--------------------------------------------
U.S.$400,000,000
SENIOR SECURED BRIDGE CREDIT AGREEMENT
among
INVERSIONES OEA LIMITADA,
as the Borrower,
INVERSIONES CACHAGUA LIMITADA,
as the Principal Guarantor,
THE GUARANTORS NAMED HEREIN,
DEUTSCHE BANK SECURITIES INC.,
as Arranger,
BANKERS TRUST COMPANY,
as Administrative Agent and Collateral Agent,
and
VARIOUS LENDERS
Dated as of December 28, 2000
--------------------------------------------
Table of Contents
-----------------
Page
----
SECTION 1. Amount and Terms of Credit..................................................................... 1
1.1. The Commitments................................................................................ 1
1.2. Pro Rata Borrowings............................................................................ 3
1.3. Interest....................................................................................... 3
1.4. Interest Periods............................................................................... 4
1.5. Increased Costs, Illegality, etc............................................................... 5
1.6. Compensation................................................................................... 7
1.7. Change of Lending Office....................................................................... 8
1.8. Replacement of Lenders......................................................................... 8
1.9. Conversions and Continuations.................................................................. 9
SECTION 2. Fees; Termination of Commitments...............................................................10
2.1. Fees...........................................................................................10
2.2. Mandatory Termination of Commitments...........................................................10
SECTION 3. Repayment, Prepayments and Taxes...............................................................10
3.1. Scheduled Repayment............................................................................10
3.2. Voluntary Prepayments..........................................................................11
3.3. Mandatory Prepayments..........................................................................11
3.4. Method and Place of Payment....................................................................12
3.5. Net Payments...................................................................................13
SECTION 4. Conditions Precedent to the Initial Borrowing..................................................14
4.1. Execution of Agreement; Notes..................................................................14
4.2. No Default; Representations and Warranties.....................................................15
4.3. Notice of Borrowing............................................................................15
4.4. Corporate Documents; Proceedings...............................................................15
4.5. Opinions of Counsel............................................................................15
4.6. Consummation of the Transactions...............................................................16
4.7. Capital Structure..............................................................................17
4.8. Adverse Change.................................................................................17
4.9. Governmental and Other Approvals...............................................................18
4.10. Litigation.....................................................................................18
4.11. Stock Pledge Agreements........................................................................18
4.12. Financial Statements; Projections..............................................................19
4.13. Existing Indebtedness, Liens and Other Obligations.............................................19
4.14. Compliance with Applicable Law.................................................................19
4.15. Payment of Fees and Other Obligations..........................................................19
4.16. Consent Letter.................................................................................19
4.17. Central Bank Approval..........................................................................19
i
Table of Contents
-----------------
(Continued)
Page
----
4.18. Other Documents................................................................................20
SECTION 5. Representations, Warranties and Agreements.....................................................20
5.1. Corporate Status...............................................................................20
5.2. Corporate Power and Authority..................................................................21
5.3. No Immunity....................................................................................21
5.4. No Violation...................................................................................21
5.5. Approvals......................................................................................21
5.6. Financial Statements; Financial Condition; Undisclosed Liabilities; Projections; etc...........22
5.7. Ranking........................................................................................24
5.8. Litigation.....................................................................................24
5.9. True and Complete Disclosure...................................................................24
5.10. Use of Proceeds; Margin Regulations............................................................25
5.11. Tax Returns and Payments.......................................................................25
5.12. Employee Benefit Plans.........................................................................26
5.13. Security Interests.............................................................................26
5.14. Properties.....................................................................................26
5.15. Capitalization.................................................................................26
5.16. Compliance with Statutes, etc..................................................................27
5.17. Investment Company Act.........................................................................27
5.18. Public Utility Holding Company Act.............................................................27
5.19. Environmental Matters..........................................................................27
5.20. Labor Relations................................................................................28
5.21. Patents, Licenses, Franchises and Formulas.....................................................28
5.22. Transactions...................................................................................29
5.23. Fees and Enforcement...........................................................................29
5.24. Form of Documentation..........................................................................30
5.25. Payment of Additional Amounts..................................................................30
5.26. Fictitious Business Names......................................................................30
5.27. Indebtedness...................................................................................30
SECTION 6. Affirmative Covenants..........................................................................30
6.1. Information Covenants..........................................................................30
6.2. Books, Records and Inspections.................................................................33
6.3. Maintenance of Property and Insurance..........................................................34
6.4. Corporate Existence and Franchises.............................................................34
6.5. Compliance with Statutes.......................................................................34
6.6. Compliance with Environmental Laws.............................................................34
6.7. Employee Benefit Plans.........................................................................34
6.8. End of Fiscal Years and Fiscal Quarters........................................................35
6.9. Performance of Obligations.....................................................................35
6.10. Payment of Taxes...............................................................................35
ii
Table of Contents
-----------------
(Continued)
Page
----
6.11. Further Assurances.............................................................................35
6.12. Gener and Dividend Payments....................................................................36
6.13. Refinancing; Non-Core Asset Sale...............................................................37
6.14. Post-Closing Adjustments.......................................................................37
6.15. Follow-on Offer to Purchase....................................................................37
SECTION 7. Negative Covenants.............................................................................37
7.1. Liens..........................................................................................38
7.2. Consolidation, Merger, Purchase or Sale of Assets, etc.........................................40
7.3. Dividends and Other Payments...................................................................42
7.4. Indebtedness...................................................................................42
7.5. Advances, Investments and Loans................................................................43
7.6. Transactions with Affiliates...................................................................46
7.7. Capital Expenditures...........................................................................47
7.8. Limitation on Voluntary Payments and Modifications of Indebtedness;
Modifications of Estatutos Socialesand Certain Other Agreements................................47
7.9. Limitation on Certain Restrictions on Subsidiaries.............................................48
7.10. Limitation on Issuance of Capital Stock........................................................48
7.11. Business.......................................................................................49
7.12. Limitation on Creation of Subsidiaries.........................................................49
SECTION 8. Events of Default..............................................................................49
8.1. Payments.......................................................................................49
8.2. Representations, etc...........................................................................49
8.3. Covenants......................................................................................49
8.4. Default Under Other Agreements.................................................................49
8.5. Bankruptcy, etc................................................................................50
8.6. Security Documents.............................................................................50
8.7. Guaranties.....................................................................................51
8.8. Judgments......................................................................................51
8.9. Change of Control..............................................................................51
8.10. Denial of Liability............................................................................51
8.11. Currency Restrictions..........................................................................51
8.12. Governmental Action............................................................................52
8.13. Transfer of Gener Shares.......................................................................52
SECTION 9. Guaranty.......................................................................................52
9.1. The Guaranteed Obligations.....................................................................52
9.2. Continuing Obligation..........................................................................53
9.3. No Discharge...................................................................................53
9.4. Tolling of Statute of Limitations..............................................................54
9.5. Bankruptcy.....................................................................................54
iii
Table of Contents
-----------------
(Continued)
Page
----
9.6. Independent Obligation.........................................................................54
9.7. Authorization..................................................................................54
9.8. Reliance.......................................................................................55
9.9. Subordination..................................................................................56
9.10. Waiver.........................................................................................56
9.11. Nature of Liability............................................................................57
9.12. Contribution...................................................................................57
SECTION 10. Definitions....................................................................................58
SECTION 11. The Agents.....................................................................................76
11.1. Appointment....................................................................................76
11.2. Administration of the Collateral...............................................................76
11.3. Application of Proceeds........................................................................77
11.4. Nature of Duties...............................................................................77
11.5. Lack of Reliance on Agents.....................................................................78
11.6. Certain Rights of the Agents...................................................................78
11.7. Reliance.......................................................................................79
11.8. Indemnification................................................................................79
11.9. The Agents in Their Respective Individual Capacities...........................................79
11.10. Holders........................................................................................80
11.11. Resignation by the Agents......................................................................80
11.12. The Arranger...................................................................................81
11.13. Notice of Default..............................................................................81
SECTION 12. Miscellaneous..................................................................................81
12.1. Payment of Expenses, etc.......................................................................81
12.2. Right of Setoff................................................................................82
12.3. Notices........................................................................................82
12.4. Benefit of Agreement; Assignments; Participations..............................................83
12.5. No Waiver; Remedies Cumulative.................................................................85
12.6. Payments Pro Rata..............................................................................85
12.7. Calculations; Computations; Accounting Terms...................................................86
12.8. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;
WAIVER OF JURY TRIAL...........................................................................87
12.9. Counterparts...................................................................................88
12.10. Effectiveness..................................................................................89
12.11. Headings Descriptive...........................................................................89
12.12. Amendment or Waiver............................................................................89
12.13. Survival.......................................................................................90
12.14. Domicile of Bridge Loans.......................................................................90
12.15. Judgment Currency..............................................................................90
12.16. Waiver of Sovereign Immunity...................................................................90
iv
Table of Contents
-----------------
(Continued)
Page
----
12.17. English Language...............................................................................91
12.18. Register.......................................................................................91
12.19. Confidentiality................................................................................91
12.20. Independence...................................................................................92
Schedule A Commitments
Schedule B Lender Addresses
Schedule 4.11 Post-Closing Collateral Actions
Schedule 4.13A Existing Indebtedness
Schedule 5.15 Capitalization
Schedule 5.15(b) Cash Contributions
Schedule 5.25 Withholding Taxes
Schedule 7.5 Existing Investments
v
SENIOR SECURED BRIDGE CREDIT AGREEMENT, dated as of December 28, 2000,
among INVERSIONES OEA LIMITADA, a limited liability partnership organized and
existing under the laws of the Republic of Chile (the "Borrower"), INVERSIONES
CACHAGUA LIMITADA, a limited liability partnership organized under the laws of
the Republic of Chile (the "Principal Guarantor"), the Guarantors party hereto
from time to time, the lenders party hereto from time to time (each, a "Lender"
and, collectively, the "Lenders"), BANKERS TRUST COMPANY, acting as
Administrative Agent and Collateral Agent in the manner and to the extent
described in Section 11 (in such respective capacities, the "Administrative
Agent" or the "Collateral Agent"), and DEUTSCHE BANK SECURITIES INC., as
Arranger (the "Arranger").
W I T N E S S E T H :
WHEREAS, subject to and upon the terms and conditions set forth herein,
the Lenders are willing to make available to the Borrower the Bridge Loans
provided herein;
NOW, THEREFORE, in consideration of the mutual promises contained
herein and other valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Amount and Terms of Credit.
1.1. The Commitments.
(a) The Bridge Loan Commitments. Subject to and upon the terms and
conditions set forth herein, each Lender severally and not jointly agrees to
make a term bridge loan (each, a "Bridge Loan" and, collectively, the "Bridge
Loans") to the Borrower in an aggregate principal amount not to exceed such
Lender's Commitment. The Bridge Loans shall be made in a single Borrowing on the
Initial Borrowing Date, and, once repaid or prepaid, may not be reborrowed. The
amount of each Lender's Commitment in excess of such Lender's Bridge Loan shall
expire on the Initial Borrowing Date.
(b) Notice of Borrowing. When the Borrower desires to incur the Bridge
Loans hereunder, the Borrower shall give the Administrative Agent at its Notice
Office at least three Business Days' prior written notice thereof; provided,
however, that any such notice shall be deemed to have been given on a certain
day only if given before 11:00 A.M. (New York time) on such day. Such written
notice (the "Notice of Borrowing") shall, except as provided in Section 1.5, be
irrevocable and shall be given by the Borrower in a form to be agreed prior to
the Initial Borrowing Date, appropriately completed to specify the aggregate
principal amount of the Bridge Loans to be made
pursuant to the Borrowing, the date of Borrowing (which shall be a Business Day)
and the length of the initial Interest Period therefor. The Administrative Agent
shall promptly give each Lender required to make such Bridge Loans written
notice of the proposed Borrowing, of such Lender's proportionate share thereof
and of the other matters required to be specified in the Notice of Borrowing.
(c) Disbursement of Funds. No later than 3:00 p.m. (New York time) on
the date specified in the Notice of Borrowing, subject to the terms and
conditions set forth herein, each Lender will make available its pro rata share
of the Borrowing. All such amounts shall be made available to the Administrative
Agent in Dollars and in immediately available funds at the Payment Office and
the Administrative Agent will make available to the Borrower, at the bank
account in New York to be designated by the Borrower to the Administrative Agent
in the Notice of Borrowing, the aggregate (net of any Fees, costs and expenses
due hereunder) of the amounts so made available by the Lenders in the type of
funds received. Unless the Administrative Agent shall have been notified by any
Lender prior to the date of Borrowing that such Lender does not intend to make
available to the Administrative Agent its portion of the Borrowing to be made on
such date, the Administrative Agent may assume that such Lender has made such
amount available to the Administrative Agent on the date of Borrowing and the
Administrative Agent, in reliance upon such assumption, may (in its sole
discretion and without any obligation to do so) make available to the Borrower a
corresponding amount. If such corresponding amount is not in fact made available
to the Administrative Agent by such Lender and the Administrative Agent has made
the same available to the Borrower, the Administrative Agent shall be entitled
to recover such corresponding amount on demand from such Lender. If such Lender
does not pay such corresponding amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent shall promptly notify the Borrower,
and the Borrower shall immediately pay such corresponding amount to the
Administrative Agent. The Administrative Agent shall also be entitled to recover
on demand from such Lender or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Administrative Agent to the Borrower until the
date such corresponding amount is recovered by the Administrative Agent, at a
rate per annum equal to (i) if recovered from such Lender, the Federal Funds
Rate and (ii) if recovered from the Borrower, the rate of interest applicable to
the Borrowing as determined pursuant to Section 1.3. Nothing in this Section 1.1
shall be deemed to relieve any Lender from its obligation to fulfill its
Commitment hereunder or to prejudice any rights which the Borrower may have
against any Lender as a result of any failure by such Lender to make its Bridge
Loans hereunder.
(d) Notes.
(i) The Borrower's obligation to pay the principal of, and interest on,
the Bridge Loan made by a Lender shall be evidenced, at such Lender's option, by
a
2
promissory note, duly executed and delivered by the Borrower and in a form to be
agreed prior to the Initial Borrowing Date (each, a "Note" and, collectively,
the "Notes"), with blanks appropriately completed in conformity herewith. Such
Note shall (A) be payable to the order of such Lender and be dated the date of
execution thereof, (B) be in a stated principal amount equal to the principal
amount of the Bridge Loan of such Lender and be payable in the unpaid principal
amount evidenced thereby, (C) mature on the Maturity Date, (D) bear interest as
provided in Section 1.3, and (E) be entitled to the benefits of this Agreement
and the other Credit Documents. Upon repayment in full of amounts due under such
Note, such Lender shall return it to the Borrower.
(ii) Each Lender will maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
as a result of the Bridge Loans of such Lender, including the amounts of
principal, interest and other amounts payable and paid to such Lender from time
to time under this Agreement and the Notes evidencing such Bridge Loans. The
entries made by each Lender in such accounts shall constitute prima facie
evidence of the existence and amounts of the Bridge Loans and other Obligations
therein recorded; provided, however, that the failure of any Lender to maintain
such account or accounts, or any error therein, shall not in any manner affect
the obligations of the Borrower to repay or pay the Bridge Loans made by such
Lender, accrued interest thereon and the other Obligations of the Borrower to
such Lender hereunder in accordance with the terms of this Agreement.
1.2. Pro Rata Borrowings. All Borrowings of the Bridge Loans shall be
incurred from the Lenders pro rata on the basis of their Commitments. It is
understood that no Lender shall be responsible for any failure by any other
Lender to make its Bridge Loans hereunder and that each Lender shall be
obligated to make the Bridge Loans provided to be made by it hereunder,
regardless of the failure of any other Lender to make its Bridge Loans.
1.3. Interest.
(a) The Borrower agrees to pay interest in respect of the unpaid
principal amount of each LIBOR Loan from the Borrowing Date thereof until the
earlier of (x) the maturity (whether by acceleration or otherwise) of such LIBOR
Loan and (y) the conversion of such LIBOR Loan to a Base Rate Loan pursuant to
Section 1.5 or 1.9, as the case may be, at a rate per annum which shall, at all
times applicable thereto, be equal to the sum of LIBOR for the relevant Interest
Period plus the Applicable Margin.
(b) The Borrower agrees to pay interest in respect of the unpaid
principal amount of each Base Rate Loan from the Borrowing Date thereof until
the earlier of (x) the maturity (whether by acceleration or otherwise) of such
Base Rate Loan and (y) the conversion of such Base Rate Loan to a LIBOR Loan
pursuant to Section 1.9
3
at a rate per annum which shall, at all times applicable thereto, be equal to
the sum of the Base Rate in effect from time to time plus the Applicable Margin.
(c) Interest shall accrue from and including the date of any Borrowing
to but excluding the date of any repayment thereof (determined in accordance
with Section 3.4) and shall be payable in arrears on each Interest Payment Date
and on any repayment or prepayment (on the amount repaid or prepaid), at
maturity (whether by acceleration or otherwise) and, after such maturity, on
demand.
(d) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Bridge Loan and any other overdue amount payable
hereunder shall bear interest at a rate per annum equal to (i) in the case of
principal of any Bridge Loan, the rate per annum equal to 2.00% plus the product
of (A) the Overdue Ratio times (B) the rate otherwise then borne by such Bridge
Loan and (ii) in the case of interest or such other amounts, the rate per annum
equal to 2.00% plus the product of (A) the Overdue Ratio times (B) the rate
otherwise applicable to Base Rate Loans; provided, that at no time shall the
interest rate payable pursuant to this clause (d) on any amount due hereunder
exceed 20% per annum. Interest which accrues under this Section 1.3(d) shall be
payable on demand. This paragraph (d) and the Borrower's payment of any
increased interest rate provided hereunder shall not (i) relieve the Borrower of
its obligation to pay amounts hereunder when and as due, (ii) cure any Default
or Event of Default resulting from a failure to pay such amounts nor (iii)
prevent the Agents from foreclosing on the Collateral or exercising any other
available remedies as a result of such a failure.
(e) Upon each Interest Determination Date, the Administrative Agent
shall determine the interest rate for each Interest Period applicable to the
LIBOR Loans and shall promptly notify the Borrower and the Lenders thereof. Each
such determination shall, absent demonstrable error, be final and conclusive and
binding on all parties hereto.
1.4. Interest Periods. The interest period (each, an "Interest Period")
applicable to the LIBOR Loans shall be:
(i) initially, the period commencing on the borrowing or conversion
date, as the case may be, with respect to such LIBOR Loan and ending one,
three or six months thereafter, as selected by the Borrower in its Notice
of Borrowing or Notice of Conversion, as the case may be, given with
respect thereto to the Administrative Agent not less than three Business
Days prior to the commencement of the designated Interest Period; and
(ii) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such LIBOR Loan and ending one,
three or six months thereafter, as selected by the Borrower by irrevocable
notice to the
4
Administrative Agent not less than three Business Days prior to the last
day of the then current Interest Period with respect thereto;
provided that, all of the foregoing provisions relating to Interest Periods are
subject to the following:
(1) if any such Interest Period would otherwise end on a day that is
not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business Day;
(2) any Interest Period that would otherwise extend beyond the Maturity
Date shall (for all purposes other than subsection 1.6) end on the Maturity
Date:
(3) any Interest Period that 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; and
(4) the Borrower shall select Interest Periods so as not to require a
scheduled payment of any LIBOR Loan during an Interest Period for such
Loan.
1.5. Increased Costs, Illegality, etc.
(a) In the event that (x) in the case of clause (i) below, the
Administrative Agent or (y) in the case of clauses (ii) and (iii) below, any
Lender, shall have determined in good faith (which determination shall, absent
demonstrable error, be final and conclusive and binding upon all parties
hereto):
(i) on any Interest Determination Date, that, by reason of any changes
arising after the Effective Date affecting the interbank Eurodollar market,
adequate and fair means do not exist for ascertaining the applicable
interest rate on the basis provided for in the definition of "LIBOR";
(ii) at any time, that such Lender shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Bridge Loan (other than any increased cost or reduction in the amount
received or receivable resulting from the imposition of taxes, which shall
be governed by Section 3.5) because of any change since the Effective Date
in any applicable law or governmental rule, regulation, order, guideline,
or request (whether or not having the force of law), or in the
interpretation or administration thereof and including the introduction of
any new law or governmental rule, regulation, order,
5
guideline or request (such as, for example, but not limited to, a change in
official reserve requirements, but, in all events, excluding, in the case
of LIBOR Loans, any reserves required under Regulation D to the extent such
reserves have been included in the computation of LIBOR) or because any
such change, interpretation or administration shall impose on such Lender
any other condition relating to the Credit Documents or the Bridge Loans;
or
(iii) at any time, that the making or continuance of any LIBOR Loan has
become unlawful by compliance by such LIBOR Loan Lender in good faith with
any law, governmental rule, regulation, guideline or order (or would
conflict with any such governmental rule, regulation, guideline or order
not having the force of law but with which such LIBOR Loan Lender
customarily complies even though the failure to comply therewith would not
be unlawful), or has become impracticable as a result of a contingency
occurring after the Effective Date which materially and adversely affects
the interbank Eurodollar market;
then, and in any such event, such Lender (or the Administrative Agent in the
case of clause (i) above) shall promptly give notice to the Borrower and, except
in the case of clause (i) above, to the Administrative Agent of such
determination (which notice the Administrative Agent shall promptly transmit to
each of the other Lenders). After the occurrence of any such event, (x) in the
case of clause (i) above, Bridge Loans shall no longer be available as LIBOR
Loans, and any Notice of Borrowing, Notice of Continuation or Borrower Notice of
Conversion given by the Borrower with respect to Bridge Loans which have not yet
been incurred shall be deemed rescinded by the Borrower and outstanding LIBOR
Loans shall be converted into Base Rate Loans until such time as the
Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice by the Administrative Agent no longer
exist (which notice the Administrative Agent shall endeavor to give promptly
after any express determination thereof by the Administrative Agent), (y) in the
case of clause (ii) above, the Borrower shall pay to such Lender, within 10
Business Days after the Borrower's receipt of written demand therefor
(accompanied by the written notice referred to below), such additional amounts
(in the form of an increased rate of, or a different method of calculating,
interest or otherwise as such Lender in its sole discretion shall determine) as
shall be required to compensate such Lender for such increased costs or
reductions in amounts received or receivable hereunder (a written notice as to
the additional amounts owed to such Lender, showing in reasonable detail the
basis for the calculation thereof, prepared in good faith and submitted to the
Borrower by such Lender shall, absent demonstrable error, be final and
conclusive and binding upon all parties hereto); provided that the Borrower
shall not be required to compensate a Lender pursuant to this clause (y) if such
Lender fails to notify the Borrower within six months after becoming aware of
the event giving rise to such claim for compensation; and provided further that,
if the circumstances giving rise to such claim have a retroactive effect, then
such six-month period shall be extended to include the period of such
retroactive effect, and (z) in the
6
case of clause (iii) above, the Borrower shall take one of the actions specified
in Section 1.5(b) as promptly as possible and, in any event, within the time
period required by law.
