercise by the Agent of its rights and remedies thereunder, or any
such Government Approval shall be revoked, terminated, withdrawn,
suspended, modified or withheld or shall cease to be in full force and
effect, and (except in the case of the matters referred to in the
foregoing clause (iii)) such failure to obtain, renew, maintain or
comply or such revocation, termination or other event shall continue
unremedied for 30 days after notice to the Borrower from the Agent, or
any proceeding shall be commenced by or before any Governmental
Authority for the purpose of so revoking, terminating, withdrawing,
suspending, modifying or withholding any such Government Approval and
such proceeding is not dismissed within 60 days; and (B) such failure
to obtain, renew, maintain or comply with or such revocation,
termination, withdrawal, suspension, modification, withholding or
cessation or such proceeding could reasonably be expected to materially
adversely affect (i) the interest of the Lenders under any of the
Project Documents, (ii) the security provided to the Lenders under the
Security Documents or (iii) the ability of the Borrower or of such
Participant to perform its obligations under any of the Project
Documents; or
(p) An Event of Default under the Indenture (as defined
therein) shall have occurred and be continuing.
If any Event of Default shall have occurred and be continuing, in
addition to any other remedies which the Agent may have under this Agreement or
any Security Document or by statute or by rule of law, upon 10 days' prior
written notice to the Borrower, the Agent shall have the right and power (but
shall not be obligated) to take over the operation of the Facility and use all
or any part of the labor, materials, supplies and equipment contracted for by or
on behalf of the Borrower, whether or not previously incorporated into the
Facility, all in the sole and absolute discretion of the Agent. The Borrower
shall be liable to the Agent for all sums paid or incurred for the operation of
the Facility whether the same shall be paid or incurred pursuant to the
provisions of this paragraph or otherwise, and all payments made or liabilities
incurred by the Agent under this Agreement of any kind whatsoever shall be paid
by the Borrower to the Agent upon demand with interest at the Default Rate to
the date of payment to the Agent. Upon the occurrence of and during the
continuance of any Event of Default, the rights, powers and privileges provided
in this paragraph and all other remedies available to the Agent under this
Agreement or any Security Document or by statute or by rule of law may be
exercised by the Agent at any time and from time to time whether or not the
Bonds or the Loans shall be due and payable, and whether or not the Agent shall
have instituted any foreclosure or other action for the enforcement of any of
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the Project Documents. For the purpose of carrying out the provisions and
exercising the rights, powers and privileges granted by this paragraph, the
Borrower hereby irrevocably constitutes and appoints the Agent its true and
lawful attorney-in-fact to execute, acknowledge and deliver any instruments and
to do and to perform any acts such as are referred to in this paragraph in the
name and on behalf of the Borrower. This power of attorney is a power coupled
with an interest and cannot be revoked.
SECTION 13. TRANSFER OF LETTERS OF CREDIT
Each Letter of Credit may be transferred in accordance with the terms
thereof. Upon any such transfer, the Borrower shall pay to the Issuing Bank a
transfer fee in the standard amount then being charged by the Issuing Bank (but
not to exceed $2,000 for each such transfer).
SECTION 14. SUCCESSORS AND ASSIGNS
(a) This Agreement shall be binding upon and inure to the benefit of
the Borrower, the Lenders, the Issuing Bank, the Agent, all future holders of
the Notes and their respective successors and assigns, except that the Borrower
may not assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of each Lender.
(b) Any Lender may, in accordance with applicable law, at any time sell
to one or more banks or other entities ("Subparticipants") participating
interests in any Loans owing to such Lender, any Notes held by such Lender, any
Commitments of such Lender or any other interests and obligations of such
Lenders hereunder. In the event of any such sale by a Lender of a participating
interest to a Subparticipant, such Lender shall remain solely responsible for
the performance of such Lender's obligations under this Agreement, such Lender
shall remain the holder of any such Notes for all purposes of this Agreement,
the Borrower and the Agent 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 not grant any such Subparticipant any voting
rights or veto power over any action by such Lender under this Agreement, except
that such Lender may agree not to change the interest rate, amortization,
maturity or amount of the Obligations hereunder and under such Notes without the
consent of such Subparticipant. The Borrower agrees that if amounts outstanding
under this Agreement and the Notes are due or unpaid, or shall have been
declared or shall have become due and payable upon the occurrence of an Event of
Default, each Subparticipant shall be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement and
any Notes in which it has purchased a participating interest to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement or any Notes held by it, provided that such right of
setoff shall be subject to the obligation of such Subparticipant to share with
the Lenders, and the Lenders agree to share with such Subparticipant, as
provided in Section 17.04. The Borrower also agrees that each Participant shall
be entitled to the benefits of Sections 7.08, 7.12 and 7.14 with respect to its
participation in the Commitments and other obligations hereunder, the Eurodollar
Loans outstanding from time to time and with respect to the Letters of Credit,
provided, that no Subparticipant shall be entitled to receive any greater amount
pursuant to such Sections than the transferor Lender would have been entitled to
receive in respect of the amount of the participation transferred by such
transferor Lender to such Subparticipant had no such transfer occurred.
