EXHIBIT 4.3
EXECUTION COPY
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DEBT SERVICE RESERVE LETTER OF CREDIT
AND REIMBURSEMENT AGREEMENT
Dated as of March 1, 2000
among
AES RED OAK, L.L.C.,
as Company,
DRESDNER BANK AG,
acting through its New York Branch,
as the Issuing Bank, as a Bank and as Agent
and
THE BANKS PARTY HERETO
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830 MW (Net) Gas-Fired Combined Cycle Electric Generating Facility
Borough of Sayreville, Middlesex County, New Jersey
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS............................................................1
SECTION 1.1 DEFINITIONS.................................................1
SECTION 1.2 CONSTRUCTION................................................7
ARTICLE II DSR LETTER OF CREDIT..................................................7
SECTION 2.1 COMMITMENTS.................................................7
SECTION 2.2 AMOUNT AND TERM OF DSR LETTER OF CREDIT.....................8
SECTION 2.3 PARTICIPATION IN DSR LETTER OF CREDIT.......................9
SECTION 2.4 DRAWING AND REIMBURSEMENT..................................10
SECTION 2.5 FEES.......................................................10
SECTION 2.6 INTEREST...................................................11
SECTION 2.7 REPAYMENT..................................................14
SECTION 2.8 PREPAYMENTS................................................15
SECTION 2.9 SECURITY...................................................15
SECTION 2.10 PAYMENTS...................................................16
SECTION 2.11 COMPUTATION OF INTEREST AND FEES...........................16
SECTION 2.12 PAYMENTS ON NON-BUSINESS DAYS..............................16
SECTION 2.13 SHARING OF PAYMENTS, ETC...................................17
SECTION 2.14 EVIDENCE OF DEBT...........................................17
SECTION 2.15 INCREASED COSTS AND REDUCED RETURNS........................17
SECTION 2.16 CAPITAL ADEQUACY...........................................19
SECTION 2.17 TAXES......................................................20
SECTION 2.18 ILLEGALITY.................................................22
SECTION 2.19 EXTENSION OF DSR LETTER OF CREDIT; ASSIGNMENTS BY BANKS....22
SECTION 2.20 REDUCTION IN COMMITMENTS/REIMBURSEMENTS....................23
SECTION 2.21 RIGHT OF SET-OFF...........................................23
ARTICLE III CONDITIONS PRECEDENT................................................24
SECTION 3.1 CONDITIONS PRECEDENT TO CLOSING DATE.......................24
ARTICLE IV REPRESENTATIONS AND WARRANTIES.......................................25
SECTION 4.1 REPRESENTATIONS AND WARRANTIES OF COMPANY..................25
SECTION 4.2 REPRESENTATIONS AND WARRANTIES OF THE ISSUING BANK.........25
ARTICLE V COVENANTS.............................................................25
SECTION 5.1 COVENANTS..................................................25
ARTICLE VI DEFAULTS AND REMEDIES................................................26
SECTION 6.1 EVENTS OF DEFAULT..........................................26
SECTION 6.2 REMEDIES...................................................26
SECTION 6.3 COLLATERALIZATION UPON ACCELERATION OF THE BONDS...........27
ARTICLE VII CHARACTER OF OBLIGATIONS............................................27
SECTION 7.1 OBLIGATIONS ABSOLUTE.......................................27
SECTION 7.2 LIMITED LIABILITY OF AGENT AND BANKS.......................28
ARTICLE VIII THE AGENT..........................................................28
SECTION 8.1 AUTHORIZATION AND ACTION...................................28
SECTION 8.2 AGENT'S RELIANCE, ETC......................................29
SECTION 8.3 THE AGENT, THE ISSUING BANK AND AFFILIATES.................30
SECTION 8.4 BANK CREDIT DECISION.......................................30
SECTION 8.5 INDEMNIFICATION............................................30
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SECTION 8.6 SUCCESSOR AGENT............................................31
SECTION 8.7 COLLATERAL.................................................31
ARTICLE IX MISCELLANEOUS........................................................31
SECTION 9.1 AMENDMENTS, ETC............................................31
SECTION 9.2 NOTICES, ETC...............................................32
SECTION 9.3 NO WAIVER, REMEDIES........................................32
SECTION 9.4 COSTS AND EXPENSES.........................................32
SECTION 9.5 APPLICATION OF MONEY.......................................33
SECTION 9.6 SEVERABILITY...............................................33
SECTION 9.7 NON-RECOURSE LIABILITY.....................................33
SECTION 9.8 BINDING EFFECT.............................................34
SECTION 9.9 ASSIGNMENTS AND PARTICIPATIONS.............................34
SECTION 9.10 INDEMNIFICATION............................................35
SECTION 9.11 GOVERNING LAW; SUBMISSION OF JURISDICTION; VENUE; WAIVER
OF JURY TRIAL.............................................37
SECTION 9.12 HEADINGS...................................................38
SECTION 9.13 EXECUTION IN COUNTERPARTS..................................38
Exhibit A Form of DSR Letter of Credit
Exhibit B Form of DSR LOC Loan Promissory Note
Exhibit C Form of Assignment and Acceptance
Exhibit D Amortization Schedule
Exhibit E Form of DSR LOC Term Loan Promissory Note
Exhibit F Form of DSR Bond Note
Schedule 1 Applicable Margin
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DEBT SERVICE RESERVE LETTER OF CREDIT
AND REIMBURSEMENT AGREEMENT
This DEBT SERVICE RESERVE LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT,
dated as of March 1, 2000 (this "AGREEMENT"), is entered into by and among (1)
AES RED OAK, L.L.C., a Delaware limited liability company (the "COMPANY"); (2)
DRESDNER BANK AG, a banking corporation under the laws of the Republic of
Germany, acting through its New York Branch, as the Issuing Bank (the "ISSUING
BANK"); (3) DRESDNER BANK AG, a banking corporation under the laws of the
Republic of Germany, acting through its New York Branch, in its individual
capacity, together with each other bank that becomes a party hereto pursuant to
Section 2.19 or Section 9.9 (each, including the Issuing Bank, a "BANK" and
collectively, the "BANKS"); and (4) DRESDNER BANK AG, a banking corporation
under the laws of the Republic of Germany, acting through its New York Branch,
as agent for the Banks (in such capacity, together with its successors in such
capacity, the "AGENT").
WHEREAS, the Company is constructing and will own a gas-fired combined
cycle electric generating facility in the Borough of Sayreville, New Jersey,
with a net design capacity of approximately 830 megawatts and related property
and facilities;
WHEREAS, the Company intends to finance the construction and equipping
of the Facility primarily through the issuance of the Bonds, the net proceeds of
which shall be received by the Company and shall be used to pay project costs
related to the Facility;
WHEREAS, the Company has duly authorized the creation and issuance of
the Bonds pursuant to the Indenture; and
WHEREAS, in order to provide assurances in respect of the Company's
satisfaction of its payment obligations under the Bonds and the Indenture, the
Company has requested that the Issuing Bank agree to issue and the Banks
participate in, and the Issuing Bank is willing to agree to issue and the Banks
are willing to participate in, the DSR Letter of Credit upon the terms and
conditions hereinafter set forth.
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS.
(a) Capitalized terms used but not otherwise defined herein shall have
the respective meanings ascribed to them in the Indenture.
(b) The following terms are used in this Agreement with the following
respective meanings:
"ADJUSTED BASE RATE" means the higher of (i) the Federal Funds Rate
plus .50% and (ii) the Reference Rate.
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"APPLICABLE MARGIN" means, in the case of the determination of the
interest rate on Base Rate Loans and Eurodollar Rate Loans, the margin
applicable to Base Rate Loans or Eurodollar Rate Loans, in each case as set
forth under the applicable heading and for the applicable rating category as set
forth on Schedule 1, and in the case of the determination of the letter of
credit fee, the amount set forth for the applicable rating category under
"Letter of Credit Fee" on Schedule 1.
"ASSIGNMENT AND ACCEPTANCE" means an Assignment and Acceptance entered
into by a Bank and another Person, substantially in the form of Exhibit C.
"BANK" has the meaning set forth in the preamble of this Agreement.
"BASE RATE LOAN" means a DSR Loan, or portion thereof, bearing interest
at a rate determined with reference to the Adjusted Base Rate.
"BOND CONVERSION EVENT" means, in respect of a DSR LOC Loan, the
failure by the Company to have repaid (i) at least 50% of the original amount of
such DSR LOC Loan on the date 30 months after the making of such DSR LOC Loan or
(ii) the full amount of such DSR LOC Loan by the DSR LOC Loan Required Payment
Date.
"BUSINESS DAY" means a day (other than a Saturday or Sunday) on which
banks are open for business in New York, New York, and with respect to all
notices and determinations in connection with, advances of, continuations of,
conversions from and to, and payments of principal and interest on, Eurodollar
Rate Loans, any day that is also a day for trading by and between banks in U.S.
dollar deposits in the London interbank Eurodollar market.
"CLOSING DATE" means the date on which the conditions precedent set
forth in Section 3.1 have been fulfilled.
"COMMITMENT" of a Bank at any time means (i) an amount equal to the
product of (A) the Maximum Stated Amount at such time, as the same may be
reduced from time to time in accordance with the provisions of this Agreement,
and (B) such Bank's Percentage Interest as set forth opposite the name of such
Bank on the signature pages hereof, or if one or more Assignments and
Acceptances shall have been entered into, as set forth in the register of the
Agent set forth for such purpose, or (ii) as the context may require, the
obligation of such Bank to make loans in an aggregate amount of principal at any
time outstanding not exceeding such amount.
"COMMITMENTS" means all of the Commitments.
"COMPANY" has the meaning set forth in the preamble of this Agreement.
"CREDIT DOCUMENTS" means this Agreement, the Security Documents, the
Collateral Agency Agreement, each DSR Note and the DSR Letter of Credit.
"DEEMED DSR LOC LOANS" has the meaning set forth in Section 6.3.
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"DEFAULT" means an event that with the giving of any required notice
and/or the lapse of any required time would constitute an Event of Default.
"DOLLARS" and "$" means freely transferable United States dollars.
"DRAWING" means a drawing under the DSR Letter of Credit.
"DSR BOND" has the meaning set forth in Section 2.7(h).
"DSR BOND NOTE" has the meaning set forth in Section 2.7(j).
"DSR LETTER OF CREDIT" means a letter of credit in favor of the
Collateral Agent substantially in the form of Exhibit A, issued or to be issued
by the Issuing Bank.
"DSR LOAN" means any DSR LOC Loan, DSR LOC Term Loan or DSR Bond, as
applicable.
"DSR LOC LOAN" has the meaning set forth in Section 2.4.
"DSR LOC LOAN NOTE" has the meaning set forth in Section 2.14(a).
"DSR LOC LOAN REQUIRED PAYMENT DATE" means, in respect of each DSR LOC
Loan, the date five years from the date such DSR LOC Loan is made by the Banks
pursuant to the terms of this Agreement.
"DSR LOC TERM LOAN" means a DSR LOC Term Loan made as a result of the
occurrence of a Step-Up Event either to fund a Drawing made upon such occurrence
or by way of the conversion of then outstanding DSR LOC Loans.
"DSR LOC TERM LOAN NOTE" has the meaning set forth in Section 2.7(f).
"DSR LOC TERM LOAN REQUIRED PAYMENT DATE" means, in respect of each DSR
LOC Term Loan, the fortieth (40th) Quarterly Date occurring after such DSR LOC
Term Loan is made by the Banks pursuant to the terms of this Agreement.
"DSR NOTE" means any DSR LOC Note, DSR LOC Term Note or DSR Bond Note,
as applicable.
"EUROCURRENCY LIABILITIES" has the meaning set forth in Regulation D.
"EUROCURRENCY RESERVE PERIOD" has the meaning set forth in Section
2.15(b).
"EURODOLLAR RATE" means, for any Interest Period with respect to a
Eurodollar Rate Loan, the rate PER ANNUM equal to the average (rounded upwards,
if necessary, to the nearest 1/100 of 1%) of the offered rates which appear on
the Telerate page 3750, British Bankers Association Interest Settlement Rates
for deposits in Dollars (or such other system for the purpose of displaying
rates of leading reference banks in the London interbank market, as designated
by the
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Agent) as of 11:00 a.m. (London time) on the day two Business Days prior to the
first day of such Interest Period in an amount approximately equal to the
principal amount of the Eurodollar Rate Loan to which such Interest Period is to
apply and for a period of time comparable to such Interest Period.
"EURODOLLAR RATE LOAN" means a DSR Loan, or portion thereof, bearing
interest at a rate determined with reference to the Eurodollar Rate.
"EVENT OF DEFAULT" has the meaning set forth in Section 6.1.
"EXCLUDED TAXES" has the meaning set forth in Section 2.17(a).
"EXPIRATION DATE" means seven years from the Issue Date; PROVIDED,
HOWEVER, that the Expiration Date of the DSR Letter of Credit may be extended as
set forth in Section 2.2(b) whereupon the Expiration Date of the DSR Letter of
Credit shall be such extended Expiration Date.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate
PER ANNUM equal for each day during such period to the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three federal funds brokers of
recognized standing selected by it.
"GUARANTEED PROVISIONAL ACCEPTANCE DATE" has the meaning set forth in
the EPC Contract.
"INDEMNIFIED PARTY" has the meaning set forth in Section 9.10.
"INDENTURE" means the Trust Indenture dated as of the date hereof by
and among the Company and The Bank of New York as Trustee and Depository Bank.
"INTEREST PERIOD" means with respect to each Eurodollar Rate Loan, a
period commencing on the date specified in the applicable Notice of Interest
Rate Election and ending one, three or six calendar months thereafter, as the
Company may elect in the applicable Notice of Interest Rate Election; PROVIDED,
that:
(a) any Interest Period which would otherwise end on a day which is not
a Business Day shall be extended to the next succeeding Business Day unless such
Business Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Business Day;
(b) any Interest Period which begins on the last Business 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
Business Day of a calendar month;
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(c) no Interest Period shall be selected to be applicable to a DSR Loan
if such Interest Period ends after the next scheduled principal payment date
therefor pursuant to this Agreement and the relevant DSR Note unless, at the
time of such selection, there are DSR Loans outstanding of the same type (i.e.,
DSR LOC Loans, DSR LOC Term Loans or DSR Bonds) the Interest Period(s)
applicable to which end on or before such scheduled payment date which the
Company reasonably determines are in an aggregate principal amount at least
equal to the amount of such next scheduled principal payment; and
(d) no Interest Period shall end after the latest relevant Required
Payment Date.
"ISSUE DATE" means the Business Day on which the Issuing Bank shall
issue the DSR Letter of Credit in accordance with Section 2.2(a) and Section
3.2.
"ISSUING BANK" has the meaning set forth in the preamble of this
Agreement.
"LOAN OBLIGATIONS" means the Drawings and the principal of all DSR LOC
Loans, DSR LOC Term Loans and DSR Bonds (including but not limited to the
Company's obligations in respect of amounts not yet disbursed).
"MAXIMUM STATED AMOUNT" means at any time, the highest amount set forth
as a Stated Amount Value shown in Schedule 1 to the DSR Letter of Credit as in
effect at such time.
"MORTGAGE BASIS" means in respect of each DSR LOC Term Loan, an
amortization schedule which, taking into account the interest rate applicable to
such DSR LOC Term Loan determined in accordance with Section 2.7(e) and assuming
payments are made on Interest Payment Dates, results in levelized payment of the
principal of and interest on such DSR LOC Term Loan to and including the DSR LOC
Term Loan Required Payment Date applicable thereto.
"NON-RECOURSE PARTY" has the meaning specified in Section 9.7.
"NOTICE DATE" has the meaning set forth in Section 2.2(b).
"NOTICE OF INTEREST RATE ELECTION" has the meaning set forth in Section
2.6(b).
"OBLIGATIONS" means all of the Loan Obligations and any and all other
obligations of the Company to the Issuing Bank, the Banks or the Agent under or
in connection with the Credit Documents, whether for interest, fees, expenses,
indemnification or otherwise.
"PARTICIPANT" has the meaning set forth in Section 9.9(b).
"PERCENTAGE INTEREST" means, for each Bank, the fraction, expressed as
a percentage, where the numerator is the Commitment of such Bank and the
denominator is the aggregate of all the Commitments held by all the Banks, as
set forth on the signature page opposite the name and signature of each
respective Bank or if applicable, in Schedule 1 to any Assignment and
Acceptance.
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"POST-DEFAULT RATE" means the rate otherwise applicable under Section
2.6(a) plus 2.0%.
"PURCHASING BANK" has the meaning set forth in Section 9.9(a).
"QUARTERLY DATE" means each Bond Payment Date during the term of this
Agreement.
"REFERENCE RATE" means the variable rate of interest PER ANNUM
officially announced or published by the Agent from time to time as its "prime
rate" or "reference rate," such rate being set by the Agent as a general
reference rate of interest, taking into account such factors as the Agent may
deem appropriate, it being understood that many of the Agent's commercial or
other loans are priced in relation to such rate, that it is not necessarily the
lowest or best rate actually charged to any customer and that the Agent may make
various commercial or other loans at rates of interest having no relationship to
such rate. For purposes of this Agreement, each change in the Reference Rate
shall be effective as of the opening of business on the date announced as the
effective date of the change in such "prime rate" or "reference rate."
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REPLACEMENT BANK" has the meaning set forth in Section 2.19.
"REQUIRED BANKS" means, at any time, Banks (one of which shall be the
Agent) owed at least 66-2/3% of the sum of Loan Obligations then outstanding
and/or the Commitments; PROVIDED, HOWEVER, that, if and so long as there are
only two Banks, then "Required Banks" shall mean both of such Banks.
"REQUIRED PAYMENT DATE" means in the case of any DSR LOC Loan, the DSR
LOC Loan Required Payment Date, in the case of a DSR LOC Term Loan, the
applicable DSR LOC Term Loan Required Payment Date or in the case of any DSR
Bond, the Final Maturity Date.
"STATED AMOUNT" means the amount (not to exceed the Maximum Stated
Amount) available to be drawn under the DSR Letter of Credit as of each
Quarterly Date, which amount shall equal the Stated Amount Value for such date
as in effect from time to time pursuant to the terms of this Agreement.
"STATED AMOUNT VALUE" means, for any date, the Stated Amount Value for
such date set forth in Schedule 1 to the Letter of Credit and as adjusted from
time to time pursuant to Section 2.2(a)(iii).
"STEP-UP EVENT" means (i) the failure of the DSR Letter of Credit to
have been extended or replaced at least 45 days prior to the expiration date of
such DSR Letter of Credit or (ii) if the credit rating of the Issuing Bank is
less than the Required Rating, the failure of the DSR Letter of Credit to have
been replaced within 45 days after the failure to satisfy the requirements of
the Required Rating with a replacement letter of credit issued by an issuer that
satisfies the requirements of the Required Rating and, in either case, the
Collateral Agent has made a
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Drawing on such DSR Letter of Credit in an amount sufficient to fund the Debt
Service Reserve Account up to the DSRA Required Balance.
"TAXES" means any and all present or future income, stamp, transfer,
turnover and other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority, and any and all interest, penalties, claims or
other liabilities arising under or relating thereto, including those imposed on
any of the Banks or on payments to be made to or received by any of them from
the Company hereunder.