(b) At any time that any Bridge Loan is affected by the circumstances
described in Section 1.5(a)(ii) or (iii), the Borrower may (and in the case of a
Bridge Loan affected pursuant to Section 1.5(a)(iii) the Borrower shall) either
(x) if the affected Bridge Loan is then being made pursuant to a Borrowing,
cancel said Borrowing by giving the Administrative Agent telephonic notice
(confirmed promptly in writing) thereof on the same date that the Borrower was
notified by a Lender pursuant to Section 1.5(a)(ii) or (iii), or (y) if the
affected Bridge Loan is then outstanding, upon at least five Business Days'
notice to the Administrative Agent, (A) direct that the affected Lender convert
each such Bridge Loan into Base Rate Loans until such time as the affected
Lender notifies the Borrower and the Administrative Agent that the circumstances
specified in Section 1.5(a)(ii) or (iii) giving rise to such conversion no
longer exist, or (B) promptly prepay the Bridge Loans in full (but in no event
later than 30 days after the most recent Interest Determination Date), together
with accrued interest thereon to the date of repayment and any amounts payable
pursuant to Sections 1.5(c) and 1.6 below as a result of such prepayment.
(c) If any Lender determines that after the Effective Date the
introduction of or any change in any applicable law or governmental rule,
regulation, guideline, order, directive or request (whether or not having the
force of law) concerning capital adequacy, or any change in interpretation or
administration thereof by any governmental authority, will have the effect of
increasing the amount of capital required or expected to be maintained by such
Lender or any corporation controlling such Lender based on the existence of such
Lender's Commitment hereunder or its obligations hereunder, then the Borrower
shall pay to such Lender, within 10 Business Days after the Borrower's receipt
of written demand therefor, such additional amounts as shall be required to
compensate such Lender or such other corporation for the increased cost to such
Lender or such other corporation or the reduction in the rate of return to such
Lender or such other corporation as a result of such increase of capital. In
determining such additional amounts, each Lender will act reasonably and in good
faith, provided that such Lender's determination of compensation owing under
this Section 1.5(c) shall, absent demonstrable error, be final and conclusive
and binding on all the parties hereto. Each Lender, upon determining that any
additional amounts will be payable pursuant to this Section 1.5(c), will give
prompt written notice thereof to the Borrower, which notice shall be prepared in
good faith and show in reasonable detail the basis for calculation of such
additional amounts.
1.6. Compensation. The Borrower shall compensate each Lender, upon its
written request (which request shall set forth in reasonable detail the basis
for requesting and the calculation of such compensation), for all losses,
reasonable expenses
7
and liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other funds
required by such Lender to fund its Bridge Loans, but excluding loss of margin)
which such Lender may sustain: (i) if for any reason (other than a default by
such Lender or the Administrative Agent) a Borrowing, conversion or continuation
of Bridge Loans does not occur on a date specified therefor in the applicable
Notice of Borrowing, Notice of Continuation or Borrower Notice of Conversion
(whether or not withdrawn by the Borrower or deemed withdrawn pursuant to
Section 1.5(a) or (b)); (ii) if any repayment or prepayment (including any
repayment or prepayment made pursuant to Section 1.5(b) or Section 3 or as a
result of an acceleration of the Bridge Loans pursuant to Section 8) occurs on a
date which is not the last day of an Interest Period with respect thereto; (iii)
if any prepayment of its Bridge Loan is not made on any date specified in a
notice of prepayment given by the Borrower; (iv) as a consequence of (x) any
other default by the Borrower to repay its Bridge Loans when required by the
terms of this Agreement or any Note held by such Lender or (y) any conversion
made pursuant to Section 1.5(b) or (v) as a consequence of any Lender being
replaced pursuant to Section 1.8. It is further understood and agreed that if
any repayment of Bridge Loans pursuant to Section 3 is made, any Bridge Loans
are converted into another Type pursuant to Section 1.5(b) or any Lender is
replaced, in any such case on a date which is not the last day of an Interest
Period applicable thereto, such repayment, conversion or replacement shall be
accompanied by any amounts owing to any Lender pursuant to this Section 1.6.
1.7. Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 1.5(a)(ii) or
(iii), Section 1.5(c) or Section 3.5 (other than with respect to the imposition
of Taxes in effect on the date hereof) with respect to such Lender, it will use
reasonable efforts (consistent with its internal policies) to change the
jurisdiction of its lending office if the making of such change (a) would avoid
the need to pay additional amounts or take any other actions under Section
1.5(a)(ii) or (iii) or Section 1.5(c), or (b) would avoid the need for, or
reduce the amount of, any such additional amounts that may thereafter accrue
under Section 3.5, and such change would not, in the reasonable judgment of such
Lender, subject such Lender to any unreimbursed cost or expense or be otherwise
disadvantageous to such Lender.
1.8. Replacement of Lenders. If any Lender defaults in its obligations
to make its Bridge Loan, or upon the occurrence of an event giving rise to the
operation of Section 1.5(a)(ii) or (iii), Section 1.5(c) or Section 3.5 with
respect to any Lender which results in such Lender charging to the Borrower
increased costs in excess of those being generally charged by the other Lenders
or in an illegality, as the case may be, the Borrower shall have the right, if
no Default or Event of Default shall then exist, to replace such Lender (the
"Replaced Lender") with one or more other Eligible Transferees, none of whom
shall be in default of its obligations to make Bridge Loans at the time of such
replacement (collectively, the "Replacement Lender") and each of whom shall be
8
required to be reasonably acceptable to the Administrative Agent; provided,
however, that (i) at the time of any replacement pursuant to this Section 1.8,
the Replacement Lender shall enter into one or more Assignment and Assumption
Agreements pursuant to Section 12.4(b) (with all fees payable under said Section
12.4(b) to be paid by the Replacement Lender) pursuant to which the Replacement
Lender shall acquire all of the outstanding Bridge Loans of the Replaced Lender
and, in connection therewith, shall pay to the Replaced Lender in respect
thereof an amount equal to the sum of (I) the principal of, and all accrued
interest on, the outstanding Bridge Loans of the Replaced Lender, plus (II) all
accrued, but theretofore unpaid, Fees owing to the Replaced Lender and (ii) all
obligations of the Borrower due and owing to the Replaced Lender at such time
(other than those specifically described in clause (i) above in respect of which
the assignment purchase price has been, or is concurrently being, paid) shall be
paid in full to such Replaced Lender concurrently with such replacement. Upon
the execution of the Assignment and Assumption Agreement, the payment of amounts
referred to in clauses (i) and (ii) above and, if so requested by the
Replacement Lender, delivery to the Replacement Lender of the appropriate Note
or Notes executed by the Borrower, the Replacement Lender shall become a Lender
hereunder and the Replaced Lender shall cease to constitute a Lender hereunder,
except with respect to indemnification provisions under this Agreement
(including, without limitation, Sections 1.5, 1.6, 3.5, 11.8 and 12.1), which
shall survive as to such Replaced Lender.
1.9. Conversions and Continuations.
(a) The Borrower shall have the option to convert all or any portion of
the outstanding principal amount of Bridge Loans made pursuant to a Borrowing of
one Type of Bridge Loan into a Borrowing of another Type of Bridge Loan;
provided, however, that (i) except as otherwise provided in Section 1.5(b),
LIBOR Loans may be converted into Base Rate Loans only on the last day of an
Interest Period applicable to the LIBOR Loans being converted; (ii) Base Rate
Loans may only be converted into LIBOR Loans if no Default or Event of Default
is in existence on the date of the conversion and (iii) at no time shall there
be more than three (3) LIBOR Borrowings outstanding at any time nor, as a result
of any conversion or continuation, any LIBOR Borrowing in an aggregate principal
amount less than $5,000,000. Each such conversion shall be effected by the
Borrower by giving the Administrative Agent, at its Notice Office, prior to
10:00 A.M. (New York time), at least three Business Days' prior written notice
(or telephonic notice promptly confirmed in writing) (each, a "Borrower Notice
of Conversion") specifying the Bridge Loans to be so converted. The
Administrative Agent shall give each Lender prompt notice of any such proposed
conversion affecting any of its Bridge Loans.
(b) Any LIBOR Loans may be continued as such upon the expiration of the
then current Interest Period with respect thereto by the Borrower giving notice
to the Administrative Agent (a "Notice of Continuation"), of the length of the
next Interest
9
Period to be applicable to such Loans, determined in accordance with the
applicable provisions of the term "Interest Period" set forth in subsection 1.4,
provided that no LIBOR Loan may be continued as such (i) (unless the Required
Lenders otherwise consent) when any Default or Event of Default has occurred and
is continuing and, in the case of any Default, the Administrative Agent has
given notice to the Borrower that no such continuations may be made or (ii)
after the date that is one month prior to the Maturity Date, and provided,
further, that if the Borrower shall fail to give any required notice as
described above in this paragraph or if such continuation is not permitted
pursuant to the preceding proviso such Loans shall be automatically converted to
Base Rate Loans on the last day of such then expiring Interest Period. Upon
receipt of any such Notice of Continuation pursuant to this subsection 1.9(b),
the Administrative Agent shall promptly notify each affected Lender thereof.
SECTION 2. Fees; Termination of Commitments.
2.1. Fees. The Borrower agrees to pay to the Administrative Agent, for
its own account and for the account of the Lenders, such fees as are set forth
in the Fee Letter and as may be agreed to from time to time between the Borrower
and the Administrative Agent, when and as due. In addition, the Borrower agrees
to pay to each Lender a commitment fee (a "Commitment Fee"), which shall accrue
at the rate of 0.75% per annum (computed on the basis of a year of 360 days) on
the daily amount of the Commitment of each Lender during the period from and
including the date hereof to but excluding the Initial Borrowing Date. Accrued
Commitment Fees shall be payable on the earlier of (i) Initial Borrowing Date
and (ii) the date on which the Commitments terminate.
2.2. Mandatory Termination of Commitments. The Total Commitment (and
the Commitment of each Lender) shall terminate in its entirety on January 31,
2001, unless the Borrowing shall have occurred on or before such date.
SECTION 3. Repayment, Prepayments and Taxes.
3.1. Scheduled Repayment. The Borrower shall repay the principal
outstanding of the Bridge Loans on (a) the True-Up Prepayment Date, in the
True-Up Prepayment Amount, (b) the date that is 180 days after the Initial
Borrowing Date, in the amount, if any, by which $150,000,000 exceeds the
principal amount of Bridge Loans repaid by the Borrower (whether pursuant to
Section 3.2 or 3.3 or the preceding clause (a)) prior to such 180th day, (c) the
date that is 270 days after the Initial Borrowing Date, in the amount, if any,
by which $100,000,000 exceeds the principal amount of Bridge Loans that were
repaid by the Borrower (whether pursuant to Section 3.2 or 3.3 or the preceding
clause (a)) prior to such 270th day and that were not applied to reduce the
repayment pursuant to the preceding clause (b), and (d) on the Maturity Date, in
an amount equal to all remaining principal.
10
3.2. Voluntary Prepayments. The Borrower shall have the right to prepay
the Bridge Loans, without premium or penalty, in whole or in part at any time
and from time to time on the following terms and conditions: (i) the Borrower
shall give the Administrative Agent prior to 12:00 noon (New York time) at its
Notice Office at least three Business Days' prior written notice of its intent
to prepay Bridge Loans, and the amount of such prepayment, which notice the
Administrative Agent shall promptly transmit to each of the Lenders; (ii) each
prepayment of Bridge Loans shall be in an aggregate principal amount of at least
$5,000,000; (iii) at the time of any prepayment of any Bridge Loans pursuant to
this Section 3.2 on any day other than the last day of an Interest Period
applicable thereto, the Borrower shall pay the amounts required pursuant to
Section 1.6; and (iv) each prepayment in respect of any Bridge Loans pursuant to
this Section 3.2 shall be applied pro rata among the respective Bridge Loans of
the Lenders.
3.3. Mandatory Prepayments.
(a) Within three Business Days after each date following the Initial
Borrowing Date upon which any Credit Party or any of its Subsidiaries shall
receive any cash proceeds from any Debt Issuance or Equity Issuance, the
Borrower shall prepay outstanding principal of the Bridge Loans in an amount
equal to 100% of its Pro Rata Share of the Net Debt Proceeds of such Debt
Issuance or of the Net Equity Proceeds of such Equity Issuance, as the case may
be.
(b) In addition to any other mandatory prepayment pursuant to this
Section 3.3, within three Business Days after each date following the Initial
Borrowing Date upon which any Credit Party or any of its Subsidiaries shall
receive any cash proceeds from any Disposition, the Borrower shall prepay
outstanding principal of the Bridge Loans in an amount equal to 100% of its Pro
Rata Share of the Net Disposition Proceeds of such Disposition.
(c) In addition to any other mandatory prepayment pursuant to this
Section 3.3, within 5 days following each date on and after the Initial
Borrowing Date upon which any Credit Party or any of its Subsidiaries shall
receive any cash proceeds from any Recovery Event, the Borrower shall prepay
outstanding principal of the Bridge Loans in an amount equal to 100% of the
Borrower's Pro Rata Share of the Net Insurance Proceeds of such Recovery Event;
provided, however, that so long as no Default or Event of Default shall then
exist, such proceeds shall not be required to be so applied on such date to the
extent that the Borrower shall have delivered a certificate to the
Administrative Agent on or prior to such date stating that such proceeds shall
be used to replace or restore any properties or assets in respect of which such
Net Insurance Proceeds were paid no later than 180 days following the date of
the receipt of such proceeds (which certificate shall set forth the estimates of
the proceeds to be so expended); and provided, further, that if all or any
portion of such proceeds shall not be so applied within such 180-day period,
such unused portion shall be applied on the last
11
day of such period as a mandatory prepayment of principal of outstanding Bridge
Loans as provided in this Section 3.3(c).
(d) In addition to any other mandatory prepayment pursuant to this
Section 3.3, on each Excess Cash Payment Date, the Borrower shall prepay
outstanding principal of the Bridge Loans in an amount equal to 100% of Excess
Cash Flow for the relevant Excess Cash Payment Period.
(e) Each prepayment of Bridge Loans made pursuant to this Section 3.3
shall be applied pro rata among the respective Bridge Loans of the Lenders.
(f) Notwithstanding the previous provisions of this Section 3.3, the
Borrower shall not be required to repay outstanding principal of the Bridge
Loans pursuant to this Section 3.3 to the extent that any legal or material
contractual restriction prevents the receipt by the Borrower, in the form of a
Dividend or other distribution or transfer, of the cash proceeds from any Debt
Issuance, Equity Issuance, Disposition or Recovery Event, provided that (i) any
such contractual restriction was entered into in writing prior to the Effective
Date, (ii) the Borrower has used commercially reasonable efforts to remove or
mitigate any such legal or contractual restriction, (iii) this clause (f), as
applied to any material contractual restriction, shall not relieve the
obligation of the Borrower to repay the principal of the Bridge Loans with the
proceeds of the Argentine Disposition and (iv) any such cash proceeds that, but
for this clause (f) would have been applied to repay Bridge Loans pursuant to
this Section 3.3, shall be invested and maintained by the Borrower or a
Subsidiary of the Borrower in one or more Cash Equivalents and not for any other
purpose.
3.4. Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement or under any Note shall be
made to the Administrative Agent for the account of the Lender or Lenders
entitled thereto not later than 12:00 Noon (New York time) on the date when due
and shall be made in Dollars in immediately available funds at the Payment
Office of the Administrative Agent. Each repayment of principal hereunder shall
be accompanied by accrued and unpaid interest on the amount thereof from the
date on which interest was last paid plus any additional amount due under
Section 1.6. Any payments under this Agreement that are made later than 12:00
Noon (New York time) on any day shall be deemed to have been made on the next
succeeding Business Day. Whenever any payment to be made hereunder or under any
Note shall be stated to be due on a day which is not a Business Day, the due
date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable during such
extension at the applicable rate in effect immediately prior to such extension.
In the event of any foreign exchange restriction or prohibition prevailing in
Chile, the Borrower or the other Credit Parties, as the case may be, shall make
such payments in Dollars by any lawful mechanism for the acquisition of Dollars.
12
In the event any operations to obtain Dollars must be undertaken with
respect to the payment of any amount due by the Borrower, interest shall
continue to accrue until payment is made to the Administrative Agent's account
and otherwise in the manner required hereunder. Nothing in this Agreement shall
impair any of the rights of the Administrative Agent or of the Lenders under
this Agreement, and nothing in this Agreement shall be construed to entitle the
Borrower to refuse to make payments hereunder in Dollars for any reason
whatsoever (other than full and final payment indefeasibly in cash in Dollars of
all amounts due hereunder), including, without limitation, any of the following:
(i) the purchase of Dollars in Chile by any means becomes more onerous
or burdensome for the Borrower than as of the Effective Date; and
(ii) the exchange rate in force in Chile increases significantly from
that in effect as of the Effective Date.
All costs, expenses and taxes payable in connection with this Section
3.4 shall be for the account of the Credit Parties.
3.5. Net Payments.
(a) All payments made by the Borrower hereunder or under any Note will
be made without setoff, counterclaim or other defense. All such payments will be
made free and clear of, and without deduction or withholding for, any present or
future taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein with respect to such payments
(but excluding any tax imposed on or measured by the net income or net profits
of any Lender or its applicable lending office, or any branch or affiliate
thereof, and all franchise taxes, branch taxes, taxes on doing business or taxes
on the overall capital or net worth of any Lender or its applicable lending
office, or any branch or affiliate thereof, or similar taxes, in each case
imposed by the applicable taxing authority pursuant to the laws of the
jurisdiction (or any political subdivision thereof or therein) in which such
Lender, applicable lending office, branch or affiliate is organized, located or
carries on business, or in which its principal executive office is located) (all
such taxes, levies, imposts, duties, fees, assessments or other charges and
related interest and penalties being referred to collectively as "Taxes"). If
any Taxes are so levied or imposed, the Borrower agrees to pay the full amount
of such Taxes, and such additional amounts as may be necessary so that every
payment of all amounts due under this Agreement or under any Note, after
withholding or deduction for or on account of any Taxes, will not be less than
the amount provided for herein or in such Note; provided that the Borrower will
not be required to pay any additional amounts that are (i) attributable to a
Lender's failure to comply with subsection (b) below, (ii) described in Section
3.5(d) or (iii) attributable to a Lender's failure to be a Basel Bank.
13
The Borrower will furnish to the Administrative Agent within 45 days after the
date the payment of any Taxes is due pursuant to applicable law certified copies
of tax receipts evidencing such payment by the Borrower. The Borrower agrees to
indemnify and hold harmless each Lender, and reimburse such Lender upon its
written request, for the amount of any Taxes so levied or imposed and paid by
such Lender; provided, that for any period with respect to which such Lender has
failed to provide the Borrower with the appropriate documentation described
under Section 3.5(b), such Lender shall not be entitled to indemnification under
Section 3.5(a). A certificate as to the amount of any such required
indemnification payment prepared in good faith by such Lender or the
Administrative Agent shall be final, conclusive and binding for all purposes
absent demonstrable error.
(b) Each Lender that is entitled to an exemption or reduction of any
Taxes under the laws of the applicable taxing jurisdiction, or any treaty to
which such jurisdiction is a party, with respect to payments under this
Agreement or under the Notes shall deliver to the Borrower (with a copy to the
Administrative Agent) any documentation prescribed by applicable law that is
necessary to permit such payments to be made without withholding or at a reduced
rate. Any fees charged by the Chilean authorities to a Lender in obtaining or
filing such documentation shall be for the account of the Borrower.
(c) If any Lender receives a refund in respect of any amounts paid by
the Borrower pursuant to this Section 3.5, which refund is allocable to such
payment, it shall promptly notify the Borrower of such refund and shall promptly
repay such refund to the Borrower net of all out-of-pocket expenses of such
Lender; provided, however, that the Borrower, upon the request of such Lender,
agrees to repay the amount paid over to the Borrower by such Lender in the event
such Lender is required to repay such refund.
(d) If a Lender changes its residence, place of business or applicable
lending office or takes any other similar action and the effect of such change
or action, as of the date thereof, would be to increase the additional amounts
that the Borrower is obligated to pay under Section 3.5(a), the Borrower shall
not be obligated to pay the amount of such increase.
SECTION 4. Conditions Precedent to the Initial Borrowing. The
obligation of each Lender to make Bridge Loans on the Initial Borrowing Date is
subject, at the time of the making of such Borrowing, to the satisfaction of the
following conditions:
4.1. Execution of Agreement; Notes. The Effective Date shall have
occurred and there shall have been delivered to the Administrative Agent for the
account of each Lender a Note under Section 1.1(d)(i). Each of the Credit
Documents shall have been executed and delivered by the respective parties
thereto, including, if the aggregate
14
amount of shares of Gener held, directly or indirectly, by the Borrower on the
Initial Borrowing Date is less than 90% of all outstanding shares of Gener on a
fully-diluted basis, the AES Guarantee.
4.2. No Default; Representations and Warranties. On the Initial
Borrowing Date and also after giving effect to the transactions contemplated
hereby and the Bridge Loans made on the Initial Borrowing Date, (i) there shall
exist no Default or Event of Default and (ii) all representations and warranties
contained herein and in the other Credit Documents shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on and as of the Initial Borrowing Date.
4.3. Notice of Borrowing. The Administrative Agent shall have received
a Notice of Borrowing, duly executed by the Borrower and meeting the
requirements of Section 1.1(b).
4.4. Corporate Documents; Proceedings.
(a) The Administrative Agent shall have received a certificate from
each of the Borrower, the Principal Guarantor and Mercury Cayman III dated the
Initial Borrowing Date, signed by the President or any Vice President of each
such Person, in a form to be agreed prior to the Initial Borrowing Date with
appropriate insertions, together with certified copies of the certificate of
incorporation and bylaws or equivalent organizational documents of such Person
and the resolutions of such Person referred to in such certificate. The
certificates delivered pursuant to this paragraph shall include a certification
by Mercury Cayman III as to (i) the number of ADS Shares acquired by Mercury
Cayman III in the Gener Acquisition and (ii) the purchase price to be paid by
the Principal Guarantor in the Cayman Acquisition.
(b) All corporate and legal proceedings and all instruments and
agreements (including, without limitation, the Credit Documents to be executed
after the Effective Date) in connection with the transactions contemplated by
this Agreement and the other Credit Documents shall be reasonably satisfactory
in form and substance to the Administrative Agent, and the Administrative Agent
shall have received all information and certified copies of all documents and
papers, including records of corporate proceedings, governmental approvals and
good standing certificates, if any, which the Administrative Agent reasonably
may have requested in connection therewith, such documents and papers where
appropriate to be certified by proper corporate or Governmental Authorities or a
notary public.
4.5. Opinions of Counsel. The Administrative Agent shall have received
from (i) Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, special New York counsel to
the Credit Parties, an opinion addressed to each of the Agents and each of the
Lenders
15
and dated the Initial Borrowing Date, in form and substance reasonably
satisfactory to the addressees, (ii) Claro & Cia., special Chilean counsel to
the Credit Parties, an opinion addressed to each of the Agents and each of the
Lenders and dated the Initial Borrowing Date, in form and substance reasonably
satisfactory to the addressees, (iii) ▇▇▇▇▇▇ & Calder, special Cayman Islands
counsel to the Credit Parties, an opinion addressed to each of the Agents and
each of the Lenders and dated the Initial Borrowing Date, in form and substance
reasonably satisfactory to the addressees, (iv) Guerrero Olivos ▇▇▇▇▇ y
Errazuriz, special Chilean counsel to the Agents, an opinion addressed to each
of the Agents and each of the Lenders and dated the Initial Borrowing Date,
covering such matters incident to the transactions contemplated herein as the
Administrative Agent may reasonably request, and (v) Walkers, special Cayman
Islands counsel to the Agents, an opinion addressed to each of the Agents and
each of the Lenders and dated the Initial Borrowing Date, covering such matters
incident to the transactions contemplated herein as the Administrative Agent may
reasonably request.