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(c) Any Lender may, in accordance with applicable law, at any time sell
to one or more additional banks or financial institutions acceptable to the
Issuing Bank in its sole discretion and reasonably acceptable to the Agent
("Purchasing Lenders") all or any part of its rights and obligations under this
Agreement and the Notes held by it; provided that each Lender shall use
reasonable efforts to offer to sell such rights and obligations to banks or
financial institutions reasonably acceptable to the Borrower, but as between
such Lender and the Borrower the ultimate decision with respect to any
disposition of such rights and obligations shall be made by such Lender in its
sole judgment. Each such sale shall be in a minimum amount of $5,000,000,
pursuant to a Commitment and Loan Transfer Supplement executed by such
Purchasing Lender and such transferor Lender and received by the Agent. Upon (i)
such execution of such Commitment and Loan Transfer Supplement (ii) delivery of
an executed copy thereof to the Borrower and receipt thereof by the Agent and
(iii) payment by such Purchasing Lender to the selling Lender of the amount set
forth in the related Commitment and Loan Transfer Supplement and payment to the
Agent of a transfer fee of $2,000, such Purchasing Lender shall for all purposes
be a Lender party to this Agreement and shall have all the rights and
obligations of a Lender under this Agreement, to the same extent as if it were
an original party hereto with the Commitment Percentage set forth in such
Commitment and Loan Transfer Supplement, which shall be deemed to amend this
Agreement (including, without limitation, Schedule 1 hereto) to the extent, and
only to the extent, necessary to reflect the addition of such Purchasing Lender
as a party to this Agreement and the resulting adjustment of Commitment
Percentages arising from the purchase by such Purchasing Lender of all or a
portion of the rights and obligations of such transferor Lender under this
Agreement and the Notes held by it. Upon the consummation of any transfer to a
Purchasing Lender pursuant to this paragraph (c), the transferor Lender, the
Agent and the Borrower shall make appropriate arrangements so that, if required,
replacement Notes are issued to such transferor Lender and new Notes or, as
appropriate, replacement Notes, are issued to such Purchasing Lender, in each
case in principal amounts reflecting their Commitment Percentage.
(d) The Agent shall maintain at its address referred to in Section
17.03 a copy of each Commitment and Loan Transfer Supplement delivered to it and
a register (the "Register") for the recordation of the names and addresses of
the Lenders and their respective Commitment Percentages. The entries in the
Register shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior written notice.
(e) The Borrower authorizes each Lender to disclose to any
Subparticipant or Purchasing Lender (each, a "Transferee") and any prospective
Transferee to any and all financial and other information in such Lender's
possession concerning the Project and the Borrower and its Affiliates including,
without limitation, any and all information which has been delivered to such
Lender by or on behalf of the Borrower, Delaware Holdings, Cogentrix Energy or
CI pursuant to this Agreement or which has been delivered to such Lender by or
on behalf of the Borrower, Delaware Holdings, Cogentrix Energy or CI in
connection with such Lender's credit evaluation of the Borrower and its
Affiliates prior to becoming a party to this Agreement.
(f) If, pursuant to this Section, any interest in this Agreement or any
Note is transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the transferor
Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, (i) to represent to the transferor Lender (for the benefit of the
transferor Lender, the Agent and the Borrower) that under applicable law and
treaties no taxes
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will be required to be withheld by the Agent, the Borrower or the transferor
Lender with respect to any payments to be made to such Transferee in respect of
the Loans, (ii) to furnish to the transferor Lender, the Agent and the Borrower
either U.S. Internal Revenue Service Form 4224 or U.S. Internal Revenue Service
Form 1001 (wherein such Transferee claims entitlement to complete exemption from
U.S. federal withholding tax on all interest payments hereunder) and (iii) to
agree (for the benefit of the transferor Lender, the Agent and the Borrower) to
provide the transferor Lender, the Agent and the Borrower a new form 4224 or
Form 1001 upon the obsolescence of any previously delivered form and comparable
statements in accordance with applicable United States laws and regulations and
amendments duly executed and completed by such Transferee, and to comply from
time to time with all applicable United States laws and regulations with regard
to such withholding tax exemption.