"TERMINATION NOTICE" has the meaning set forth in Section 2.2(f).
SECTION 1.2 CONSTRUCTION.
In this Agreement, unless expressly specified to the contrary: the
singular includes the plural and the plural the singular; words importing any
gender include the other genders; references to statutes or regulations are to
be construed as including all statutory or regulatory provisions consolidating,
amending or replacing the statute or regulation referred to; references to
"writing" include printing, typing, lithography and other means of reproducing
words in a tangible, visible form, but shall not include electronic mail; the
words "including," "includes" and "include" shall be deemed to be followed by
the words "without limitation;" references to articles, sections (or
subdivisions of sections), recitals, appendices, exhibits, annexes or schedules
are to those of this Agreement; references to agreements and other instruments
shall be deemed to include all amendments and other modifications to such
agreements and instruments, but only to the extent such amendments and other
modifications are not prohibited by the terms of this Agreement; references to
Persons include their respective permitted successors and assigns and, in the
case of Governmental Authorities, Persons succeeding to their respective
functions and capacities; and all accounting terms used in this Agreement shall
be interpreted, all accounting determinations under this Agreement shall be made
and all financial statements required to be delivered under this Agreement shall
be prepared in accordance with GAAP as in effect from time to time, on a basis
consistent with the most recent audited financial statements, if any, of the
relevant Person delivered to the Agent, or otherwise reasonably acceptable to
the Agent.
ARTICLE II
DSR LETTER OF CREDIT
SECTION 2.1 COMMITMENTS.
Each Bank irrevocably agrees severally, on the terms and conditions
contained in this Agreement, to participate in the DSR Letter of Credit and each
Drawing thereunder in the Percentage Interest of such Bank and in an aggregate
amount not to exceed at any time such Bank's Commitment.
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SECTION 2.2 AMOUNT AND TERM OF DSR LETTER OF CREDIT.
(a) Subject to the terms and conditions contained in this Agreement:
(i) The Issuing Bank irrevocably agrees to issue the DSR Letter of
Credit on the Closing Date for the account of the Company and in the
Stated Amount equal to the highest Stated Amount Value set forth in
Schedule 1 to the form of the DSR Letter of Credit attached to this
Agreement as Exhibit A, as in effect on the Closing Date. Schedule 1 to
the DSR Letter of Credit when issued shall include a schedule of Stated
Amount Values in effect for the entire term of the DSR Letter of
Credit. For each date during the term of the DSR Letter of Credit, the
Stated Amount Value shall be the sum of (x) the total amount of
principal and interest on the Bonds payable on the first two Quarterly
Dates next succeeding such date, plus (y) an amount equal to six
months' interest on the amount described in the preceding clause (i),
computed at a rate per annum equal to (A) 2% plus (B) the Eurodollar
Rate for a three month Interest Period as in effect two Business Days
prior to the Issue Date (or in the case of an extension of the
Expiration Date of the DSR Letter of Credit, two Business Days prior to
the date on which the Issuing Bank issues its notice of confirmation
extending the Expiration Date of the DSR Letter of Credit) plus (C) 50
basis points.
(ii) If the DSRA Required Balance for any period is reduced by a
prepayment of the principal of the Bonds, the Stated Amount Values for
such period shall be correspondingly reduced.
(iii) Each of the Stated Amount Values set forth in Schedule 1 to
the DSR Letter of Credit as in effect from time to time shall be
reduced from time to time in accordance with the provisions of Section
2.2(c)(ii) and (e).
(b) On or prior to the date that is 120 days prior to the original
Expiration Date of the DSR Letter of Credit or any extension thereof pursuant to
this Section 2.2(b) (the "NOTICE DATE"), the Agent may on behalf of the Banks in
accordance with Section 2.19(a) extend the original or extended Expiration Date,
as the case may be, of such DSR Letter of Credit for an additional one or more
years beyond the original or extended Expiration Date, as the case may be. The
Agent shall notify the Company, the Collateral Agent and the Trustee of the
Banks' decision regarding such extension on or prior to the applicable Notice
Date. Failure of the Agent to provide the Company, the Collateral Agent and the
Trustee with written notice of renewal on or prior to the applicable Notice Date
in respect of the original Expiration Date or any extended Expiration Date, as
the case may be, or imposition of additional terms and conditions adverse to the
Company (in the Company's reasonable judgment) in respect of such renewal, shall
be deemed to constitute non-renewal of the DSR Letter of Credit beyond the
original or extended Expiration Date, as the case may be. If the Agent agrees to
extend the then current Expiration Date, the Expiration Date of the DSR Letter
of Credit shall, effective upon the giving of such notice to the Company, be
such extended date.
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(c) (i) If a Step-Up Event shall have occurred and the Collateral Agent
shall have made a Drawing in accordance with Section 2.4(b), the DSR
Letter of Credit shall thereupon terminate.
(ii) If a Bond Conversion Event shall have occurred, and the Agent,
subject to the approval of the Required Banks, elects to convert any
DSR LOC Loan into a DSR Bond in accordance with Section 2.7(h), each of
the Stated Amount Values set forth in Schedule 1 to the DSR Letter of
Credit as then in effect shall be reduced by an amount equal to the
amount of the DSR LOC Loan so converted, and the Maximum Stated Amount
correspondingly reduced.
(d) [Reserved].
(e) To the extent the DSRA Required Balance for any period is reduced
by a prepayment of the principal of the Bonds at a time when there are amounts
on deposit in the Debt Service Reserve Account, then the Stated Amount Value for
each affected date, as set forth in Schedule 1 to the DSR Letter of Credit,
shall be reduced to an amount equal to not less than the excess of (i) the DSRA
Required Balance (with interest calculated as provided for in Section 2.2(a)(i))
applicable to such affected date, over (ii) the amount on deposit in the Debt
Service Reserve Account on the date such prepayment is made.
(f) The Issuing Bank shall have the right, upon the occurrence and
during the continuance of an Event of Default, to deliver to the Collateral
Agent and the Trustee a notice in the form of Annex 2 to the DSR Letter of
Credit (a "TERMINATION NOTICE"), which notice shall be given at least sixty (60)
days prior to the date of termination referred to in such notice. After the
delivery by the Issuing Bank of a Termination Notice, the Stated Amount shall be
neither increased, nor reinstated upon payment of any DSR LOC Loans,
notwithstanding any other provision of this Agreement to the contrary.
(g) The Agent shall, solely for informational purposes, deliver to the
Company a copy of any Termination Notice given to the beneficiary under the DSR
Letter of Credit; PROVIDED, HOWEVER, that the Issuing Bank's ability to
terminate the DSR Letter of Credit shall not be contingent upon the Agent's
delivery to the Company of such notice and that neither the Agent nor the Banks
shall incur any liability whatsoever as a result of the Agent's failure to
deliver such notice to the Company.
SECTION 2.3 PARTICIPATION IN DSR LETTER OF CREDIT.
Simultaneously with the issuance of the DSR Letter of Credit, the
Issuing Bank shall be deemed to have sold and transferred to each Bank, and each
Bank shall be deemed to have purchased and received from the Issuing Bank, in
each case irrevocably and without any further action by any party, an undivided
interest and participation in the DSR Letter of Credit, each Drawing and the
other Loan Obligations in respect thereof in an amount equal to such Bank's
Percentage Interest therein. The Agent shall promptly advise each Bank of any
reduction in the Maximum Stated Amount, change in the Stated Amount or
Expiration Date in respect of the DSR Letter of Credit or the cancellation or
other termination of the DSR Letter of Credit and any
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Drawing; PROVIDED, HOWEVER, that failure to provide such notice shall not limit
or impair the rights of the Agent hereunder or under the Financing Documents.
SECTION 2.4 DRAWING AND REIMBURSEMENT.
(a) The payment by the Issuing Bank of a Drawing shall constitute the
making by the Issuing Bank of a loan to the Company in the amount of such
payment. In the event that a Drawing is not repaid by the Company by 10:00 a.m.
(New York City time), on the day of such Drawing, the Agent shall promptly
notify each other Bank. Each such Bank (including the Issuing Bank in its
capacity as a Bank) shall, on the day of such notification, make a loan to the
Company, which shall be used to repay the applicable portion of the Issuing
Bank's loan with respect to such Drawing, in an amount equal to the amount of
such Bank's Percentage Interest in such Drawing, for application to repay the
Issuing Bank (each such loan by a Bank to be referred to as a "DSR LOC LOAN"),
and shall deliver to the Agent for the Issuing Bank's account, on the day of
such notification and in immediately available funds, the amount of such DSR LOC
Loan. In the event that any Bank fails to make available to the Agent for the
account of the Issuing Bank the amount of such DSR LOC Loan, the Issuing Bank
shall be entitled to recover such amount on demand from such Bank together with
interest thereon at the Federal Funds Rate and until such reimbursement is made,
the unreimbursed amount of the Issuing Bank's loan shall be deemed to be a DSR
LOC Loan for all purposes of this Agreement.
(b) If a Step-Up Event shall have occurred, the Collateral Agent shall
(i) make a Drawing on the DSR Letter of Credit in an amount equal to the lesser
of (A) the Stated Amount of the DSR Letter of Credit as in effect immediately
prior to such Drawing and (B) the positive difference between (x) the DSRA
Required Balance and (y) amounts then on deposit in the Debt Service Reserve
Account (such Drawing shall be funded as a DSR LOC Term Loan), and (ii) deposit
such amount in the Debt Service Reserve Account, and the DSR Letter of Credit
shall thereupon terminate.
SECTION 2.5 FEES.
The Company shall pay the following fees to the Agent for the
respective accounts of the Persons specified below:
(a) from and including the Issue Date, for the respective accounts of
the Banks, a letter of credit fee equal to the product of (x) the average daily
Maximum Stated Amount and (y) the Applicable Margin for the letter of credit
fee, payable quarterly in arrears on each Quarterly Date occurring after the
Issue Date; and
(b) from and including the Issue Date, for the account of the Issuing
Bank, a fronting fee equal to the product of (x) the average daily Maximum
Stated Amount and (y) 0.15% per annum payable quarterly in arrears on each
Quarterly Date occurring after the Issue Date.
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SECTION 2.6 INTEREST.
(a) RATE. The Company shall pay interest on the unpaid principal amount
of each DSR Loan from the date such DSR Loan is made until such principal amount
has been paid in full as follows:
(i) BASE RATE LOANS. As to Base Rate Loans, at a rate per annum
equal to the sum of (x) the Adjusted Base Rate plus (y) the Applicable
Margin, payable monthly in arrears on the first Business Day of each
month;
(ii) EURODOLLAR RATE LOANS. As to Eurodollar Rate Loans, at a rate
PER ANNUM equal to the sum of (x) the Eurodollar Rate plus (y) the
Applicable Margin, payable on the last day of the applicable Interest
Period or, if such Interest Period exceeds three months, at intervals
of three months from the first day of such Interest Period; and
(iii) POST-DEFAULT RATE. During an Event of Default (and whether
before or after judgment), each DSR LOC Loan, DSR LOC Term Loan and DSR
Bond (whether or not due) and, to the maximum extent permitted by
Applicable Law, each other amount due and payable under the Credit
Documents shall bear interest at a rate per annum equal to the
applicable Post-Default Rate.
(b) METHOD OF ELECTING INTEREST RATES. (i) Each DSR Loan shall
constitute a Base Rate Loan unless the Company elects otherwise pursuant to the
following provisions of this Section 2.6(b).
(ii) Each DSR Loan shall constitute a Base Rate Loan or a
Eurodollar Rate Loan as the Company may elect in accordance with this
Section 2.6(b). If no such election is timely made with respect to a
DSR Loan, such DSR Loan shall constitute a Base Rate Loan in accordance
with Section 2.6(b)(i); PROVIDED THAT, in the case of DSR LOC Term
Loans or DSR Bonds that arise on the occasion of a conversion from DSR
LOC Loans in accordance with Section 2.7(d) or 2.7(h), such DSR LOC
Term Loans shall be continued as the same type of DSR Loan (i.e., Base
Rate Loan or Eurodollar Rate Loan), and if any such DSR LOC Loan was a
Eurodollar Rate Loan, the then current Interest Period shall continue
after such conversion, until the end of such Interest Period, at which
time the provisions for election of Interest Periods contained in this
Section 2.6(b) shall apply. The Company may from time to time elect to
change or continue the interest rate borne by each DSR Loan, subject to
the conditions set forth below, as follows:
(A) with respect to DSR Loans that are Base Rate Loans, the
Company may elect to convert all or any portion of such DSR Loans
to Eurodollar Rate Loans as of any Business Day; and
(B) with respect to DSR Loans that are Eurodollar Rate Loans,
the Company may elect to convert all or any portion of such DSR
Loans to Base Rate Loans or elect to continue all or any portion of
such DSR Loans as Eurodollar
11
Rate Loans for an additional Interest Period, in each case
effective on the last day of the then current Interest Period
applicable to such DSR Loans.
Each such election shall be made by delivering a notice (a "NOTICE OF
INTEREST RATE ELECTION") to the Agent (1) in the case of a conversion
to or continuation of a Eurodollar Rate Loan, not later than 10:00 a.m.
(New York City time) on the third Business Day prior to the day on
which such conversion or continuation is to be effective or (2) in the
case of a conversion to a Base Rate Loan, at any time prior to the day
on which such conversion is to be effective. Each Notice of Interest
Rate Election shall be in writing (including facsimile transmission) or
by voice, promptly confirmed in writing. A Notice of Interest Rate
Election may, if it so specifies, apply to only a portion of the
aggregate principal amount of the relevant DSR Loan.
(iii) Each Notice of Interest Rate Election shall specify:
(A) the DSR Loans (or portion thereof) together with amount of
each thereof to which such notice applies;
(B) the date on which the conversion or continuation selected
in such notice is to be effective, which shall comply with the
applicable clause of subsection (i) above;
(C) if DSR Loans are to be converted, each new type of DSR
Loan together with amount thereof, and if such new DSR Loans are
Eurodollar Rate Loans, the duration of the initial Interest Period
applicable thereto; and
(D) if such DSR Loans are to be continued as Eurodollar Rate
Loans for additional Interest Periods, the duration of such
Interest Periods.
Each Interest Period specified in a Notice of Interest Rate Election
shall comply with the provisions of the definition of Interest Period.
No conversion into or continuation of a Eurodollar Rate Loan shall be
permitted when a Default or an Event of Default has occurred and is
continuing, and if a Default or an Event of Default has occurred and is
continuing, each Eurodollar Rate Loan shall automatically be converted
into a Base Rate Loan on the last day of the then current Interest
Period applicable thereto.
(iv) A Notice of Interest Rate Election shall not be revocable by
the Company. If the Company fails to deliver a timely Notice of
Interest Rate Election to the Agent for any Eurodollar Rate Loan, such
DSR Loans shall be converted into Base Rate Loans on the last day of
the then current Interest Period applicable thereto.
(v) Anything to the contrary in this Agreement notwithstanding, at
no time shall there be outstanding more than four different Interest
Periods applicable to the DSR Loans, and Eurodollar Rate Loans that
bear a single Interest Period shall not be less than $1 million and
shall be in integral multiples of $100,000.
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(c) FUNDING LOSSES. If the Company makes any payment of principal with
respect to any Eurodollar Rate Loan or any Eurodollar Rate Loan is converted to
a Base Rate Loan on any day other than the last day of an Interest Period
applicable thereto, or if the Company fails to borrow, repay or prepay any
Eurodollar Rate Loan after notice has been given to the Agent in accordance with
the terms hereof, the Company shall reimburse the Agent, for the ratable account
of the Banks, within 30 days after demand for any resulting loss or expense
incurred by them, including any loss incurred in obtaining, liquidating or
employing deposits from third parties. Without prejudice to the foregoing, the
Company shall indemnify the Agent and the Banks against any direct (as opposed
to consequential) loss or expense that the Agent or the Banks may sustain or
incur as a consequence of a failure by the Company in payment of principal of,
or interest on, any Eurodollar Rate Loan, or any part thereof, including any
interest, premium or penalty paid by the Agent or any Bank to lenders of funds
borrowed by it or deposited with it for the purpose of making or maintaining
such Eurodollar Rate Loan. A certificate as to the amount of any such loss or
expense in reasonable detail (specifying the basis of such loss or expense)
shall be promptly submitted by the Agent, or by any Bank through the Agent, to
the Company and shall be conclusive and binding as to the amount thereof, absent
manifest error.
(d) BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR UNFAIR. If on or
prior to the first day of any Interest Period for any Eurodollar Rate Loan:
(i) the Agent or any Bank determines, in its reasonable judgment,
that deposits in Dollars (in the applicable amounts) are not being
offered to the Agent or such Bank in the relevant market for such
Interest Period, or
(ii) the Agent or such Bank, in its reasonable judgment, shall
determine that the Eurodollar Rate will not adequately and fairly
reflect the cost to the Agent or such Bank of funding its Eurodollar
Rate Loans for such Interest Period,
the Agent, or such Bank through the Agent, shall forthwith give notice thereof
(which notice shall describe in reasonable detail the basis for such
determination) to the Company, whereupon until the Agent, or such Bank through
the Agent, notifies the Company that the circumstances giving rise to such
suspension no longer exist, (A) the obligations of the Agent or such Bank to
make or continue Eurodollar Rate Loans or to convert outstanding DSR Loans into
Eurodollar Rate Loans shall be suspended and (B) each outstanding Eurodollar
Rate Loan, or if a Bank only shall be affected, each Eurodollar Rate Loan held
by such Bank shall be converted into a Base Rate Loan on the last day of the
then current Interest Period applicable thereto.
(e) MAXIMUM RATE. This Agreement is hereby expressly limited so that in
no contingency or event, whether by reason of acceleration of the maturity of
any indebtedness hereunder or otherwise, shall the interest contracted for or
charged or received by the Banks exceed the maximum amount permissible under
Applicable Law. If, from any circumstance whatsoever, interest would otherwise
be payable to the Banks in excess of the maximum lawful amount, the interest
payable to the Banks shall be reduced to the maximum amount permitted under
Applicable Law, and the amount of interest for any subsequent period, to the
extent less
13
than that permitted by Applicable Law, shall to that extent be increased by the
amount of such reduction.
SECTION 2.7 REPAYMENT.
(a) The Company shall repay the principal amount of each DSR LOC Loan
as, when and to the extent monies are available for such purpose pursuant to
Section 3.10 of the Collateral Agency Agreement. Each DSR LOC Loan shall mature
on the applicable DSR LOC Loan Required Payment Date; PROVIDED, that the
outstanding principal of each such DSR LOC Loan shall be due and payable as,
when and to the extent that monies are available for the purpose of repayment of
principal pursuant to Section 3.10 of the Collateral Agency Agreement.
(b) The Issuing Bank shall reduce the Stated Amount by the outstanding
principal amount of each DSR LOC Loan.
(c) Subject to Sections 2.2 and 6.2, the Issuing Bank shall, upon
receipt of written notice from the Company, reinstate the Stated Amount to the
DSR Letter of Credit to the extent of any repayment or prepayment of the
principal amount of any DSR LOC Loan; PROVIDED, that such reinstatement shall
not cause the Stated Amount to exceed the Stated Amount Value for such date or
(when added to the cash balance in the Debt Service Reserve Account) to exceed
the DSRA Required Balance (with interest calculated as provided for in Section
2.2(a)(i)) as then in effect.