4.6. Consummation of the Transactions.
(a) The Gener Acquisition shall have been consummated and the Borrower
and its Subsidiaries (including Mercury Cayman III) shall own at least a
majority of the outstanding equity interests of Gener (the "Gener Shares").
(b) The Cayman Acquisition shall have been consummated in all material
respects in accordance with the Acquisition Agreements and all applicable laws,
and each of the conditions precedent to the Cayman Acquisition as set forth in
the Acquisition Agreements shall have been fulfilled (and not waived except with
the consent of the Administrative Agent) to the satisfaction of the
Administrative Agent.
(c) (i) AES shall have directly or indirectly (whether in the form of
equity or subordinated back-to-back loans) made cash contributions to the
Borrower in the manner and amounts provided in Schedule 5.15(b) and (ii) the
Borrower shall have used the full amount of such contribution to make payments
owing in connection with the Gener Acquisition and the Cayman Acquisition prior
to utilizing any proceeds of the Loans for that purpose.
(d) The Administrative Agent shall have received true and correct
copies of all material documents entered into in connection with the Gener
Acquisition and the Cayman Acquisition (including, without limitation, the
Acquisition Agreements) and all of the terms and conditions of such material
documents (including, without limitation, the Acquisition Agreements), as well
as the structure of the Gener Acquisition and the Cayman Acquisition, shall be
in form and substance reasonably acceptable to the Administrative Agent.
16
(e) The Administrative Agent shall have received evidence, in form,
scope and substance reasonably satisfactory to it, that the matters set forth in
Section 4.6(a) through (d) shall have been satisfied as of the Initial Borrowing
Date.
4.7. Capital Structure. AES shall indirectly own 100% of the equity
interests of the Borrower. The Borrower shall own all of the outstanding equity
interests of the Principal Guarantor. The Principal Guarantor shall have
acquired all of the outstanding shares of Mercury Cayman III and shall, directly
or indirectly own more than 50% of the capital stock of Gener. The pro forma
consolidated capital structure of the Borrower, the Principal Guarantor and
Gener, after giving effect to the transactions contemplated hereby, shall be set
forth in an officer's certificate of the Chief Financial Officer of AES and
shall be satisfactory to the Administrative Agent. The legal and capital
structure of the Borrower, the Principal Guarantor, Mercury Cayman III, and
Gener shall be reasonably satisfactory to the Administrative Agent and shall not
differ in any material respect from the description of such structure provided
to the Administrative Agent prior to the Effective Date. All agreements relating
to such legal and capital structure, and all organizational documents (including
the estatutos sociales) of the Borrower, the Principal Guarantor, Mercury Cayman
III, Gener and each of their respective Subsidiaries shall be reasonably
satisfactory to the Administrative Agent.
4.8. Adverse Change. (i) None of the Credit Parties or any of their
Subsidiaries shall have sustained any loss or interference with respect to their
businesses or properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor dispute or any
legal or governmental proceeding, which loss or interference, in the sole
judgment of the Required Lenders, could reasonably be expected to have a
Material Adverse Effect; both before and after giving effect to the transactions
contemplated hereby, there shall not have been since December 31, 1999, in the
sole judgment of the Required Lenders, any change, or any development involving
a prospective change, which could reasonably be expected to have a Material
Adverse Effect; (ii) trading in securities generally on the New York or American
Stock Exchange or ▇▇▇▇▇▇▇▇ Stock Exchange shall not have been suspended and
minimum or maximum prices shall not have been established on any such exchange;
(iii) a banking moratorium shall not have been declared by New York, United
States, European Union or Chilean authorities; and (iv) there shall not have
occurred (A) an outbreak or escalation of hostilities between the United States
or Chile and any foreign power, (B) an outbreak or escalation of any other
insurrection or armed conflict involving the United States or Chile or any other
national or international calamity or emergency, or (C) any material change in
the financial markets (including, without limitation, market conditions for
securities of or loan transactions involving Latin American or Chilean issuers
or borrowers) of the United States or Chile which, in the reasonable judgment of
the Required Lenders, makes it impracticable to proceed with the consummation of
the transactions contemplated hereby or materially adversely affects the
syndication of the Bridge Loans.
17
4.9. Governmental and Other Approvals. All necessary corporate,
governmental (domestic and foreign) and third party approvals and/or consents,
if any, in connection with the Gener Acquisition, the Cayman Acquisition, or the
other transactions contemplated hereby, the Bridge Loans and the Credit
Documents or otherwise referred to herein or therein shall have been obtained
and remain in effect, and all applicable waiting periods with respect thereto
shall have expired without any action being taken by any competent authority
which restrains, prevents or imposes materially adverse conditions upon the
consummation of Gener Acquisition, the Cayman Acquisition, or the other
transactions contemplated hereby or the Bridge Loans or the transactions
contemplated by the Credit Documents. There shall not exist any judgment, order,
injunction or other restraint issued or filed or a hearing seeking injunctive
relief or other restraint pending or notified prohibiting or imposing materially
adverse conditions upon the Gener Acquisition, the Cayman Acquisition, or the
other transactions contemplated by the Credit Documents.
4.10. Litigation. There shall be no actions, suits or proceedings
(governmental or other) pending or, to the knowledge of the Borrower or the
Principal Guarantor, threatened (i) that is material with respect to the Gener
Acquisition, the Cayman Acquisition or the other transactions contemplated
hereby, the Bridge Loans or any Credit Document or (ii) which the Required
Lenders shall determine, in their reasonable judgment, could reasonably be
expected to have a Material Adverse Effect.
4.11. Stock Pledge Agreements. (a) Mercury Cayman IV shall have duly
authorized, executed and delivered a legal mortgage in respect of all the
outstanding shares of Mercury Cayman Co. II, Ltd. and a pledge agreement in
respect of its intercompany note issued by Mercury Cayman Co. I, Ltd.; (b)
Mercury Cayman III shall have duly authorized, executed and delivered a stock
pledge agreement, in a form to be agreed prior to the Initial Borrowing Date,
with respect to all of the shares of Gener (or ADS Shares in respect thereof)
and shall have delivered to the Collateral Agent, as Collateral Agent
thereunder, all of the Pledged Securities referred to therein and owned by such
Person, together with satisfactory evidence of all annotations in the stock
registry books of the issuers of the Pledged Securities and all other
annotations necessary to grant a first priority lien on the Pledged Securities;
and (c) the Principal Guarantor shall have duly authorized, executed and
delivered a stock pledge agreement in respect of all of its shares of Gener and
a legal mortgage in respect of all the outstanding shares of Mercury Cayman III,
each in a form to be agreed prior to the Initial Borrowing Date (each, as
amended, modified or supplemented from time to time, a "Stock Pledge
Agreement"), and shall have delivered to the Collateral Agent, as Collateral
Agent thereunder, all of the Pledged Securities referred to therein and owned by
such Person, together with satisfactory evidence of all annotations in the stock
registry books or register of members, as applicable, of the issuers of the
Pledged Securities and all other annotations necessary to grant a first priority
lien on the Pledged Securities; provided, however, that to the extent that the
Post-Closing Collateral Conditions expressly permit any of the preceding
18
actions to be taken at a time later than that specified in this paragraph, such
later time shall apply.
4.12. Financial Statements; Projections. The Lenders shall have
received true and correct copies of the financial statements and projections
referred to in Section 5.6, which historical financial statements and
projections shall be in form and substance reasonably satisfactory to the
Required Lenders.
4.13. Existing Indebtedness, Liens and Other Obligations. The Credit
Parties shall have no Indebtedness or preferred stock outstanding other than
pursuant to the Credit Documents and other Indebtedness listed on Schedule
4.13A. The assets of the Credit Parties shall be subject to no Lien other than
Liens created pursuant to the Security Documents. The Credit Parties shall have
no contractual obligations other than pursuant to the Credit Documents and the
other obligations listed on Schedule 4.13A.
4.14. Compliance with Applicable Law. The Administrative Agent and its
counsel shall be reasonably satisfied that the consummation of the transactions
contemplated hereby and the funding of the Bridge Loans shall be in compliance
with all applicable law. There shall not have been any statute, rule,
regulation, injunction or order applicable to any of the transactions
contemplated hereby or the Bridge Loans, promulgated, enacted, entered or
enforced by any Governmental Authority, nor shall there be pending any action or
proceeding by or before any such Governmental Authority that would prohibit,
restrict, delay or otherwise materially affect the transactions contemplated by
this Agreement or any other Credit Document.
4.15. Payment of Fees and Other Obligations. The Borrower shall have
paid to the Administrative Agent and each Lender all Fees, costs and expenses
(including, without limitation, reasonable legal fees and expenses) payable to
the Administrative Agent and such Lender to the extent then due. Mercury Cayman
IV shall simultaneously repay all amounts due and owing under the credit
agreement between Mercury Cayman IV and Bankers Trust Company entered into on
the Effective Date.
4.16. Consent Letter. The Administrative Agent shall have received a
letter (the "Consent Letter") from CT Corporation System, presently located at
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, indicating its consent to its
appointment by the Borrower, the Principal Guarantor and Mercury Cayman III as
their agent to receive service of process as specified in Section 12.8(a) of
this Agreement.
4.17. Central Bank Approval. On or prior to the Initial Borrowing Date,
the Administrative Agent shall have received evidence satisfactory to it that
the terms of this Agreement and the Security Documents have been registered and
approved by the Central Bank of Chile.
19
4.18. Other Documents. The Lenders shall have received such other
agreements, certificates or documents as the Administrative Agent shall
reasonably request.
The acceptance of the benefits of the Borrowing of the Bridge Loans
shall constitute a representation and warranty by each of the Borrower and the
Initial Guarantors to the Administrative Agent and the Lenders that all the
conditions specified in this Section 4 exist as of such time (except to the
extent that any of such conditions are required to be satisfactory to or
determined by any Lender, the Required Lenders and/or the Administrative Agent
and except to the extent waived by the Lenders). All of the Notes, certificates,
legal opinions and other documents and papers referred to in this Section 4,
unless otherwise specified, shall be delivered to the Administrative Agent at
its Notice Office for the account of each of the Lenders and, except for the
Notes, in sufficient counterparts or copies for each of the Lenders and shall be
in form and substance reasonably satisfactory to the Administrative Agent.
SECTION 5. Representations, Warranties and Agreements. In order to
induce the Lenders to enter into this Agreement and to make the Bridge Loans
provided for herein, each of the Credit Parties makes the following
representations, warranties and agreements as of the Effective Date (in each
case both before and after giving effect to the Gener Acquisition, the Cayman
Acquisition and the other transactions contemplated hereby and the making of the
Bridge Loans hereunder), all of which shall survive the execution and delivery
of this Agreement and the Notes and the making of the Bridge Loans (with the
occurrence of the Initial Borrowing Date being deemed to constitute a
representation and warranty that the matters specified in this Section 5 are
true and correct in all material respects on and as of the Initial Borrowing
Date, unless stated to relate to a specific earlier date, in which case such
representation and warranty shall be true and correct in all material respects
as of such earlier date); provided that each such representation, warranty and
agreement with respect to Gener and its Subsidiaries is made to the best
knowledge of each Credit Party:
5.1. Corporate Status. Each Credit Party and each of its Subsidiaries
(i) is a duly organized and validly existing limited liability company or
corporation, as the case may be, in good standing (to the extent such concept is
relevant in such jurisdiction) under the laws of the jurisdiction of its
organization or incorporation, (ii) has the corporate power and authority to own
its property and assets, to lease the property it operates as lessee and to
transact the business in which it is engaged and presently proposes to engage
and (iii) is duly qualified and is authorized to do business and is in good
standing in each jurisdiction where the ownership, leasing or operation of its
property or the conduct of its business requires such qualifications, except for
failures to be so qualified which, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
20
5.2. Corporate Power and Authority. Each Credit Party has the corporate
power and authority, and the legal right, to execute, deliver and perform the
terms and provisions of each of the Credit Documents to which it is a party and
has taken all necessary corporate action to authorize the execution, delivery
and performance by it of each of such Credit Documents. Each Credit Party has
duly executed and delivered each Credit Document to which it is a party, and
each such Credit Document constitutes its legal, valid and binding obligation,
enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws generally affecting creditors'
rights and by equitable principles (regardless of whether enforcement is sought
in equity or at law).
5.3. No Immunity. Neither the Borrower nor any other Credit Party nor
any of their respective properties has any right of immunity on the grounds of
sovereignty or otherwise from jurisdiction of any court or from setoff or any
legal process (whether through service or notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) under the laws of any
jurisdiction. The execution and delivery of the Credit Documents by the Borrower
and the other Credit Parties and the performance by them of their obligations
thereunder constitute commercial transactions.
5.4. No Violation. Neither the execution, delivery or performance by
any Credit Party of the Credit Documents to which it is a party, nor compliance
by it with the terms and provisions thereof, nor the consummation of the
transactions contemplated herein or therein, (i) will contravene any applicable
provision of any law, statute, rule or regulation, or any order, writ,
injunction or decree of any court or Governmental Authority, (ii) will conflict
or be inconsistent with, or result in any breach of, any of the terms,
covenants, conditions or provisions of, or constitute a default under, or result
in the creation or imposition of (or the obligation to create or impose) any
Lien (other than pursuant to the Security Documents) upon any of the property or
assets of such Credit Party and its Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, loan agreement, credit agreement or any
other material agreement, contract or instrument to which any Credit Party or
any of its Subsidiaries is a party or by which it or any of its property or
assets is bound or to which it may be subject or (iii) will violate any
provision of the certificate of incorporation or bylaws (estatutos sociales) or
equivalent organizational or other charter documents of such Credit Party or any
of its Subsidiaries.
5.5. Approvals. No order, consent, approval, license, authorization or
validation of, or filing, recording or registration with (except (i) those that
have otherwise been obtained or made on or prior to the Initial Borrowing Date
and which remain in full force and effect on the Initial Borrowing Date and (ii)
the Post-Closing Collateral Actions), or exemption by, any Governmental
Authority, or any subdivision thereof or any other Person, is required to
authorize, or is required in connection with, (A) the execution, delivery and
performance of any Credit Document, (B) the legality, validity,
21
binding effect or enforceability of any such Credit Document, (C) the ability of
the Borrower to obtain Dollars to pay its obligations under this Agreement
punctually in Dollars on the Formal Market with respect to those payments and to
apply such Dollars to the satisfaction of its obligations hereunder in
accordance with the terms hereof except for the registration and approval of the
financial terms of this Agreement with the Central Bank of Chile as required by
the Foreign Exchange Regulations of the Central Bank of Chile, or (D) the
admissibility of this Agreement in evidence in the courts of the Chile, except
that in order for this Agreement to be admissible in evidence in judicial
proceedings in a Chilean Court, this Agreement would first have to be translated
into the Spanish language by a licensed public translator who certifies as to
the accuracy thereof, unless executed in Spanish by all the parties thereto
(which procedure could be carried out in relation to any document at any time
prior to such document being admitted as evidence in a proceeding held in
Chilean courts).
5.6. Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc.
(a) The audited consolidated balance sheets of Gener and its
Subsidiaries for the Applicable Fiscal Years and the related statements of
income, cash flows and shareholders' equity of Gener and its Subsidiaries,
copies of which have been furnished to the Lenders prior to the Initial
Borrowing Date, (i) have been audited by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, (ii) have been
prepared in accordance with Chilean GAAP consistently applied throughout the
periods covered thereby, and (iii) (on the basis disclosed in the footnotes to
such financial statements) present fairly, in all material respects, the
combined financial condition, results of operations and cash flows of Gener and
its Subsidiaries for financial condition, results of operations and cash flows
of Gener and its Subsidiaries for the periods covered thereby. The unaudited
interim consolidated balance sheets of the Gener and its Subsidiaries as at the
end of, and the related unaudited interim combined statements of income and of
cash flows for, the nine-month period ended September 30, 2000 have heretofore
been furnished to each Lender. During the period from September 30, 2000 to and
including the Effective Date, there has been no sale, transfer or other
disposition by Gener and its Subsidiaries of any material part of the business
or property of the Gener and its Subsidiaries and no purchase or other
acquisition by Gener or its Subsidiaries of any business or property (including
any capital stock of any other Person) material in relation to the combined
financial condition of Gener and its Subsidiaries, in each case, which is not
reflected in the foregoing financial statements or in the notes thereto and has
not otherwise been disclosed in writing to the Lenders on or prior to the
Effective Date.
(b) The pro forma balance sheet and statements of income and of cash
flows of the Borrower and the other Credit Parties (the "Pro Forma Financial
Statements"), copies of which have heretofore been furnished to each Lender, are
the balance sheet and statements of income and of cash flows of the Borrower and
the other
22
Credit Parties for the twelve-month period ended September 30, 2000 (the "Pro
Forma Date"), adjusted to give effect (as if such events had occurred on such
date) to (i) the consummation of the Gener Acquisition and the Cayman
Acquisition, (ii) the making of the Loans to be made on the Initial Borrowing
Date in an aggregate principal amount of not more than U.S.$400,000,000, (iii)
the refinancing of certain existing Indebtedness of the Borrower incurred in
connection with the Gener Acquisition, and (iv) the payment of estimated fees,
expenses, financing costs and settlement of intercompany accounts related to the
transactions contemplated hereby and thereby. The Pro Forma Financial Statements
were prepared in good faith on the basis of reasonable estimates.
(c) Since September 30, 2000, nothing has occurred that has had or
could reasonably be expected to have a Material Adverse Effect.
(d) On and as of the Initial Borrowing Date and after giving effect to
the transactions contemplated hereby and the Bridge Loans being incurred or
assumed and Liens created by the Credit Parties, (i) the sum of the tangible and
intangible assets, at a fair valuation, of the Borrower on a stand-alone basis
and of the Borrower and its Subsidiaries taken as a whole will exceed their
debts; (ii) the Borrower on a stand-alone basis and the Borrower and its
Subsidiaries taken as a whole have not incurred and do not intend to incur, and
do not believe that they will incur, debts beyond their ability to pay such
debts as such debts mature; (iii) the Borrower on a stand-alone basis and the
Borrower and its Subsidiaries taken as a whole will have sufficient capital with
which to conduct their business; and (iv) neither the Borrower, on a stand-alone
basis, nor the Borrower and its Subsidiaries, taken as a whole, will be in
"cesacion de pagos" as such term is construed under Chilean law. The amount of
contingent liabilities at any time shall be computed as the amount that, in the
light of all the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured liability.
(e) Except as fully disclosed in the financial statements delivered
pursuant to Sections 5.6(a) and (b), there were, as of the Initial Borrowing
Date, no liabilities or obligations with respect to any Credit Party or any of
its Subsidiaries (including without limitation Gener and its Subsidiaries) of
any nature whatsoever (whether absolute, accrued, contingent or otherwise and
whether or not due) other than those which are in the ordinary course of its
business and consistent with past practice and which, either individually or in
aggregate, could not reasonably be expected to have a Material Adverse Effect.
As of the Initial Borrowing Date, none of the Credit Parties knows of any basis
for the assertion against it or any of its Subsidiaries (including without
limitation Gener and its Subsidiaries) of any liability or obligation of any
nature whatsoever that is not fully disclosed in the financial statements
delivered pursuant to Sections 5.6(a) and (b) other than those which are in the
ordinary course of its business and consistent with past practice and which,
either individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.
23
(f) On and as of the Initial Borrowing Date, the projections delivered
to the Administrative Agent and the Lenders prior to the Initial Borrowing Date
have been prepared in good faith and are based on reasonable assumptions, and
there are no statements or conclusions in the projections which are based upon
or include information known to any Credit Party to be misleading in any
material respect or which fail to take into account material information known
to such Credit Party regarding the matters reported therein. On the Initial
Borrowing Date, each Credit Party believes that the projections are reasonable
and attainable, it being recognized by the Lenders, however, that projections as
to future events are not to be viewed as facts and that the actual results
during the period or periods covered by the projections may differ from the
projected results and that the differences may be material.
5.7. Ranking. The obligations under the Bridge Loans and the Credit
Documents constitute unconditional and unsubordinated Indebtedness of the Credit
Parties and rank and will rank at least pari passu in priority of payment and in
all other respects with all other present and future unsubordinated Indebtedness
of the Credit Parties.
5.8. Litigation. There are no actions, suits or proceedings by or
before any arbitrator or Governmental Authority pending or, to the knowledge of
the Borrower or the Principal Guarantor, threatened (i) that is material with
respect to the Gener Acquisition, the Cayman Acquisition or the other
transactions contemplated hereby, the Bridge Loans or any Credit Document or
(ii) that could reasonably be expected to have a Material Adverse Effect.
5.9. True and Complete Disclosure. All factual information (taken as a
whole) furnished by or on behalf of any Credit Party in writing to the
Administrative Agent or any Lender (including, without limitation, all
information contained in the Credit Documents but excluding the projections
referred to in the next sentence) for purposes of or in connection with this
Agreement, the syndication of the Bridge Loans (including, without limitation,
the preparation of any information memorandum related thereto), the Credit
Documents, or any transaction contemplated herein or therein is, true and
accurate in all material respects on the date as of which such information is
dated or certified and as of the date of this Agreement and each date that this
representation is deemed to be made hereunder and not incomplete by omitting to
state any material fact necessary to make such information (taken as a whole)
not misleading in any material respect at such time in light of the
circumstances under which such information was provided. The projections and pro
forma financial information furnished by any Credit Party to the Administrative
Agent or any Lender pursuant to this Agreement have been prepared in good faith
based on assumptions believed by the Borrower and by the Principal Guarantor to
be reasonable at the time made, it being recognized by the Lenders that such
financial information as it relates to future events is not to be viewed as fact
and that actual results during the period or periods covered by such financial
information may
24
differ from the projected results set forth therein by a material amount and no
Credit Party, however, makes any representation as to the ability of the
Borrower, the Principal Guarantor or any of their Subsidiaries to achieve the
results set forth in any such projections.
5.10. Use of Proceeds; Margin Regulations.
(a) All proceeds of the Bridge Loans will be used by the Borrower
pursuant to one or more irrevocable instructions given to the Agents, to repay
the outstanding principal and interest on the Intercompany Note and the proceeds
of such repayment will be used by Mercury Cayman IV, pursuant to irrevocable
instructions given to the Agents, first to make a capital contribution (the
"Capital Contribution") to Mercury Cayman Co. II, Ltd., the proceeds of which
will be used to make successive capital contributions on the Initial Borrowing
Date to subsidiaries until the proceeds have been contributed to the Principal
Guarantor, to fund a portion or all of the purchase price of the Cayman
Acquisition and , second, any balance shall be applied on the Initial Borrowing
Date to repay the Senior Secured Short Term Bridge Credit Agreement, dated as of
the Effective Date, between Mercury Cayman IV, the Guarantors named therein,
Deutsche Bank Securities Inc., as Arranger, and Bankers Trust Company, as Lender
and Secured Party.