(g) Notwithstanding anything to the contrary in this Section 14, if the
long-term unsecured debt rating of any Lender shall, at any time, be less than a
rating of BBB or the equivalent thereof by Standard & Poor's Corporation or Baa2
or the equivalent thereof by ▇▇▇▇▇'▇ Investors Service, Inc., then the Issuing
Bank may, in its sole and absolute discretion, terminate such Lender's interest
hereunder (the "Terminated Interests") by providing such Lender with two
Business Days' prior notice thereof and making a payment to such Lender for all
outstanding amounts owing to it hereunder on the date of such termination. Upon
such termination, such Lender shall no longer have any rights or obligations as
a Lender under this Agreement. The Issuing Bank may, in its sole and absolute
discretion, retain for its own account and/or sell its interest in all or any
portion of the Terminated Interests.
SECTION 15. EXPENSES
All statements, reports, certificates, opinions and other documents or
information required to be furnished by the Borrower or any other Participant to
the Agent, the Issuing Bank or the Lenders under this Agreement shall be
supplied without cost to the Agent, the Issuing Bank or the Lenders. Further,
the Borrower shall pay, on demand, whether or not any Loan is made or any
Letters of Credit are issued hereunder, (a) all reasonable out-of-pocket costs
and expenses of the Agent and the Issuing Bank (including, without limitation,
travel expenses and the reasonable fees and disbursements of special counsel and
of local counsel to the Agent and the Issuing Bank) incurred in connection with
(i) the negotiation, preparation, execution and delivery of the Project
Documents or any waiver or amendment of, or supplement or modification to, the
Project Documents, (ii) the syndication of this Agreement, and (iii) the review
of any of the other agreements, instruments or documents referred to in this
Agreement or in any of the other Project Documents or relating to the
transactions contemplated hereby, and (b) the reasonable fees and disbursements
of the Independent Engineer, the Insurance Advisor, the Fuel Consultant and any
other special consultants engaged by the Agent, on behalf of the Lenders, in
connection with the transactions contemplated by any of the Project Documents
and (c) all costs and expenses of collection of any of the Agent, the Issuing
Bank or any Lenders (including reasonable fees and disbursements of counsel to
the Agents or any Lender) incident to the enforcement, protection or
preservation of any right or claim of the Agent, the Issuing Bank or such Lender
under the Project Documents. The Agent may, prior to the Restatement Effective
Date, provide to the Borrower an itemized statement of such fees and expenses
referred to above incurred prior to the Restatement Effective Date and such fees
and expenses shall be payable on the Restatement Effective Date.
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SECTION 16. THE AGENT AND RELATIONS AMONG LENDERS, ETC.
SECTION 16.01. Appointment of Agent, Powers and Immunities. Each Lender
and the Issuing Bank hereby irrevocably appoints and authorizes the Agent to act
as its agent hereunder and under the other Project Documents with such powers as
are expressly delegated to the Agent by the terms of this Agreement, together
with such other powers as are reasonably incidental thereto. The Agent shall not
have any duties or responsibilities except those expressly set forth in this
Agreement or in any other Project Document, or be a trustee for any Lender or
the Issuing Bank. Notwithstanding anything to the contrary contained herein, the
Agent shall not be required to take any action which is contrary to this
Agreement or any other Project Document or applicable law. Neither the Agent nor
any Lender or the Issuing Bank nor any of their respective affiliates shall be
responsible to any other Lender for any recitals, statements, representations or
warranties made by the Borrower contained in this Agreement or in any
certificate or other document referred to or provided for in, or received by any
Lender under, this Agreement, for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement, the Notes or any
other document referred to or provided for herein or for any failure by the
Borrower to perform its obligations hereunder or thereunder. The Agent and the
Issuing Bank may employ agents and attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. Neither the Agent nor the
Issuing Bank nor any of their respective directors, officers, employees or
agents shall be responsible for any action taken or omitted to be taken by it or
them hereunder or under any other Project Document or in connection herewith or
therewith, except for its or their own gross negligence or wilful misconduct.
SECTION 16.02. Reliance by Agent. The Agent and the Issuing Bank shall
be entitled to rely upon any certificate, notice or other document (including
any cable, telegram or telex) believed by it to be genuine and correct and to
have been signed or sent by or on behalf of the proper Person or Persons, and
upon advice and statements of legal counsel, independent accountants and other
experts selected by the Agent. As to any matters not expressly provided for by
this Agreement, the Agent and the Issuing Bank shall not be required to take any
action or exercise any discretion, but the Agent shall be required to act or to
refrain from acting upon instructions of the Required Lenders and shall in all
cases be fully protected in acting, or in refraining from acting, hereunder or
under any other Project Document in accordance with the instructions of the
Required Lenders, and such instructions of the Required Lenders and any action
taken or failure to act pursuant thereto shall be binding on all of the Lenders.