(d) Notwithstanding the foregoing provisions of this Section 2.7, if a
Step-Up Event shall have occurred, all outstanding DSR LOC Loans shall be
automatically converted into DSR LOC Term Loans on the date the Collateral Agent
makes the Drawing pursuant to Section 2.4(b), and such DSR LOC Term Loan shall
for purposes of this Agreement be treated as made when so converted.
(e) Each DSR LOC Term Loan shall (i) amortize and be payable on
successive Quarterly Dates in amounts of principal and interest computed on a
Mortgage Basis, and (ii) finally mature and be due and payable on the applicable
DSR LOC Term Loan Required Payment Date in the amount of remaining principal
thereof and accrued interest thereon.
(f) Within thirty (30)-days after the date of the automatic conversion
specified in Section 2.7(d), or such shorter period agreed to by the Agent and
the Company, the Company shall deliver to the Agent an appropriately completed
DSR LOC Term Loan Note substantially in the form of Exhibit E (each a "DSR LOC
TERM LOAN NOTE").
(g) The Company shall pay interest and principal on each DSR LOC Term
Loan quarterly in arrears in accordance with Section 3.10 of the Collateral
Agency Agreement. Payments of DSR LOC Term Loans shall not give rise to a
reinstatement of the Stated Amount of the DSR Letter of Credit.
(h) If a Bond Conversion Event shall have occurred, then from and after
the date such Bond Conversion Event occurs, the Agent may, subject to the
approval of the Required Banks
14
and upon thirty (30) days' prior written notice to the Company and the other
Senior Parties, convert any such DSR LOC Loan into a substitute security (such
converted DSR LOC Loan, a "DSR BOND"), the interest and principal of which shall
be payable at the same level of priority as the Bonds. The Company shall pay the
entire remaining principal amount of such DSR Bond in accordance with Section
3.10 of the Collateral Agency Agreement.
(i) Each DSR Bond shall (x) amortize and be payable on successive
Quarterly Dates in amounts of principal (proportionate in amount to the amount
of the Bonds being paid) and interest computed on the same amortization schedule
as the Bonds and (y) finally mature and be due and payable on the Final Maturity
Date in the amount of remaining principal thereof and interest accrued thereon.
(j) Upon the expiration of the thirty (30)-day period specified in
Section 2.7(h), or such shorter period agreed to by the Agent and the Company,
the Company shall deliver to the Agent an appropriately completed DSR Bond Note
substantially in the form of Exhibit F (each a "DSR BOND NOTE").
(k) The Company shall pay interest and principal on each DSR Bond
quarterly in arrears in accordance with Section 3.10 of the Collateral Agency
Agreement. Payments of DSR Bonds shall not give rise to a reinstatement of the
Stated Amount of the DSR Letter of Credit.
SECTION 2.8 PREPAYMENTS.
The Company may, at any time and from time to time on any Business Day,
upon prior written notice to the Agent not later than 11:00 a.m. (New York City
time), at least one Business Day before the day of any prepayment of the DSR LOC
Loans, such notice stating the proposed date and aggregate principal amount of
the prepayment, and if such notice is given the Company shall, prepay without
premium or penalty, except as provided in Section 2.6(c), the outstanding
principal amounts of the DSR LOC Loans in whole or in part, together with
accrued interest to the date of such prepayment on the principal amount prepaid.
DSR LOC Term Loans and DSR Bonds shall be prepaid ratably with the Bonds in the
event the Bonds are prepaid.
All prepayments made hereunder shall be applied by the Agent and the
Banks against the installments of principal amount of outstanding DSR Loans of a
particular class (i.e., DSR LOC Loans, DSR LOC Term Loans or DSR Bonds), in
inverse order of maturity; such prepayments shall first be applied to the
prepayment of outstanding Base Rate Loans of a particular class (i.e., DSR LOC
Loans, DSR LOC Term Loans or DSR Bonds) to the extent thereof and then to the
prepayment of outstanding Eurodollar Rate Loans of such class.
SECTION 2.9 SECURITY.
The Obligations shall be secured by the Security Documents, the rights
and remedies in respect of which shall be exercised pursuant to the Collateral
Agency Agreement.
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SECTION 2.10 PAYMENTS.
(a) The Company shall make each payment hereunder and under any DSR
Note not later than 10:00 a.m. (New York City time), on the day when due to the
Agent at its address set forth in Section 9.2, in Dollars in immediately
available funds. The Agent will promptly thereafter cause to be distributed like
funds relating to the payment of principal (including reimbursement of
Drawings), interest or fees ratably (other than amounts payable for the account
of the Issuing Bank pursuant to Section 2.5(b), which shall be payable solely to
the Issuing Bank, or payable pursuant to Section 9.4) to the Banks and like
funds relating to the payment of any other amount payable to any Bank, to such
Bank, in each case to be applied in accordance with the terms of this Agreement.
The Agent may withhold from any interest payment to any Bank an amount equal to
any applicable withholding tax (including upon the failure of any Bank to
provide the forms or other documentation required under Section 2.17(e)).
(b) Unless the Agent receives notice from the Company before the date
on which any payment is due to the Banks hereunder that the Company will not
make such payment in full, the Agent may assume that the Company has made such
payment in full to the Agent on such date, and the Agent may, in reliance upon
such assumption, cause to be distributed to each Bank on such due date an amount
equal to the amount then due to such Bank. If and to the extent that the Company
has not so made such payment in full to the Agent on the date on which such
payment is due, each Bank agrees, irrevocably and without qualification or
exception, to repay to the Agent forthwith on demand such amount distributed to
such Bank together with interest thereon, for each day from the date such amount
is distributed to such Bank until the date on which such Bank repays such amount
to the Agent, at the Federal Funds Rate.
(c) All payments made by the Company to each of the Banks and the Agent
under this Agreement and the DSR Notes will be made without set-off,
counterclaim or other defense.
SECTION 2.11 COMPUTATION OF INTEREST AND FEES.
All computations of interest and fees hereunder shall be made on the
basis of a year of 360 days for the actual number of days (including the first
day but excluding the last day) occurring in the period for which such interest
or fees are payable. Each calculation and each determination by the Agent of an
interest rate hereunder shall be conclusive and binding for all purposes, absent
manifest error.
SECTION 2.12 PAYMENTS ON NON-BUSINESS DAYS.
Whenever any payment hereunder or under any DSR Note is stated to be
due on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or fees, as the case may be.
If no due date is specified for the payment of any amount payable by the Company
hereunder, such amount shall be due and payable not later than 10 Business Days
after receipt by the Company of written demand from the Agent for payment
thereof.
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SECTION 2.13 SHARING OF PAYMENTS, ETC.
(a) Each Bank agrees that if, as a result of the exercise of a right of
set-off, banker's lien or counterclaim or other similar right or the receipt of
a secured claim it receives any payment in respect of the DSR Loans or other
Obligations hereunder it shall promptly notify the Agent thereof (and the Agent
shall promptly notify the other Banks). If, as a result of such payment, such
Bank receives a greater percentage of the Obligations owed to it under this
Agreement than the percentage received by any other Bank, such Bank shall
purchase a participation (which it shall be deemed to have purchased
simultaneously upon the receipt of such payment) in the Obligations then held by
such other Banks so that all such recoveries of principal and interest with
respect to all Obligations owed to each Bank shall be pro rata on the basis of
its respective amount of such Obligations owed to all Banks; PROVIDED, that if
all or part of such proportionately greater payment received by such purchasing
Bank is thereafter recovered by or on behalf of the Company from such Bank, such
purchase shall be rescinded and the purchase price paid for such participation
shall be returned to such Bank to the extent of such recovery, but without
interest.
(b) Each Bank which receives a secured claim as described in subsection
(a) above shall, to the extent practicable, exercise its rights in respect of
such secured claim in accordance with such subsection (a) and otherwise in a
manner consistent with the rights of the Banks entitled under this Section 2.13
to share in the benefits of any recovery on such secured claim.
(c) The Company expressly consents to the foregoing arrangements and
agrees that any holder of a participation in any Obligation so purchased or
otherwise acquired of which the Company has received notice may exercise any and
all rights of set-off, banker's lien or counterclaim with respect to any and all
monies owing by the Company to such holder as fully as if such holder were a
holder of such Obligation in the amount of the participation held by such
holder.
SECTION 2.14 EVIDENCE OF DEBT.
(a) The indebtedness of the Company resulting from all DSR Loans shall
be evidenced by this Agreement and the promissory note substantially in the form
of Exhibit B in the case of the DSR LOC Loans (the "DSR LOC LOAN NOTE"), the DSR
LOC Term Loan Note and the DSR Bond Note delivered by the Company to the Agent
for the benefit of the Banks in accordance with the terms hereof.
(b) The books and accounts of the Agent shall be conclusive evidence,
absent manifest error, of the amounts of all Drawings, DSR Loans, fees, interest
and other amounts advanced, due, outstanding, payable or paid pursuant to this
Agreement or the DSR Notes.
SECTION 2.15 INCREASED COSTS AND REDUCED RETURNS.
(a) If, on or after the date hereof, the adoption of any Applicable
Law, or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration
17
thereof, or compliance by the Agent or any Bank with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency:
(i) shall subject the Agent or such Bank to any tax, duty or other
charge (other than routine examination fees or Taxes) with respect to
the Eurodollar Rate Loans, the DSR Notes or its obligation to make or
continue Eurodollar Rate Loans, or shall change the basis of taxation
of payments to the Agent or any Bank of the principal of or interest on
its Eurodollar Rate Loans or any other amounts due under this Agreement
in respect of its Eurodollar Rate Loans or its obligation to make or
continue DSR Loans or Eurodollar Rate Loans (except for changes in the
rate of tax on the net income of the Agent or such Bank imposed by the
federal, state or local jurisdiction in which the Agent's or such
Bank's principal executive office is located); or
(ii) shall impose, modify or deem applicable any reserve, special
deposit or similar requirement (including any such requirement imposed
by the Board of Governors of the Federal Reserve System, but excluding
with respect to any Eurodollar Rate Loan any such requirement provided
in Section 2.17(b)), against assets of, deposits with or for the
account of, or credit extended by, the Agent or any Bank or shall
impose on the Agent or any Bank or on the London interbank market any
other condition affecting the Eurodollar Rate Loans, the DSR Notes or
its obligation to advance Eurodollar Rate Loans;
and the result of any of the foregoing is to increase the cost to the Agent or
such Bank of making or continuing any Eurodollar Rate Loan or to reduce the
amount of any sum received or receivable by the Agent or such Bank under this
Agreement or under the DSR Notes with respect thereto by an amount deemed by the
Agent or such Bank to be material, then, the Agent, or such Bank through the
Agent, shall deliver to the Company as promptly as practicable a certificate
setting forth in reasonable detail the additional amounts that the Agent or such
Bank, as the case may be, determines will fully compensate it for such
reduction, increased cost or payment and the basis for the determination of such
amount; PROVIDED, that the Company shall not be obligated to compensate the
Agent or any Bank for the amount of such increased cost incurred with respect to
a period of time prior to the date which is 90 days before the date on which the
Agent first notifies the Company of a claim for such compensation or that an
event had occurred which will entitle the Agent or a Bank to such compensation.
Any such amount claimed by the Agent or any Bank shall, in the case of clause
(i) above, be net of applicable tax savings, if any, directly attributable
thereto. Within 30 days after demand by the Agent, the Company shall pay to the
Agent, for its account or for the account of the applicable Bank, as the case
may be, such additional amount shown as due on any such certificate, absent
manifest error.
(b) In the event that the Agent or any Bank shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
on all the parties hereto) at any time that the Agent or such Bank is required
to maintain reserves in respect of Eurocurrency Liabilities during any period
during which any DSR Loan owing to it bears interest based on the Eurodollar
Rate (each such period, for the Agent or such Bank, a "EUROCURRENCY RESERVE
PERIOD"), but only in respect of any period during which any reserve shall
actually be maintained
18
by the Agent or such Bank for any Eurodollar Rate Loan as a result of a reserve
requirement applicable to it under Regulation D in connection with Eurocurrency
Liabilities, then the Agent, or such Bank through the Agent, shall promptly give
notice to the Company of such determination, and the Company shall directly pay
to the Agent, for its account or for the account of the applicable Bank, as the
case may be, additional interest on the unpaid principal amount of such DSR Loan
during such Eurocurrency Reserve Period at a rate PER ANNUM which shall, during
each monthly period applicable to such DSR Loan, be the amount by which (x) the
Eurodollar Rate for such monthly period divided (and rounded upward to the next
whole multiple of 1/100 of 1%) by a percentage equal to 100% minus the then
stated maximum rate of all reserve requirements (including any marginal,
emergency, supplemental, special or other reserves) applicable to the Agent or
such Bank in respect of Eurocurrency Liabilities exceeds (y) the Eurodollar Rate
for such monthly period. The Agent, or such Bank through the Agent, shall
furnish along with such notice a certificate setting forth in reasonable detail
the cost actually incurred to maintain such reserves and the basis for the
determination of such amount; PROVIDED, that the Company shall not be obligated
to compensate the Agent or any Bank for the amount of such increased cost
incurred with respect to a period of time prior to the date which is 90 days
before the date on which the Agent first notifies the Company of a claim for
such compensation or that an event has occurred which will entitle the Agent or
a Bank to such compensation. Additional interest payable pursuant to the
immediately preceding sentence shall be paid by the Company at the time that it
is otherwise required to pay interest in respect of such DSR Loan, or, if later
demanded by the Agent or any Bank, promptly on demand. Each of the Agent and the
Banks agrees that, if notice is given to the Company of the existence of a
Eurocurrency Reserve Period, the Agent, or the applicable Bank through the
Agent, shall promptly notify the Company of any termination thereof, at which
time the Company shall cease to be obligated to pay additional interest to the
Agent or such Bank pursuant to the first sentence of this paragraph until such
time, if any, as a subsequent Eurocurrency Reserve Period shall occur.
(c) The Agent, and each Bank through the Agent, will promptly notify
the Company of any event of which it has knowledge, occurring after the date
hereof, which will entitle the Agent or such Bank to compensation pursuant to
this Section and will designate a different lending office if such designation
will avoid the need for, or reduce the amount of, such compensation and will
not, in the sole judgment of the Agent or such Bank, be otherwise
disadvantageous to the Agent or such Bank.
SECTION 2.16 CAPITAL ADEQUACY.
If the Agent or any Bank shall determine that, after the date hereof,
the adoption of any Applicable Law regarding capital adequacy, or any change
therein, or any change in the interpretation or administration thereof by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on capital of the Agent or such Bank or its holding company as a
consequence of the Agent's or such Bank's obligations hereunder to a level below
that which the Agent or such Bank could have achieved but for such adoption,
change, request or directive (taking into
19
consideration its policies with respect to capital adequacy) by an amount deemed
by the Agent or such Bank to be material, then the Agent, or such Bank through
the Agent, shall deliver to the Company as promptly as practicable (but in no
event later than 120 days after the Agent or such Bank has actual knowledge of
such claim for capital adequacy) a certificate setting forth in reasonable
detail the amount being charged by the Agent or such Bank and the basis for the
determination of such amount. Within 30 days after the delivery of such
certificates by the Agent, the Company shall pay to the Agent, for its account
or for the account of the applicable Bank, as the case may be, the amount shown
as due on any such certificate.
SECTION 2.17 TAXES.
(a) Payments by the Company to the Agent and the Banks under this
Agreement and the DSR Notes will be made free and clear of and without deduction
for Taxes, other than Taxes based on the net income of the Agent or any Bank
(including franchise taxes imposed in lieu of net income taxes) imposed by (i)
the United States federal government, (ii) the jurisdiction where the Agent or
such Bank is organized or has its principal office or (iii) the jurisdiction of
the branch of such Bank maintaining any DSR Loan or the branch of the Agent
through which it renders its services as the Agent ("EXCLUDED TAXES"). If the
Company is required by law to deduct Taxes (other than Excluded Taxes) from such
a payment, then the sum payable under the instrument to which the payment
relates will be increased so that such deduction does not result in a diminution
in the amount the Agent or any Bank actually receives.
(b) To the extent permitted by law, without duplication of amounts paid
by the Company under Section 2.17(a), the Company hereby indemnifies and holds
harmless the Agent and each Bank from and against, and agrees to reimburse the
Agent and each Bank on an after-tax basis (computed taking into account any
deductions or other benefits available for federal income tax purposes for the
Agent or such Bank if it is a United States taxpayer and any deductions and
benefits available for income tax purposes in any jurisdiction in which the
Agent or such Bank is a taxpayer) on demand for, any and all Taxes paid or
incurred by the Agent or such Bank in connection with the transactions
contemplated by this Agreement; PROVIDED, HOWEVER, that the foregoing indemnity
does not cover Excluded Taxes. Reimbursement on an "after-tax basis" means on a
basis such that the Agent or such Bank is made whole after taking into account
income taxes that the Agent or such Bank will owe on the indemnity or
reimbursement payment in any jurisdiction and any related tax benefits, assuming
the Agent or such Bank is subject to income taxes at the highest marginal rates.
Nothing in this paragraph shall interfere with the right of the Agent or any
Bank to arrange its tax affairs in whatever manner it thinks fit and, in
particular, the Agent and the Banks are under no obligation to claim a deduction
or other benefit relating to these transactions ahead of any other claim,
relief, credit, deduction or other benefit to which it is entitled. The Agent,
or applicable Bank through the Agent, shall promptly give written notice to the
Company after (but in no event later than 60 days after) the Agent or such Bank
has actual knowledge of the imposition of any Taxes subject to indemnification
hereunder; PROVIDED, HOWEVER, that failure to give such notice within such 60
day period will not relieve the Company of the obligation to indemnify the Agent
or such Bank in accordance with the terms hereof, except to the extent of
interest that would have been avoided had the notice been given prior to the end
of such 60-day period.
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(c) The Company will provide evidence that all Taxes imposed on
payments under this Agreement, any DSR Loan or any DSR Note have been fully paid
to the appropriate authorities by delivering official receipts or notarized
copies to the Agent within 30 days after payment. The Company will compensate
the Agent or any Bank that has to pay any Taxes because the Company failed to
timely furnish such evidence; PROVIDED, that prior to paying such Taxes, the
Agent, or such Bank through the Agent, shall have notified the Company of its
intent to make such payment.
(d) If the Company so requests promptly in writing after receipt of any
notice under Section 2.17 hereof, the Agent or applicable Bank will contest in
good faith the Taxes at the Company's expense, keep the Company fully informed
about the progress of the contest, consult in good faith with the Company's
counsel regarding conduct of the contest, and not compromise or otherwise settle
the contest without the Company's consent (which shall not be unreasonably
withheld or delayed); PROVIDED, that the Agent or such Bank may in its sole
discretion select the forum for the contest and determine whether the contest
will be by resisting payment of the Taxes or by paying the Taxes and seeking a
refund; PROVIDED, FURTHER that the Agent or such Bank will be under no
obligation to contest unless (A) if the Agent or such Bank requests, the Company
has provided the Agent or such Bank an opinion of independent tax counsel
selected by the Company and reasonably acceptable to the Agent or such Bank to
the effect that there is a reasonable basis for the contest, (B) the amount in
controversy is at least $75,000, (C) the Agent or such Bank has received
satisfactory indemnification and security for any liability, loss, cost or
expense arising out of the contest (including, but not limited to, all
reasonable legal and accounting fees and expenses, penalties, interest and
additions to tax), (D) if requested by the Agent or such Bank, the Company has
admitted in writing its duty to indemnify the Agent or such Bank for the Taxes
if the contest is lost (but such admission shall not preclude the Company from
raising a defense to liability if a court of competent jurisdiction has rendered
a decision articulating the cause of such Taxes, and the cause is not one for
which the Company is responsible under this Section 2.17), and (E) if the
contest is conducted in a manner that requires paying all or part of the Taxes,
the Company has paid the amount required.