(b) Neither the making of any Bridge Loan, nor the use of the proceeds
thereof, will violate or be inconsistent with the provisions of Regulation T, U
or X of the Board of Governors of the Federal Reserve.
5.11. Tax Returns and Payments. Each Credit Party and each of its
Subsidiaries has timely filed all income tax returns and all other material tax
returns, domestic and foreign, required to be filed by it and has paid all
material taxes and assessments payable by it which have become due for the last
two fiscal years, except for those contested in good faith and adequately
disclosed and fully provided for on the financial statements in accordance with
GAAP. Each Credit Party and each of its Subsidiaries has at all times paid, or
has provided adequate reserves (in the good faith judgment of the management of
such Credit Party) for the payment of, all income taxes applicable for the last
two fiscal years and for the current fiscal year to date. There is no material
action, suit, proceeding, investigation, audit, or claim now pending or, to the
knowledge of any Credit Party or Subsidiary, threatened, by any authority
regarding any taxes relating to such Credit Party or any of its Subsidiaries. No
Credit Party or any Subsidiary of a Credit Party has entered into an agreement
or waiver or been requested to enter into an agreement or waiver extending any
statute of limitations relating to the payment or collection of taxes of such
Credit Party or any Subsidiary, or is aware of any circumstances that would
cause the taxable years or other taxable periods of such Credit Party or any
Subsidiary not to be subject to the normally applicable statute of limitations.
25
5.12. Employee Benefit Plans. Each Credit Party and each of its
Subsidiaries is in compliance in all material respects with its respective
obligations relating to all employee benefit plans established, maintained or
contributed to by it, as required by law, and does not have outstanding any
material liabilities with respect to any such employee benefit plans.
5.13. Security Interests. Each Stock Pledge Agreement (upon completion
of the Post-Closing Collateral Actions) will create, as security for the
Obligations, a valid and enforceable perfected security interest in all of the
Collateral described therein in favor of the Lenders and their assignees,
superior and prior to the rights of all third Persons and subject to no Liens
other than as provided in such Security Document. No filings or recordings are
required in order to perfect (or maintain the perfection or priority of) the
security interests created under the Stock Pledge Agreements other than those
completed on or prior to the Initial Borrowing Date and the Post-Closing
Collateral Actions. No filings or recordings are required in order to perfect
(or maintain the perfection or priority of) the security interests created under
the Security Documents other than those completed on or prior to the Initial
Borrowing Date and the Post-Closing Collateral Actions.
5.14. Properties. Each Credit Party and each of its Subsidiaries has
good and marketable title to all material properties owned by it, including all
property reflected in the balance sheets referred to in Section 5.6(a) and (b)
(except as sold or otherwise disposed of since the date of such balance sheet in
the ordinary course of business or as permitted by the terms of this Agreement),
free and clear of all Liens, other than Permitted Liens. Each Credit Party and
each of its Subsidiaries holds all material licenses, certificates and
clearances of municipal and other authorities necessary to own and operate its
properties in the manner and for the purposes currently operated by it. There
are no actual, or, to the knowledge of any Credit Party, threatened or alleged
defaults which, either individually or in the aggregate, could have a Material
Adverse Effect with respect to any leases of real property under which any
Credit Party or its Subsidiaries is lessor or lessee.
5.15. Capitalization.
(a) The authorized equity interests of the Borrower are as described in
Schedule 5.15, and such interests indicated in Schedule 5.15 are issued and
outstanding and owned by Inversiones CYC Limitada free and clear of any Liens
(other than Liens created by the Security Documents). All outstanding equity
interests of the Borrower have been duly and validly issued, and are fully paid
and nonassessable. The Borrower does not have outstanding any securities
convertible into or exchangeable for its equity interests or outstanding any
rights to subscribe for or to purchase, or any options for the purchase of, or
any agreement providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, its equity interests.
26
(b) The authorized and outstanding capital stock or other equity
interests, jurisdiction of incorporation and name of Mercury Cayman IV and each
direct or indirect Subsidiary of the Borrower which is a Credit Party is as set
forth on Schedule 5.15. All outstanding capital stock or other equity interests
of each such company have been duly and validly issued, are fully paid and
nonassessable and are owned, directly or indirectly, by the Person or Persons
identified as the owners thereof on Schedule 5.15 free and clear of any Liens
(other than the Liens created by the Security Documents or pursuant to any
agreements entered into in connection with the transactions contemplated in this
Agreement). No such company has outstanding any securities convertible into or
exchangeable for such company's capital stock or other equity interests or
outstanding any rights to subscribe for or to purchase, or any options for the
purchase of, or any agreement providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to,
such company's capital stock or other equity interests.
5.16. Compliance with Statutes, etc. Each Credit Party and each of its
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all Governmental
Authorities, domestic or foreign, in respect of the conduct of its business and
the ownership of its property (including applicable statutes, regulations,
orders and restrictions relating to environmental standards and controls),
except such noncompliances as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. None of the Credit
Parties or their Subsidiaries is in violation of its certificate of
incorporation or bylaws (or similar organizational document) or in breach of or
default under (nor has any event occurred which, with notice or passage of time
or both, would constitute a default under) or in violation of any of the terms
or provisions of any indenture, mortgage, deed of trust, loan agreement, credit
agreement or any other material agreement, contract or instrument to which any
of them is a party or to which any of them or their respective properties or
assets is subject, except, in each case, for any such breach, default, violation
or event that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
5.17. Investment Company Act. No Credit Party is an "investment
company" or a company "controlled" by an "investment company" within the meaning
of, or subject to regulation under, the Investment Company Act of 1940, as
amended.
5.18. Public Utility Holding Company Act. No Credit Party or any
Subsidiary thereof is a "holding company" subject to registration under the
Public Utility Holding Company Act of 1935, as amended ("PUHCA") or is a
"subsidiary company" or an "affiliate" of such a "holding company" within the
meaning of PUHCA.
5.19. Environmental Matters. Each Credit Party and each of its
Subsidiaries has complied with, and on the Initial Borrowing Date is in
compliance in all
27
material respects with, all applicable environmental laws and all requirements
of any permits issued under such environmental laws. There are no pending or, to
the best knowledge of such Credit Party or Subsidiary, threatened environmental
claims against any Credit Party or any Subsidiary of a Credit Party (including
any such claim arising out of the ownership or operation by such Credit Party or
Subsidiary of any real property no longer owned or operated by such Credit Party
or Subsidiary) or any real property owned or operated by any Credit Party or any
Subsidiary of a Credit Party. There are no facts, circumstances, conditions or
occurrences with respect to the business or operations of any Credit Party or
any Subsidiary of a Credit Party, or any real property owned or operated by any
Credit Party or any Subsidiary of a Credit Party (including any real property
formerly owned or operated by such Credit Party or Subsidiary but no longer
owned or operated by such Credit Party or Subsidiary) or any property adjoining
or adjacent to any such real property that could be expected (i) to form the
basis of an environmental claim against such Credit Party or Subsidiary or any
real property owned or operated by any Credit Party or any Subsidiary of a
Credit Party or (ii) to cause any real property owned or operated by such Credit
Party or Subsidiary to be subject to such restrictions on the ownership,
occupancy or transferability of such real property by such Credit Party or
Subsidiary under any applicable environmental law which are reasonably likely to
have a Material Adverse Effect.
5.20. Labor Relations. No Credit Party nor any of its Subsidiaries is
engaged in any unfair labor practice that could reasonably be expected to have a
Material Adverse Effect. There is (i) no unfair labor practice complaint pending
against any Credit Party or any of its Subsidiaries or, to the best knowledge of
any Credit Party or any Subsidiary of a Credit Party, threatened against such
Credit Party or any of its Subsidiaries, and no grievance or arbitration
proceeding arising out of or under any collective bargaining agreement is so
pending against any Credit Party or any of its Subsidiaries or, to the best
knowledge of any Credit Party, threatened against such Credit Party or any of
its Subsidiaries, (ii) no strike, labor dispute, slowdown or stoppage pending
against any Credit Party or any of its Subsidiaries or, to the best knowledge of
any Credit Party, threatened against such Credit Party or any of its
Subsidiaries and (iii) to the best knowledge of any Credit Party, no union
representation question existing with respect to the employees of such Credit
Party or any of its Subsidiaries and, to the best knowledge of any Credit Party,
no union organizing activities are taking place, except (with respect to any
matter specified in clause (i), (ii) or (iii) above, either individually or in
the aggregate) such as could not reasonably be expected to have a Material
Adverse Effect.
5.21. Patents, Licenses, Franchises and Formulas. Each Credit Party and
each of its Subsidiaries owns or has the right to use all the patents,
trademarks, permits, service marks, trade names, copyrights, licenses,
franchises, proprietary information (including, but not limited to, rights in
computer programs and databases) and formulas, or rights with respect to the
foregoing, and has obtained assignments of all leases and
28
other rights of whatever nature, necessary for the present conduct of its
business, without any known conflict with the rights of others which, or the
failure to obtain which, as the case may be, could reasonably be expected to
have a Material Adverse Effect. To the best knowledge of such Credit Party or
Subsidiary, no claim is pending that any Credit Party or any Subsidiary of a
Credit Party infringes upon the asserted rights of any other Person under any
intellectual property, except for claims which could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. To the best
knowledge of such Credit Party or Subsidiary, no claim is pending that such
intellectual property owned or licensed by any Credit Party or any Subsidiary of
a Credit Party or which such Credit Party or Subsidiary otherwise has the right
to use is invalid and unenforceable, except for claims which could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The consummation of the transactions contemplated hereby will
not alter or impair any rights of any Credit Party or any Subsidiary of a Credit
Party to use any intellectual property in a way that would, individually or in
the aggregate, have a Material Adverse Effect. All intellectual property is free
and clear of all Liens, except such Liens as would not, individually or in the
aggregate, have a Material Adverse Effect and Liens created by the Security
Documents. Neither the Borrower nor the Principal Guarantor owns or licenses any
material trademarks.
5.22. Transactions. At the time of consummation of each of the Gener
Acquisition, the Cayman Acquisition and the other transactions contemplated
hereby, all consents and approvals of, and filings and registrations with, and
all other actions in respect of, all Governmental Authorities required in order
to make or consummate the Gener Acquisition, the Cayman Acquisition or the other
transactions contemplated hereby were obtained, given, filed or taken and are in
full force and effect (or effective judicial relief with respect thereto has
been obtained). All applicable waiting periods with respect thereto, expired
without, in all such cases, any action being taken by any competent authority
which restrains, prevents, or imposes material adverse conditions upon the Gener
Acquisition, the Cayman Acquisition or the other transactions contemplated
hereby. Additionally, there does not exist any judgment, order or injunction
prohibiting or imposing material adverse conditions upon the transactions
contemplated hereby or the performance by any Credit Party of its obligations
under the Credit Documents to which it is party. All actions taken by each
Credit Party pursuant to or in furtherance of the transactions contemplated
hereby were taken in all material respects in compliance with the respective
Credit Documents and all applicable laws.
5.23. Fees and Enforcement. No fees or taxes, including, without
limitation, stamp, transaction, registration or similar taxes, are required to
be paid to ensure the legality, validity, or enforceability of this Agreement or
any of the other Credit Documents (except for fees and stamp taxes in respect of
this Agreement). Under the laws of Chile and the Cayman Islands, the choice of
the laws of the State
29
of New York as set forth in the Credit Documents that are stated to be governed
by the laws of the State of New York is a valid choice of law, and the
irrevocable submission by each Credit Party to jurisdiction and consent to
service of process and appointment by each Credit Party of an agent for service
of process, in each case as set forth in such Credit Documents, is legal, valid,
binding and effective.
5.24. Form of Documentation. Each of the Credit Documents is in proper
legal form under the laws of Chile, the Cayman Islands and the United States for
the enforcement thereof under such laws.
5.25. Payment of Additional Amounts.
(a) The Borrower and the Principal Guarantor are permitted under
applicable law to pay any additional amounts payable under Section 3.5 as will
result in receipt by the Lenders of such amounts as would have been received by
the Lenders had no such additional amounts been required to have been paid.
(b) Other than as set forth on Schedule 5.25, as of the Effective Date,
no withholding or other taxes are required to be paid in respect of, or deducted
from, any payment required to be made by the Borrower under this Agreement, the
Notes, or any other Credit Document.
5.26. Fictitious Business Names. No Credit Party has used any corporate
or fictitious name, other than the corporate name shown on its governing
documents.
5.27. Indebtedness. The Credit Parties do not have any Indebtedness or
preferred stock outstanding other than pursuant to the Credit Documents and
Indebtedness listed on Schedule 4.13A. The assets of the Credit Parties are not
subject to any Lien other than Liens created pursuant to the Security Documents.
The Credit Parties have no contractual obligations other than pursuant to the
Credit Documents and the other obligations listed on Schedule 4.13A.
SECTION 6. Affirmative Covenants. The Credit Parties hereby covenant
and agree that on the Effective Date and thereafter for so long as this
Agreement is in effect and until the Bridge Loans and the Notes, together with
interest, Fees and all other Obligations incurred hereunder and thereunder, are
paid in full:
6.1. Information Covenants. The Borrower will furnish to the
Administrative Agent, and the Administrative Agent shall furnish to each Lender:
(a) Quarterly Financial Statements. As soon as available and in any
event by the earlier of (i) 45 days after the close of each of the first
three quarterly accounting periods in each fiscal year of Gener and its
Subsidiaries or (ii) five days after the delivery to the applicable Chilean
Governmental Authority of
30
financial statements for such accounting periods (commencing with the
quarterly accounting period ending on March 31, 2001), Spanish language
copies of, and within 20 days thereafter free translations into English of,
(i) the balance sheets of Gener and its Subsidiaries, as at the end of such
quarterly accounting period and the related statements of income and
retained earnings and statement of cash flows for such quarterly accounting
period and the elapsed portion of such fiscal year, in each case setting
forth comparative figures for the related periods in the prior fiscal year,
all of which shall be in reasonable detail and certified by the Chief
Financial Officer of Gener to the effect that such financial statements
have been prepared in accordance with Chilean GAAP and that they fairly
present in all material respects the financial condition of Gener and its
Subsidiaries, as of the dates indicated and the results of their operations
and changes in their cash flows for the periods indicated, subject to
normal year-end audit adjustments and except for the absence of footnotes.
The financial statements of Gener and its Subsidiaries delivered pursuant
to this Section 6.1(a) shall be on a consolidated and (to the extent
prepared by Gener or its Subsidiaries for delivery to any Chilean or
non-Chilean Governmental Authority) consolidating basis.
(b) Annual Financial Statements. As soon as available and in any event
by the earlier of (i) 90 days after the close of each fiscal year of Gener
and its Subsidiaries and (ii) five days after the delivery to the
applicable Chilean Governmental Authority of financial statements for such
fiscal year, Spanish language copies of, and within 20 days thereafter free
translations into English of, (i) the balance sheets of Gener and its
Subsidiaries as at the end of such fiscal year and the related statements
of income and retained earnings and statement of cash flows for such fiscal
year, in each case setting forth comparative figures for the preceding
fiscal year, and certified by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or such other independent
certified public accountants of recognized international standing as shall
be reasonably acceptable to the Administrative Agent, in each case to the
effect that such financial statements have been prepared in accordance with
Chilean GAAP and fairly present in all material respects the financial
condition of Gener and its Subsidiaries as of the dates indicated and the
results of their operations and changes in their cash flows for the periods
indicated. The English language financial statements delivered pursuant to
this subsection 6.1(b) will be supplemented with a reconciliation to U.S.
GAAP. The financial statements of Gener and its Subsidiaries delivered
pursuant to this Section 6.1(b) shall be on a consolidated and (to the
extent prepared by Gener or its Subsidiaries for delivery to any Chilean or
non-Chilean Governmental Authority) consolidating basis.
(c) Quarterly Financial Statements. As soon as available and in any
event within 45 days after the close of each of the first three quarterly
accounting periods in each fiscal year of the Borrower (commencing with the
quarterly accounting period ending on March 31, 2001), English language
copies of (i) the
31
balance sheets of the Borrower and its Subsidiaries as at the end of such
quarterly accounting period and the related statements of income and
retained earnings and statement of cash flows for such quarterly accounting
period and the elapsed portion of such fiscal year, all of which shall be
in reasonable detail and certified by the Chief Financial Officer of the
Borrower to the effect that such financial statements have been prepared in
accordance with Chilean GAAP and that they fairly present in all material
respects the financial condition of the Borrower and its Subsidiaries as of
the dates indicated and the results of their operations and changes in
their cash flows for the periods indicated, subject to normal year-end
audit adjustments and except for the absence of footnotes. The financial
statements of the Borrower and its Subsidiaries delivered pursuant to this
Section 6.1(c) shall be on a consolidated basis.
(d) Annual Financial Statements. As soon as available and in any event
within 90 days after the close of each fiscal year of the Borrower the
balance sheets of the Borrower and its Subsidiaries as at the end of such
fiscal year and the related statements of income and retained earnings and
statement of cash flows for such fiscal year, and certified by ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ or such other independent certified public accountants of
recognized international standing as shall be reasonably acceptable to the
Administrative Agent, in each case to the effect that such financial
statements have been prepared in accordance with Chilean GAAP and fairly
present in all material respects the financial condition of the Borrower
and its Subsidiaries as of the dates indicated and the results of their
operations and changes in their cash flows for the periods indicated. The
financial statements delivered pursuant to this subsection 6.1(d) will be
supplemented with a reconciliation to U.S. GAAP. The financial statements
of the Borrower and its Subsidiaries delivered pursuant to this Section
6.1(d) shall be on a consolidated basis.
(e) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Sections 6.1(a), (b), (c) and (d) a
certificate of the Chief Financial Officer of each of the Borrower and the
Principal Guarantor to the effect that, to the best of such officer's
knowledge, no Default or Event of Default has occurred and is continuing
or, if any Default or Event of Default has occurred and is continuing,
specifying the nature and extent thereof, which certificate shall set forth
in reasonable detail the calculations required to establish whether the
Borrower and the Principal Guarantor were in compliance with the provisions
of Section 3.3, as at the end of such fiscal quarter or year.
(f) Notice of Default or Litigation. Promptly upon, and in any event
within five Business Days after, the principal executive officer or the
principal financial officer of any Credit Party or any Subsidiary thereof
obtains knowledge thereof, notice of (i) the occurrence of any event which
constitutes a Default or an
32
Event of Default and (ii) any litigation or governmental investigation or
proceeding pending (x) against any Credit Party or any Subsidiary of a
Credit Party which could reasonably be expected to have a Material Adverse
Effect, (y) with respect to any material Indebtedness of any Credit Party
or any Subsidiary of a Credit Party or (z) with respect to any Credit
Document.
(g) Other Reports and Filings. Promptly after the filing or delivery
thereof (unless previously delivered pursuant to another provision hereof),
copies of all material financial information, if any, which the Borrower,
the Principal Guarantor, Gener or their Subsidiaries shall publicly file
with any Governmental Authority (including, without limitation, the United
States Securities and Exchange Commission and any Chilean securities
authority) or with any international or national securities exchange
(including, without limitation, the New York or American Stock Exchange and
the ▇▇▇▇▇▇▇▇ Stock Exchange) or deliver to holders of its Indebtedness
pursuant to the terms of the documentation governing such Indebtedness.
(h) Notice of Material Adverse Effect. Promptly after obtaining
knowledge thereof, written notice of the occurrence of any Material Adverse
Effect or any event or condition which could reasonably be expected to
result in any Material Adverse Effect.
(i) Other Information. From time to time, such other information or
documents (financial or otherwise) with respect to any Credit Party or any
Subsidiary of a Credit Party as the Administrative Agent or any Lender
(through the Administrative Agent) may reasonably request.
6.2. Books, Records and Inspections. Each Credit Party will, and will
cause each of its Subsidiaries to, keep proper books of record and accounts in
which full, true and correct entries in conformity with applicable generally
accepted accounting principles and all requirements of law shall be made of all
dealings and transactions in relation to its business and activities. Each
Credit Party will, and will cause each of its Subsidiaries to, permit officers
and designated representatives of the Administrative Agent to visit and inspect,
under guidance of officers of such Credit Party or such Subsidiary, any of the
properties of such Credit Party or such Subsidiary, and to examine the books of
account of such Credit Party or such Subsidiary and discuss the affairs,
finances and accounts of such Credit Party or such Subsidiary with, and be
advised as to the same by, its and their officers and independent accountants
(provided that the Borrower shall be permitted to attend any meeting with such
accountants), all upon reasonable prior notice and at such reasonable times and
intervals and to such reasonable extent as the Administrative Agent may
reasonably request. The Administrative Agent may conduct such examinations on
any Lender's behalf.
33
6.3. Maintenance of Property and Insurance. Each Credit Party will, and
will cause each of its Subsidiaries to, (i) keep all property necessary to its
business in reasonably good working order and condition, ordinary wear and tear
excepted, in accordance with industry practice for companies similarly situated
owning similar properties in the same general areas in which such Credit Party
or any of its Subsidiaries operates, (ii) maintain insurance on all such
property in at least such amounts and against at least such risks as is
consistent and in accordance with industry practice for companies similarly
situated owning similar properties in the same general areas in which such
Credit Party or any of its Subsidiaries operates, and (iii) furnish to the
Administrative Agent, upon written request, reasonable information as to the
insurance carried.
6.4. Corporate Existence and Franchises. Each Credit Party will, and
will cause each of its Subsidiaries to, do or cause to be done, all reasonable
things necessary to preserve and keep in full force and effect its existence and
its material rights, franchises, licenses and patents; provided, however, that
nothing in this Section 6.4 shall prevent (i) sales of assets and other
transactions by such Credit Party or any of its Subsidiaries pursuant to and in
accordance with Section 7.2 or (ii) the withdrawal by such Person or any of its
Subsidiaries of its qualification as a foreign corporation in any jurisdiction
where such withdrawal could not reasonably be expected to have a Material
Adverse Effect.
6.5. Compliance with Statutes. Each Credit Party will, and will cause
each of its Subsidiaries to, comply with all applicable statutes, regulations
and orders of, and all applicable restrictions imposed by, all Governmental
Authorities in respect of the conduct of its business and the ownership of its
property, except such noncompliances as could not, either individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
6.6. Compliance with Environmental Laws. Each Credit Party will comply,
and will cause each of its Subsidiaries to comply, in all respects with all
environmental laws applicable to the ownership or use of its real property now
or hereafter owned or operated by such Credit Party or any of its Subsidiaries
(except to the extent that any failure so to comply could not reasonably be
expected to have a Material Adverse Effect), will promptly pay or cause to be
paid all costs and expenses incurred in connection with such compliance, and
will keep or cause to be kept all such real property free and clear of any Liens
imposed pursuant to such environmental laws.
6.7. Employee Benefit Plans. Each Credit Party will, and will cause
each of its Subsidiaries to, comply fully and timely with all its obligations
relating to all employee benefit plans established, maintained or contributed to
by it, except such non-compliance as could not, either individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
34
6.8. End of Fiscal Years and Fiscal Quarters. No Credit Party will, and
each will ensure that none of their respective Subsidiaries will, change the
date of the end of its fiscal year.