SECTION 16.03. Defaults. Neither the Agent nor the Issuing Bank shall
be deemed to have knowledge or notice of the occurrence of a Default unless the
Agent or the Issuing Bank has received notice from a Lender or the Borrower
referring to this Agreement, describing such Default and stating that such
notice is a "Notice of Default". In the event that the Agent receives such a
notice of the occurrence of a Default the Agent shall give notice thereof to the
Lenders. The Agent shall take such action with respect to such Default as shall
be reasonably directed by the Required Lenders; provided that, unless and until
the Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from
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taking such action, with respect to such Default as it shall deem advisable in
the best interest of the Lenders.
SECTION 16.04. Rights as Lenders. Paribas shall have the same rights
and powers hereunder as any Lender and may exercise the same as though it were
not acting as the Agent and the Issuing Bank. The term "Lender" or "Lenders"
shall, unless the context otherwise indicates, include Paribas in its individual
capacity. Paribas and its respective affiliates may (without having to account
therefor to any Lender) accept deposits from, extend credit (on a secured or
unsecured basis) to and generally engage in any kind of banking, trust or other
business with the Borrower or any of its Affiliates, as if it was not acting as
the Agent and the Issuing Bank.
SECTION 16.05. Indemnification. Without limiting the obligations of the
Borrower under Section 10.20 or Section 15 hereof, each Lender agrees to
indemnify the Agent and the Issuing Bank, ratably in accordance with their
Commitment Percentages, for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may at any time (including, without
limitation, at any time following the payment of principal of and/or interest on
the Loans and on unreimbursed amounts under the Letters of Credit) be imposed
on, incurred by or asserted against the Agent or the Issuing Bank in any way
relating to or arising out of this Agreement or the other Project Documents or
any documents contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby (including the costs and expenses
which the Borrower is obligated to pay under Section 10.20 and Section 15
hereof) or the enforcement of any of the terms hereof or thereof or of any such
other documents, provided that no Lender shall be liable for any of the
foregoing to the extent they arise from the gross negligence or wilful
misconduct of the Agent or the Issuing Bank, as the case may be. The Agent and
the Issuing Bank shall be fully justified in refusing to take or to continue to
take any action hereunder unless it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.
SECTION 16.06. Documents. The Agent will forward to each Lender,
promptly after the Agent's receipt thereof, a copy of each document furnished to
the Agent for such Lender hereunder and of each opinion furnished to the Agent
pursuant to Section 9 or 10 hereof (and a copy of such other documents furnished
to the Agent pursuant to Section 9 or 10 hereof as may be requested by such
Lender).
SECTION 16.07. Non-Reliance on Agents and Other Lenders. Each Lender
represents that it has, independently and without reliance on the Agent, the
Issuing Bank or any other Lender, and based on such documents and information as
it has deemed appropriate, made its own appraisal of the Project and of the
financial condition and affairs of the Borrower and its own decision to enter
into this Agreement and agrees that it will, independently and without reliance
upon the Agent, the Issuing Bank or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own appraisals and decisions in taking or not taking action under this
Agreement. Neither the Agent nor any Lender shall be required to keep informed
as to the performance or observance by the Borrower under this Agreement or any
other document referred to or provided for herein or to make inquiry of, or to
inspect the properties or books of, the Borrower. Except for notices, reports
and other documents and information expressly required to be furnished to the
Lenders by the Agent hereunder, neither
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the Agent nor any Lender shall have any duty or responsibility to provide any
Lender with any credit or other information concerning the Borrower or any
Affiliate of the Borrower or any other Participant, which may come into the
possession of the Agent or such Lender or any of its Affiliates.
SECTION 16.08. Resignation or Removal of Agent. Subject to the
appointment and acceptance of a successor Agent as provided below, the Agent may
resign at any time by giving notice thereof to the Lenders and the Borrower, and
the Agent may be removed at any time with or without cause by the Required
Lenders. Upon any such resignation or removal, the Required Lenders shall have
the right to appoint a successor Agent. If no such successor Agent shall have
been appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Agent's giving of notice of resignation or the
Required Lenders' removal of the retiring Agent, then the retiring Agent may, on
behalf of the Lenders, appoint a successor Agent which shall be a bank with an
office (or having an affiliate with an office) in New York, New York, having a
combined capital and surplus of not less than $500,000,000. Upon the acceptance
of any appointment as an Agent hereunder by a successor Agent, such successor
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and such retiring Agent shall be
discharged from its duties and obligations hereunder. After any retiring Agent's
resignation or removal hereunder, the provisions of this Section 16 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 the Agent.