(e) If the Company so requests within 10 days of notice to the Company
of the imposition of any Taxes on payments to any of the Banks of a type not
generally imposed on United States or foreign lenders making advances of the
types contemplated hereunder, such Banks shall (consistent with legal and
regulatory restrictions) comply with Section 2.19 hereof.
(f) At such times as may be required by Applicable Law or as the Agent
or the Company may reasonably request, each Bank agrees that it will deliver to
the Agent and the Company duly completed forms of any applicable jurisdiction or
other documentation reasonably satisfactory to the Agent and the Company that
such Bank is entitled to receive payments under this Agreement without deduction
or withholding of income tax under the Applicable Law of such jurisdiction. Each
Bank further agrees to notify the Agent and the Company of the occurrence of any
event (including any change in treaty, law or regulation) that would render such
Bank unable to receive payments hereunder without such deduction or withholding.
The provisions of this Section 2.17(f) shall apply to any successor holder of a
DSR Note.
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SECTION 2.18 ILLEGALITY.
If, on or after the date of this Agreement, the adoption of any
Applicable Law, or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by the Agent or any Bank with any request or directive (whether or not having
the force of law) of any such Governmental Authority, central bank or comparable
agency shall make it unlawful or impossible for the Agent or such Bank to make,
continue or convert its Eurodollar Rate Loans, the Agent, or such Bank through
the Agent, shall so notify the Company, whereupon until the Agent, or such Bank
through the Agent, notifies the Company that the circumstances giving rise to
such suspension no longer exist, the obligation of the Agent or such Bank to
make or continue Eurodollar Rate Loans or convert outstanding DSR Loans into
Eurodollar Rate Loans, shall be suspended. Before giving any notice to the
Company pursuant to this Section 2.18, the Agent or applicable Bank shall
designate a different lending office for the Eurodollar Rate Loans if such
designation will avoid the need for giving such notice and will not, in the sole
judgment of the Agent or such Bank, be otherwise disadvantageous to the Agent or
such Bank. If such notice is given, each Eurodollar Rate Loan of the Agent or
such Bank then outstanding shall either (i) be converted to a Base Rate Loan on
the last day of the then current Interest Period applicable to such Eurodollar
Rate Loan if the Agent or such Bank may lawfully make or continue such DSR Loan
to such day, or (ii) be immediately converted to a Base Rate Loan if the Agent
or such Bank shall determine that it may not lawfully continue to make or
continue such DSR Loan to such day; PROVIDED, that the Company shall not be
obligated to make any payment pursuant to Section 2.6(c) as a result of such
conversion. If the Company so requests within 10 days of receipt of the notice
referred to above, the applicable Bank shall (consistent with legal and
regulatory restrictions) comply with Section 2.19(b) hereof.
SECTION 2.19 EXTENSION OF DSR LETTER OF CREDIT; ASSIGNMENTS BY BANKS.
(a) If at least one hundred and eighty (180) days before the Expiration
Date, the Agent shall have requested the consent of each of the other Banks to
the extension of the DSR Letter of Credit, and if the Agent shall not, within
twenty-five (25) days of issuing such request, have received the written consent
of any such Bank to the extension proposed by the Agent, the Agent shall have
the right to require such Bank to transfer all of its proportionate share of the
DSR Loans in accordance with Section 2.19(b). Prior to the Notice Date, each
Bank shall give the Agent written notice of such Bank's election to extend or
not to extend the original or extended Expiration Date of the DSR Letter of
Credit for an additional one or more years as specified by the Agent.
(b) In the event that (i) a Bank is required to comply with this
Section 2.19(b) after a request from the Company pursuant to Sections 2.17 or
2.18, (ii) the Company or the Issuing Bank requests that the provisions of this
Section 2.19(b) apply to a Bank within 10 days after the Company receives a
notice from the Agent that (A) such Bank has failed to make available to the
Agent its portion of any DSR LOC Loan or DSR LOC Term Loan on the date required
to be made available to the Agent pursuant to this Agreement after the Agent has
made written
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demand upon such Bank for such payment, (B) such Bank has provided the Agent
with notice that such Bank shall not make available to the Agent such portion of
any DSR LOC Loan or DSR LOC Term Loan required to be made available to the Agent
pursuant to this Agreement or (C) such Bank has failed to reimburse the Agent
pursuant to the terms of this Agreement, (iii) the Issuing Bank requests that
the provisions of this Section 2.19(b) apply to a Bank in the event the
long-term debt rating of such Bank shall at any time be less than a rating of
"A" or the equivalent by S&P or by ▇▇▇▇▇'▇, or (iv) the Agent requests that the
provisions of this Section 2.19(b) apply to a Bank in the event that such Bank
has failed to consent to extend the original or extended Expiration Date within
twenty-five (25) days after the Agent's request for such consent, then such Bank
shall assign all or a part of its proportionate share of the DSR Loans (as
applicable) and its Commitment to a replacement bank (which may be, but is not
required to be, a Bank, and shall be subject to the prior written consent of the
Issuing Bank) (a "REPLACEMENT BANK") designated by the Company; PROVIDED, that
any assignment or transfer made by a Bank to a Replacement Bank shall
substantially be in the form of Exhibit C hereto, and any assignment of all or
part of the DSR Loans or other obligations with respect to any DSR Letter of
Credit shall be made without recourse, representation or warranty. The Company
shall promptly pay when due all reasonable fees and expenses which such Bank
incurs in connection with such transfer or assignment and the Company shall
cause the Replacement Bank to pay to the Agent for the account of the assigning
Bank in immediately available funds all amounts outstanding or payable under
this Agreement to each Bank assigning its interest in the DSR Loans or other
obligations with respect to the DSR Letter of Credit.
SECTION 2.20 REDUCTION IN COMMITMENTS/REIMBURSEMENTS.
The Company shall have the right to refinance the Commitment and any
outstanding DSR Loans, if any, without premium or penalty, except as provided in
Section 2.6(c), upon at least 10 Business Days' prior written notice to the
Agent.
SECTION 2.21 RIGHT OF SET-OFF.
Subject to the terms and conditions of the Collateral Agency Agreement,
the Company hereby authorizes each Bank (in addition to, and without limitation
of, any right of set-off, banker's lien or counterclaim a Bank may otherwise
have), upon the occurrence and during the continuance of any Event of Default,
at any time and from time to time, without notice to the Company or any Person
other than the Collateral Agent (any such notice being hereby expressly waived
by the Company to the extent it may legally do so) to set off and appropriate
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
Bank in any of its offices, wherever located (whether such deposits or
indebtedness be in Dollars or in any other currency), to or for the credit or
the account of the Company against any and all of the Obligations and
liabilities of the Company now or hereafter existing under this Agreement,
irrespective of whether or not such Bank shall have made any demand hereunder or
thereunder and although such Obligations may be contingent or unmatured.
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ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.1 CONDITIONS PRECEDENT TO CLOSING DATE.
The occurrence of the Closing Date is subject to satisfaction or waiver
of the following conditions precedent:
(a) issuance of the Bonds and submission to the Agent of duplicate
originals or certified copies of all of the documents submitted in connection
with the issuance of the Bonds on the Closing Date, which shall be in form and
substance satisfactory to the Agent;
(b) receipt by the Issuing Bank of the following, in each case in the
form approved by the Agent on the Closing Date:
(i) this Agreement and the DSR LOC Loan Note duly executed by the
Company;
(ii) an original of each of the Security Documents, duly executed
by the parties thereto;
(iii) a copy of each other Financing Document, duly executed by the
parties thereto and certified by the Company as to completeness and
authenticity;
(iv) written opinions of counsel acceptable to the Agent, addressed
to the Agent and the Banks, and in form and substance satisfactory to
the Agent and covering such matters as the Agent may reasonably
request;
(v) evidence satisfactory to the Agent that each of the parties to
the Project Contracts, Financing Documents and Security Documents shall
have duly and irrevocably appointed a process agent to act for and on
behalf of such person, to receive summonses and other legal process in
connection with any suit, action or proceeding relating to such
documents in the jurisdictions in which it is required to submit to
such jurisdiction and such appointment shall have been accepted and all
fees scheduled to accrue to each such agent for the service of process
shall have been paid in full; and
(vi) evidence satisfactory to the Agent that all actions necessary
or appropriate in order to effectively establish, create or perfect the
Security Interest have been duly taken.
(c) payment by the Company of all accrued fees and expenses (as
provided in Sections 2.5 and 9.4) of the Agent and the Banks (including the
reasonable accrued fees and disbursements of counsel to the Agent and the
Banks), to the extent that one or more statements for such fees and expenses
have been presented for payment.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1 REPRESENTATIONS AND WARRANTIES OF COMPANY.
The Company hereby makes for the benefit of the Agent and the Banks all
of the representations and warranties of the Company contained in Article III of
the Indenture (which representations and warranties are incorporated by
reference herein as if fully set forth herein together with all related
definitions and which representations and warranties shall be true and correct
as of the date hereof and the Closing Date).
SECTION 4.2 REPRESENTATIONS AND WARRANTIES OF THE ISSUING BANK.
The Issuing Bank represents and warrants to the Company as of the
Closing Date that:
(a) The Issuing Bank is duly formed, validly existing and in good
standing under the laws of its jurisdiction of organization.
(b) The Issuing Bank has all necessary power and authority to execute
and deliver, and to perform its obligations under this Agreement, and when
issued, the DSR Letter of Credit.
(c) All action on the part of the Issuing Bank that is required for the
authorization, execution and delivery of, and performance by the Issuing Bank of
its obligations under this Agreement, and when issued, the DSR Letter of Credit
has been duly and effectively taken.
(d) This Agreement has been, and when issued, the DSR Letter of Credit
will have been, duly executed and delivered by the Issuing Bank.
(e) This Agreement constitutes, and the DSR Letter of Credit upon the
issuance thereof will constitute, the legal, valid and binding obligations of
the Issuing Bank, enforceable against the Issuing Bank in accordance with the
respective terms thereof, except as such enforceability (i) may be limited by
applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
liquidation, moratorium and similar laws relating to or affecting the
enforcement of creditors' rights and remedies generally, including but not
limited to any implied contractual obligations of good faith and limitations on
enforcement of specific performance, and (ii) is subject to general principles
of equity and similar laws (regardless of whether enforceability is considered
in a proceeding in equity or at law).
ARTICLE V
COVENANTS
SECTION 5.1 COVENANTS.
So long as any Commitment is in effect, the DSR Letter of Credit is
outstanding or the Obligations remain unpaid, the Company shall observe and
perform all of the covenants of the
25
Company contained in Article VI of the Indenture (which covenants together with
all related definitions are incorporated herein by reference as if fully set
forth herein).
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.1 EVENTS OF DEFAULT.
Each of the following shall constitute an "Event of Default" under this
Agreement so long as the same shall be continuing:
(a) the Company shall fail to pay any amount due under this Agreement
(including under any DSR Note) within 15 days after the due date thereof; or
(b) an "Event of Default" under the Indenture shall have occurred and
be continuing; or
(c) an "Event of Default" under the PPA LOC Reimbursement Agreement
shall have occurred and be continuing; or
(d) an "Event of Default" under the Working Capital Agreement shall
have occurred and be continuing.
SECTION 6.2 REMEDIES.
Upon the occurrence and during the continuation of an Event of Default,
the Agent shall, at the request of the Required Banks, take one or more of the
following actions: (i) after giving any required notice to the beneficiary of
the DSR Letter of Credit and the Trustee and the lapse of the time period
required prior to termination of the DSR Letter of Credit, terminate the DSR
Letter of Credit in accordance with Section 2.2(f), (ii) declare the
Obligations, all interest thereon and all other amounts payable under this
Agreement, and any DSR Note to be forthwith due and payable, including but not
limited to the amount of any and all DSR LOC Loans which may be made upon a
Drawing under the DSR Letter of Credit which occurs after the date on which the
Agent declares such amounts to be due and payable, but prior to the effective
date of a termination of the DSR Letter of Credit in accordance with Section
2.2(f), whereupon the Obligations, all such interest and all such amounts shall
become and be immediately due and payable, without presentment, demand, protest
or further notice of any kind, all of which are hereby expressly waived by the
Company, (iii) terminate the ability of the Company to cause reinstatement of
the Stated Amount through the reimbursement of Drawings, as contemplated by the
terms hereof, or (iv) terminate the ability of the Company to continue DSR Loans
as, or convert DSR Loans to, Eurodollar Rate Loans; PROVIDED, that, in each
case, the Agent and the Banks shall not have the right to exercise any other
remedy hereunder or otherwise available to the Agent or any Bank except in
accordance with the provisions of the Collateral Agency Agreement.
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SECTION 6.3 COLLATERALIZATION UPON ACCELERATION OF THE BONDS.
In the event that an Event of Default hereunder results from an "EVENT
OF DEFAULT" under the Indenture and the Trustee accelerates amounts due under
the Indenture, the DSR LOC Provider shall be entitled to require
collateralization of the Maximum Stated Amount by having the Collateral Agent
deposit (in a separate account to be held by the Collateral Agent), at the time
that any amounts are paid to the Trustee in respect of accelerated amounts due
under the Indenture, an amount equal to the amount that would have been
disbursed to the Agent at such time (based on pro rata payment requirements) if
Drawings had been made to the full extent of the Maximum Stated Amount ("DEEMED
DSR LOC LOANS") and the Deemed DSR LOC Loans had been accelerated at the same
time as an acceleration under the Indenture. Upon a Drawing on the DSR Letter of
Credit, a portion of the amount in the separate account equal to such Drawing's
proportionate share of the Maximum Stated Amount shall be transferred by the
Collateral Agent to the DSR LOC Provider. The Agent, the Issuing Bank and each
Bank agree that upon termination or expiration of the DSR Letter of Credit, the
Collateral Agent shall become entitled to all amounts in such separate
collateral account that have not been transferred pursuant to the previous
sentence (to the extent of such expiration or termination) for application in
accordance with the provisions of Section 4.1(a) of the Collateral Agency
Agreement.
ARTICLE VII
CHARACTER OF OBLIGATIONS
SECTION 7.1 OBLIGATIONS ABSOLUTE.
The Obligations shall be absolute, unconditional and irrevocable and
shall not be affected or impaired under any circumstances whatsoever, including
the following circumstances:
(a) any lack of validity or enforceability of any provision of any
Project Contract or Financing Document;
(b) any amendment or waiver of, or any consent to departure from, any
provision of any Project Contract or Financing Document;
(c) the existence of any claim, set-off, defense or other right that
the Company may have at any time against the beneficiary of the DSR Letter of
Credit (or any Person for whom such beneficiary may be acting), any Bank, the
Agent or any other Person, whether in connection with any Project Contract or
Financing Document, the transactions contemplated thereby or any unrelated
transaction;
(d) any statement or signature in any certificate or other document
presented under the DSR Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect, or any such statement being untrue or
inaccurate in any respect whatsoever;
27
(e) any exchange, release or nonperfection of any Collateral or other
collateral, or any release, amendment or waiver of or consent to departure from
any Project Contract, Financing Document or any guaranty, for any of the
Obligations;
(f) payment by the Issuing Bank under the DSR Letter of Credit against
presentation of a draft or certificate that does not comply with the terms of
the DSR Letter of Credit; or
(g) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing.
SECTION 7.2 LIMITED LIABILITY OF AGENT AND BANKS.
As among the Company, the Agent and the Banks (including the Issuing
Bank), the Company assumes all risks of the acts or omissions of the
beneficiaries of the DSR Letter of Credit with respect to the use of the DSR
Letter of Credit. Neither the Agent nor any Bank nor any of their respective
officers, directors, employees or agents shall be liable or responsible for (i)
the use that may be made of the DSR Letter of Credit or any acts or omissions of
any beneficiaries of the DSR Letter of Credit in connection with the DSR Letter
of Credit; (ii) the form, validity, sufficiency, accuracy, genuineness or legal
effect of any document submitted in connection with the DSR Letter of Credit or
of any endorsement thereon, even if such document or endorsement should prove to
be in any or all respects invalid, insufficient, inaccurate, fraudulent or
forged; (iii) payment by the Issuing Bank against presentation of any document
that does not comply with the terms of the DSR Letter of Credit, including
failure of any document to bear any reference or adequate reference to the DSR
Letter of Credit; or (iv) any other circumstance whatsoever in making, delaying
to make or failing to make payment under the DSR Letter of Credit; PROVIDED,
HOWEVER, that the Company shall have a claim against the Issuing Bank, and the
Issuing Bank shall be liable to the Company, to the extent of any direct, as
opposed to consequential, damages suffered by the Company that the Company
proves were the result of the Issuing Bank's willful misconduct or gross
negligence in paying under the DSR Letter of Credit or the Issuing Bank's
willful or grossly negligent failure to pay under the DSR Letter of Credit after
the presentation to it by the beneficiary of a draft and certificate strictly
complying with the terms and conditions of the DSR Letter of Credit (unless the
Issuing Bank in good faith believed itself (based upon an opinion of counsel) 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
any document that appears on its face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary.
ARTICLE VIII
THE AGENT
SECTION 8.1 AUTHORIZATION AND ACTION.
(a) Each Bank hereby appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
as are delegated to the Agent by the terms hereof, together with such powers as
are reasonably incidental thereto. As to any
28
matters not expressly provided for by the Credit Documents (including
enforcement of and collection under any Credit Document or other Project
Contract), the Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Banks, and such instructions shall be binding upon all Banks and
the holders of any DSR Note; PROVIDED, HOWEVER, that the Agent shall not be
required to take any action that, in the Agent's sole judgment, exposes the
Agent to personal liability or that is contrary to any Credit Document or other
Project Contract or Applicable Law. In performing its function and duties
hereunder as Agent, the Agent shall act solely as the agent of the Banks and in
its capacity as Issuing Bank it shall act solely as issuer of the DSR Letter of
Credit, and does not assume and shall not be deemed to have assumed in either
such capacity any obligation towards or relationship of agency or trust or other
fiduciary relationship with or for the Company or any other party to any Project
Contract.
(b) Each Bank hereby authorizes the Agent in the name of and on behalf
of such Bank to sign such documents, take all such actions and perform such
obligations that the Agent deems necessary or appropriate to bind each of the
Banks under the Credit Documents and the Transaction Documents, and to create,
perfect or maintain the existence or perfected status of any security interest,
to be the named "Senior Party" under the Collateral Agency Agreement, and the
sole named payee, in respect of all of the Financing Liabilities of the Company
under or pursuant to this Agreement and each DSR Note and all Collateral to the
extent securing such Financing Liabilities, and to take all such actions and
perform such obligations that the Agent deems necessary or appropriate in such
capacity.