6.9. Performance of Obligations. Each of the Credit Parties will, and
will cause each of its Subsidiaries to, perform all of its obligations under the
terms of each mortgage, indenture, security agreement, loan agreement and each
other material agreement, contract or instrument by which it is bound, except
such non-performances as could not, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. Each Credit Party will
perform all such actions as are necessary to ensure the validity of the Guaranty
of each Guarantor.
6.10. Payment of Taxes. Each of the Credit Parties will pay and
discharge, and will cause each of its Subsidiaries to pay and discharge, all
material taxes, assessments and governmental charges or levies imposed upon it
or upon its income or profits, or upon any properties belonging to it, prior to
the date on which penalties attach thereto, and all lawful claims for sums that
have become due and payable which, if unpaid, might become a Lien not otherwise
permitted under Section 7.1(i); provided that none of the Credit Parties nor any
of its Subsidiaries shall be required to pay any such tax, assessment, charge,
levy or claim which is being contested in good faith and by proper proceedings
if it has maintained adequate reserves with respect thereto in accordance with
Chilean GAAP.
6.11. Further Assurances.
(a) Each of the Credit Parties will, and (to the extent applicable)
will cause Gener to, at their expense, (i) make, execute, endorse, acknowledge,
file and/or deliver to the Collateral Agent from time to time such assignments,
conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, real property surveys, reports and other assurances or instruments
and take such further steps relating to the Collateral covered by any of the
Security Documents as the Collateral Agent may reasonably require and (ii)
complete the Post-Closing Collateral Actions promptly after the Initial
Borrowing Date, but in any event no later than three Business Days after the
Initial Borrowing Date (except to the extent that Schedule 4.11 clearly
indicates that such actions are on-going requirements that cannot be completed
until a later date). Furthermore, such Person will cause to be delivered to the
Collateral Agent such opinions of counsel and other related documents as may be
reasonably requested by the Administrative Agent to assure itself that this
Section 6.11 has been complied with.
(b) Each of the Credit Parties agrees that each action required by this
Section 6.11 shall be completed as soon as possible, but in no event later than
(i) with respect to actions required pursuant to Section 6.11(a), 45 days (or
such longer period as may be agreed by the Administrative Agent) after such
action is requested to be taken by
35
the Administrative Agent or (ii) with respect to actions required to be taken
under clause (c) of this Section 6.11, as required pursuant to the terms of such
sections; provided that, in no event will any Credit Party be required to take
any action, other than using its commercially reasonable efforts, to obtain
consents from third parties with respect to its compliance with this Section
6.11.
(c) On the Initial Borrowing Date, or, to the extent any of the
following constitute Post-Closing Collateral Actions, on the applicable date
therefor, each Credit Party (i) shall record, or cause to be recorded, if
necessary under applicable law, the pledge of its capital stock, shares or other
equity interests under the Stock Pledge Agreements in the stock registry or
register of members, as applicable, of the issuer of the Pledged Securities or
in any other registry, if necessary, in the manner provided in such Security
Documents, so as to evidence the perfection of the pledge of first priority
purported to be granted thereby and shall provide to the Administrative Agent
evidence thereof satisfactory to the Administrative Agent and (ii) shall give,
or cause to be given, if necessary under applicable law, all notices, in form
and substance satisfactory to the Collateral Agent and the Lenders, by a notary
public to all relevant Persons in the manner provided by the law applicable to
the relevant Stock Pledge Agreement to perfect the Collateral specified in the
Stock Pledge Agreements with respect to third parties, and give, or cause to be
given, all other notices, in each case in form and substance satisfactory to the
Collateral Agent and the Lenders, so as to evidence the creation and perfection
of the first priority security interest purported to be created and perfected
thereby and shall provide to the Administrative Agent evidence thereof
satisfactory to the Administrative Agent.
6.12. Gener and Dividend Payments.
(a) The Credit Parties shall cause Gener and its Subsidiaries to
dividend, distribute or loan (consistent with applicable law and subject to any
contractual restrictions existing on the Effective Date) to Mercury Cayman III
and, to the extent required by law, its other shareholders promptly 100% of (A)
the Net Debt Proceeds from any Debt Issuance by Gener or any of its Subsidiaries
(B) the Net Equity Proceeds of any Equity Issuance by Gener or any of its
Subsidiaries and (C) the Net Disposition Proceeds of any Disposition by Gener or
any of its Subsidiaries.
(b) Each of the Principal Guarantor and Mercury Cayman III shall
dividend, distribute or loan (consistent with applicable law) to its
shareholders promptly 100% of any cash or other assets received by it at any
time, less up to U.S.$25,000 per fiscal quarter to the extent used by the
Principal Guarantor and Mercury Cayman III, respectively, to pay its or its
Subsidiaries operating and administrative expenses.
(c) Each of the Credit Parties shall use, and shall cause Gener and its
Subsidiaries to use, all commercially reasonable efforts to enable Gener and its
36
Subsidiaries to make Dividends and/or other distributions to the Borrower in
amounts sufficient to repay the principal and pay the interest on the Bridge
Loans when and as due hereunder.
6.13. Refinancing; Non-Core Asset Sale. No later than 270 days after
the Effective Date, the Borrower shall demonstrate, or shall cause Gener to
demonstrate, to the reasonable satisfaction of the Administrative Agent that (i)
significant steps have been taken to implement a Debt Issuance, the proceeds of
which would be sufficient to repay all outstanding Bridge Loans and/or (ii) a
clear plan has been developed to sell the Non-Core Assets.
6.14. Post-Closing Adjustments. The Borrower and the other Credit
Parties acknowledge that the Agents intend to syndicate the Bridge Loans after
the Initial Borrowing Date and that the representations and warranties,
covenants, and Events of Default (including in every such case related defined
terms) contained herein have been negotiated by the parties in reliance on
publicly available information relating to Gener and its Subsidiaries. Following
the Initial Borrowing Date, in order to assist the Agents in obtaining a
successful syndication, the Borrower and the other Credit Parties, in
consultation with the Agents, will investigate the business, assets, properties,
prospects, obligations and other liabilities of Gener and its Subsidiaries with
a view to answering questions of potential Lenders in the syndication process
and, if the Agents determine in good faith that such changes are reasonable and
necessary to achieve a successful syndication, to negotiate in good faith with
the Agents in order to amend the Credit Documents to effect changes requested by
the Agents as to such representations and warranties, covenants, and Events of
Default (including in every such case related defined terms).
6.15. Follow-on Offer to Purchase. The Principal Guarantor will
commence, no later than the date (if any) required by law, and will in any event
complete, no later than April 15, 2001, an offer to purchase for cash
outstanding shares of Gener that were not acquired by the Principal Guarantor in
the Gener Acquisition on or prior to the Initial Borrowing Date. Such offer to
purchase shall be for an amount of shares such that at least 81% of the
outstanding shares of Gener would be held by the Principal Guarantor upon
successful completion of the offer (or for such greater amount as may be
required by law). The Principal Guarantor will ensure that, by the date of
completion of such offer, all such acquired shares are pledged pursuant to the
applicable Stock Pledge Agreement (or one otherwise substantially identical in
form and substance to the one delivered by the Principal Guarantor pursuant to
Section 4.11).
SECTION 7. Negative Covenants. The Borrower and the Guarantors hereby
covenant and agree that on and after the Effective Date and until the Bridge
Loans and the Notes, together with interest, Fees and all other Obligations
incurred hereunder and thereunder, are paid in full:
37
7.1. Liens. The Credit Parties will not, and will not permit any of
their Subsidiaries to, directly or indirectly, create, incur, assume or suffer
to exist any Lien upon or with respect to any item constituting Collateral
except for the Lien of the Security Documents relating thereto and other Liens
expressly permitted by the Security Documents. The Credit Parties will not, and
will not permit any of their Subsidiaries to, directly or indirectly, create,
incur, assume or suffer to exist any Lien upon or with respect to any of their
property or assets (real or personal, tangible or intangible) or the property or
assets of any of their Subsidiaries (other than the Collateral), whether now
owned or hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
or assets (including sales of accounts receivable with recourse to the Credit
Parties or any of their Subsidiaries), or sell or assign any income or right in
respect thereof or permit the filing of any notice of Lien under any similar
recording or notice statute; provided, however, that the provisions of this
Section 7.1 shall not prevent the creation, incurrence, assumption or existence
of the following (Liens described below are herein referred to as "Permitted
Liens"):
(i) inchoate Liens for taxes, assessments or governmental charges or
levies not yet due or Liens for taxes, assessments or governmental charges
or levies being contested in good faith and by appropriate proceedings for
which adequate reserves have been established to the extent required by
Chilean GAAP;
(ii) Liens in respect of property or assets of any Credit Party or any
of its Subsidiaries imposed by law, which were incurred in the ordinary
course of business and are not overdue by more than 30 days and do not
secure Indebtedness for borrowed money, such as carriers', warehousemen's,
materialmen's and mechanics' liens and other similar Liens arising in the
ordinary course of business, and (x) which do not in the aggregate
materially detract from the value of such Credit Party's or such
Subsidiary's property or assets or materially impair the use thereof in the
operation of the business of such Credit Party or such Subsidiary or (y)
which are being contested in good faith by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale of the
property or assets subject to any such Lien;
(iii) Liens in existence on the Effective Date or which Gener is
Committed to incur, plus renewals, replacements and extensions of such
Liens; provided, however, that in the case of any Credit Party and its
Subsidiaries (x) the aggregate principal amount of the Indebtedness, if
any, secured by such Liens does not increase from that amount outstanding
at the time of any such renewal, replacement or extension (except to the
extent such increase is permitted by clause (ii) or (vii) of Section 7.4)
and (y) any such renewal, replacement or extension does not encumber any
additional assets or properties of any Credit Party or any of its
Subsidiaries;
38
(iv) Liens created pursuant to the Security Documents;
(v) leases or subleases granted by any Subsidiary (other than a Credit
Party) to other Persons in the ordinary course of business;
(vi) Liens (including capital leases) placed upon assets to be used in
the ordinary course of business of any Subsidiary (other than a Credit
Party) at the time of the acquisition thereof by such Subsidiary or within
90 days thereafter to secure Indebtedness incurred to pay all or a portion
of the purchase price thereof or to secure Indebtedness incurred solely for
the purpose of financing the acquisition of any such assets or extensions,
renewals or replacements of any of the foregoing for the same or a lesser
amount; provided, however, that (x) the aggregate outstanding principal
amount of Capitalized Lease Obligations and all other Indebtedness secured
by Liens permitted by this clause (vii) shall not at any time exceed $5.0
million, (y) the principal amount of Capitalized Lease Obligation or other
Indebtedness secured by any such Lien (including any refinancing thereof)
does not exceed 100% of the lesser of the fair market value or the purchase
price of the property being purchased or financed at the time of the
incurrence of such Indebtedness, and (z) in all events, the Lien
encumbering the assets so acquired does not encumber any other asset of
such Subsidiary;
(vii) easements, rights-of-way, restrictions, encroachments and other
similar charges or encumbrances, and minor title deficiencies, in each case
not securing Indebtedness, not materially affecting the value of the
property affected and not materially interfering with the conduct of the
business of any Subsidiary (other than a Credit Party);
(viii) Liens arising out of the existence of judgments or awards not
constituting an Event of Default under Section 8.8;
(ix) statutory and common law landlords' liens under leases to which
any Subsidiary (other than a Credit Party) is a party;
(x) Liens incurred in the ordinary course of business in connection
with worker's compensation claims, unemployment insurance and social
security benefits and Liens securing the performance of bids, tenders,
leases and contracts in the ordinary course of business, statutory
obligations, surety bonds, performance bonds and other obligations of a
like nature incurred in the ordinary course of business of any Subsidiary
(other than a Credit Party) (exclusive of obligations in respect of the
payment for borrowed money);
(xi) Liens solely in favor of a Credit Party;
39
(xii) Liens upon tangible personal property acquired after the
Effective Date by any Subsidiary (other than a Credit Party), each of which
Liens existed on such property before the time of its acquisition and was
not created in anticipation thereof; provided, however, that no such Lien
shall extend to cover any property of any Subsidiary other than the
property so acquired;
(xiii) Liens existing on any property of any Person at the time such
Person becomes a Subsidiary of the Borrower or the Principal Guarantor or
is merged or consolidated with or into a Subsidiary of the Borrower or the
Principal Guarantor and, in each case, not created in contemplation of or
in connection with such event; provided, however, that such Liens do not
extend to any other property of the Borrower or the Principal Guarantor or
any of their Subsidiaries;
(xiv) Liens securing reimbursement obligations of any Subsidiary (other
than a Credit Party) with respect to letters of credit issued in the
ordinary course of business and not in connection with the incurrence of
Indebtedness for money borrowed that encumber documents and other property
relating to such letters of credit;
(xv) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods; and
(xvi) any extension, renewal or replacement of the foregoing Liens;
provided, however, that such extensions, renewals or replacements shall not
cover any additional Indebtedness or property (other than like property
substituted for property covered by such Lien) and extensions, renewals or
replacements of Liens described in clauses (iii) and (vi) above shall be
governed by such clauses.
Except with respect to (i) specific property or assets encumbered
pursuant to a Lien permitted to be incurred pursuant to this Section 7.1 or (ii)
specific property or assets to be sold pursuant to an executed agreement with
respect to a Disposition consummated in accordance with this Agreement, the
Credit Parties will not, and will not permit any of their Subsidiaries to,
directly or indirectly, enter into any agreement on or after the Effective Date
prohibiting or restricting in any manner (directly or indirectly and including
by way of covenant, representation or warranty or event of default) the creation
or assumption of any Lien upon its property or assets, whether now owned or
hereafter acquired, except pursuant to the Credit Documents.
7.2. Consolidation, Merger, Purchase or Sale of Assets, etc. The Credit
Parties will not, and will not permit any of their Subsidiaries to, directly or
indirectly, wind up, liquidate or dissolve their affairs or enter into any
transaction of merger or consolidation, or convey, sell, lease or otherwise
dispose of all or any part of their
40
property or assets, or enter into any sale-leaseback transactions, or purchase
or otherwise acquire (in one or a series of related transactions) all or
substantially all of the assets of any Person or assets substantially
constituting an operating division or line of business of any Person (or agree
to do any of the foregoing at any future time), except that:
(i) any Subsidiary other than a Credit Party may sell assets (other
than Gener Shares), so long as (A) no Default or Event of Default then
exists or would result therefrom, (B) each such sale is at arm's-length and
such Subsidiary, receives at least fair market value (as determined in good
faith by such Subsidiary, (C) 100% of the total consideration received by
such Subsidiary is cash and is paid at the time of the closing of such
sale, and (D) the Net Disposition Proceeds therefrom are applied as
required by Section 3.3(b);
(ii) any Subsidiary other than a Credit Party may lease (as lessee)
real or personal property (so long as any such lease does not create a
Capitalized Lease Obligation, except to the extent permitted by Section
7.4(iv));
(iii) any Subsidiary (other than a Credit Party) may make sales in the
ordinary course of business;
(iv) any Subsidiary (other than a Credit Party) may sell obsolete or
worn-out equipment or materials or equipment or materials that are no
longer used or useful in the business of such Subsidiary;
(v) any Subsidiary (other than a Credit Party) may sell or discount, in
each case without recourse and in the ordinary course of business, accounts
receivable arising in the ordinary course of business, but only in
connection with the compromise or collection thereof consistent with
customary industry practice (and not as part of any bulk sale);
(vi) any Subsidiary (other than a Credit Party) may grant leases or
subleases to other Persons in the ordinary course of business consistent
with past practice and not materially interfering with the conduct of the
business of such Subsidiary;
(vii) any Subsidiary of a Credit Party may sell, lease, transfer or
otherwise dispose of any or all of its property (upon voluntary liquidation
or otherwise) to, or merge or consolidate with, such Credit Party so long
as in the case of any such merger or consolidation such Credit Party is the
continuing or surviving corporation;
(viii) Liens may be granted to the extent permitted by Section 7.1;
(ix) Dividends may be paid to the extent permitted by Section 7.3;
41
(x) Investments may be made to the extent permitted by Section 7.5;
(xi) the Cayman Acquisition shall be permitted;
(xii) the Argentine Disposition shall be permitted; and
(xiii) Gener and Subsidiaries shall be permitted to sell all of their
rights and assets (including contractual obligations) in connection with
projects in development as of the Effective Date, so long as (A) the cash
consideration received in connection with such sale is at least equal to
the aggregate amount of Investments made in such project by Gener and its
Subsidiaries or (B) the Required Lenders shall have consented to the terms
of such sale (such consent not to be unreasonably withheld).
Notwithstanding the foregoing, no Credit Party nor any Subsidiary thereof may
sell, transfer or dispose of a portion less than all of the shares held by it in
any of its directly-owned Subsidiaries, except where such transfer, disposition
or sale is made to another Credit Party or Subsidiary thereof.
7.3. Dividends and Other Payments. The Credit Parties will not, and
will not permit any of their Subsidiaries to, directly or indirectly, authorize,
declare or pay any Dividends, except that (a) any Subsidiary of the Borrower may
pay cash Dividends to the Borrower or any Wholly-Owned Subsidiary of the
Borrower, (b) any Subsidiary of Gener may pay Dividends to their parent
companies and, whether directly or indirectly, to Gener, (c) the Credit Parties
may consummate the transactions contemplated hereby (including payments required
under Section 6.12), (d) any Subsidiary of the Borrower may pay cash Dividends
to its shareholders to the extent required by law or its bylaws as in effect on
the Effective Date and (e) the Credit Parties may Dividend or otherwise transfer
to AES and its Affiliates any shares of AES stock held by them and not used to
complete the Gener Acquisition. The Borrower will not make any voluntary payment
of principal or interest in respect of the Loan Agreement, dated as of December
29, 2000, between the Borrower and Bankers Trust Company.
7.4. Indebtedness. The Credit Parties will not, and will not permit any
of their Subsidiaries to, directly or indirectly, contract, create, incur,
assume or suffer to exist any Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents;
(ii) Indebtedness of the Credit Parties outstanding on the Effective
Date and listed on Schedule 4.13A hereto and any Permitted Refinancing
thereof;
42
(iii) Indebtedness pursuant to Hedging Agreements or Interest Rate
Protection Agreements entered into by any Subsidiary (other than a Credit
Party) as bona fide ▇▇▇▇▇▇ against currency, interest rate or commodity
fluctuations in the ordinary course of business and not for speculative
purposes;
(iv) Indebtedness subject to Liens permitted by Section 7.1(vi);
(v) intercompany Indebtedness among the Borrower and its Subsidiaries
to the extent permitted by Section 7.5(ix);
(vi) additional Indebtedness incurred by Norgener, S.A. and/or Energia
Verde, S.A. in an aggregate principal amount not to exceed $100 million
(provided that (A) no Default or Event of Default shall have occurred and
be continuing at the time of such incurrence and (B) the agreements
governing all such Indebtedness do not contain covenants more restrictive
on dividends and asset sales than customarily applicable to financings of
the same type by businesses that are similar (including with respect to
capital structure) and in the same geographical area as Norgener, S.A. and
Energia Verde, S.A.); and
(vii) Indebtedness (including Contingent Obligations) of Gener and its
Subsidiaries outstanding or Committed to on the Effective Date and
Permitted Refinancings thereof;
(viii) Indebtedness of the Borrower and its Subsidiaries to AES and its
Wholly-Owned Subsidiaries so long as (w) the Net Debt Proceeds thereof are
applied to prepay the Loans as required by Section 3.3(a), (x) such
Indebtedness is expressly subordinated to the Bridge Loans, (y) such
Indebtedness is unsecured and does not result in the imposition of any Lien
upon the assets of the Borrower or its Subsidiaries and (z) all of the
terms and conditions of such Indebtedness are reasonably satisfactory to
the Administrative Agent;
(ix) Indebtedness incurred to finance working capital needs of Gener
and its Subsidiaries in the ordinary course of business, provided that the
aggregate amount of all Indebtedness incurred pursuant to this clause (ix)
shall not exceed $20,000,000; and
(x) Indebtedness in a principal amount not to exceed $15,000,000
incurred to finance the Investment made under Section 7.5(xv)(A).
7.5. Advances, Investments and Loans. The Credit Parties will not, and
will not permit any of their Subsidiaries to, directly or indirectly, lend money
or credit or make advances to any Person, or purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to, any other Person, or purchase or own a futures contract or
otherwise become liable for the purchase or sale of
43
currency or other commodities at a future date in the nature of a futures
contract (each of the foregoing, an "Investment" and, collectively,
"Investments"), except that the following shall be permitted:
(i) in the case of Subsidiaries (other than any Credit Party),
acquiring and holding accounts receivable owing to any of them, if created
or acquired in the ordinary course of business consistent with past
practice and payable or dischargeable in accordance with customary trade
terms of the Borrower or its Subsidiaries;
(ii) acquiring and holding cash and Cash Equivalents;
(iii) Investments held by the Credit Parties on the Effective Date and
described on Schedule 7.5 hereto and Investments held by or Committed by
Gener and its Subsidiaries on the Effective Date; provided, however, that
any additional Investments made with respect to either thereto shall be
permitted only if independently justified under the other provisions of
this Section 7.5;
(iv) in the case of Subsidiaries (other than any Credit Party),
Investments (including debt obligations) received in connection with the
bankruptcy or reorganization of suppliers and customers and in good faith
settlement of delinquent obligations of, and other disputes with, customers
and suppliers arising in the ordinary course of business;
(v) in the case of Subsidiaries (other than any Credit Party), loans
and advances in the ordinary course of business to their respective
employees so long as the aggregate principal amount thereof at any time
outstanding (determined without regard to any write-downs or write-offs of
such loans and advances) shall not exceed $500,000;
(vi) Investments in Hedging Agreements and Interest Rate Protection
Agreements to the extent permitted by Section 7.4(iii);
(vii) cash equity contributions to the capital of the Borrower's
Subsidiaries that are Credit Parties;
(viii) equity Investments in Chivor, S.A. that are made (i) after
September 30, 2001, (ii) when no Default or Event of Default shall have
occurred and be continuing, (iii) in an aggregate amount not greater than
$125,000,000;
(ix) loans, advances, dividends or distributions by Subsidiaries of the
Borrower to their parent companies and, whether directly or indirectly, to
the Borrower; provided, that any such loan or advance made to a Credit
Party shall be subordinated to the Bridge Loans and the Guaranty granted
under Article IX;
44
(x) Investments that constitute Indebtedness permitted by Section 7.4;
(xi) in the case of Subsidiaries (other than any Credit Party) pledges
or deposits required in the ordinary course of business in connection with
worker's compensation, unemployment insurance and other social security
legislation;
(xii) in the case of Subsidiaries (other than any Credit Party) pledges
or deposits in connection with the non-delinquent performance of bids,
trade contracts (other than for borrowed money), leases or statutory
obligations, surety or appeal bonds, and other non-delinquent obligations
of a like nature, in each case incurred in the ordinary course of business;
(xiii) the Cayman Acquisition and the Gener Acquisition;
(xiv) in the case of Subsidiaries (other than any Credit Party) advance
purchases of inventory, equipment and supplies in the ordinary course of
business;
(xv) (A) equity Investments made by Gener in TermoAndes in an aggregate
amount not to exceed $15,000,000, the proceeds of which are used to pay
Grid Expenses of TermoAndes and (B) Investments made by Gener in
TermoAndes, the proceeds of which are used to pay scheduled amortization in
calendar year 2001 of Indebtedness of TermoAndes outstanding on the
Effective Date; provided, that in the case of clause (A) and clause (B),
(1) such Investments are made at a time when no Default or Event of Default
has occurred and is continuing and (2) prior to either such Investment, the
Borrower and TermoAndes have used commercially reasonable efforts to use
cash of TermoAndes to pay such amortization or Grid Expenses, as the case
may be;
(xvi) Gener and its Subsidiaries, in the ordinary course of business
and consistent with past practices, purchasing or owning a futures contract
or otherwise becoming liable for the purchase or sale of currency or other
commodities at a future date in the nature of a futures contract; provided,
that, with respect to any such purchase, ownership or liability of MEGA,
MEGA's Value at Risk shall not, at the time the applicable contract is
entered into (after giving effect thereto), exceed MEGA's Value at Risk as
of the Effective Date; and
(xvii) the Credit Parties and their Subsidiaries may make Investments
in their respective Subsidiaries using the identifiable proceeds of equity
issuances that are excluded from the definition of "Equity Issuance" by
clause (a) of the proviso thereto.