SECTION 16.09. Authorization. The Agent is hereby authorized by the
Lenders to execute, deliver and perform each of the Project Documents to which
the Agent is or is intended to be a party and each Lender agrees to be bound by
all of the agreements of the Agent contained in the Project Documents.
SECTION 16.10. Rescission of Payments. In the event that, following the
making of a payment in respect of ▇▇▇▇ ▇▇ Reimbursement Obligations, Term VP
Reimbursement Obligations or Debt Service Reserve Letter of Credit reimbursement
obligations by the Borrower directly to the Issuing Bank pursuant to Sections 5,
6 or 6A hereof, any portion of such payment shall be rescinded or must otherwise
be restored by the Issuing Bank, then each Lender, upon notice to it by the
Issuing Bank of such rescission or restoration, shall pay to the Issuing Bank
its Commitment Percentage of the amount of such payment which was so rescinded
or restored.
SECTION 17. MISCELLANEOUS
SECTION 17.01. Commercial Practices. The Borrower agrees that neither
the Agent, the Issuing Bank, nor any other Lender (nor any of their respective
officers or directors) shall be liable or responsible for: (i) the use which may
be made of any Letter of Credit or for any acts or omissions of the Trustee, the
Remarketing Agent or the Tender Agent or any beneficiary or transferee in
connection therewith; (ii) any reference which may be made to this Agreement or
to any Letter of Credit in any agreements, instruments or other documents
relating to the Bonds; (iii) the validity, sufficiency or genuineness of
documents other than the Letters of Credit, or of any endorsement(s) thereon,
even if such documents should in fact prove to be in any or all respects
invalid, insufficient, fraudulent or forged or any statement therein prove to be
untrue or inaccurate
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in any respect whatsoever; (iv) payment by the Issuing Bank against presentation
of documents which do not comply with the terms of the applicable Letter of
Credit, including failure of any documents to bear any reference or adequate
reference to the applicable Letter of Credit; or (v) any other circumstances
whatsoever in making or failing to make payment under any Letter of Credit,
except that the Borrower shall have a claim against the Issuing Bank, and the
Issuing Bank shall be liable to the Borrower, to the extent, but only to the
extent, of any direct, as opposed to consequential, damages suffered by the
Borrower which the Borrower proves were caused by the Issuing Bank's wilful
failure to pay under a Letter of Credit after the presentation to it of a
certificate for payment strictly complying with the terms and conditions of such
Letter of Credit (unless the Issuing Bank in good faith believed itself to be
prohibited by law or legal authority from making such payment). In furtherance
and not in limitation of the foregoing, 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.
SECTION 17.02. No Waiver; Remedies Cumulative. No failure to exercise
and no delay in exercising on the part of the Agent, the Issuing Bank or any
Lender of any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
privilege preclude any other or further exercise thereof, or the exercise of any
other right, power or privilege. The rights and remedies herein provided are
cumulative and not exclusive of any rights or remedies provided by law.
SECTION 17.03. Notices. Except as otherwise specifically provided
herein, all notices, requests, demands, consents, instructions or other
communications hereunder ("notices") shall be in writing and shall be duly given
or made if delivered by hand or courier or if sent by first class mail or by
tested or otherwise authenticated telex, or by facsimile transmission, or by
telegram or cable, and shall be deemed to have been duly given or made upon the
receipt thereof if by hand or courier or upon the transmittal thereof if by
telex or facsimile transmission or upon the delivery thereof to the telegraph
office if by telegram or cable, or on the third Business Day following the
deposit thereof in the mail, first class postage prepaid, in each case addressed
to the party or Transferee to which such notice is requested or permitted to be
given or made hereunder, (a) if to any Agent, the Issuing Bank or a Lender, at
its address specified on Schedule 1 hereto, (b) if to the Borrower, at the
address set forth below its signature line on this Agreement and (c) if to any
Transferee not a party hereto, to such address as such Transferee shall notify
to the other parties hereto in writing, and (d) at such other address as any
Person referred to in clauses (a), (b) and (c) shall notify to the other parties
hereto in writing.
SECTION 17.04. Right of Set-off. (a) Upon the occurrence and during the
continuance of any Event of Default, each of the Lenders is, subject (as between
the Lenders) to the provisions of Section 16 hereof, hereby authorized at any
time and from time to time, without notice to the Borrower (any such notice
being expressly waived by the Borrower) and to the fullest extent permitted 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 in any of its offices to or for the credit or the
account of the Borrower against any and all of the respective obligations of the
Borrower now or hereafter existing under the Project Documents, irrespective of
whether or not such Lender or any other Lender shall have made any demand
hereunder and although such obligations may be contingent or unmatured and such
deposits or indebtedness may be unmatured.