SECTION 8.2 AGENT'S RELIANCE, ETC.
Neither the Agent nor the Issuing Bank nor any of its or their
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with any Credit
Document or other Project Contract, except for its or their own gross negligence
or willful misconduct. Without limitation of the generality of the foregoing,
the Agent and the Issuing Bank (i) may treat any Bank that has signed an
Assignment and Acceptance as the holder of the applicable portion of the
Obligations; (ii) may consult with legal counsel (including counsel for the
Company or any Affiliate), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (iii) makes no warranty or representation to any Bank
and shall not be responsible to any Bank for any statements, warranties or
representations made in or in connection with any Credit Document or other
Project Contract; (iv) shall not have any duty to ascertain or to inquire as to
the performance or observance of any of the terms, covenants or conditions of
any Credit Document or other Project Contract on the part of the Company or any
Affiliate or to inspect the property (including the books and records) of the
Company or any Affiliate thereof; (v) shall not be responsible to any Bank for
the due execution, legality, validity, enforceability, genuineness, sufficiency
or value of any Credit Document or other Project Contract or any other
instrument or document furnished pursuant hereto or thereto; and (vi) shall
incur no liability under or in respect of any Credit Document or other Project
Contract by acting upon any notice, consent, certificate
29
or other instrument or writing (which may be by telecopier or otherwise)
believed by it to be genuine and signed or sent by the proper party or parties.
SECTION 8.3 THE AGENT, THE ISSUING BANK AND AFFILIATES.
With respect to its Commitment and participation in the DSR Letter of
Credit, the Issuing Bank shall have the same rights and powers under this
Agreement as any other Bank and may exercise the same as though it were not the
Agent or the Issuing Bank, as the case may be; and the term "BANK" or "BANKS"
shall, unless otherwise expressly indicated, include the Agent and the Issuing
Bank in their capacity as a Bank (including the Issuing Bank in its capacity as
such). The Agent and the Issuing Bank and their Affiliates may accept deposits
from, lend money to, act as trustee under indentures of, and generally engage in
any kind of business with, the Company, any Affiliate thereof and any Person
that may do business with or own securities of the Company or any Affiliate
thereof, all as if the Agent and the Issuing Bank, respectively, were not the
Agent and the Issuing Bank and without any duty to account therefor to the
Banks.
SECTION 8.4 BANK CREDIT DECISION.
Each Bank agrees that it has, independently and without reliance on the
Agent, the Issuing Bank or any other Bank and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Bank also agrees that it will,
independently and without reliance on the Agent, the Issuing Bank or any other
Bank and based on such documents and information as it deems appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement.
SECTION 8.5 INDEMNIFICATION.
The Banks agree to indemnify the Agent and the Issuing Bank (to the
extent not promptly reimbursed by the Company and without limiting the
obligation of the Company to do so), on demand, ratably according to such Bank's
Percentage Interest, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses and
disbursements of any kind or nature whatsoever that may at any time (including
at any time following the payment of any Obligations or termination of this
Agreement) be imposed on, incurred by or asserted against the Agent or the
Issuing Bank in any way relating to or arising out of any Credit Document or
other Project Contract or any action taken or omitted by the Agent under any
Credit Document or other Project Contract; PROVIDED, HOWEVER, that no Bank shall
be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements to the
extent resulting solely from the Agent's gross negligence or willful misconduct.
Without limitation of the foregoing, each Bank agrees to reimburse the Agent
promptly upon demand for its ratable share of any costs and expenses payable by
the Company under Section 9.4, to the extent that the Agent is not reimbursed
for such costs and expenses by the Company.
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SECTION 8.6 SUCCESSOR AGENT.
The Agent may resign at any time by giving written notice thereof to
the Banks and the Company and may be removed at any time with or without cause
with the written approval of the Required Banks. Upon any such resignation or
removal, the Required Banks shall have the right to appoint a successor Agent
with the consent of the Company, which shall not be unreasonably withheld or
delayed. If no successor Agent has been so appointed by the Required Banks, and
has accepted such appointment, within 30 days after the retiring Agent's giving
of notice of resignation or the Required Banks' removal of the retiring Agent,
then the retiring Agent may, on behalf of the Banks, appoint a successor Agent
with the consent of the Company (which shall not be unreasonably withheld or
delayed), which successor Agent shall be a commercial bank organized under the
laws of the United States of America or of any state thereof and having a
combined capital and surplus of at least $500,000,000. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations under the Credit Documents and the
other Project Contracts. After any retiring Agent's resignation or removal
hereunder as Agent, the provisions of this Article 8 shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was agent under
this Agreement.
SECTION 8.7 COLLATERAL.
(a) Except as expressly provided herein, the Agent shall have no duty
to take any affirmative steps with respect to the collection of amounts payable
in respect of the Collateral. The Agent shall incur no liability as a result of
any private sale of the Collateral.
(b) The Banks hereby consent, and agree upon written request by the
Agent to execute and deliver such instruments and other documents as the Agent
may deem desirable to confirm such consent, to the release of the Liens on the
Collateral, including any release in connection with any sale, transfer or other
disposition of the Collateral or any part thereof, in accordance with the
Project Contracts.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 AMENDMENTS, ETC.
No amendment or waiver of any provision of this Agreement or any DSR
Note or consent to any departure by the Company therefrom, shall be effective
unless in writing and signed or consented to (in writing) by the Required Banks
(and, in the case of amendments, the Company), and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; PROVIDED, HOWEVER, that (A) no amendment, waiver or consent
shall, unless in writing and signed or consented to (in writing) by all of the
Banks do any of the following: (i) waive any of the conditions specified in
Article 3; (ii) increase the Commitments of the Banks or subject the Banks to
any additional obligations; (iii) reduce the
31
principal of, or interest on, the DSR Loans or any fees or other amounts payable
hereunder; (iv) postpone any date fixed for (a) payment of principal of, or
interest on, any DSR Loans (b) reimbursement of Drawings or (c) payment of fees
or other amounts payable hereunder; (v) change the percentage of the Commitments
or the number of Banks, required for the Banks or any of them to take any action
hereunder; or (vi) amend this Section 9.1; (B) no amendment, waiver or consent
shall, unless in writing or consented to (in writing) by the Issuing Bank,
affect the rights and obligations of the Issuing Bank hereunder; (C) no
amendment, waiver or consent shall, unless in writing and signed by the Agent in
addition to the Persons required above to take such action, affect the rights or
duties of the Agent under this Agreement or any other Credit Document and (D)
any provision that is a part of this Agreement as a result of an incorporation
by reference to the Indenture shall be amended or waived as provided in Section
2.5 of the Collateral Agency Agreement.
SECTION 9.2 NOTICES, ETC.
All notices and other communications provided for hereunder shall be in
writing (including by telecopier and shall be mailed, telecopied or delivered,
if to the Company, to it at AES Red Oak, L.L.C., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Project Manager, telephone ▇▇▇-▇▇▇-▇▇▇▇,
telecopier ▇▇▇-▇▇▇-▇▇▇▇; if to any Bank other than the Issuing Bank, to it at
the address or telecopier number set forth below its name in the Assignment and
Acceptance by which it became a party hereto; if to the Agent or the Issuing
Bank, to it at Dresdner Bank AG, New York Branch, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Project Finance Group, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇; telephone ▇▇▇-▇▇▇-▇▇▇▇, telecopier ▇▇▇-▇▇▇-▇▇▇▇, or as to each party,
to it at such other address or telecopier number as designated by such party in
a written notice to the other parties. All such notices and communications shall
be deemed received, (i) if personally delivered, upon delivery, (ii) if sent by
first-class mail, on the third Business Day following deposit into the mails and
(iii) if sent by telecopier, upon acknowledgment of receipt thereof by the
intended recipient, except that notices and communications to the Agent pursuant
to Article 2 or 8 shall not be effective until received by the Agent.
SECTION 9.3 NO WAIVER, REMEDIES.
No failure on the part of any Bank (including the Issuing Bank) or the
Agent to exercise, and no delay in exercising, any right hereunder shall operate
as a waiver thereof, and no single or partial exercise of any such right shall
preclude any other or further exercise thereof or the exercise of any other
right. The remedies provided herein are cumulative and not exclusive of any
remedies provided by law.
SECTION 9.4 COSTS AND EXPENSES.
The Company agrees to pay on demand (i) all reasonable costs and
expenses of the Agent and the Banks (including the Issuing Bank) in connection
with the preparation, execution, delivery, syndication, administration,
modification and amendment of this Agreement, any DSR Note, the other Credit
Documents, and the other documents to be delivered hereunder, including (a) the
reasonable fees and out-of-pocket expenses of counsel for the Agent and the
Banks with
32
respect thereto and with respect to advising the Agent and the Banks as to their
rights and responsibilities, or the perfection, protection or reservation of
rights or interests, under this Agreement, the other Credit Documents, the other
Project Contracts and the other documents to be delivered hereunder, (b) the
reasonable fees and expenses of any consultants, auditors or accountants engaged
by the Agent with the written consent (which shall not be unreasonably withheld)
of the Company pursuant hereto, and (ii) all reasonable costs and expenses of
the Agent and the Banks (including the Issuing Bank) (including reasonable
counsel fees and expenses of the Agent and the Banks) in connection with the
enforcement (whether through negotiations, legal proceedings or otherwise) of
this Agreement, the other Credit Documents, the other Project Contracts and the
other documents to be delivered hereunder, whether in any action, suit or
litigation, bankruptcy, insolvency or similar proceeding. In addition, the
Company shall pay any and all stamp and other taxes and fees payable or
determined to be payable in connection with the execution, delivery, filing and
recording of the aforementioned documents, and the Company agrees to indemnify
and hold the Agent and the Banks (including the Issuing Bank) harmless from and
against any and all liabilities with respect to or resulting from any delay in
paying or omission to pay any of the foregoing.
SECTION 9.5 APPLICATION OF MONEY.
If any sum paid or recovered in respect of the Obligations is less than
the amount then due, the Agent may apply that sum to principal, interest, fees
or any other amount due under this Agreement in such proportions and order and
generally in such manner as the Agent shall reasonably determine.
SECTION 9.6 SEVERABILITY.
Any provision of this Agreement that is prohibited, unenforceable or
not authorized in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition, unenforceability or
nonauthorization without invalidating the remaining provisions of this Agreement
or affecting the validity, enforceability or authorization of such provision in
any other jurisdiction.
SECTION 9.7 NON-RECOURSE LIABILITY.
Satisfaction of the Obligations shall be had solely from the
Collateral. Notwithstanding any provision to the contrary in the Transaction
Documents, there shall be no recourse against any Affiliates, stockholders,
officers, directors, representatives or employees of the Company, other than the
Company (each a "NON-RECOURSE PARTY"), for any payment due hereunder or under
any other Financing Document or Security Document from the Company or for the
performance of any obligation of such Non-Recourse Party, or breach of any
representation or warranty made by such Non-Recourse Party hereunder or
thereunder. The sole recourse of the Agent and the Banks hereunder or under any
other Transaction Document or for the performance of any obligation of the
Company, or breach of any representation or warranty made hereunder or
thereunder by the Company, shall be against the Company and its assets, it being
expressly understood by the Senior Parties that such obligations of the Company
are obligations solely of the Company and that no such personal liability shall
attach to, or be incurred by any
33
Non-Recourse Party; PROVIDED, that nothing contained in this Section 9.7 shall
(i) impair in respect of the Company the validity of any DSR Note, or any other
Credit Document, as applicable, prevent the taking of any action permitted by
law against the Company or any of its Affiliates, or in any way affect or impair
the rights of the Agent and the Banks to take any action permitted by law, in
either case to realize upon the Collateral, (ii) be deemed to release the
Company or any of its Affiliates, or any past, present or future shareholder,
partner, officer, employee, director or agent of any thereof, from liability for
its fraudulent actions, fraudulent misrepresentations, gross negligence or
willful misconduct or (iii) limit or affect the obligations and liabilities of
any Non-Recourse Party in accordance with the terms of any other Transaction
Document creating such obligations and liabilities to which such Non-Recourse
Party is a party.
SECTION 9.8 BINDING EFFECT.
This Agreement shall be binding upon and inure to the benefit of the
Company, the Agent and the Banks and their respective successors and assigns,
except that the Company shall not have the right to assign any of its rights and
obligations hereunder without the prior written consent of the Required Banks,
and, except as provided in Section 9.9, no Bank other than the Issuing Bank
shall have the right to assign any of its rights and obligations hereunder.
SECTION 9.9 ASSIGNMENTS AND PARTICIPATIONS.
(a) Any Bank may at any time (with the consent of the Company, such
consent not to be unreasonably withheld or delayed, the consent of the Agent,
such consent not to be unreasonably withheld or delayed, and the consent of the
Issuing Bank) sell to one or more banks or other entities whose long-term
unsecured debt is rated at least "A" or the equivalent by S&P and ▇▇▇▇▇'▇ (a
"PURCHASING BANK") all or any part of its rights and obligations under this
Agreement and any DSR Note which, except in the case of an assignment to a
Person that, immediately before such assignment, was a Bank, shall be in an
amount equal to not less than the lesser of (x) $5,000,000 and (y) 33 1/3% of
the Maximum Stated Amount pursuant to an Assignment and Acceptance, executed by
such Purchasing Bank, such transferor Bank, the Agent and the Issuing Bank (and,
in the case of a Purchasing Bank that is not then a Bank or an Affiliate
thereof, by the Company). Upon (i) such execution of such Assignment and
Acceptance and (ii) delivery of a copy thereof to the Company and payment of the
amount of its participation to the Agent or such transferor Bank, such
Purchasing Bank shall for all purposes be a Bank party to this Agreement and
shall have all the rights and obligations of a Bank under this Agreement, to the
same extent as if it were an original party hereto with the Percentage Interest
as set forth in such Assignment and Acceptance, which shall be deemed to amend
this Agreement to the extent, and only to the extent, necessary to reflect the
addition of such Purchasing Bank and the resulting adjustment of Percentage
Interests arising from the purchase by such Purchasing Bank of all or a portion
of the rights and obligations of such transferor Bank under this Agreement and
any DSR Note.
(b) Any Bank may, from time to time, sell or offer to sell
participating interests in any DSR Loans owing to such Bank, such Bank's
interest in any DSR Note, any Commitment of such Bank or any other interests and
obligations of such Bank hereunder, to one or more banks or
34
other entities (each, a "Participant"), on such terms and conditions as may be
determined by the selling Bank, without the consent of or notice to the Company,
and the grant of such participation shall not relieve any Bank of its
obligations, or impair the rights of any Bank, hereunder. In the event of any
such sale by a Bank of a participating interest to a Participant, such Bank
shall remain solely responsible for the performance of such Bank's obligations
under this Agreement, the Company, the Agent and the Issuing Bank will continue
to deal solely and directly with such Bank in connection with such Bank's rights
and obligations under this Agreement and such Bank shall retain the sole right
and responsibility to exercise the rights of such Bank, and enforce the
obligations of the Company, including the right to approve any amendment,
modification, supplement or waiver of any provision of any Credit Document and
the right to take action under Article 6 hereof and such Bank shall not grant
any such Participant any voting rights or veto power over any such action by
such Bank under this Agreement (PROVIDED, that such Bank may agree not to
consent to any modification, amendment or waiver of this Agreement, without the
consent of the Participant, that would alter the principal of or interest on any
DSR Loans, postpone the date fixed for any payment of principal of or interest
thereon or extend the term of any Commitment). No Participant shall have any
rights under this Agreement to receive payment of principal, interest or any
other amount payable hereunder except through a Bank and as provided in this
Section 9.9. The Company agrees that, upon the occurrence and during the
continuance of any Event of Default, each Participant shall have the right of
set-off in respect of its participating interest in amounts owing under this
Agreement and any DSR Note as set forth in Section 2.21 hereof to the same
extent as if the amount of its participating interest was owing directly to it
as a Bank under this Agreement or any DSR Note. The Company also agrees that
each Participant shall be entitled to the benefits of Sections 2.15, 2.16, 2.17
and 2.18 hereof with respect to its participation granted hereunder; PROVIDED,
that no Participant shall be entitled to receive any greater amount pursuant to
such Sections than the Bank transferring such participation would have been
entitled to receive in respect of the amount of the participation transferred to
such Participant had no such transfer occurred.
(c) Any Bank may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 9.9, disclose to
the Purchasing Bank or Participant or proposed Purchasing Bank or Participant
any information relating to the Company furnished to such Bank by or on behalf
of the Company; PROVIDED, HOWEVER, that prior to any such disclosure, the Person
receiving such disclosure shall sign such confidentiality agreements as the
Company may reasonably request.
SECTION 9.10 INDEMNIFICATION.
The Company agrees to indemnify, on demand, and hold harmless the Agent
and each Bank (including the Issuing Bank) and each of their respective
officers, directors, employees, agents and affiliates from and against any and
all claims, damages, losses, liabilities, costs and expenses whatsoever that
such indemnified party may incur (or that may be claimed against such
indemnified party by any Person) by reason of (i) any untrue statement or
alleged untrue statement of any material fact concerning the Company or the
Collateral, or the omission or alleged omission to state any fact concerning the
Company or the Collateral necessary to make any such statement, in light of the
circumstances under which it was made, not misleading; (ii)
35
the issuance, sale or delivery of the Senior Debt; (iii) the use of the proceeds
of the Senior Debt or any Drawing; (iv) any reasonable action taken by such
indemnified party in protecting and enforcing the rights and remedies of the
Agent and the Banks under the Project Contracts; (v) subject to Section 7.2, the
execution, delivery or transfer of, or payment or failure to pay under, the DSR
Letter of Credit; (vi) any claim of any Person with respect to any finder's fee,
brokerage commission or other similar sum due in connection with any Project
Contract; or (vii) any failure by the Company to comply with any Environmental
Requirement; PROVIDED, HOWEVER, that the Company shall not be required to
indemnify the Issuing Bank for any claims, damages, losses, liabilities, costs
or expenses to the extent caused by the Issuing Bank's willful misconduct or
gross negligence in paying under the DSR Letter of Credit or the Issuing Bank's
willful or grossly negligent failure to pay under the DSR Letter of Credit after
the presentation to it by the beneficiary of a draft and certificate strictly
complying with the terms and conditions of the DSR Letter of Credit (unless the
Issuing Bank in good faith believed itself (based upon an opinion of counsel) to
be prohibited by law or legal authority from making such payment). The Company,
upon demand by any party indemnified or intended to be indemnified pursuant to
this Section 9.10 at any time, shall also reimburse such party for any
reasonable legal or other expenses incurred in connection with investigating or
defending against any of the foregoing. If any action, suit or proceeding
arising from any of the foregoing is brought against any party indemnified or
intended to be indemnified pursuant to this Section 9.10 (an "INDEMNIFIED
PARTY"), such Indemnified Party shall promptly notify the Company in writing,
enclosing a copy of all papers served, but the omission so to notify the Company
of any such action shall not relieve it of any liability that it may have to any
Indemnified Party otherwise than under this Section 9.10; PROVIDED, HOWEVER,
that the Company shall not be liable for any settlement of any such action
effected without the Company's prior written consent. In case any such action
shall be brought against any Indemnified Party and it shall notify the Company
of the commencement thereof, the Company shall be entitled to participate in
and, to the extent that it shall wish, to assume the defense thereof with
counsel reasonably satisfactory to such Indemnified Party, and after notice from
the Company to such Indemnified Party of the Company's election so to assume the
defense thereof, the Company shall not be liable to such Indemnified Party for
any subsequent legal or other expenses attributable to such defense, except as
provided below, other than reasonable costs of investigation subsequently
incurred by such Indemnified Party in connection with the defense thereof. The
Indemnified Party shall have the right to employ its own counsel in any such
action, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party unless (i) the employment of counsel by such Indemnified
Party has been authorized by the Company, (ii) the Indemnified Party shall have
reasonably concluded that there may be a conflict of interest between the
Company and the Indemnified Party in the conduct of the defense of such action
(in which case the Company shall not have the right to direct the defense of
such action on behalf of the Indemnified Party) or counsel for the Company shall
have declined to represent the Indemnified Party in light of a potential
conflict of interest or (iii) the Company shall not in fact have employed
counsel reasonably satisfactory to the Indemnified Party to assume the defense
of such action.