45
7.6. Transactions with Affiliates.
(a) The Credit Parties will not, and will not permit any of their
Subsidiaries to, directly or indirectly, enter into any transaction or series of
related transactions, with any Affiliate of any such Credit Party or such
Subsidiary (each such transaction, an "Affiliate Transaction"), other than as
permitted by paragraph (b) below and Affiliate Transactions with an Affiliate
which is an operating company in the ordinary course of business and on fair and
reasonable terms that are not less favorable to such Credit Party or such
Subsidiary than would reasonably be obtained by such Credit Party or such
Subsidiary at that time in a comparable arm's-length transaction with a Person
other than an Affiliate; provided, however, that (i) the Borrower shall provide
the Administrative Agent with at least 10 Business Days' prior written notice of
all Affiliate Transactions (and each series of related Affiliate Transactions)
involving aggregate payments or other property with a fair market value in
excess of $1.0 million, and such notice shall describe in reasonable specificity
such Affiliate Transaction and fair market value and (ii) if any Credit Party or
a Subsidiary of a Credit Party enters into an Affiliate Transaction (or a series
of related Affiliate Transactions) involving aggregate payments or other
property with a fair market value in excess of $20 million, such Credit Party or
such Subsidiary, as the case may be, shall, prior to the consummation thereof,
obtain a favorable opinion as to the fairness of such Affiliate Transaction or
series of related Affiliate Transactions to such Credit Party or such
Subsidiary, as the case may be, from a financial point of view, from an
Independent Financial Advisor and deliver the same to the Administrative Agent.
(b) Notwithstanding paragraph (a) above, the following transactions
shall be permitted:
(i) Dividends may be paid to the extent provided in Section 7.3;
(ii) loans, advances, dividends and distributions may be made to the
extent permitted by Section 7.5(v), (viii), (ix) or (xiii);
(iii) any transaction with an officer or member of the Board of
Directors of any Subsidiary (other than any Credit Party) in the ordinary
course of business involving compensation, indemnity or employee benefit
arrangements;
(iv) customary fees may be paid to non-officer directors of any Credit
Party and its Subsidiaries;
(v) services may be provided by the Borrower, the Principal Guarantor
or any of their respective Subsidiaries in the ordinary course of business
and on market terms; and
46
(vi) transactions with suppliers in the ordinary course of business and
on market terms may be effected.
7.7. Capital Expenditures.
(a) The Credit Parties will not, and will not permit any of their
respective Subsidiaries to, directly or indirectly, make any Capital
Expenditures, except that any Subsidiary (other than any Credit Party) may make
Capital Expenditures made for maintenance purposes or to satisfy regulatory
requirements in accordance with prudent utility practices of such Subsidiary so
long as the aggregate amount of all such Capital Expenditures (excluding (i) any
Capital Expenditures to which a Subsidiary is contractually Committed on the
Effective Date and (ii) payment of the Grid Expenses) does not exceed $20
million.
(b) In addition to the foregoing, any Subsidiary (other than any Credit
Party) may make Capital Expenditures with the amount of Net Insurance Proceeds
received by such Subsidiary from any Recovery Event so long as such Net
Insurance Proceeds are used to replace or restore any properties or assets in
respect of which such Net Insurance Proceeds were paid no later than 180 days
following the date of receipt of such Net Insurance Proceeds from such Recovery
Event.
7.8. Limitation on Voluntary Payments and Modifications of
Indebtedness; Modifications of Estatutos Sociales and Certain Other Agreements.
The Credit Parties will not, and will not permit any of their Subsidiaries to,
directly or indirectly, except to the extent necessary to comply with law (a)
make (or give any notice in respect thereof) any voluntary or optional payment
or prepayment on or redemption or acquisition for value of, or any prepayment or
redemption as a result of any disposition, change of control or similar event
of, any Indebtedness (other than the Bridge Loan), (b) amend or modify, or
permit the amendment or modification of, any provision of any Indebtedness or of
any agreement (including, without limitation, any purchase agreement, indenture,
loan agreement or security agreement) relating thereto which materially and
adversely affects the interests of the Lenders under any Credit Document, (c)
amend, modify or change their certificate of incorporation (including, without
limitation, by the filing or modification of any certificate of designation) or
by laws (estatutos sociales or equivalent organizational documents), or any
agreement entered into by any of them, with respect to their capital stock or
equity interests, or enter into any new agreement with respect to their capital
stock or equity interests which materially and adversely affects the interests
of the Lenders under any Credit Document or (d) amend, modify, change or waive
any provision of any Acquisition Agreement, other than any amendments,
modifications, changes or waivers which do not in any way materially and
adversely affect the interests of the Lenders or any Credit Document.
47
7.9. Limitation on Certain Restrictions on Subsidiaries. The Credit
Parties will not, and will not permit any of their Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any such Subsidiary to (a) pay
dividends or make any other distributions (including without limitation any
reduction of capital) on its equity interests or any other interest or
participation in its profits owned by such Credit Party or any Subsidiary of
such Credit Party, or pay any Indebtedness owed to such Credit Party or a
Subsidiary of such Credit Party, (b) make loans or advances to such Credit Party
or any of such Credit Party's Subsidiaries or (c) transfer any of its properties
or assets to such Credit Party or any of such Credit Party's Subsidiaries,
except for such encumbrances or restrictions existing under or by reason of (i)
applicable law, (ii) this Agreement and the other Credit Documents, (iii) any
agreement in effect on the Effective Date (as such agreement is in effect on the
Effective Date), (iv) customary provisions restricting (A) subletting or
assignment of any lease governing a leasehold interest of a Subsidiary of such
Credit Party or (B) transfers of assets subject to Capitalized Lease Obligations
of a Subsidiary of such Credit Party, (v) with respect to clause (c) above only,
Permitted Liens and other customary restrictions contained in security
agreements with respect to the transfer of collateral subject to such Permitted
Liens, (vi) customary provisions in contracts entered into in the ordinary
course of business that prohibit assignments of such contract and (vii) any
restriction on the transfer of an asset pursuant to an agreement to sell such
asset (but only in those cases where the sale of such asset is permitted by
Section 7.2).
7.10. Limitation on Issuance of Capital Stock.
(a) The Credit Parties will not, and will not permit any of their
respective Subsidiaries to, directly or indirectly, issue (i) any preferred
stock (other than preferred stock that is not Disqualified Stock and has no
mandatory dividend payments and does not accrue any rate of return and the Net
Equity Proceeds of which are applied to prepay the Bridge Loans in accordance
with Section 3.3(a)) or (ii) any redeemable common stock; provided, that each
Credit Party (other than the Borrower) may issue any of the foregoing stock to
its parent company.
(b) The Borrower will not permit any of its Subsidiaries to issue any
equity interests (including by way of sales of treasury stock) or any options or
warrants to purchase, or securities convertible into, equity interets, except
(i) transfers and replacements of then outstanding equity interests, (ii) stock
splits, stock dividends and issuances which do not decrease the percentage
ownership of the Borrower, the Credit Parties and their Subsidiaries, in any
class of the capital stock of such Subsidiary, (iii) any issuance by any
Subsidiary of the Principal Guarantor to the Credit Parties or any Wholly-Owned
Subsidiary of the Credit Parties, and (iv) any Equity Issuance so long as the
Net Equity Proceeds therefrom are applied as required by Section 3.3(a).
48
7.11. Business. Gener and its Subsidiaries will not engage in any
business other than the businesses engaged in by them as of the Effective Date
and reasonable extensions thereof. The Credit Parties will not engage in any
business other than owning the equity interests of their Subsidiaries and
maintaining Indebtedness permitted hereunder.
7.12. Limitation on Creation of Subsidiaries. Notwithstanding anything
to the contrary contained in this Agreement, (a) the Credit Parties will not
directly establish, create or acquire after the Effective Date any Subsidiary
and (b) Gener and its Subsidiaries will not directly establish, create or
acquire after the Effective Date any Subsidiary other than a Wholly-Owned
Subsidiary.
SECTION 8. Events of Default. Upon the occurrence of any of the
following specified events (each, an "Event of Default"):
8.1. Payments. The Borrower shall (i) default in the payment when due
of any principal of any Bridge Loan or any Note or (ii) default, and such
default shall continue unremedied for three or more Business Days, in the
payment when due of any interest on any Bridge Loan or any Note or any Fees or
any other amounts owing hereunder or under any other Credit Document; or
8.2. Representations, etc. Any representation, warranty or statement
made by any Credit Party herein or in any other Credit Document or by AES in the
AES Guarantee or in any certificate delivered to the Administrative Agent or any
Lender pursuant hereto or thereto or relating to any amendment, modification,
waiver or supplement hereto or thereto shall prove to be untrue in any material
respect on the date as of which made or deemed made; or
8.3. Covenants. Any Credit Party or AES shall (a) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 3.3, 6.11(c), 6.15 or 7 or (b) default in the due performance or
observance by it of any term, covenant or agreement contained herein or in any
other Credit Document (other than those set forth in Sections 8.1 and 8.2 or
clause (a) of this Section 8.3) or in the AES Guarantee and such default shall
continue unremedied for a period of 15 consecutive days; or
8.4. Default Under Other Agreements. (i) Any Credit Party or any of its
Subsidiaries shall (x) default in any payment of any Indebtedness (other than
the Obligations) or (y) default in the observance or performance of any
agreement or condition relating to any Indebtedness (other than the Obligations)
or contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist, the effect of which
default or other event or condition is to cause, or to permit the holder or
holders of such Indebtedness (or a trustee or agent on
49
behalf of such holder or holders) to cause (determined without regard to whether
any notice is required), any such Indebtedness to become due prior to its stated
maturity; or (ii) any Indebtedness (other than the Obligations) of any Credit
Party or any of its Subsidiaries shall be declared to be (or shall become) due
and payable, or required to be prepaid other than by a regularly scheduled
required prepayment, prior to the stated maturity thereof; provided, however,
that it shall not be a Default or an Event of Default under clause (i) or (ii)
of this Section 8.4 unless the aggregate principal amount (or, with respect to
Indebtedness under Interest Rate Protection Agreements, the termination amount)
of all Indebtedness as described in the preceding clauses (i) and (ii) is at
least $5.0 million; or
8.5. Bankruptcy, etc. Any Credit Party or any of its Subsidiaries or,
at any time when the AES Guarantee is outstanding, AES (each, a "Designated
Party") shall commence a voluntary case concerning itself under any bankruptcy
law of Chile or the Cayman Islands or any other jurisdiction or Title 11 of the
United States Code entitled "Bankruptcy," as now or hereafter in effect, or any
successor thereto (the "Bankruptcy Code"); or an involuntary case is commenced
against any Designated Party under any such laws, and the petition is not
controverted within 10 days, or is not dismissed within 30 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of
such Designated Party, or such Designated Party commences any other proceeding
under any reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to such Designated Party, or there
is commenced against any Designated Party any such proceeding which remains
undismissed for a period of 30 days, or such Designated Party is adjudicated
insolvent or bankrupt; or any order of relief or other order approving any such
case or proceeding is entered; or such Designated Party suffers any appointment
of any custodian or the like for it or any substantial part of its property to
continue undischarged or unstayed for a period of 30 days; or such Designated
Party makes a general assignment for the benefit of creditors; or any such
Designated Party shall generally not pay its debts as they become due or there
shall otherwise occur a cesacion de pagos (within the meaning of Chilean or
other applicable law); or any corporate action is taken by such Designated Party
for the purpose of effecting any of the foregoing; or
8.6. Security Documents. (a) Any Security Document shall cease to be in
full force and effect, or shall cease to give the Lenders the Liens and the
material rights, powers and privileges purported to be created thereby
(including, without limitation, a perfected security interest in, and Lien on,
all of the Collateral described therein, in favor of the Lenders, superior to
and prior to the rights of all third Persons, and subject to no Liens other than
Liens permitted under such Security Document), or (b) any Credit Party or any
other party to the Security Documents shall default in the due performance or
observance of any term, covenant or agreement on its part to be performed or
observed pursuant to any such Security Document and such default shall
50
continue unremedied for a period of 15 consecutive days after written notice
thereof to the defaulting party by the Administrative Agent or any Lender or the
Collateral Agent; or
8.7. Guaranties. (a) At any time after the execution and delivery
thereof, any Guaranty, or any material provision thereof shall cease to be in
full force or effect as to any Guarantor, (b) any Guarantor or any Person acting
by or on behalf of such Guarantor shall deny or disaffirm such Guarantor's
obligations under its Guaranty, or (c) any Guarantor shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to its Guaranty (and such default shall continue
unremedied for a period of 15 consecutive days after written notice thereof to
the defaulting party by the Administrative Agent or any Lender), and in each
such case the Borrower shall fail to propose a substitute Guarantor satisfactory
to the Administrative Agent, in its sole discretion, in the case of clause (a)
or (b) above, within three Business Days following such event and, in the case
of clause (c) above, within such 15 day period; or
8.8. Judgments. One or more judgments or decrees shall be entered
against any Credit Party or any Subsidiary of such Credit Party involving a
liability (not paid or fully covered by a reputable and solvent insurance
company) and such judgments and decrees either shall be final and non-appealable
or shall not be vacated, discharged or stayed or bonded pending appeal for any
period of 15 consecutive days, and the aggregate amount of all such judgments
equals or exceeds $1.0 million; or
8.9. Change of Control. A Change of Control shall occur; or
8.10. Denial of Liability. (a) Any Credit Party shall deny its
obligations under this Agreement, any Note or any other Credit Document, (b) any
law, rule or regulation shall purport to render invalid, or preclude enforcement
of, any material provision of this Agreement or any other Credit Document or
impair performance of the Borrower's or any Credit Party's material obligations
hereunder or under any other Credit Document or (c) any dominant authority
asserting or exercising de jure or de facto governmental or police powers shall,
by moratorium laws or otherwise, cancel, suspend or defer the obligation of any
Credit Party or any of its Subsidiaries to pay any amount required to be paid
hereunder or under any other Credit Document; or
8.11. Currency Restrictions. Chile or any Governmental Authority
thereof shall impose restrictions on the availability of freely transferable
Dollars to Persons outside Chile or Dollars shall, in the reasonable judgment of
the Administrative Agent, be unavailable at all or at a commercially reasonable
rate of exchange, and the Borrower shall not, within 15 Business Days after
notice from the Administrative Agent, have demonstrated to the satisfaction of
the Administrative Agent that such restrictions will not have a material adverse
effect on the ability of any Credit Party to perform its
51
obligations under any of the Credit Documents or the availability of Dollars for
purposes of paying any amounts required to be paid pursuant to any of the Credit
Documents; or
8.12. Governmental Action. Any Governmental Authority shall have
condemned, nationalized, seized, or otherwise expropriated all or substantially
all of the property, equity interests or other assets of any Credit Party or of
any Credit Party and its Subsidiaries, taken as a whole, or shall have assumed
custody or control of such property or other assets or of the business or
operations of any Credit Party or of any Credit Party and its Subsidiaries,
taken as a whole, or shall have taken any action for the dissolution or
disestablishment of any Credit Party or any action that would prevent any Credit
Party or any of its officers from carrying on the business of such Credit Party
or a substantial part thereof; or
8.13. Transfer of Gener Shares. The Principal Guarantor shall cease to
own, directly or indirectly, any of the Gener Shares acquired by it in the Gener
Acquisition.
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent may and, upon the written
request of the Required Lenders shall, by written notice to the Borrower, take
any or all of the following actions, without prejudice to the rights of the
Administrative Agent, the Collateral Agent, any Lender or the holder of any Note
to enforce its claims against any Credit Party (provided that, if an Event of
Default specified in Section 8.5 shall occur with respect to any Credit Party,
the result which would occur upon the giving of written notice by the
Administrative Agent as specified in clauses (i) and (ii) below shall occur
automatically without the giving of any such notice): (i) declare the Total
Commitment terminated, whereupon the Commitment of each Lender shall forthwith
terminate immediately; (ii) declare the principal of and any accrued interest in
respect of all Bridge Loans, the Notes and all Obligations owing hereunder and
thereunder to be, whereupon the same shall become, forthwith due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by each Credit Party; (iii) instruct the Collateral Agent to
enforce any or all of the Liens and security interests created pursuant to the
Security Documents; and (iv) exercise any other rights available under the
Credit Documents or applicable law.
SECTION 9. Guaranty.
9.1. The Guaranteed Obligations.
(a) In order to induce the Lenders to enter into this Agreement and
extend credit hereunder, each of the Initial Guarantors irrevocably and
unconditionally guarantees, on a joint and several basis, the full and prompt
payment when due (whether by acceleration or otherwise) of the principal of and
interest on any Note issued under
52
this Agreement and of all other obligations and liabilities (including, without
limitation, indemnities, Fees and interest thereon) of the Borrower now existing
or hereafter incurred under, arising out of or in connection with this Agreement
or any other Credit Document and the due performance and compliance with the
terms of the Credit Documents by the Borrower (all such principal, interest,
obligations and liabilities, collectively, the "Guaranteed Obligations"). Each
of the Initial Guarantors understands, agrees and confirms that the Lenders may
enforce this Guaranty up to the full amount of the Guaranteed Obligations
against the Initial Guarantors without proceeding against the Borrower, against
any security for the Guaranteed Obligations or against any other Guarantor under
any other Guaranty covering the Guaranteed Obligations. Each of the Initial
Guarantors irrevocably and unconditionally promises, on a joint and several
basis, to pay such Guaranteed Obligations to the Lenders, on demand, in Dollars.
This Guaranty shall constitute a guaranty of payment and not of collection. All
obligations of the Initial Guarantors hereunder shall be joint and several.
(b) All payments made by the Initial Guarantors hereunder shall be made
without setoff, counterclaim or other defense. All such payments will be made
free and clear of, and without deduction or withholding for, any present or
future Taxes in the manner provided for in Section 3.5. The Initial Guarantors
will indemnify and hold harmless each Lender, and reimburse such Lender upon its
written request, for the amount of any Taxes so levied or imposed and paid by
such Lender. A certificate as to the amount of any such required indemnification
payment prepared by such Lender or the Administrative Agent shall be final,
conclusive and binding for all purposes absent demonstrable error.
9.2. Continuing Obligation. This Guaranty is a continuing one and all
liabilities to which it applies or may apply under the terms hereof shall be
conclusively presumed to have been created in reliance hereon. No failure or
delay on the part of any Lender in exercising any right, power or privilege
hereunder and no course of dealing between any Initial Guarantor and any Lender
or the holder of any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. The rights, powers and remedies herein expressly provided are
cumulative and not exclusive of any rights, powers or remedies which any Lender
or the holder of any Note would otherwise have. No notice to or demand on any
Initial Guarantor in any case shall entitle such Person or Persons to any other
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of any Lender or the holder of any Note to any other or
further action in any circumstances without notice or demand.
9.3. No Discharge. If a claim is ever made upon any Lender for
repayment or recovery of any amount or amounts received in payment or on account
of any of the Guaranteed Obligations and any of the aforesaid payees repays all
or part of
53
said amount by reason of (a) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property
or (b) any settlement or compromise of any such claim effected by such payee
with any such claimant (including the Initial Guarantors), then and in such
event each of the Initial Guarantors agrees that any such judgment, decree,
order, settlement or compromise shall be binding upon it notwithstanding any
revocation hereof or the cancellation of any Note or other instrument evidencing
any liability of the Initial Guarantors, and each of the Initial Guarantors
shall be and remain jointly and severally liable to the aforesaid payees
hereunder for the amount so repaid or recovered to the same extent as if such
amount had never originally been received by any such payee. It is the intention
of the Lenders and each of the Initial Guarantors that the Guaranteed
Obligations hereunder shall not be discharged (whether pursuant to any
bankruptcy law or comparable legislation or otherwise) except by the Initial
Guarantors' indefeasible performance of such obligations and then only to the
extent of such performance.
9.4. Tolling of Statute of Limitations. Any acknowledgment or new
promise, whether by payment of principal or interest or otherwise and whether by
the Initial Guarantors or others, with respect to any of the Guaranteed
Obligations shall, if the statute of limitations in favor of the Initial
Guarantors against the Administrative Agent, the Collateral Agent, any Lender or
the holder of any Note shall have commenced to run, toll the running of such
statute of limitations, and if the period of such statute of limitations shall
have expired, prevent the operation of such statute of limitations.
9.5. Bankruptcy. Each of the Initial Guarantors, unconditionally and
irrevocably, guarantees the payment of any and all of the Guaranteed Obligations
of the Borrower to the Lenders whether or not due or payable by the Borrower
upon the occurrence of any of the events specified in Section 8.5, and
unconditionally promises to pay such indebtedness to the Lenders, on order or
demand, in lawful money of the United States.
9.6. Independent Obligation. The obligations of each Initial Guarantor
hereunder are independent of the obligations of any other Credit Party, and a
separate action or actions may be brought and prosecuted against any Initial
Guarantor whether or not an action is brought against any other Credit Party and
whether or not any other Credit Party is joined in any such action or actions.
Each of the Initial Guarantors waives, to the full extent permitted by law, the
benefit of any statute of limitations affecting its liability hereunder or the
enforcement thereof.