101
94
(b) A Lender shall promptly notify the Agent and the Borrower after any
such set-off and application, provided that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of the
Lenders under this Section 17.04 are in addition to other rights and remedies
(including, without limitation, other rights of set-off) which the Lenders may
have.
SECTION 17.05. Release of Collateral. (a) Limitations on Releases. From
time to time after the execution and delivery of the Security Documents, the
Borrower may, without the consent of the Agent or the Lenders, sell, transfer or
dispose of (i) any tangible property subject to the Lien of the Security
Documents for which replacement items of the same character and at least
equivalent fair market value, useful life and utility have been substituted and
become part of the Collateral and (ii) other tangible property subject to the
Lien of the Security Documents that is not necessary for the proper operation of
the Facility, if, at the time of such disposition and after giving effect
thereto, no Default or Event of Default exists and the property subject to the
Lien of the Security Documents will be adequate to operate the Facility with the
capabilities described in the definition of such term in Section 1.01 hereof;
provided, however, that the Borrower shall not in any calendar year dispose of
property pursuant to the foregoing clause (ii) having a fair market value as of
the respective time or times of the sale, transfer or disposition exceeding
$350,000 at any one time or $750,000 in the aggregate. Nothing in this Section
17.05(a) shall restrict the Borrower's right to sell Bonds pledged under a Bond
Pledge Agreement in accordance with the terms thereof.
(b) Confirmations of Releases. Upon any sale, transfer or disposition
pursuant to subsection (a) above, the Lien of the Project Mortgage shall cease
as to the property so sold, transferred or disposed of without the requirement
of a formal release by the Agent; provided, however, that upon request by the
Borrower, the Agent shall execute an appropriate instrument confirming the
release of such property from the Lien of the Security Documents.
(c) Releases in Lenders' Discretion. Neither the Agent nor the Lenders
shall be required to make any release of Collateral other than pursuant to
subsection (a) above. Without limiting the generality of the foregoing, neither
the Agent nor the Lenders shall be required to make any release of Collateral if
one or more Defaults or Events of Default shall exist. The Borrower shall
deliver to each Lender, in connection with each request for the release of any
part of the Collateral, a certificate of a Responsible Officer of the Borrower
stating that there is, and that after giving effect to the release applied for
there will be, no Default or Event of Default.
SECTION 17.06. Severability. Any provision hereof which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof and without affecting the validity
or enforceability of any provision in any other jurisdiction.
SECTION 17.07. Headings. The headings of the various sections and
paragraphs of this Agreement are for convenience of reference only, do not
constitute a part hereof and shall not affect the meaning or construction of any
provision hereof.
SECTION 17.08. Amendments, Etc. This Agreement may not be modified,
supplemented or amended, and no provision of this Agreement may be waived,
except by a written
102
95
instrument signed by the Borrower and the Agent with the written consent of the
Required Lenders, provided, however, that no modification, supplement, amendment
or waiver in respect of Sections 4, 6, 7, 9, 10.20, 11.03, 12(a), 15, 16.05,
17.05 and 17.08 hereof, the definition of "Required Lenders" in Section 1.01
hereof or any provision of the Security Documents shall be made without the
unanimous consent of the Lenders and no modification, supplement, amendment or
waiver of any provision hereof affecting the rights or obligations of the
Issuing Bank or the Agent shall be made without the consent of the Issuing Bank
or the Agent, as the case may be. In the case of any waiver, the Borrower, the
Agent, the Issuing Bank and the Lenders shall be restored to their former
position and rights hereunder and under the outstanding Notes, and any Default
or Event of Default waived shall be deemed to be cured and not continuing; but
no such waiver shall extend to any subsequent or other Default or Event of
Default, or impair any right consequent thereon.
SECTION 17.09. GOVERNING LAW. THIS AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
SECTION 17.10. SUBMISSION TO JURISDICTION; WAIVERS. (A) THE BORROWER
HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(I) SUBMITS FOR ITSELF AND ITS PROPERTY, IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT, THE NOTES OR ANY SECURITY
DOCUMENT OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT
THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;
(II) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE
BROUGHT IN SUCH COURTS, AND WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN
INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(III) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR
CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE
PREPAID, TO THE BORROWER AT ITS ADDRESS SPECIFIED IN SECTION 17.03 AND,
IF APPLICABLE, TO THE AGENT, THE ISSUING BANK AND THE LENDERS AT THEIR
RESPECTIVE ADDRESSES SET FORTH IN SCHEDULE 1 HERETO OR AT SUCH OTHER
ADDRESS OF WHICH THE AGENT OR THE BORROWER, IF APPLICABLE, SHALL HAVE
BEEN NOTIFIED PURSUANT HERETO; AND
103
96
(IV) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO
EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL
LIMIT THE RIGHT TO ▇▇▇ IN ANY OTHER JURISDICTION.