36
SECTION 9.11 GOVERNING LAW; SUBMISSION OF JURISDICTION; VENUE; WAIVER
OF JURY TRIAL.
(a) THE RIGHTS AND OBLIGATIONS OF EACH OF THE PARTIES UNDER THIS
AGREEMENT AND ANY DSR NOTE SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW
SECTION 5-1401, BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING AGAINST THE COMPANY WITH
RESPECT TO THIS AGREEMENT, ANY DSR NOTE OR ANY OTHER CREDIT DOCUMENT MAY BE
BROUGHT IN ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ IN THE COUNTY OF NEW YORK OR OF
THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK AND, BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, THE COMPANY HEREBY IRREVOCABLY ACCEPTS FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS. THE COMPANY HEREBY IRREVOCABLY DESIGNATES,
APPOINTS AND EMPOWERS CT CORPORATION SYSTEM, WITH OFFICES ON THE DATE HEREOF AT
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, AS ITS DESIGNEE, APPOINTEE AND AGENT WITH
RESPECT TO ANY ACTION OR PROCEEDING IN NEW YORK TO RECEIVE, ACCEPT AND
ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE OF
ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN
ANY SUCH ACTION OR PROCEEDING AND AGREES THAT THE FAILURE OF SUCH AGENT TO GIVE
ANY ADVICE OF ANY SUCH SERVICE OF PROCESS TO THE COMPANY SHALL NOT IMPAIR OR
AFFECT THE VALIDITY OF SUCH SERVICE OR OF ANY CLAIM BASED THEREON. IF FOR ANY
REASON SUCH DESIGNEE, APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS
SUCH, THE COMPANY AGREES TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN NEW
YORK CITY ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION SATISFACTORY TO
THE AGENT. THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
THE COMPANY AT ITS ADDRESS SET FORTH IN SECTION 9.2, SUCH SERVICE TO BECOME
EFFECTIVE 30 DAYS AFTER SUCH MAILING.
(b) THE COMPANY HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR
PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, ANY DSR NOTE OR
ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN SECTION 9.11(a)
ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN
ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.
37
(c) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO ANY OF THIS AGREEMENT, ANY DSR NOTE, OR THE CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
SECTION 9.12 HEADINGS.
The section and subsection headings used herein have been inserted for
convenience of reference only and do not constitute matters to be considered in
interpreting this Agreement.
SECTION 9.13 EXECUTION IN COUNTERPARTS.
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
38
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized, as of the
day and year first above written.
AES RED OAK, L.L.C.
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
COMMITMENT Percentage Interest
$22,000,000 100%
DRESDNER BANK AG, acting through its
New York Branch, as Agent, as Issuing Bank
and as a Bank
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
EXHIBIT A
FORM OF DEBT SERVICE RESERVE LETTER OF CREDIT
ISSUING BANK: Letter of Credit No. 14A6-00
Dresdner Bank AG, acting through its Irrevocable Standby Credit
New York Branch
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ 10005-2889
Date and Place of Issue: Date and Place of Expiry:
New York, New York New York, New York
March 15, 2000 March 15, 2007, as the same may be
extended from time to time in
accordance with the terms hereof
Applicant:
AES Red Oak, L.L.C.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Amount: Up to an aggregate of
Twenty-Two Million United States
Dollars
(US$22,000,000)
Beneficiary: Credit Available With:
The Bank of New York, Dresdner Bank AG, acting through its
as Collateral Agent New York Branch
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 75 Wall Street, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ By: Negotiation, Against Presentation
Attn: Corporate Trust Administration of the Documents Detailed Herein,
Drawn on
Dresdner Bank AG, acting through its
New York Branch
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
We irrevocably authorize you to draw on us for the account of the
Applicant up to an aggregate amount of TWENTY-TWO MILLION UNITED STATES DOLLARS
(US$22,000,000) or, on any day, such other amount as shall be specified as the
Stated Amount Value for such day on Schedule 1 attached to this Letter of Credit
to the extent such other
Ex. A-1
amount is less than $22,000,000 (as reduced and reinstated from time to time as
set forth in this Letter of Credit, the "STATED AMOUNT") available against
presentation of a dated drawing request drawn on Dresdner Bank AG, acting
through its New York Branch, manually signed by an authorized officer of the
Beneficiary (who is identified as such) appropriately completed in the form of
Annex 1 hereto.
The above drawing request and all communications with respect to this
Letter of Credit shall be in writing, addressed to us at:
Dresdner Bank AG, New York Branch
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇
Credit Administration Department
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Dresdner Bank AG, New York Branch
Global Project Finance
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Portfolio Management Group
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
referencing this Letter of Credit No. 14A6-00 and presented to us by delivery in
person or facsimile transmission at such address, provided that the original of
the above drawing request or such communications, as the case may be, shall be
sent to us at such address by overnight courier for receipt by us within two (2)
Business Days of the date of any such facsimile transmission.
If the drawing request is presented in compliance with the terms of
this Letter of Credit to us at such address by 12:00 noon New York City time on
any Business Day, payment will be made no later than 3:00 p.m. New York City
time on such Business Day and if such drawing request is so presented to us
after 12:00 noon New York City time on any Business Day, payment will be made no
later than 12:00 noon New York City time on the following Business Day. Payment
under this Letter of Credit shall be made in immediately available funds by wire
transfer to such account as may be designated by the Beneficiary in the
applicable drawing request.
Ex. A-2
As used in this Letter of Credit, "Business Day" means any day on which
commercial banks located in New York, New York are not required or authorized to
remain closed.
This Letter of Credit shall automatically terminate upon the earliest
of (i) the then applicable Stated Expiration Date or New Stated Expiration Date
(as each such term is hereinafter defined), as the case may be, (ii) the date on
which we receive notice from the Trustee consenting to termination of the Letter
of Credit by the Applicant and (iii) the date on which payment is made pursuant
to a drawing request in the form of Annex 1 which includes a certification in
the form of the second, third or fourth alternative paragraph (C) contained in
such form of Annex 1 attached hereto. Notwithstanding the foregoing, we may at
any time, subject to the provisions of the Debt Service Reserve Letter of Credit
and Reimbursement Agreement, dated as of March 1, 2000, among the Applicant, the
Issuing Bank and the other Banks party thereto and the Issuing Bank, as Agent
(the "REIMBURSEMENT AGREEMENT"), terminate this Letter of Credit by giving the
Beneficiary and The Bank of New York, as Trustee (in such capacity, the
"TRUSTEE") under the Indenture referred to in the Reimbursement Agreement,
written notice thereof in the form of Annex 2 hereto by delivery in person or
facsimile transmission (with written confirmation by overnight courier for
receipt by the Beneficiary and the Trustee within two (2) Business Days)
addressed to in the case of the Beneficiary, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Corporate Trust Administration, telecopier no.
▇▇▇-▇▇▇-▇▇▇▇, and in the case of the Trustee, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Corporate Trust Administration, telecopier no.
▇▇▇-▇▇▇-▇▇▇▇, at least sixty (60) days prior to termination whereupon the
Beneficiary is authorized to draw on us prior to such termination the Stated
Amount of this Letter of Credit by presentation to us, in the manner and at the
address specified in the third preceding paragraph, of a drawing request
appropriately completed in the form of Annex 1 hereto and signed by the
Beneficiary's authorized officer (the earliest of the date referred to in the
preceding sentence, and the effective date of any termination in accordance with
this sentence, being referred to herein as the "EXPIRY DATE").
This Letter of Credit is effective immediately but drawings hereunder
shall not be permitted until we shall have received at the address set forth in
the fourth preceding paragraph a dated certificate manually signed by an officer
of the Beneficiary in the form of Annex 3 hereto. Unless terminated earlier in
accordance with the provisions hereof, the date of expiry set forth hereinabove
(the "STATED EXPIRATION DATE") may be extended for a period of one or more years
at the option of the Agent effective upon the Stated Expiration Date (each
expiration date of any extension being referred to as the "NEW STATED EXPIRATION
DATE") upon notice of such extension given by Dresdner Bank AG, acting through
its New York Branch, to the Beneficiary and the Trustee by delivery in person or
facsimile transmission (with written confirmation by overnight courier for
receipt by the Beneficiary and the Trustee within two (2) Business Days)
addressed to in the case of the Beneficiary, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Corporate Trust Administration, and in the case of
the Trustee, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention:
Corporate Trust Administration, on or before the date that is forty-five (45)
days prior to the Stated Expiration Date or any such New Stated Expiration Date
which notice of extension shall have attached to it a revised Schedule 1, to be
attached to this Letter of Credit, setting forth the Stated Amount Values (as
defined in the
Ex. A-3
Reimbursement Agreement) for each day of the term of this Letter of Credit
(giving effect to any reductions theretofore effected pursuant to a Certificate
in the form of Annex 6 or Annex 7 hereto) for the period from and including the
effective date of the extension, to and including the New Stated Expiration
Date.
In the event that a drawing request fails to comply with the terms of
this Letter of Credit, we shall provide the Beneficiary prompt notice of same
stating the reasons therefor and shall upon your instructions hold any
non-conforming drawing request and other documents at your disposal or return
any non-conforming drawing request and other documents to the Beneficiary at the
address set forth above by delivery in person or facsimile transmission (with
originals thereof sent by overnight courier for receipt within two (2) Business
Days). Upon being notified that the drawing was not effected in compliance with
this Letter of Credit, the Beneficiary may attempt to correct such non-complying
drawing request in accordance with the terms of this Letter of Credit prior to
the Expiry Date.
This Letter of Credit sets forth in full the terms of our undertaking
and this undertaking shall not in any way be modified, amended, limited or
amplified by reference to any document, instrument or agreement referred to
herein, except only defined terms used herein and the drawing requests and
certificates referred to herein; and any such reference shall not be deemed to
incorporate herein by reference any document, instrument, or agreement except
for such defined terms, drawing requests and certificates.
This Letter of Credit may be assigned upon presentation to us of a
signed transfer certificate in the form of Annex 4 accompanied by this Letter of
Credit, in which the Beneficiary irrevocably transfers to such transferee all of
its rights hereunder, whereupon we agree to either issue a substitute letter of
credit to such successor or endorse such transfer on the reverse of this Letter
of Credit.
Partial drawings under this Letter of Credit are allowed and each such
partial drawing shall reduce the Stated Amount hereof available for drawings
under this Letter of Credit. This Letter of Credit shall be reinstated as
provided in Section 2.7(c) of the Reimbursement Agreement and we shall so advise
the Beneficiary in a certificate in the form of Annex 5 hereto. The Stated
Amount shall be reduced as provided in Section 2.7(b) of the Reimbursement
Agreement. In addition, the Stated Amount Values in Schedule 1 to this Letter of
Credit shall be reduced as provided in Sections 2.2(c)(ii) and (e) of the
Reimbursement Agreement to the extent that we so advise the Beneficiary pursuant
to a certificate in the form of Annex 6 hereto. The Stated Amount shall be
reduced upon receipt by us of a certificate from the Trustee consenting to a
reduction of the Stated Amount by the Applicant to the extent that we so advise
the Beneficiary pursuant to a certificate in the form of Annex 7 hereto.
All banking charges, including any advising and negotiating bank
charges, are for the account of the Applicant.
All drawing requests under this Letter of Credit must bear the clause:
Ex. A-4
"Drawn under Dresdner Bank AG, acting through its New York Branch,
Letter of Credit No. 14A6-00 dated March 15, 2000."
This Letter of Credit shall not be amended except with the written
concurrence of Dresdner Bank AG, New York Branch, the Applicant and the
Beneficiary.
We hereby engage with you that a drawing request drawn strictly in
compliance with the terms of this Letter of Credit and amendments thereto shall
meet with due honor upon presentation.
This Letter of Credit is subject to the International Standby Practices
of the Chamber of Commerce ("ISP98"). This Letter of Credit shall be deemed to
be a contract made under the laws of the State of New York and shall, as to
matters not governed by ISP98, be governed by and construed in accordance with
the laws of such State.
We irrevocably agree with you that any legal action or proceeding with
respect to this Letter of Credit shall be brought in the courts of the State of
New York in the County of New York or of the United States of America in the
Southern District of New York. By signing this Letter of Credit, we irrevocably
submit to the jurisdiction of such courts solely for the purposes of this Letter
of Credit. We hereby waive, to the fullest extent permitted by law, any
objection we may now or hereafter have to the laying of venue in any such action
or proceeding in any such court.
DRESDNER BANK AG, acting through its
New York Branch
By:
--------------------------------
Authorized Signature
By:
--------------------------------
Authorized Signature
Ex. A-5
ANNEX 1
DRAWING REQUEST
[Date]
"Drawn under Dresdner Bank AG, acting through its New York Branch
Letter of Credit No. 14A6-00 Irrevocable Standby Letter of Credit
dated March 15, 2000."
Dresdner Bank AG,
New York Branch
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇
Credit Administration Department
cc: Dresdner Bank AG, New York Branch
Global Project Finance
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Portfolio Management Group
Ladies and Gentlemen:
The undersigned hereby draws on Dresdner Bank AG, acting through its
New York Branch, Letter of Credit No. 14A6-00 Irrevocable Standby Letter of
Credit (the "LETTER OF CREDIT"), dated March 15, 2000, issued by you in favor of
us. Any capitalized term used herein and not defined herein shall have its
respective meaning as set forth in the Letter of Credit.
In connection with this drawing, we hereby certify that:
(A) "This drawing in the amount of US$_________ is being made pursuant to
Dresdner Bank AG, acting through its New York Branch, Letter of Credit No.
14A6-00 Irrevocable Standby Letter of Credit issued to [Collateral Agent]
pursuant to Section 3.12 of the Collateral Agency and Intercreditor Agreement,
dated as of March 1, 2000, by and among the Company, The Bank of New York, as
Trustee, Collateral Agent and Depositary Bank, and Dresdner Bank AG, acting
through its New York Branch, as Working Capital Provider, DSR LOC Provider, and
PPA LOC Provider (as the same may be amended, supplemented or modified from time
to time, the "COLLATERAL AGENCY AGREEMENT")"; and
(B) "The [Commercial Operation Date] [Guaranteed Provisional Acceptance Date]
has occurred (each capitalized term being used as defined in the Indenture)";
and
1-1
[Use one or more of the following forms of paragraph C, as applicable]
(C) "After the transfer of monies on deposit in the Debt Service Reserve Account
to the Bond Payment Account, there are insufficient monies in the Bond Payment
Account on the [Interest] [Principal] Payment Date occurring _______________,
200_ to pay the [interest] [and] [principal] due on the Bonds on such date (each
capitalized term being used as defined in the Indenture)";
or
(C) "The long-term debt rating of Dresdner Bank AG, has fallen below the
Required Rating, and the Company has failed within 45 days to deliver a
replacement letter of credit from a financial institution which meets the
Required Rating (each capitalized term being used as defined in the Collateral
Agency Agreement)";
or
(C) "A Trigger Event has occurred and is continuing and the written request of
the Required Senior Parties contained in the Senior Party Certificates has been
delivered to the Collateral Agent and not been rescinded (each capitalized term
being used as defined in the Collateral Agency Agreement)";
or
(C) "You have delivered to us notice that the Letter of Credit will not be
extended or replaced upon its stated expiry date of [insert Stated Expiration
Date or New Stated Expiration Date, as applicable] and the Company has failed to
deliver no later than 45 days prior to such stated expiry date a replacement
letter of credit from a financial institution which meets the Required Rating
(each capitalized term being used as defined in the Collateral Agency
Agreement)";
or
(C) "There are insufficient funds available pursuant to Section 3.10(b) of the
Collateral Agency Agreement to repay interest now due and payable on any DSR LOC
Loans made by Dresdner Bank AG, acting through its New York Branch, in respect
of drawings under Dresdner Bank AG, acting through its New York Branch, Letter
of Credit No. [ ] Irrevocable Standby Letter of Credit[, and the drawing
requested hereunder, together with all drawings under the Letter of Credit do
not exceed the LOC Interest Amount $____________ in the aggregate] (each
capitalized term being used as defined in the Collateral Agency Agreement)"; and
(D) "The amount requested to be drawn does not exceed the Stated Amount"; and
(E) "You are directed to make payment of the requested drawing to account no.
____________ at ____________________________ [insert bank name, address and
account number]."
1-2
IN WITNESS WHEREOF, the undersigned has executed and delivered this request
on this _____ day of _______________, 200_.
THE BANK OF NEW YORK, as
Collateral Agent
By:
-------------------------------------------
Name:
Title:
1-3
ANNEX 2
NOTICE OF TERMINATION OF LETTER OF CREDIT
[Date]
[Name of Trustee],
as Trustee
[Address]
[Address]
Attention:
[Name of Collateral Agent],
as Collateral Agent
[Address]
[Address]
Attention:
Ladies and Gentlemen:
Reference is made to Dresdner Bank AG, acting through its New York
Branch, Letter of Credit No. 14A6-00 Irrevocable Standby Letter of Credit (the
"LETTER OF CREDIT"), dated March 15, 2000, issued by us in favor of [Collateral
Agent].
This constitutes our notice to you pursuant to the Letter of Credit
that the Letter of Credit shall terminate on ___________, 200_ [insert a date
which is 60 or more days after the date of this notice of termination (the
"TERMINATION DATE")].
Pursuant to the terms of the Letter of Credit, you are authorized to
draw (pursuant to one or more drawings), prior to the Termination Date, on the
Letter of Credit in an aggregate amount that does not exceed the Stated Amount
(as defined in the Letter of Credit).
Very truly yours,
DRESDNER BANK AG, acting through its New York
Branch
By:
-------------------------------------------
Name:
Title:
2-1
By:
-------------------------------------------
Name:
Title:
2-2
ANNEX 3
CERTIFICATE AS TO OCCURRENCE
OF COMMERCIAL OPERATION DATE/GUARANTEED
PROVISIONAL ACCEPTANCE DATE
[Date]
"Delivered under Dresdner Bank AG, acting through its
New York Branch, Letter of Credit No. 14A6-00
dated March 15, 2000."