9.7. Authorization. Each of the Initial Guarantors authorizes the
Lenders without notice or demand (except as shall be required by applicable
statute and cannot be waived), and without affecting or impairing its liability
hereunder, from time to time to:
54
(a) change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew, increase, accelerate or alter, any of
the Guaranteed Obligations (including any increase or decrease in the rate
of interest thereon), any security therefor, or any liability incurred
directly or indirectly in respect thereof, and the Guaranty herein made
shall apply to the Guaranteed Obligations as so changed, extended, renewed
or altered;
(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any of
those hereunder) incurred directly or indirectly in respect thereof or
hereof, and/or any offset there against;
(c) exercise or refrain from exercising any rights against the
Borrower, any other Credit Party or others or otherwise act or refrain from
acting;
(d) release or substitute any one or more endorsers, guarantors, the
Borrower, any other Credit Parties or other obligors;
(e) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of the Borrower to its creditors other than
the Lenders;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of any Credit Party to the Lenders regardless of
what liability or liabilities of the Initial Guarantors or the Borrower
remain unpaid;
(g) consent to or waive any breach of, or any act, omission or default
under, this Agreement, any other Credit Document or any of the instruments
or agreements referred to herein or therein, or otherwise amend, modify or
supplement this Agreement, any other Credit Document or any of such other
instruments or agreements; and/or
(h) take any other action which would, under otherwise applicable
principles of common law, give rise to a legal or equitable discharge of
the Initial Guarantors from their liabilities under this Guaranty.
9.8. Reliance. It is not necessary for any Lender to inquire into the
capacity or powers of the Initial Guarantors or any of their respective
Subsidiaries or the officers, directors, partners or agents acting or purporting
to act on their behalf, and any
55
Guaranteed Obligations made or created in reliance upon the professed exercise
of such powers shall be guaranteed hereunder.
9.9. Subordination. Any indebtedness of any Credit Party now or
hereafter owing to the Initial Guarantors is hereby subordinated to the
Guaranteed Obligations of the Borrower owing to the Lenders; and if the
Administrative Agent so requests at a time when an Event of Default exists, all
such indebtedness of any Credit Party to the Initial Guarantors shall be
collected, enforced and received by them for the benefit of the Lenders and be
paid over to the Administrative Agent on behalf of the Lenders on account of the
Guaranteed Obligations of the Initial Guarantors to the Lenders, but without
affecting or impairing in any manner the liability of the Initial Guarantors
under the other provisions of this Guaranty. Prior to the transfer by the
Initial Guarantors of any note or negotiable instrument evidencing any such
indebtedness of the Borrower to the Initial Guarantors, each of the Initial
Guarantors shall ▇▇▇▇ such note or negotiable instrument with a legend that the
same is subject to this subordination. Without limiting the generality of the
foregoing, each of the Initial Guarantors hereby agrees with the Lenders that it
will not exercise any right of subrogation which it may at any time otherwise
have as a result of this Guaranty (whether contractual, under the Bankruptcy
Code or otherwise) until all Guaranteed Obligations have been irrevocably paid
in full in cash.
9.10. Waiver.
(a) Each of the Initial Guarantors waives any right (except as shall be
required by applicable law and cannot be waived) to require any Lender to (i)
proceed against any other Credit Party or any other party, (ii) proceed against
or exhaust any security held from any other Credit Party or any other party or
(iii) pursue any other remedy in any Lender's power whatsoever. Each of the
Initial Guarantors waives any defense based on or arising out of any defense of
any other Credit Party or any other party, other than payment in full of the
Guaranteed Obligations, based on or arising out of the disability of any other
Credit Party or any other party, or the validity, legality or unenforceability
of the Guaranteed Obligations or any part thereof from any cause, or the
cessation from any cause of the liability of any other Credit Party or any other
party other than payment in full of the Guaranteed Obligations. The Lenders may,
at their election, foreclose on any security held by any Agent or any other
Lender by one or more judicial or nonjudicial sales, whether or not every aspect
of any such sale is commercially reasonable (to the extent such sale is
permitted by applicable law), or exercise any other right or remedy the Lenders
may have against any other Credit Party or any other party, or any security,
without affecting or impairing in any way the liability of the Initial
Guarantors hereunder except to the extent the Guaranteed Obligations have been
paid. To the extent permitted by applicable law, each of the Initial Guarantors
waives any defense arising out of any such election by the Lenders, even though
such election operates to impair or extinguish any right of reimbursement or
subrogation or other right
56
or remedy of the Initial Guarantors against any other Credit Party or any other
party or any security.
(b) Each of the Initial Guarantors waives all presentments, demands for
performance, protests and notices, including, without limitation, notices of
nonperformance, notices of protest, notices of dishonor, notices of acceptance
of this Guaranty, and notices of the existence, creation or incurring of new or
additional Guaranteed Obligations. Each of the Initial Guarantors assumes all
responsibility for being and keeping itself informed of each Credit Party's
financial condition and assets, and of all other circumstances bearing upon the
risk of nonpayment of the Guaranteed Obligations and the nature, scope and
extent of the risks which each of the Initial Guarantors assumes and incurs
hereunder, and agrees that the Administrative Agent and the Lenders shall have
no duty to advise the Initial Guarantors of information known to them regarding
such circumstances or risks.
(c) Each of the Initial Guarantors warrants and agrees that each of the
waivers set forth herein is made with full knowledge of its significance and
consequences and that if any of such waivers are determined to be contrary to
any applicable law or public policy, such waivers shall be effective only to the
maximum extent permitted by law.
9.11. Nature of Liability. It is the desire and intent of each of the
Initial Guarantors and the Lenders that this Guaranty shall be enforced against
the Initial Guarantors to the fullest extent permissible under the laws and
public policies applied in each jurisdiction in which enforcement is sought. If,
however, and to the extent that, the obligations of the Initial Guarantors under
this Guaranty shall be adjudicated to be invalid or unenforceable for any
reason, then the amount of the Initial Guarantors' obligations under this
Guaranty shall be deemed to be reduced and the Initial Guarantors shall pay the
maximum amount of the Guaranteed Obligations which would be permissible under
applicable law.
9.12. Contribution. At any time a payment in respect of the Guaranteed
Obligations is made under any Guaranty, the right of contribution, if any, of
each Guarantor against each other Guarantor shall be determined as provided in
the immediately following sentence, with the right of contribution of each
Guarantor to be revised and restated as of each date on which a payment (a
"Relevant Payment") is made on the Guaranteed Obligations under a Guaranty. At
any time that a Relevant Payment is made by a Guarantor that results in the
aggregate payments made by such Guarantor in respect of its Guaranteed
Obligations to and including the date of the Relevant Payment exceeding such
Guarantor's Contribution Percentage (as hereinafter defined) of the aggregate
payments made by all Guarantors in respect of the Guaranteed Obligations to and
including the date of the Relevant Payment (such excess, the "Aggregate Excess
Amount"), each such Guarantor shall have a right of contribution against each
other
57
Guarantor who has made payments in respect of the Guaranteed Obligations to and
including the date of the Relevant Payment in an aggregate amount less than such
other Guarantor's Contribution Percentage of the aggregate payments made to and
including the date of the Relevant Payment by all Guarantors in respect of the
Guaranteed Obligations (the aggregate amount of such deficit, the "Aggregate
Deficit Amount") in an amount equal to (x) a fraction the numerator of which is
the Aggregate Excess Amount of such Guarantor and the denominator of which is
the Aggregate Excess Amount of all Guarantors multiplied by (y) the Aggregate
Deficit Amount of such Guarantor. A Guarantor's right of contribution, if any,
pursuant to the preceding sentences shall arise at the time of each computation,
subject to adjustment to the time of any subsequent computation; provided,
however, that no Guarantor may take any action to enforce such right until the
Guaranteed Obligations have been paid in full and the Lenders' commitments have
been terminated, it being expressly recognized and agreed by all parties hereto
that any Guarantor's right of contribution arising pursuant to this Section 9.12
against any other Guarantor shall be expressly junior and subordinate to such
Guarantor's obligations and liabilities in respect of the Guaranteed Obligations
and any other obligations owing under its Guaranty. As used in this paragraph,
(i) each Guarantor's "Contribution Percentage" shall mean the percentage
obtained by dividing (x) the Adjusted Net Worth of such Guarantor by (y) the
aggregate Adjusted Net Worth of all Guarantors giving Guaranties; (ii) the
"Adjusted Net Worth" of each Guarantor shall mean the greater of (x) the Net
Worth of such Guarantor or (y) zero; and (iii) the "Net Worth" of each Guarantor
shall mean the amount by which the fair salable value of such Guarantor's assets
on the Initial Borrowing Date exceeds its existing debts and other liabilities
(including contingent liabilities, but without giving effect to (1) any
Guaranteed Obligations arising under a Guaranty, (2) the obligations of such
Guarantor in respect of the Credit Documents and (3) any obligations of such
Guarantor in respect of the Borrower's other Indebtedness for borrowed money),
in each case after giving effect to the transactions occurring on the Initial
Borrowing Date.
SECTION 10. Definitions. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Acquisition Agreements" shall mean each document, instrument or other
agreement executed in connection with the Cayman Acquisition.
"Adjusted Net Worth" is defined in Section 9.12.
"Administrative Agent" shall have the meaning provided in the first
paragraph of this Agreement and shall include any successor to the
Administrative Agent appointed pursuant to Section 11.11.
58
"ADS Shares" shall mean the American Depositary Shares of Gener, each
representing 68 shares of common stock of Gener.
"AES" shall mean The AES Corporation, a Delaware corporation.
"AES Guarantee" shall mean an irrevocable and unconditional guarantee,
in a form to be agreed, pursuant to which AES will guarantee the prepayment of
an amount of principal and interest equal to the True-Up Prepayment Amount to be
made on the True-Up Prepayment Date, or on any earlier date as a result of the
acceleration of the Bridge Loans pursuant to Section 8 (but no other payments of
principal or interest); provided, that AES's liability under such guarantee
shall be in a maximum amount equal to the lesser of (a) $40,000,000 and (b) the
amount by which the principal amount of the Bridge Loans made on the Initial
Borrowing Date exceeds the product of (i) $444,444,445 times (ii) the
percentage, on a fully-diluted basis, of the outstanding shares of Gener owned,
directly or indirectly, by the Borrower on the Initial Borrowing Date.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person (other than the Borrower or any Wholly-Owned
Subsidiary that is a Guarantor). A Person shall be deemed to control another
Person if such Person possesses, directly or indirectly, the power (i) to vote
10% or more of the securities having ordinary voting power for the election of
directors of such Person or (ii) to direct or cause the direction of the
management and policies of such other Person, whether through the ownership of
voting securities, by contract or otherwise.
"Affiliate Transaction" shall have the meaning provided in Section 7.6.
"Agents" shall mean, collectively, the Administrative Agent, the
Collateral Agent and the Arranger.
"Aggregate Deficit Amount" is defined in Section 9.12.
"Aggregate Excess Amount" is defined in Section 9.12.
"Agreement" shall mean this Senior Secured Bridge Credit Agreement, as
modified, supplemented, amended, restated (including any amendment and
restatement hereof), extended, renewed, refinanced or replaced from time to
time.
"Applicable Fiscal Years" shall mean, as to Gener, the three fiscal
years of Gener ending December 31, 1999, 1998 and 1997.
"Applicable Margin" shall mean for each Interest Period (a) in the case
of LIBOR Loans (i) for the initial period of three months commencing on the
Initial Borrowing Date, 3.00% per annum, (ii) for the subsequent three-month
period 3.25% per
59
annum, (iii) for the next subsequent three-month period, 3.75% per annum and
(iv) thereafter, 4.50% per annum and (b) in the case of Base Rate Loans (i) for
the initial period of three months commencing on the Initial Borrowing Date,
2.00% per annum, (ii) for the subsequent three-month period, 2.25% per annum,
(iii) for the next subsequent three-month period, 2.75% per annum and (iv)
thereafter, 3.50% per annum.
"Argentine Disposition" shall mean the Disposition for cash of (i) 51%
of the outstanding ordinary shares of Hidroquenen S.A., a sociedad anonima
organized under the laws of Argentina ("Hidroquenen"), (ii) options to acquire
up to another 19.02% of the outstanding equity of Hidroquenen, (iii) 63.9% of
the outstanding shares of Central Puerto S.A., a sociedad anonima organized
under the laws of Argentina, (iv) 100% of the outstanding equity of Termoandes
S.A., a sociedad anonima organized under the laws of Argentina, (v) 100% of the
outstanding ordinary shares of Interandes S.A., a sociedad anonima organized
under the laws of Argentina and (vi) the promissory note issued by ▇▇▇▇▇▇ del
▇▇▇▇▇▇ to Gener in the approximate principal amount of $30.7 million plus
accrued and capitalized interest thereon.
"Arranger" shall have the meaning provided in the first paragraph of
this Agreement.
"Assignment and Assumption Agreement" shall mean an Assignment and
Assumption Agreement, in a form to be agreed prior to the Initial Borrowing
Date.
"Bankruptcy Code" shall have the meaning provided in Section 8.5.
"Base Rate" shall mean, at any time, the higher of (i) the Prime
Lending Rate and (ii) 0.5% per annum in excess of the Federal Funds Rate.
"Base Rate Loan" shall mean each Bridge Loan bearing interest at the
Base Rate as provided in Section 1.3(b).
"Basel Accords" shall mean the international banking supervision
standards set by the Basel Committee on Banking Supervision.
"Basel Bank" means a financial institution located in a country in
which the central bank or similar governmental authority has adopted the Basel
Accords.
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrower Notice of Conversion" is defined in Section 1.9.
60
"Borrowing" shall mean any borrowing of one Type of Bridge Loans from
the Lenders on a given date (or resulting from a conversion or conversions on
such date) having, in the case of LIBOR Loans, the same Interest Period.
"Borrowing Date" shall mean the date on which a Borrowing of Bridge
Loans occurs.
"Bridge Loan" shall have the meaning provided in Section 1.1(a).
"Business Day" shall mean any day except a Saturday, Sunday or other
day on which commercial banks are authorized or required by law or regulation to
close in New York City or Santiago, Chile or, in the case of LIBOR Loans, with
respect to determination of LIBOR, London.
"Capital Contribution" shall have the meaning set forth in Section
5.10.
"Capital Expenditures" shall mean, with respect to any Person, all
expenditures to acquire or construct plants, fixed assets or equipment by such
Person which are or will be required to be capitalized in accordance with
Chilean GAAP, including, without duplication, the amount of Capitalized Lease
Obligations incurred by such Person, but excluding expenditures to effect
acquisitions permitted by Section 7.5(ii).
"Capitalized Lease Obligations" shall mean, with respect to any Person,
all rental or other obligations of such Person which are or will be required to
be capitalized on the books of such Person in accordance with Chilean GAAP, in
each case taken at the amount thereof accounted for as liabilities in accordance
with such principles.
"Cash Equivalents" shall mean (a) any evidence of Indebtedness with a
maturity of 180 days or less from the date of acquisition thereof issued or
directly and fully guaranteed or insured by the United States of America, Chile
or any agency or instrumentality or political subdivision thereof (provided that
the full faith and credit of the United States of America or Chile, as the case
may be, is pledged in support thereof); (b) demand deposits, certificates of
deposit or time deposits with a maturity of 180 days or less from the date of
acquisition thereof with any financial institution having combined capital,
surplus and undivided profits of not less than U.S.$200,000,000 so long as such
banks shall not be under intervention of, or controlled by, any governmental
agency regulating Chilean financial institutions; (c) commercial paper with a
maturity of 180 days or less from the date of acquisition thereof issued by a
corporation (except an Affiliate of the Borrower) organized under the laws of
(i) any State of the United States or the District of Columbia rated at least
A-2 or the equivalent thereof by S&P or at least P-2 or the equivalent thereof
by ▇▇▇▇▇'▇ or (ii) Chile rated investment grade by Duff &
61
▇▇▇▇▇▇; (d) repurchase agreements and reverse repurchase agreements relating to
marketable obligations, directly or indirectly, issued or unconditionally
guaranteed by the United States of America or issued by any agency thereof and
backed by the full faith and credit of the United States, as the case may be, in
each case maturing within 180 days from the date of acquisition; provided,
however, that the terms of such agreements comply with the guidelines set forth
in the Federal Financial Agreements of Depository Institutions with Securities
Dealers and Others, as adopted by the Comptroller of the Currency; (e)
instruments backed by letters of credit of institutions satisfying the
requirements of clause (b) above; (f) investments in money market funds at least
95% of whose assets are comprised of securities of the types described in
clauses (a) through (d) above; (g) investments in money market funds complying
with the risk limit conditions of Rule 2a-7 or any successor rule of the
Securities and Exchange Commission under the U.S. Securities Exchange Act of
1934, as amended; and (h) demand deposit and similar accounts maintained in the
ordinary course of business.
"Cayman Acquisition" shall mean the acquisition of 100% of the shares
of Mercury Cayman III by the Principal Guarantor from Mercury Cayman IV.
"Central Bank of Chile" shall mean the Banco Central de la Republica de
Chile.
"Change of Control" shall mean the occurrence of any one or more of the
following: (i) the Permitted Holders shall cease to own, directly or indirectly,
100% of the aggregate outstanding voting securities of each Credit Party or the
Permitted Holders shall not be entitled (by ownership of voting stock, contract
or otherwise) to elect, or for any reason shall not have elected, directly or
indirectly, directors of such Credit Party, as the case may be, holding at least
a majority of the voting power of the board of directors of any Credit Party, as
the case may be; provided, that (A) Mercury Cayman IV shall not cease to own
(subject to the Lien of the applicable Stock Pledge Agreements) 100% of the
outstanding shares of Mercury Cayman Co. II, Ltd., (B) Mercury Cayman Co. II,
Ltd shall not cease to own all of the voting interests of Inversiones CYC
Limitada, (C) Inversiones CYC Limitada shall not cease to own all of the
outstanding voting interests of the Borrower and (D) the Borrower shall not
cease to own all of the outstanding voting interests of the Principal Guarantor;
(ii) the merger or consolidation of any Credit Party with or into another Person
or the merger of another Person with or into any Credit Party, or the sale,
lease, transfer or other disposition of all or substantially all of the assets
of any Credit Party to another Person, in a single transaction or a series of
transactions; (iii) any Person or group shall have acquired beneficial
ownership, directly or indirectly, of the voting stock of AES (or other
securities convertible into such voting stock) representing 35% or more of the
combined voting power of all voting stock of AES; (iv) the individuals who were
directors of AES at the Effective Date shall cease for any reason (other than
death or disability) to constitute a majority of the board of directors of AES
(except to the extent that individuals who at the Effective Date were replaced
by
62
individuals (A) elected by the remaining board of directors of AES or (B)
nominated for election by the remaining members of the board of directors of AES
and thereafter elected as directors by shareholders of AES); or (v) any Person
or group shall have acquired by contract or otherwise, or shall have entered
into a contract or arrangement that, upon consummation, will result in a Change
of Control under clause (iv) or (v) above. For purposes of this definition, (x)
the terms "beneficially own" and "group" shall have the respective meanings
ascribed to them pursuant to Section 13(d) of the United States Securities
Exchange Act of 1934, and (y) any Person or group shall be deemed to
beneficially own any voting securities beneficially owned by any other Person
(the "parent entity") so long as such Person or group beneficially owns,
directly or indirectly, voting securities of the parent entity representing at
least a majority of the voting power of the then outstanding voting securities
of the parent entity and no other Person or group has the right to designate or
appoint a majority of the directors of such parent entity.
"Chile" shall mean the Republic of Chile, and any political subdivision
thereof.
"Chilean GAAP" shall mean generally accepted accounting principles in
Chile, consistently applied during a relevant period.
"Collateral" shall mean the Pledged Securities and all of the
Collateral as defined in each of the Security Documents.
"Collateral Agent" shall have the meaning provided in the first
paragraph of this Agreement and shall include any successor to the Collateral
Agent appointed pursuant to Section 11.11.
"Committed," with respect to any Indebtedness, Lien or Investment,
means that Gener or one of its Subsidiaries (a) was subject to a written
contractual obligation on the Effective Date to incur such Indebtedness or Lien,
or make such Investment, and (b) such contractual obligation was not terminable
or revocable by Gener or such Subsidiary, after using commercially reasonable
efforts to do so, without incurring a material burden or cost.
"Commitment" shall mean, for each Lender, the amount set forth opposite
such Lender's name in Schedule A directly below the heading "Commitment."
"Commitment Letter" shall mean the letter dated December 15, 2000
between AES, the Borrower and the Administrative Agent relating to the Senior
Secured Bridge Credit Agreement.
"Consent Letter" is defined in Section 4.16.
63
"Contingent Obligation" shall mean, as to any Person, any obligation of
such Person as a result of such Person being a general partner of any other
Person, unless the underlying obligation is expressly made non-recourse as to
such general partner, and any obligation of such Person guaranteeing or intended
to guarantee any Indebtedness, leases, dividends or other obligations ("primary
obligations") of any other Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of such
Person, whether or not contingent, (i) to purchase any such primary obligation
or any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (x) for the purchase or payment of any such primary
obligation or (y) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary
obligor, (iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation or (iv) otherwise
to assure or hold harmless the holder of such primary obligation against loss in
respect thereof; provided, however, that the term Contingent Obligation shall
not include endorsements of instruments for deposit or collection in the
ordinary course of business. The amount of any Contingent Obligation shall be
deemed to be an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect
thereof (assuming such Person is required to perform thereunder) as determined
by such Person in good faith.
"Contribution Percentage" is defined in Section 9.12.
"Credit Documents" shall mean this Agreement, the Notes, the
Guaranties, the Security Documents, the Commitment Letter and the Fee Letter,
the AES Guarantee (if required pursuant to Section 4.1) and any document entered
into pursuant to Section 4.18.
"Credit Parties" shall mean each of the Borrower and the Initial
Guarantors.
"Debt Issuance" shall mean the incurrence after the Initial Borrowing
Date of any Indebtedness for borrowed money by any Credit Party or any of its
Subsidiaries, but excluding (a) Permitted Refinancings and (b) Indebtedness
incurred pursuant to clauses (iv), (v), (vi), (ix) and (x) of Section 7.4.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Disposition" shall mean any sale, transfer or other disposition by any
Credit Party or its Subsidiaries to any Person (including by way of redemption
by such Person) other than to the Borrower or the Principal Guarantor of any
asset other than
64
sales of assets permitted by clauses (iii), (iv) (but with respect to clause
(iv), only to the extent that the aggregate Net Disposition Proceeds of all such
sales, transfers and other dispositions do not exceed $5,000,000), (v), (vi) and
(vii) of Section 7.2.
"Disqualified Stock" shall mean, with respect to any capital stock of
such Person that, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures (excluding any maturity as the result of an optional redemption
by the issuer thereof) or is mandatorily redeemable (other than solely for
capital stock that is not Disqualified Stock), pursuant to a sinking fund
obligation or otherwise, or is redeemable at the sole option of the holder
thereof (other than solely for capital stock that is not Disqualified Stock) or
exchangeable or convertible into debt securities of the issuer thereof at the
sole option of the holder thereof, in whole or in part, on or prior to the date
which is 90 days after the Maturity Date.
"Dividend" shall mean, with respect to any Person, that such Person has
declared or paid a dividend or returned any equity capital (including by way of
capital reduction) to its stockholders or partners or authorized or made any
other distribution, payment or delivery of property (other than common stock of
such Person) or cash to its stockholders or partners as such, or redeemed,
retired, purchased or otherwise acquired, directly or indirectly, for a
consideration any shares of any class of its capital stock or any partnership
interests outstanding on or after the Effective Date (or any options or warrants
issued by such Person with respect to its capital stock), or set aside any funds
for any of the foregoing purposes, or shall have permitted any of its
Subsidiaries to purchase or otherwise acquire for a consideration any shares of
any class of the capital stock or any partnership interests of such Person
outstanding on or after the Effective Date (or any options or warrants issued by
such Person with respect to its capital stock). Without limiting the foregoing,
"Dividends" with respect to any Person shall also include all payments made or
required to be made by such Person to shareholders of such Person with respect
to any stock appreciation rights, plans, equity incentive or achievement plans
or any similar plans or setting aside of any funds for the foregoing purposes.