(B) EACH OF THE BORROWER, THE AGENT, THE ISSUING BANK AND EACH LENDER
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO OR ARISING OUT OF THIS AGREEMENT, THE NOTES OR ANY
SECURITY DOCUMENT AND FOR ANY COUNTERCLAIM THEREUNDER.
SECTION 17.11. Limitation of Liability. There shall be full recourse to
the Borrower and all of its assets for the liabilities of the Borrower under
this Agreement and the Notes and its other Obligations, but in no event shall
CI, Delaware Holdings, CHC, Cogentrix Energy or any officer, director or holder
of any equity interest in the Borrower, CI, Delaware Holdings, CHC or Cogentrix
Energy be personally liable or obligated for such liabilities and obligations of
the Borrower, except as may be specifically provided in any other Project
Document to which CI, Delaware Holdings, CHC or Cogentrix Energy is a party.
Nothing herein contained shall limit or be construed to (i) limit the
obligations and liabilities of CI, Delaware Holdings, CHC or Cogentrix Energy in
accordance with the terms of any Project Document creating such liabilities and
obligations to which CI, Delaware Holdings, CHC or Cogentrix Energy is a party
or (ii) affect or diminish any rights of any Person against any other Person
arising from misappropriation or misapplication of any funds or for such other
Person's fraud, gross negligence or willful misconduct. The provisions of this
Section 17.11 shall survive the termination of this Agreement.
SECTION 17.12. Confidentiality. (a) The Agent, the Issuing Bank and
each Lender agrees that it shall use its best efforts in good faith to hold in
confidence and not disclose to any third party any information contained in the
Assigned Agreements, the financial statements of the Borrower, Delaware
Holdings, CHC, Cogentrix Energy and CI and any written information and materials
that are marked "confidential" and are provided by the Borrower either directly
to the Agent, the Issuing Bank or such Lender or indirectly through the Agent to
the Issuing Bank or such Lender.
(b) Notwithstanding the foregoing paragraph (a), this Section 17.12
shall not prohibit: (i) the exchange of information among the Agent, the Issuing
Bank and the Lenders or among their employees, officers, attorneys or
consultants; (ii) any disclosure of information that has been or is made public
by the Borrower or any third party without breach of this Agreement or otherwise
becomes generally available to the public other than as a result of a disclosure
in violation of this Section 17.12; (iii) any disclosure of information that was
or becomes available to the Agent, the Issuing Bank or any Lender from a third
party on a non-confidential basis; (iv) any disclosure of information that
relates to generalized business ideas, concepts, know-how or techniques; (v) any
disclosure of information that is required to be disclosed to any auditor or by
any Requirement of Law; (vi) any disclosure of information that is requested to
be disclosed by any court, agency or legislative body to such court, agency or
legislative body (by interrogatories, requests for information, oral questions,
subpoena, civil investigative demand or similar process);
104
97
or (vii) any disclosure of confidential information to a proposed Subparticipant
or Purchasing Lender in connection with a proposed participation or transfer
pursuant to Section 14 hereof.
SECTION 17.13. Survival of Representations and Warranties. All
representations and warranties made hereunder and in any document, certificate
or statement delivered pursuant hereto or in connection herewith shall survive
the execution and delivery of this Agreement and the Notes.
SECTION 17.14. Amendment and Restatement. Except as otherwise amended
and modified hereby, all terms, conditions and provisions of the Project
Documents and the documents and instruments executed in connection therewith
shall continue unchanged and shall be and remain in full force and effect. By
its execution and delivery of this Agreement, the Borrower hereby acknowledges,
ratifies and confirms such agreements, documents and instruments. Nothing in
this Agreement, the Notes, or the documents, agreements and instruments executed
in connection herewith shall diminish, impair, or adversely affect (i) the
indebtedness evidenced by the Notes or any other obligation or liability of the
Borrower to the Lenders or the Agent, or (ii) the enforceability, perfection or
priority of any lien, assignment, pledge, hypothecation, encumbrance or security
interest held by the Lenders as security for any obligations or liabilities of
the Borrower, which liens, assignments, pledges, hypothecations, encumbrances
and security interests are acknowledged by the Borrower to be valid and
subsisting.
105
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in New York, New York as of the day and year first
above written.