Dresdner Bank AG,
New York Branch
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇
Credit Administration Department
cc: Dresdner Bank AG, New York Branch
Global Project Finance
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Portfolio Management Group
Ladies and Gentlemen:
The undersigned hereby refers to Dresdner Bank AG, acting through its
New York Branch, Letter of Credit No. 14A6-00 Irrevocable Standby Letter of
Credit (the "LETTER OF CREDIT"), dated March 15, 2000, issued by you in favor of
us.
We hereby certify that we have received a certificate of the Company
stating that the [Commercial Operation Date] [Guaranteed Provisional Acceptance
Date] has occurred (each capitalized word being used as defined in the Trust
Indenture, dated as of March 1, 2000, by and among the Company, The Bank of New
York, as Trustee, and The Bank of New York, as Depositary Bank (as the same may
be amended, supplemented or modified from time to time)).
3-1
IN WITNESS WHEREOF, the undersigned has executed and delivered this
request on this _____ day of ______________, 200_.
THE BANK OF NEW YORK, as
Collateral Agent
By:
-------------------------------------------
Name:
Title:
3-2
ANNEX 4
TRANSFER OF LETTER OF CREDIT
[Date]
"Delivered under Dresdner Bank AG, acting through its
New York Branch, Letter of Credit No. 14A6-00
dated March 15, 2000."
Dresdner Bank AG,
New York Branch
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇
Credit Administration Department
cc: Dresdner Bank AG, New York Branch
Global Project Finance
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Portfolio Management Group
Gentlemen:
Reference is made to Dresdner Bank AG, acting through its New York
Branch, Letter of Credit No. 14A6-00 Irrevocable Standby Letter of Credit, dated
March 15, 2000, originally issued by you in favor of [Collateral Agent] (the
"LETTER OF CREDIT"). Any capitalized terms used, but not defined, herein shall
have its respective meaning as set forth in the Letter of Credit.
For value received, the undersigned, as Beneficiary under the Letter of
Credit, hereby irrevocably transfers to _____________ (the "TRANSFEREE") all
rights of the undersigned to draw under the Letter of Credit in their entirety.
The Transferee is the successor to the Beneficiary, as Collateral Agent
under the Collateral Agency and Intercreditor Agreement, dated as of March 1,
2000, by and among the Company, The Bank of New York, as Trustee, Collateral
Agent and Depositary Bank, and Dresdner Bank AG, acting through its New York
Branch, as Working Capital Provider, DSR LOC Provider, and PPA LOC Provider (as
the same may be amended, supplemented or modified from time to time, the
"COLLATERAL AGENCY AGREEMENT") and all conditions to appointment of such
successor set forth in the Collateral Agency Agreement have been satisfied.
4-1
By this transfer, all rights of the undersigned, as Beneficiary under
the Letter of Credit, are transferred to the Transferee, and the Transferee
shall have the sole rights with respect to the Letter of Credit relating to any
amendments thereof and any notices thereunder. All amendments to the Letter of
Credit are to be consented to by the Transferee without necessity of any consent
of or notice to the undersigned.
Simultaneously with the delivery of this notice to you, copies of this
notice are being transmitted to the Transferee.
The Letter of Credit is returned herewith, and we ask you to either
issue a substitute letter of credit for the benefit of the Transferee or endorse
the transfer on the reverse thereof, and forward it directly to the Transferee
with your customary notice of transfer.
Very truly yours,
THE BANK OF NEW YORK, as
Collateral Agent
By:
-------------------------------------------
Name:
Title:
▇-▇
▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
[Date]
[Name of Collateral Agent], as
Collateral Agent
[Address]
[Address]
Attention:
Ladies and Gentlemen:
Reference is made to Dresdner Bank AG, acting through its New York
Branch, Letter of Credit No. 14A6-00 Irrevocable Standby Letter of Credit (the
"LETTER OF CREDIT"), dated March 15, 2000, issued by us in your favor. Any
capitalized term used herein and not defined shall have its respective meaning
as set forth in the Letter of Credit. Reference is also made to that certain
Collateral Agency and Intercreditor Agreement, dated as of March 1, 2000, by and
among the Company, The Bank of New York, as Trustee, Collateral Agent and
Depositary Bank, and Dresdner Bank AG, acting through its New York Branch, as
Working Capital Provider, DSR LOC Provider, and PPA LOC Provider (as the same
may be amended, supplemented or modified from time to time, the "COLLATERAL
AGENCY AGREEMENT").
This constitutes our notice to you pursuant to the Letter of Credit
that:
[use one or more of the following paragraphs]
We have received repayment of a DSR LOC Loan in accordance with the
provisions of the Reimbursement Agreement in the amount of $_________, and,
pursuant to Section 2.7(c) of the Reimbursement Agreement, the Stated Amount is
therefore increased to $___________.
or
We have received payment of a DSR LOC Loan in accordance with the
provisions of the Reimbursement Agreement in the amount of $____________. The
DSRA Required Balance (as defined in the Collateral Agency Agreement) has been
previously reduced. Accordingly, the Stated Amount is hereby increased by
$___________ to $__________ to the extent that such
5-1
increase shall not cause the Stated Amount (when added to the balance in the
Debt Service Reserve Account (as defined in the Collateral Agency Agreement)) to
exceed the DSRA Required Balance or the Stated Amount Value applicable for the
date of such reinstatement.
Very truly yours,
DRESDNER BANK AG, acting through its New
York Branch
By:
-------------------------------------------
Name:
Title:
By:
-------------------------------------------
Name:
Title:
5-2
ANNEX 6
CERTIFICATE OF REDUCTION OF STATED AMOUNT
AND STATED AMOUNT VALUES
[Date]
[Name of Collateral Agent], as
Collateral Agent
[Address]
[Address]
Attention:
Ladies and Gentlemen:
Reference is made to Dresdner Bank AG, acting through its New York
Branch, Letter of Credit No. 14A6-00 Irrevocable Standby Letter of Credit (the
"LETTER OF CREDIT"), dated March 15, 2000, issued by us in your favor. Any
capitalized term used herein and not defined shall have its respective meaning
as set forth in the Letter of Credit. Reference is also made to that certain
Collateral Agency and Intercreditor Agreement, dated as of March 1, 2000, by and
among the Company, The Bank of New York, as Trustee, Collateral Agent and
Depositary Bank, and Dresdner Bank AG, acting through its New York Branch, as
Working Capital Provider, DSR LOC Provider, and PPA LOC Provider (as the same
may be amended, supplemented or modified from time to time, the "COLLATERAL
AGENCY AGREEMENT").
This constitutes our notice to you pursuant to the Letter of Credit
that we have been advised by the Applicant that:
[use one or more of the following paragraphs]
An event specified in Section 2.2(c)(ii) of the Reimbursement Agreement
has occurred and, accordingly, each of the Stated Amount Values specified in
Schedule 1 attached to this Letter of Credit is reduced by $______ [insert
amount of DSR LOC Loan being converted into DSR Bond].
or
The DSRA Required Balance (as defined in the Collateral Agency
Agreement) has been reduced by the amount of $__________. Accordingly, pursuant
to Section 2.2(e) of the Reimbursement Agreement, each of the Stated Amount
Values specified in Schedule 1 attached to this Letter of Credit is reduced by
$__________ [insert appropriate portion of reduction in DSRA Required Balance].
6-1
Attached hereto is a revised Schedule 1, to be attached to the Letter
of Credit, modifying the Stated Amount Values in accordance with this
Certificate.
Very truly yours,
DRESDNER BANK AG, acting through its New
York Branch
By:
------------------------------------------
Name:
Title:
By:
-------------------------------------------
Name:
Title:
6-2
ANNEX 7
CERTIFICATE OF REDUCTION OF STATED AMOUNT
AND STATED AMOUNT VALUES
[Date]
[Name of Collateral Agent], as
Collateral Agent
[Address]
[Address]
Attention:
Ladies and Gentlemen:
Reference is made to Dresdner Bank AG, acting through its New York
Branch, Letter of Credit No. 14A6-00 Irrevocable Standby Letter of Credit (the
"LETTER OF CREDIT"), dated March 15, 2000, issued by us in your favor. Any
capitalized term used herein and not defined shall have its respective meaning
as set forth in the Letter of Credit. Reference is also made to that certain
Collateral Agency and Intercreditor Agreement, dated as of March 1, 2000, by and
among the Applicant, The Bank of New York, as Trustee (the "TRUSTEE"),
Collateral Agent and Depositary Bank, and Dresdner Bank AG, acting through its
New York Branch, as Working Capital Provider, DSR LOC Provider and PPA LOC
Provider (as the same may be amended, supplemented or modified from time to
time, the "COLLATERAL AGENCY AGREEMENT").
This constitutes our notice to you pursuant to the Letter of Credit
that we have been advised by the Trustee that:
The Applicant has requested, and the Trustee has consented to, the
reduction of the Stated Amount. Accordingly, effective on ________, 200_,
[insert date which is at least two Business Days after the date of this
Certificate], the Stated Amount shall be reduced to $________ and each of the
Stated Amount Values specified in Schedule 1 attached to this Letter of Credit
is reduced by $_________. Attached hereto is a revised Schedule 1 to be attached
to the Letter of Credit, modifying the Stated Amount Values in accordance with
this Certificate.
Very truly yours,
DRESDNER BANK AG, acting through its
New York Branch
By:
-------------------------------------------
Name:
Title:
By:
-------------------------------------------
Name:
Title:
7-1
SCHEDULE 1
DATE STATED AMOUNT VALUE
------ -------------------
Feb-02 18,364,489
May-02 19,676,828
Aug-02 20,960,063
Nov-02 20,097,724
Feb-03 18,747,648
May-03 21,087,545
Aug-03 22,000,000
Nov-03 21,317,543
Feb-04 18,380,779
May-04 20,348,521
Aug-04 22,000,000
Nov-04 20,596,548
Feb-05 18,125,872
May-05 20,033,960
Aug-05 22,000,000
Nov-05 20,452,202
Feb-06 18,052,665
May-06 20,724,896
Aug-06 22,000,000
Nov-06 21,246,980
Feb-07 17,887,419
7-2
EXHIBIT B
FORM OF DSR LOC LOAN PROMISSORY NOTE
$22,000,000 New York, New York
March 15, 2000
FOR VALUE RECEIVED, the undersigned, AES Red Oak, L.L.C., a Delaware
limited liability company (the "COMPANY"), hereby unconditionally promises to
pay to the order of Dresdner Bank AG, acting through its New York Branch (the
"AGENT") for the benefit of the Banks party from time to time to the
Reimbursement Agreement referred to below the lesser of (i) the principal sum of
Twenty-Two Million Dollars ($22,000,000) and (ii) the aggregate unpaid principal
amount of DSR LOC Loans owing to the Banks by the Company under the
Reimbursement Agreement, on the dates and in the amounts described therein and,
if any such DSR LOC Loans shall have been converted into DSR LOC Term Loans or
DSR Bonds, and replacement DSR Notes (as defined in the Reimbursement Agreement)
evidencing such converted Loans shall not have been executed and delivered to
the Agent, the aggregate unpaid principal amount of such DSR LOC Term Loans or
DSR Bonds.
The Company further promises to pay interest on the daily unpaid
principal amount hereof from time to time outstanding on the dates and at the
rates specified in the Reimbursement Agreement. This DSR LOC Loan Note is hereby
expressly limited so that in no contingency or event, whether by reason of
acceleration of the maturity of any indebtedness evidenced hereby or otherwise,
shall the interest contracted for or charged or received by the Agent for the
account of the Banks exceed the maximum amount permissible under Applicable Law.
If, from any circumstance whatsoever, interest would otherwise be payable to the
Agent for the account of the Banks, in excess of the maximum lawful amount, the
interest payable to the Agent for the account of the Banks shall be reduced to
the maximum amount permitted under Applicable Law, and the amount of interest
for any subsequent period, to the extent less than that permitted by Applicable
Law, shall to that extent be increased by the amount of such reduction.
The holder hereof is irrevocably authorized to endorse on the schedule
attached hereto, or on a continuation thereof, the date each such interest
payment is due and the amount of each such interest payment determined in
accordance with the Reimbursement Agreement. All such notations shall constitute
PRIMA FACIE evidence of the accuracy of the information so recorded and be
enforceable against the Company with the same force and effect as if such
amounts were each set forth in a separate DSR LOC Loan Note executed by the
Company.
All payments due hereunder shall be made without set-off, counterclaim
or deduction of any nature to the Agent, for the account of the Banks, in lawful
money of the United States of America and in immediately available funds, at
such place and in such manner as may be specified by the Agent pursuant to the
Reimbursement Agreement.
The holder hereof is irrevocably authorized to endorse on the schedule
attached hereto, or on a continuation thereof, the date and amount of each DSR
LOC Loan made by the Banks and
Ex. B-1
each payment or prepayment of principal thereof, provided that the failure of
the holder to make, or any error in making, any such recordation or endorsement
shall not affect the obligations of the Company hereunder or under the
Reimbursement Agreement. All such notations shall constitute PRIMA FACIE
evidence of the accuracy of the information so recorded and be enforceable
against the Company with the same force and effect as if such amounts were each
set forth in a separate DSR LOC Loan Note executed by the Company.
This DSR LOC Loan Note is the "DSR LOC Loan Note" of the Company to the
Agent, for the benefit of the Banks, referred to in, evidences each DSR LOC Loan
owing to the Banks by the Company under, is subject to the provisions of, and
entitles the holder to the benefits of, the Debt Service Reserve Letter of
Credit and Reimbursement Agreement, dated as of March 1, 2000 (the
"REIMBURSEMENT AGREEMENT"), among the Company, the Banks (including the Issuing
Bank) parties thereto, and the Agent, as the same may be amended, supplemented
or otherwise modified from time to time and to which reference is hereby made
for a more complete statement of the terms and conditions under which each DSR
LOC Loan evidenced hereby is to be incurred and paid. Capitalized terms in this
DSR LOC Loan Note that are not specifically defined herein shall have the
meanings ascribed to them in the Reimbursement Agreement.
The Reimbursement Agreement provides for, among other things, the
acceleration of the maturity of the unpaid principal amount hereof upon the
occurrence of certain stated events and for voluntary prepayments in certain
circumstances and upon certain terms and conditions. The obligations of the
Company under the Reimbursement Agreement and this DSR LOC Loan Note are secured
by, and the holder hereof is entitled to the benefit of, the Security Documents.
In addition to any and all costs, fees and expenses for which the
Company is liable under the Reimbursement Agreement, the Company promises to pay
all costs and expenses, including reasonable attorneys' fees and disbursements,
incurred in the collection and enforcement hereof or any appeal of any judgment
rendered hereon.
The Company hereby expressly waives diligence, presentment, protest,
demand, dishonor, nonpayment and notice of every kind to the fullest extent
permitted by Applicable Law. No failure or delay by the holder of this DSR LOC
Loan Note to exercise any right or remedy under this DSR LOC Loan Note or any
other document or instrument entered into pursuant to the Reimbursement
Agreement shall operate or be construed as a waiver or modification hereof or
thereof.
This DSR LOC Loan Note shall be binding upon the successors and assigns
of the Company and shall inure to the Agent and its successors, endorsees and
assigns. If any term or provision of this DSR LOC Loan Note shall be held
invalid, illegal or unenforceable, the validity of all other terms and
provisions hereof shall in no way be affected thereby.
Recourse under this DSR LOC Loan Note is limited in accordance with
Section 9.7 of the Reimbursement Agreement, and the provisions of said Section
9.7 are incorporated herein by reference.
Ex. B-2
THIS DSR LOC LOAN NOTE SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS
LAW SECTION 5-1401, BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING AGAINST THE COMPANY WITH
RESPECT TO THIS DSR LOC LOAN NOTE MAY BE BROUGHT IN ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇ IN THE COUNTY OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK AND, BY EXECUTION AND DELIVERY OF THIS DSR LOC LOAN NOTE,
THE COMPANY HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS
OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS DSR LOC LOAN NOTE
BROUGHT IN THE COURTS REFERRED TO ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES
AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
AES RED OAK, L.L.C.
By:
-------------------------------------------
Name:
Title:
Ex. B-3
SCHEDULE
Principal
Amount of Amount and Date Unpaid Total Principal
Date Loan Reimbursement of Principal Principal Date Interest Amount of Amount of DSR LOC Notation
Made Obligation Paid or Prepaid Balance Payment is Due Interest Due Loans Outstanding Made By
----------- ------------- ---------------- --------- -------------- ------------- ----------------- --------
Ex. B-4
EXHIBIT C
FORM OF ASSIGNMENT AND ACCEPTANCE
Dated __________, 200__
Reference is made to the Debt Service Reserve Letter of Credit and
Reimbursement Agreement, dated as of March 1, 2000 (the "REIMBURSEMENT
Agreement"), among AES Red Oak, L.L.C., a Delaware limited liability company
(the "COMPANY"), the Issuing Bank (as defined in the Reimbursement Agreement),
the Banks (as defined in the Reimbursement Agreement) and Dresdner Bank AG,
acting through its New York Branch, as Agent for the Banks (the "AGENT"). Terms
defined in the Reimbursement Agreement are used herein with the same meaning.
_________________ (the "ASSIGNOR") and ___________________ (the
"ASSIGNEE") agree as follows:
(1) The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, the percentage interest
specified on Schedule 1 hereto in and to all of the Assignor's rights and
obligations under the Reimbursement Agreement as of the date hereof (after
giving effect to any other assignments thereof made before the date hereof,
whether or not such assignments have become effective, but without giving effect
to any other assignments thereof also made on the date hereof), including,
without limitation, such percentage interest in the Assignor's Commitment, each
of the DSR Loans owing to the Assignor and the DSR Letter of Credit. The
Assignee shall pay to the Assignor, at or before 12:00 noon, local time of the
Assignor, on the Effective Date, the purchase price therefor in an amount equal
to the percentage interest of each of the DSR Loans owing to the Assignor, as
reflected on Schedule 1 hereto, in immediately available funds.
(2) The Assignor (a) represents and warrants that as of the date hereof its
Commitment, each of the DSR Loans owing to it and its participation in the DSR
Letter of Credit (after giving effect to any other assignments of the foregoing
made before the date hereof, whether or not such assignments have become
effective, but without giving effect to any other such assignments also made on
the date hereof) are in the respective dollar amounts specified therefor on
Schedule 1 hereto; (b) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (c) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with any of the Credit
Documents or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of any of the Credit Documents or any other instrument or
document furnished pursuant thereto; and (d) makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
Company or the performance or observance by the Company or any other Person of
any of its obligations under any of the Credit Documents or any other instrument
or document furnished pursuant thereto.
Ex. C-1
(3) The Assignee (a) confirms that it has received copies of the Credit
Documents and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Assignment and
Acceptance, including such documents evidencing satisfaction of the conditions
precedent set forth in the Reimbursement Agreement; (b) agrees that it will,
independently and without reliance upon the Agent, the Assignor or any other
Bank (including the Issuing Bank) and based on such documents and information as
it may deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Reimbursement Agreement; (c) appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers under the Credit Documents as are delegated to the Agent by
the terms thereof, together with such powers as are reasonably incidental
thereto; (d) agrees that it will perform in accordance with their terms all of
the obligations that by the terms of the Reimbursement Agreement are required to
be performed by it as a Bank; and (e) specifies as its address for notices the
address set forth beneath its name on Schedule 1 hereto.