COGENTRIX OF RICHMOND, INC.,
as the Borrower
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Title: Vice President - Project Finance
Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: General Counsel
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
BNP PARIBAS
in its capacity as
Agent, Issuing Bank,
and as a Lender
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Title: Director
By /s/ ▇▇▇▇ ▇▇▇▇▇
----------------------------------
Title: Assistant Vice President
106
Schedule 1
Lenders' Commitment Percentages, Addresses
for Notices and Lending Offices
Commitment
Lender Percentage
------ ----------
BNP PARIBAS 100%
ADDRESS FOR NOTICES:
The Equitable Tower
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Specialized Industries
Group
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
DOMESTIC LENDING OFFICE AND
EURODOLLAR LENDING OFFICE:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
107
Schedule 2
APPLICABLE MARGIN
Base Rate
Eurodollar Loans Loans
---------------- ---------
From the Restatement Effective Date to but
excluding the third anniversary of the
Restatement Effective Date 1.125% 0.125%
From the third anniversary of the Restatement
Effective Date to but excluding the seventh
anniversary of the Restatement Effective Date 1.250% 0.250%
Thereafter 1.375% 0.375%
108
Schedule 3
DESCRIPTION OF THE SITE
109
Schedule 4
GOVERNMENTAL APPROVALS
110
Schedule 5
RECORDINGS AND FILINGS
111
Schedule 6
TERM LOAN AMORTIZATION AMOUNTS
--------------------------------------------------------------------------------
# Installment Payment Date Amortization Amount
--------------------------------------------------------------------------------
1 30-Sep-00 4,553,600
--------------------------------------------------------------------------------
2 31-Dec-00 4,553,600
--------------------------------------------------------------------------------
3 31-Mar-01 4,482,450
--------------------------------------------------------------------------------
4 30-Jun-01 4,482,450
--------------------------------------------------------------------------------
5 30-Sep-01 4,482,450
--------------------------------------------------------------------------------
6 31-Dec-01 4,482,450
--------------------------------------------------------------------------------
7 31-Mar-02 4,019,975
--------------------------------------------------------------------------------
8 30-Jun-02 4,019,975
--------------------------------------------------------------------------------
9 30-Sep-02 4,019,975
--------------------------------------------------------------------------------
10 31-Dec-02 4,019,975
--------------------------------------------------------------------------------
11 31-Mar-03 4,375,725
--------------------------------------------------------------------------------
12 30-Jun-03 4,375,725
--------------------------------------------------------------------------------
13 30-Sep-03 4,375,725
--------------------------------------------------------------------------------
14 31-Dec-03 4,375,725
--------------------------------------------------------------------------------
15 31-Mar-04 5,193,950
--------------------------------------------------------------------------------
16 30-Jun-04 5,193,950
--------------------------------------------------------------------------------
17 30-Sep-04 5,193,950
--------------------------------------------------------------------------------
18 31-Dec-04 5,193,950
--------------------------------------------------------------------------------
19 31-Mar-05 5,656,425
--------------------------------------------------------------------------------
20 30-Jun-05 5,656,425
--------------------------------------------------------------------------------
21 30-Sep-05 5,656,425
--------------------------------------------------------------------------------
22 31-Dec-05 5,656,425
--------------------------------------------------------------------------------
23 31-Mar-06 6,296,775
--------------------------------------------------------------------------------
24 30-Jun-06 6,296,775
--------------------------------------------------------------------------------
25 30-Sep-06 6,296,775
--------------------------------------------------------------------------------
26 31-Dec-06 6,296,775
--------------------------------------------------------------------------------
27 31-Mar-07 3,272,900
--------------------------------------------------------------------------------
28 30-Jun-07 3,272,900
--------------------------------------------------------------------------------
29 30-Sep-07 3,272,900
--------------------------------------------------------------------------------
30 31-Dec-07 3,272,900
--------------------------------------------------------------------------------
================================================================================
TOTAL 142,300,000
--------------------------------------------------------------------------------
112
Schedule 7
BOND MANDATORY PREPAYMENT SCHEDULE
-----------------------------------------------------------------------
# DATE AMOUNT
-----------------------------------------------------------------------
1 31-Mar-07 5,160,000
2 30-Sep-07 5,160,000
3 31-Mar-08 7,800,000
4 30-Sep-08 7,800,000
5 31-Mar-09 8,496,000
6 30-Sep-09 8,496,000
7 31-Mar-10 5,088,000
-----------------------------------------------------------------------
Total: 48,000,000
-----------------------------------------------------------------------
113
Schedule 8
REQUIRED ALLOWANCES
---------------------------------------------------------------------------
Column X Column Y
-------- --------
---------------------------------------------------------------------------
373 2003
---------------------------------------------------------------------------
415 2004
---------------------------------------------------------------------------
449 2005
---------------------------------------------------------------------------
482 2006
---------------------------------------------------------------------------
506 2007
---------------------------------------------------------------------------
541 2008
---------------------------------------------------------------------------
574 2009
---------------------------------------------------------------------------
597 2010
---------------------------------------------------------------------------