(4) Following the execution of this Assignment and Acceptance by the
Assignor and the Assignee, it will be delivered to the Agent for acceptance and
recording by the Agent in the register maintained by the Agent for such purpose.
The effective date of this Assignment and Acceptance shall be the date of
acceptance thereof by the Agent, unless otherwise specified on Schedule 1 hereto
(the "EFFECTIVE DATE").
(5) Upon such acceptance and recording by the Agent, as of the Effective
Date (a) the Assignee shall be a party to the Reimbursement Agreement and, to
the extent provided in this Assignment and Acceptance, have the rights and
obligations of a Bank thereunder and (b) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Reimbursement Agreement.
(6) Upon such acceptance and recording by the Agent, from and after the
Effective Date the Agent shall make all payments under the Reimbursement
Agreement in respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest and fees with respect thereto)
to the Assignee. The Assignor and the Assignee shall make all appropriate
adjustments directly between themselves in respect of payments of principal,
interest and/or fees under the Reimbursement Agreement for periods before the
Effective Date.
(7) Each of the Assignor and the Assignee agrees that at any time and from
time to time upon the written request of the other party, it will execute and
deliver such further documents and do such further acts and things as the other
party may reasonably request in order to effect the purposes of this Assignment
and Acceptance.
(8) THE RIGHTS AND OBLIGATIONS OF EACH OF THE PARTIES UNDER THIS ASSIGNMENT
AND ACCEPTANCE SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW SECTION
5-1401, BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.
(9) This Assignment and Acceptance is executed by the parties on Schedule 1
hereto and may be executed in one or more counterparts, each of which shall be
deemed an original and
Ex. C-2
all of which together shall constitute one and the same document. Execution of
this Assignment and Acceptance by the Agent and the Company on Schedule 1 hereto
shall constitute any consent of such Person required pursuant to Section 9.9 of
the Reimbursement Agreement.
[ASSIGNOR]
By:
-------------------------------------------
Name:
Title:
By:
-------------------------------------------
Name:
Title:
[ASSIGNEE]
By:
-------------------------------------------
Name:
Title:
[ADDRESS FOR NOTICES]
Consented to on this _____ day
of __________, 200__:
DRESDNER BANK AG, acting through its
New York Branch,
as Agent and as Issuing Bank
By:
-----------------------------
Name:
Title:
By:
-----------------------------
Name:
Title:
Ex. C-3
Consented to on this _____ day of
__________, 200__:
AES RED OAK, L.L.C.
By:
----------------------------
Name:
Title:
Ex. C-4
Schedule 1 to
Assignment and Acceptance
Section 1.
Percentage of Assignor interest
in Drawings, Commitments, and
DSR Loans to be assigned: _______%
Section 2.
Immediately prior to Effective Date:
Assignor's Commitment: $_______
DSR Loans owing to Assignor:
DSR LOC Loan $_______
DSR LOC Term Loan $_______
DSR Bond $_______
Assignor's participation in DSR Letter
of Credit: $_______
Assignor's Percentage Interest (as defined
in the Reimbursement Agreement) _______%
Section 3.
Upon Effective Date:
Assignor's Commitment: $_______
Assignor's Percentage Interest: _______%
Assignee's Commitment: $_______
Assignee's Percentage Interest: _______%
Section 4.
Effective Date: ____________________
Ex. C-5
EXHIBIT D
AMORTIZATION SCHEDULE
The principal amount of each DSR LOC Loan shall be due and payable to
the extent of 100% of the cash available therefor on consecutive Quarterly
Dates, commencing on the first such Quarterly Date to occur after such DSR LOC
Loan is made, and shall in any event be due and payable, to the extent not
previously paid, on the applicable DSR LOC Loan Required Payment Date. The
Company shall pay interest on any DSR LOC Loan on such Quarterly Dates and on
the DSR LOC Loan Required Payment Date out of cash available in the Revenue
Account at the same level in the flow of funds as interest on other Senior Debt
and shall repay the principal amount, if any, of DSR LOC Loans on such Quarterly
Dates and on the DSR LOC Loan Required Payment Date out of 100% of the cash
available in the Revenue Account after payment of Debt Service on all Senior
Debt other than principal of DSR LOC Loans.
The principal amount of each DSR LOC Term Loan shall be due and payable
in quarterly installments on consecutive Quarterly Dates, commencing on the
first such Quarterly Date to occur after such DSR LOC Term Loan is made, and
maturing in full on the applicable DSR LOC Term Loan Required Payment Date. The
amount of principal payable on each such Quarterly Date shall be equal to the
amount of the principal component only of an amortization schedule based on the
foregoing payment schedule and a final maturity date ten (10) years after the
date on which such DSR LOC Term Loan is made and assuming (i) a fixed PER ANNUM
interest rate equal to the interest rate (whether determined with reference to
the Adjusted Base Rate or the Eurodollar Rate) applicable to such DSR LOC Term
Loan on such date and (ii) mortgage-style payments of principal and interest.
The principal amount of each DSR Bond shall be due and payable in
quarterly installments on consecutive Quarterly Dates, commencing on the first
such Quarterly Date to occur after such DSR Bond is issued, and maturing in full
on the Final Maturity Date. Each DSR Bond shall be amortized on the same
amortization schedule and in an amount on each Quarterly Date that bears the
same proportion to the original principal amount of such DSR Bond (on the date
of the conversion of the relevant DSR LOC Loan into such DSR Bond) as the amount
of the required payment of principal on the Bonds bears to the remaining unpaid
principal amount of the Bonds outstanding on the date of such conversion.
Interest on and principal of any DSR Bond will be paid, respectively, at the
same levels as interest on and principal of the Bonds.
Ex. D-1
EXHIBIT E
FORM OF DSR LOC TERM LOAN PROMISSORY NOTE
[$________] New York, New York
_________ __, 200_
FOR VALUE RECEIVED, the undersigned, AES RED OAK, L.L.C., a Delaware limited
liability company (the "COMPANY"), hereby unconditionally promises to pay to
the order of Dresdner Bank AG, New York Branch (the "AGENT") for the benefit
of the Banks party from time to time to the Reimbursement Agreement referred
to below the lesser of (i) the principal sum of _____________________ dollars
($________) and (ii) the aggregate unpaid principal amount of the DSR LOC
Term Loans owing to the Banks by the Company under the Reimbursement
Agreement, on the dates and in the amounts described therein.
The Company further promises to pay interest on the daily unpaid principal
amount hereof from time to time outstanding on the dates and at the rates
specified in the Reimbursement Agreement. This DSR LOC Term Loan Note is hereby
expressly limited so that in no contingency or event, whether by reason of
acceleration of the maturity of any indebtedness evidenced hereby or otherwise,
shall the interest contracted for or charged or received by the Agent for the
account of the Banks exceed the maximum amount permissible under Applicable Law.
If, from any circumstance whatsoever, interest would otherwise be payable to the
Agent for the account of the Banks in excess of the maximum lawful amount, the
interest payable to the Agent for the account of the Banks shall be reduced to
the maximum amount permitted under Applicable Law, and the amount of interest
for any subsequent period, to the extent less than that permitted by Applicable
Law, shall to that extent be increased by the amount of such reduction.
The holder hereof is irrevocably authorized to endorse on the schedule attached
hereto, or on a continuation thereof, the date each such interest payment is due
and the amount of each such interest payment determined in accordance with the
Reimbursement Agreement. All such notations shall constitute PRIMA FACIE
evidence of the accuracy of the information so recorded and be enforceable
against the Company with the same force and effect as if such amounts were each
set forth in a separate DSR LOC Term Loan Note executed by the Company.
All payments due hereunder shall be made without set-off, counterclaim or
deduction of any nature to the Agent, for the account of the Banks, in lawful
money of the United States of America and in immediately available funds, at
such place and in such manner as may be specified by the Agent pursuant to the
Reimbursement Agreement.
The holder hereof is irrevocably authorized to endorse on the schedule attached
hereto, or on a continuation thereof, the date and amount of each DSR LOC Term
Loan made by the Banks and each payment or prepayment of principal thereof,
provided that the failure of the holder to make, or any error in making, any
such recordation or endorsement shall not affect the obligations of the Company
hereunder or under the Reimbursement Agreement. All such notations shall
constitute PRIMA FACIE evidence of the accuracy of the information so recorded
and be enforceable
Ex. E-1
against the Company with the same force and effect as if such amounts were each
set forth in a separate DSR LOC Term Loan Note executed by the Company.
This DSR LOC Term Loan Note is the "DSR LOC TERM LOAN NOTE" of the Company to
the Agent, for the benefit of the Banks, referred to in, evidences each DSR LOC
Term Loan owing to the Banks by the Company under, is subject to the provisions
of, and entitles the holder to the benefits of, the Debt Service Reserve Letter
of Credit and Reimbursement Agreement, dated as of March 1, 2000 (the
"REIMBURSEMENT AGREEMENT"), among the Company, the Banks (including the Issuing
Bank) parties thereto, and the Agent, as the same may be amended, supplemented
or otherwise modified from time to time and to which reference is hereby made
for a more complete statement of the terms and conditions under which each DSR
LOC Term Loan evidenced hereby is to be incurred and paid. Capitalized terms in
this DSR LOC Term Loan Note that are not specifically defined herein shall have
the meanings ascribed to them in the Reimbursement Agreement.
The Reimbursement Agreement provides for, among other things, the acceleration
of the maturity of the unpaid principal amount hereof upon the occurrence of
certain stated events and for voluntary prepayments in certain circumstances and
upon certain terms and conditions. The obligations of the Company under the
Reimbursement Agreement and this DSR LOC Term Loan Note are secured by, and the
holder hereof is entitled to the benefit of, the Security Documents.
In addition to any and all costs, fees and expenses for which the Company is
liable under the Reimbursement Agreement, the Company promises to pay all costs
and expenses, including reasonable attorneys' fees and disbursements, incurred
in the collection and enforcement hereof or any appeal of any judgment rendered
hereon.
The Company hereby expressly waives diligence, presentment, protest, demand,
dishonor, nonpayment and notice of every kind to the fullest extent permitted by
Applicable Law. No failure or delay by the holder of this DSR LOC Term Loan Note
to exercise any right or remedy under this DSR LOC Term Loan Note or any other
document or instrument entered into pursuant to the Reimbursement Agreement
shall operate or be construed as a waiver or modification hereof or thereof.
This DSR LOC Term Loan Note shall be binding upon the successors and assigns of
the Company and shall inure to the Agent and its successors, endorsees and
assigns. If any term or provision of this DSR LOC Term Loan Note shall be held
invalid, illegal or unenforceable, the validity of all other terms and
provisions hereof shall in no way be affected thereby.
Recourse under this DSR LOC Term Loan Note is limited in accordance with Section
9.7 of the Reimbursement Agreement, and the provisions of said Section 9.7 are
incorporated herein by reference.
THIS DSR LOC TERM LOAN NOTE SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW
SECTION 5-1401, BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING AGAINST THE COMPANY WITH
RESPECT TO THIS DSR
Ex. E-2
LOC TERM LOAN NOTE MAY BE BROUGHT IN ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ IN THE
COUNTY OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK
AND, BY EXECUTION AND DELIVERY OF THIS DSR LOC TERM LOAN NOTE, THE COMPANY
HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY
AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. THE
COMPANY HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS
ARISING OUT OF OR IN CONNECTION WITH THIS DSR LOC TERM LOAN NOTE BROUGHT IN THE
COURTS REFERRED TO ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO
PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN
ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
AES RED OAK, L.L.C.
By:
------------------------------------------
Name:
Title:
Ex. E-3
SCHEDULE
Principal Total Principal
Date Amount of Amount and Date Unpaid Amount of DSR LOC
Loan Reimbursement of Principal Principal Date Interest Amount of Term Loans Notation
Made Obligation Paid OR Prepaid Balance Payment is Due Interest Due Outstanding Made By
----------- ------------- ---------------- --------- -------------- ------------- ----------------- --------
Ex. E-4
EXHIBIT F
FORM OF DSR BOND PROMISSORY NOTE
[$________] New York, New York
_________ __, 200_
FOR VALUE RECEIVED, the undersigned, AES Red Oak, L.L.C., a Delaware limited
liability company (the "COMPANY"), hereby unconditionally promises to pay to
the order of Dresdner Bank AG, New York Branch (the "AGENT") for the benefit
of the Banks party from time to time to the Reimbursement Agreement referred
to below the lesser of (i) the principal sum ____________________________
dollars ($________) and (ii) the aggregate unpaid principal amount of the DSR
Bonds owing to the Banks by the Company under the Reimbursement Agreement, on
the dates and in the amounts described therein.
The Company further promises to pay interest on the daily unpaid principal
amount hereof from time to time outstanding on the dates and at the rates
specified in the Reimbursement Agreement. This DSR Bond Note is hereby expressly
limited so that in no contingency or event, whether by reason of acceleration of
the maturity of any indebtedness evidenced hereby or otherwise, shall the
interest contracted for or charged or received by the Agent for the account of
the Banks exceed the maximum amount permissible under Applicable Law. If, from
any circumstance whatsoever, interest would otherwise be payable to the Agent
for the account of the Banks in excess of the maximum lawful amount, the
interest payable to the Agent for the account of the Banks shall be reduced to
the maximum amount permitted under Applicable Law, and the amount of interest
for any subsequent period, to the extent less than that permitted by Applicable
Law, shall to that extent be increased by the amount of such reduction.
The holder hereof is irrevocably authorized to endorse on the schedule attached
hereto, or on a continuation thereof, the date each such interest payment is due
and the amount of each such interest payment determined in accordance with the
Reimbursement Agreement. All such notations shall constitute PRIMA FACIE
evidence of the accuracy of the information so recorded and be enforceable
against the Company with the same force and effect as if such amounts were each
set forth in a separate DSR Bond Note executed by the Company.
All payments due hereunder shall be made without set-off, counterclaim or
deduction of any nature to the Agent, for the account of the Banks, in lawful
money of the United States of America and in immediately available funds, at
such place and in such manner as may be specified by the Agent pursuant to the
Reimbursement Agreement.
The holder hereof is irrevocably authorized to endorse on the schedule attached
hereto, or on a continuation thereof, the date and amount of each DSR Bond made
by the Banks and each payment or prepayment of principal thereof, provided that
the failure of the holder to make, or any error in making, any such recordation
or endorsement shall not affect the obligations of the Company hereunder or
under the Reimbursement Agreement. All such notations shall constitute PRIMA
FACIE evidence of the accuracy of the information so recorded and be enforceable
against
Ex. F-1
the Company with the same force and effect as if such amounts were each
set forth in a separate DSR Bond Note executed by the Company.
This DSR Bond Note is the "DSR BOND NOTE" of the Company to the Agent, for the
benefit of the Banks, referred to in, evidences each DSR Bond owing to the Banks
by the Company under, is subject to the provisions of, and entitles the holder
to the benefits of, the Debt Service Reserve Letter of Credit and Reimbursement
Agreement, dated as of March 1, 2000 (the "REIMBURSEMENT AGREEMENT"), among the
Company, the Banks (including the Issuing Bank) parties thereto, and the Agent,
as the same may be amended, supplemented or otherwise modified from time to time
and to which reference is hereby made for a more complete statement of the terms
and conditions under which each DSR Bond evidenced hereby is to be incurred and
paid. Capitalized terms in this DSR Bond Note that are not specifically defined
herein shall have the meanings ascribed to them in the Reimbursement Agreement.
The Reimbursement Agreement provides for, among other things, the acceleration
of the maturity of the unpaid principal amount hereof upon the occurrence of
certain stated events and for voluntary prepayments in certain circumstances and
upon certain terms and conditions. The obligations of the Company under the
Reimbursement Agreement and this DSR Bond Note are secured by, and the holder
hereof is entitled to the benefit of, the Security Documents.
In addition to any and all costs, fees and expenses for which the Company is
liable under the Reimbursement Agreement, the Company promises to pay all costs
and expenses, including reasonable attorneys' fees and disbursements, incurred
in the collection and enforcement hereof or any appeal of any judgment rendered
hereon.
The Company hereby expressly waives diligence, presentment, protest, demand,
dishonor, nonpayment and notice of every kind to the fullest extent permitted by
Applicable Law. No failure or delay by the holder of this DSR Bond Note to
exercise any right or remedy under this DSR Bond Note or any other document or
instrument entered into pursuant to the Reimbursement Agreement shall operate or
be construed as a waiver or modification hereof or thereof.
This DSR Bond Note shall be binding upon the successors and assigns of the
Company and shall inure to the Agent and its successors, endorsees and assigns.
If any term or provision of this DSR Bond Note shall be held invalid, illegal or
unenforceable, the validity of all other terms and provisions hereof shall in no
way be affected thereby.
Recourse under this DSR Bond Note is limited in accordance with Section 9.7 of
the Reimbursement Agreement, and the provisions of said Section 9.7 are
incorporated herein by reference.
THIS DSR BOND NOTE SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW SECTION
5-1401, BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK. ANY LEGAL ACTION OR PROCEEDING AGAINST THE COMPANY WITH RESPECT TO
THIS DSR BOND NOTE MAY BE BROUGHT IN ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ IN THE
COUNTY OF NEW
Ex. ▇-▇
▇▇▇▇ ▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ FOR THE SOUTHERN DISTRICT OF NEW YORK AND, BY
EXECUTION AND DELIVERY OF THIS DSR BOND NOTE, THE COMPANY HEREBY IRREVOCABLY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. THE
COMPANY HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS
ARISING OUT OF OR IN CONNECTION WITH THIS DSR BOND NOTE BROUGHT IN THE COURTS
REFERRED TO ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
AES RED OAK, L.L.C.
By:
------------------------------------------
Name:
Title:
Ex. F-3
SCHEDULE
Principal
Date Amount of Amount and Date Unpaid Total Principal
Loan Reimbursement of Principal Principal Date Interest Amount of Amount of DSR Bonds Notation
Made Obligation Paid Or Prepaid Balance Payment is Due Interest Due Outstanding Made By
------------ ------------- --------------- --------- -------------- ------------
Ex. F-4
SCHEDULE 1
APPLICABLE MARGIN
------------------------------ ----------------------------------------------------------------------
APPLICABLE MARGIN
(The Applicable Margin at any time shall be the percentage listed
below opposite the rating of the Bonds as in effect at such time)
RATING1 /
------------------------------- ----------------------- ---------------------- ----------------------
EURODOLLAR RATE LOANS BASE RATE LOANS LETTER OF CREDIT FEE
------------------------------- ----------------------- ---------------------- ----------------------
BBB+/Baa1 or higher 1.75% 0.25% 1.125%
------------------------------- ----------------------- ---------------------- ----------------------
BBB/Baa2 1.875% 0.375% 1.25%
------------------------------- ----------------------- ---------------------- ----------------------
BBB-/Baa3 2.00% 0.50% 1.375%
------------------------------- ----------------------- ---------------------- ----------------------
BB+/Ba1 3.00% 1.50% 2.375%
------------------------------- ----------------------- ---------------------- ----------------------
BB/Ba2 3.25% 1.75% 2.625%
------------------------------- ----------------------- ---------------------- ----------------------
BB-/Ba3 or lower 3.50% 2.00% 2.875%
------------------------------- ----------------------- ---------------------- ----------------------
------------------------------------
1/ The lower of the rating assigned by S&P or ▇▇▇▇▇'▇ to the Bonds.