"Dollars" and the sign "$" shall each mean freely transferable lawful
money of the United States of America.
"Effective Date" shall have the meaning provided in Section 12.10.
"Eligible Transferee" shall mean a commercial bank or financial
institution that is a Basel Bank.
"Equity Issuance" shall mean without duplication, any of (a) any
issuance or sale by any Credit Party or any of its Subsidiaries after the
Initial Borrowing Date of (i) any capital stock (including any capital stock
issued upon exercise of any warrant or
65
option) or any warrants or options to purchase capital stock or (ii) any other
security or instrument representing an equity interest (or the right to obtain
any equity interest) in the issuing or selling Person or (b) any capital
contribution to any Credit Party or any of its Subsidiaries made after the
Initial Borrowing Date whether or not evidenced by any equity security issued by
the recipient of such contribution; provided that the following shall not
constitute Equity Issuances: (a) any issuance of common shares of Gener or any
Credit Party as part of a cash Investment by AES or any of its Affiliates (other
than any Credit Party or Subsidiary) solely in the equity of Gener or such
Credit Party, so long as such common shares (other than common shares of the
Borrower) are owned by a Credit Party and pledged to the Collateral Agent
pursuant to the applicable Stock Pledge Agreement and (b) any issuance of common
stock or other equity securities by a Credit Party or one of its Subsidiaries to
another Credit Party or one of its Subsidiaries, so long as the corresponding
Investment is otherwise permitted under this Agreement.
"Event of Default" shall have the meaning provided in Section 8.
"Excess Amount" shall have the meaning provided in Section 12.6(b).
"Excess Cash Flow" shall mean, for any period, the remainder of the
amount of any Dividend paid by Gener, less (i) any amount otherwise applied to
make payments of interest or principal with respect to the Bridge Loans and (ii)
up to US$25,000 per fiscal quarter to the extent used by the Borrower to pay its
or any other Credit Party's operating and administrative expenses.
"Excess Cash Payment Date" shall mean the date occurring 10 days after
the last day of each fiscal quarter of the Borrower.
"Excess Cash Payment Period" shall mean, with respect to the repayment
required on each Excess Cash Payment Date, the immediately preceding fiscal
quarter of the Borrower.
"Federal Funds Rate" shall mean, for any period, a fluctuating interest
rate 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 which
is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.
"Fee Letter" shall mean the letter dated December 15, 2000 from the
Agents to the Borrower.
66
"Fees" shall mean all amounts payable pursuant to, or referred to in,
Section 2.1 and the other Credit Documents.
"Formal Market" shall mean, at any time, the foreign currency exchange
market provided at such time by the Central Bank of Chile where banks and other
financial institutions authorized by the Central Bank of Chile must purchase and
sell foreign currencies.
"Gener" shall mean Gener S.A., a sociedad anonima organized under the
laws of Chile.
"Gener Acquisition" shall mean the acquisition of at least 50% of the
capital stock of Gener pursuant to an offer by the Principal Guarantor to
purchase outstanding Chilean shares (an "OPA") and a U.S. tender offer by
Mercury Cayman III for all of Gener's outstanding American Depository Shares.
"Gener Shares" shall have the meaning provided in Section 4.6.
"Governmental Authority" shall mean any ministry, administrative
department, agency, commission, bureau, board, regulatory authority, registry,
instrumentality, corporation or other governmental body, entity, judicial or
administrative body or court (including, without limitation, banking and taxing
authorities), of, or owned or controlled by, as the case may be, Chile, the
Cayman Islands, the Republic of Argentina, Colombia or the United States or any
political subdivision thereof.
"Grid Expenses" shall mean up to $15,000,000 of infrastructure and
other costs paid by TermoAndes to connect the TermoAndes facility to the
Argentine power grid.
"Guaranteed Obligations" shall have the meaning provided in Section
9.1(a).
"Guarantor" shall mean each Initial Guarantor, AES (in the event the
AES Guarantee is required pursuant to Section 4.1) and each other Person who
guarantees the Obligations.
"Guaranty" shall mean the guaranty contained in Section 9 and, if
required pursuant to Section 4.1, the AES Guarantee.
"Hedging Agreement" means any foreign currency exchange agreement,
commodity price protection agreement or other currency exchange rate or
commodity price hedging agreement.
67
"Indebtedness" shall mean, as to any Person, without duplication, (i)
all indebtedness (including principal, interest, fees and charges) of such
Person for borrowed money or for the deferred purchase price of property or
services, (ii) the maximum amount available to be drawn under all letters of
credit issued for the account of such Person and all unpaid drawings in respect
of such letters of credit, (iii) all Indebtedness of the types described in
clause (i), (ii), (iv), (v), (vi) or (vii) of this definition secured by any
Lien on any property owned by such Person, whether or not such Indebtedness has
been assumed by such Person (provided that if the Person has not assumed or
otherwise become liable in respect of such Indebtedness, such Indebtedness shall
be deemed to be the lesser of (A) the amount of such Indebtedness of such other
Person and (B) an amount equal to the fair market value of the property to which
such Lien relates as determined in good faith by such Person), (iv) the
aggregate amount required to be capitalized under leases under which such Person
is the lessee, (v) all obligations of such person to pay a specified purchase
price for goods or services, whether or not delivered or accepted, i.e.,
take-or-pay and similar obligations, (vi) all Contingent Obligations of such
Person and (vii) all obligations under any Interest Rate Protection Agreement,
Hedging Agreement or similar type of agreement. Notwithstanding the foregoing,
Indebtedness shall not include trade payables and accrued expenses incurred by
any Person in accordance with customary practices and in the ordinary course of
business of such Person.
"Independent Financial Advisor" means an internationally recognized
investment banking firm (i) which does not, and whose directors, officers and
employees or Affiliates do not, have a direct or indirect financial interest in
any Credit Party (other than any interest in the Bridge Loans), (ii) which, in
the judgment of the board of directors of the Borrower, is otherwise independent
and qualified to perform the task for which it is to be engaged and (iii) which
is reasonably acceptable to the Required Lenders.
"Initial Borrowing Date" shall mean the date upon which the initial
Borrowing of Bridge Loans occurs hereunder.
"Initial Guarantors" shall mean Mercury Cayman III, Mercury Cayman IV
and the Principal Guarantor.
"Intercompany Note" means the Intercompany Note dated as of the
Effective Date, issued by the Borrower to Mercury Cayman IV.
"Interest Determination Date" shall mean with respect to LIBOR Loans,
the second Business Day on which dealings in deposits in Dollars are transacted
in the London interbank market preceding the commencement of any Interest Period
or, if such day is not a Business Day, the Business Day immediately preceding
the commencement of the relevant Interest Period.
"Interest Payment Date": (a) as to any Base Rate Loan, the last day of
each March, June, September and December to occur while such Loan is
outstanding, and the Maturity Date, (b) as to any LIBOR Loan having an Interest
Period of three months or less, the last day of such Interest Period, and (c) as
to any LIBOR Loan having an Interest Period longer than three months, (x) each
day which is three months, or a whole multiple thereof, after the first day of
such Interest Period and (y) the last day of such Interest Period.
68
"Interest Period" shall have the meaning provided in Section 1.4.
"Interest Rate Protection Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement, interest
rate hedging agreement or other similar agreement or arrangement.
"Inversiones CYC Limitada" shall mean Inversiones CYC Limitada, a
Chilean Corporation and an indirect Wholly-Owned Subsidiary of AES.
"Investment" shall have the meaning provided in Section 7.5.
"Lender" shall have the meaning provided in the first paragraph of this
Agreement.
"LIBOR" shall mean, with respect to each Interest Period for LIBOR
Loans, (a) the rate per annum determined by the Administrative Agent to be the
arithmetic mean (rounded to the nearest 1/16th of 1%) of the offered rates for
deposits in Dollars with a term comparable to such Interest Period that appears
on the Telerate British Bankers Assoc. Interest Settlement Rates Page (as
defined below) at approximately 11:00 a.m. (London time) on the date which is
two Business Days prior to the commencement of such Interest Period or (b) if
there shall at such time no longer exist a Telerate British Bankers Assoc.
Interest Settlement Rates Page, (i) the arithmetic average of the offered
quotation to first-class banks in the interbank Eurodollar market by the
Administrative Agent for Dollar deposits of amounts in same day funds comparable
to the outstanding principal amount of the LIBOR Loans for which an interest
rate is then being determined with maturities comparable to the Interest Period
to be applicable to such LIBOR Loans, determined as of 11:00 A.M. (London time)
on the date which is two Business Days prior to the commencement of such
Interest Period divided, in each case (and rounded to the nearest 1/16 of 1%),
by (ii) a percentage equal to 100% minus the then stated maximum rate of all
reserve requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves) applicable to any member bank of the
Federal Reserve System in respect of Eurocurrency liabilities as defined in
Regulation D (or any successor category of liabilities under Regulation D).
"Telerate British Bankers Assoc. Interest Settlement Rates Page" shall mean the
display designated as Page 3750 on the Telerate System Incorporated Service (or
such other page as may
69
replace such page on such service for the purpose of displaying the rates at
which Dollar deposits are offered by leading banks in the London interbank
deposit market).
"LIBOR Loan" shall mean each Bridge Loan bearing interest at the LIBOR
rate as provided in Section 1.3(a).
"LIBOR Loan Lender" means any Lender holding a LIBOR Loan.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment
(fiduciary or otherwise), deposit arrangement, encumbrance, lien (statutory or
other), preference, priority or other security agreement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any financing or similar statement or notice filed under
any recording or notice statute, and any capital lease having substantially the
same effect as any of the foregoing).
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall mean, with respect to any Credit Party,
(i) any material adverse effect on the condition (financial or otherwise),
business, operations, assets, revenues, properties, prospects or liabilities of
such Credit Party and its Subsidiaries, taken as a whole, (ii) any material
adverse effect on the ability of such Credit Party to perform any of its
material financial obligations under any of the Credit Documents, (iii) any
material adverse effect on the ability of Gener to pay Dividends or other
distributions (including reductions of capital), or to advance funds, to any
Credit Party without any third-party consent, or (iv) any material adverse
effect on the legality, binding effect or enforceability of any material
provision of any of the Credit Documents, or any material rights or remedies of
the Lenders, Administrative Agent or the Collateral Agent thereunder.
"Maturity Date" shall mean December 27, 2001.
"MEGA" means Merchant Energy Company of the Americas, Inc., a
Subsidiary of Gener.
"Mercury Cayman III" means Mercury Cayman Co. III, Ltd., a Cayman
Islands company.
"Mercury Cayman IV" means Mercury Cayman Holdco, Ltd., a Cayman Islands
company.
"Net Debt Proceeds" shall mean, with respect to any Debt Issuance, the
cash proceeds (net of underwriting discounts and commissions and other
reasonable costs and expenses associated therewith) received in respect thereof.
70
"Net Disposition Proceeds" shall mean, for any Disposition, the cash
proceeds (including any cash received by way of deferred payment pursuant to a
promissory note, receivable or otherwise, but only as and when received)
received from such Disposition, net of (a) the reasonable costs and expenses of
such Disposition (including fees and commissions, payments of unassumed
liabilities relating to the assets sold and required payments of any
Indebtedness (other than Indebtedness secured pursuant to the Security
Documents) which is secured by the respective assets which were disposed of),
(b) the incremental taxes paid or payable as a result of such Disposition and
(c) reserves for indemnification obligations to the buyer in connection with
such Disposition (provided that once such reserves are released to any Credit
Party or any of its Subsidiaries, such reserves shall be Net Disposition
Proceeds). The Net Disposition Proceeds in respect of the Argentine Disposition
shall include any funds received by Gener (but shall not be adjusted to reflect
any funds payable by Gener) pursuant to the post-closing adjustment to the
purchase price provided in Section 2.5 of the Purchase and Sale Agreement to be
entered into between Total Gas and Power Ventures and Gener.
"Net Equity Proceeds" shall mean, with respect to any Equity Issuance,
the cash proceeds (net of underwriting discounts and commissions and other
reasonable costs and expenses associated therewith) received in respect thereof.
"Net Insurance Proceeds" shall mean, with respect to any Recovery
Event, the cash proceeds (net of reasonable costs, expenses and taxes incurred
in connection with such Recovery Event) received in respect thereof.
"Net Worth" shall mean, as to any Person, the sum of its capital stock,
capital in excess of par or stated value of shares of its capital stock,
retained earnings and any other account which, in accordance with Chilean GAAP,
constitutes stockholders equity, excluding treasury stock.
"Non-Core Assets" shall mean the assets identified in the disclosure
letter, dated the date hereof, from the Borrower to the Administrative Agent.
"Noon Buying Rate" shall mean the noon buying rate in New York City for
cable transfers in foreign currencies as certified for customs purposes by the
Federal Reserve Bank of New York.
"Note" shall have the meaning provided in Section 1.1(d)(i).
"Notice of Borrowing" shall have the meaning provided in Section
1.1(b).
"Notice of Continuation" shall have the meaning provided in Section
1.9(b).
71
"Notice Office" shall mean the office of the Administrative Agent
located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ or such other office as the Administrative Agent may hereafter
designate in writing as such to the other parties hereto.
"Obligations" shall mean all amounts owing to the Administrative Agent,
the Collateral Agent or any Lender pursuant to the terms of this Agreement or
any other Credit Document.
"Overdue Ratio" shall (a) mean 1.00, at all times prior to the Maturity
Date, (b) mean 1.25, during the three-month period commencing on the Maturity
Date and (c) increase by 0.25 upon each three-month anniversary of the Maturity
Date.
"Payment Office" shall mean the office of the Administrative Agent
located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other
office as the Administrative Agent may hereafter designate in writing as such to
the other parties hereto.
"Permitted Holders" shall mean AES and its Wholly-Owned Subsidiaries.
"Permitted Liens" shall have the meaning provided in Section 7.1.
"Permitted Refinancing" shall mean (a) with respect to any Indebtedness
of the Borrower or its Subsidiaries that does not mature in calendar year 2001,
any refinancing thereof; provided, however, that (x) no Event of Default shall
have occurred and be continuing or would arise therefrom, (y) any such
refinancing Indebtedness shall (I) not be on financial and other terms that are
taken as a whole materially more onerous to any Credit Party , Subsidiary or
Lender than the Indebtedness being refinanced and shall not have defaults,
rights or remedies, taken as a whole, nor restrictions on dividends and
distributions and on asset sales, each taken individually, that are more
burdensome to any Credit Party, Subsidiary or Lender than the Indebtedness being
refinanced, (II) not have a stated maturity or weighted average life that is
shorter than the Indebtedness being refinanced, (III) if the Indebtedness being
refinanced is subordinated by its terms or by the terms of any agreement or
instrument relating to such Indebtedness, be at least as subordinate to the
Obligations as the Indebtedness being refinanced (and unsecured if the
Indebtedness being refinanced is unsecured), and (IV) be treated as a Debt
Issuance subject to prepayment under Section 3.3(a) (and the Borrower shall
actually make such a repayment of Bridge Loans) to the extent that the principal
amount of such refinancing Indebtedness exceeds the principal amount so
refinanced, plus any interest being capitalized thereby plus the lesser of (1)
the stated amount of any premium or other payment required to be paid in
connection with such refinancing pursuant to the terms of the Indebtedness being
refinanced and (2) the amount of premium or other payment actually paid at such
time to refinance the Indebtedness, plus, in either case, the amount
72
of fees and reasonable expenses of any Credit Party or any of its Subsidiaries
incurred in connection with such refinancing, and (z) the primary obligor on
such refinancing Indebtedness shall be the primary obligor on such Indebtedness
being refinanced; provided, however, that any guarantor of the Indebtedness
being refinanced shall be permitted to guarantee the refinancing Indebtedness
and (b) with respect to any Indebtedness of Gener and its Subsidiaries that
matures in calendar year 2001, any refinancing of such Indebtedness, (I) for
which the agreements governing all such refinancing Indebtedness do not contain
covenants more restrictive on dividends and asset sales than customarily
applicable to financings of the same type by businesses that are similar
(including with respect to capital structure) and in the same geographical area
as Gener or such Subsidiary, as the case may be, (II) for which Gener and any
such Subsidiary has used commercially reasonable efforts to minimize any
restrictions on dividends and distributions or on asset sales incurred in
connection with such refinancing and (III) the proceeds of which, to the extent
such proceeds exceed the principal amount of such refinanced Indebtedness (plus
any interest being capitalized thereby) are treated as the proceeds of a Debt
Issuance and actually applied to repay Bridge Loans in accordance with Section
3.3(a).
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Peso" shall mean the lawful currency of Chile.
"Pledged Securities" shall mean all Acciones, Acciones Adicionales,
Importes Prendados, Aportes (if any), shares, additional shares, Pledged
Securities and any other property (if any) as indicated and defined in the
applicable Stock Pledge Agreement.
"Post-Closing Collateral Actions" means each of the filings,
registrations or other actions indicated in Schedule 4.11 and the continuing
holding by the Administrative Agent or its nominee of share certificates of any
stock pledged pursuant to the Stock Pledge Agreements.
"Prime Lending Rate" shall mean the rate which the Administrative Agent
announces from time to time as its prime lending rate, the Prime Lending Rate to
change when and as such prime lending rate changes. The Prime Lending Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. The Administrative Agent may make commercial
loans or other loans at rates of interest at, above or below the Prime Lending
Rate.
"Principal Guarantor" shall have the meaning provided in the first
paragraph of this Agreement.
73
"Pro Forma Date" shall have the meaning provided in Section 5.6(b).
"Pro Forma Financial Statements" shall have the meaning provided in
Section 5.6(b).
"Pro Rata Share" shall mean, with respect to any amount distributed to
any Person, the amount that would be received by such Person if such amount were
paid as one or more Dividends or capital reductions, giving effect to any
required payments to holders of minority interests.
"PUHCA" is defined in Section 5.18.
"Recovery Event" shall mean the receipt by any Credit Party or any of
its Subsidiaries of any cash insurance proceeds or condemnation awards payable
(i) by reason of theft, loss, physical destruction, damage, taking or any other
similar event with respect to any property or assets of such Person and (ii)
under any policy of insurance required to be maintained under Section 6.3.
"Register" shall have the meaning provided in Section 12.18.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing reserve requirements.
"Regulation T" shall mean Regulation T of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing margin requirements.
"Regulation X" shall mean Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Relevant Payment" is defined in Section 9.12.
"Replaced Lender" shall have the meaning provided in Section 1.8.
"Replacement Lender" shall have the meaning provided in Section 1.8.
"Required Lenders" shall mean, at any time, Lenders holding more than
50% of the total outstanding principal amount of the Bridge Loans.
74
"Security Documents" shall mean each Stock Pledge Agreement.
"Stock Pledge Agreement" shall have the meaning provided in Section
4.11.
"Subsidiary" of any Person shall mean and include (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person directly or
indirectly and (ii) any partnership, association, limited liability company,
joint venture or other entity in which such Person directly or indirectly has
more than a 50% equity interest at the time. Except where the context may
otherwise require, a Subsidiary shall be understood to mean a Subsidiary of the
Borrower.
"Taxes" shall have the meaning provided in Section 3.5(a).
"Total Commitment" shall mean, at any time, the sum of the Commitments
of the Lenders, which sum shall not exceed $400.0 million.
"True-Up Prepayment Amount" equals the amount by which the principal
amount of outstanding Bridge Loans on the True-Up Prepayment Date exceeds the
product of (i) $444,444,445 times (ii) the percentage of the outstanding shares
of Gener on a fully-diluted basis that are owned, directly or indirectly, by the
Borrower and that have been pledged pursuant to the applicable Stock Pledge
Agreement.
"True-Up Prepayment Date" means the earlier of (i) April 15, 2001 and
(ii) the date that the Principal Guarantor completes the offer to purchase
shares of Gener required by Section 6.15.
"Type" shall mean any type of Bridge Loan determined with respect to
the interest option applicable thereto, i.e., a Base Rate Loan or a LIBOR Loan.
"United States" and "U.S." shall each mean the United States of
America.
"U.S. GAAP" means generally accepted accounting principles in the
United States.
"Value at Risk" means the estimated level of loss on the aggregate
portfolio (open trading positions) of MEGA which is calibrated to a one-day
holding period and expected to be equaled or exceeded with a 95% probability.
75
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying shares
and/or other nominal amounts of shares required to be held other than by such
Person under applicable law) is at the time owned by such Person and/or one or
more Wholly-Owned Subsidiaries of such Person and (ii) any partnership,
association, limited liability company, joint venture or other entity in which
such Person and/or one or more Wholly-Owned Subsidiaries of such Person has or
have a 100% equity interest at such time.
SECTION 11. The Agents.
11.1. Appointment. The Lenders hereby irrevocably designate Bankers
Trust Company as Administrative Agent and as Collateral Agent. Each Lender shall
on the date hereof execute a Power of Attorney in a form to be agreed prior to
the Initial Borrowing Date. Each Lender hereby irrevocably authorizes, and each
holder of any Note by the acceptance of such Note shall be deemed irrevocably to
authorize, the Agents to take such action on their behalf under the provisions
of this Agreement, the other Credit Documents and any other instruments and
agreements referred to herein or therein and to exercise such powers and to
perform such duties hereunder and thereunder as are specifically delegated to or
required of the Agents by the terms hereof and thereof and such other powers as
are reasonably incidental hereto and thereto. The Agents may perform any of
their duties hereunder by or through their officers, directors, agents,
employees or affiliates. The Agents may perform any of their duties hereunder by
or through their officers, directors, agents, employees or affiliates. Each
Lender hereby accepts the pledges, mortgages and fiduciary assignments created
for its benefit under the Security Documents and empowers the Collateral Agent
to enter into such agreements and act as Collateral Agent on behalf and for the
benefit of each Lender. The provisions of this Section 11 are solely for the
benefit of the Agents and the Lenders, and neither any of the Credit Parties nor
any of their respective Subsidiaries or Affiliates shall have any rights as a
third party beneficiary of any of the provisions hereof. In performing its
functions and duties under this Agreement, the Agents shall act solely as agents
of the Lenders and the Agents do not assume and shall not be deemed to have
assumed any obligation or relationship of agency or trust with the Credit
Parties or for any of their respective Subsidiaries or Affiliates.
11.2. Administration of the Collateral. The Collateral Agent shall
administer the Collateral and any Lien thereon for the benefit of the Lenders in
the manner provided herein and in the Security Documents; provided, however,
that in the event of conflict between the provisions relating to administration
of Collateral included in this Agreement and those included in the Security
Documents, the latter shall prevail. The Collateral Agent shall exercise such
rights and remedies with respect to the Collateral as are granted to it
hereunder and under the Security Documents and applicable law and as shall be
directed by the Required Lenders. Upon payment in full of all Obligations under
the Credit Documents, the Agents and their Affiliates shall promptly
76
release any and all Liens, Collateral and other security arrangements entered
into in connection with this Agreement and the transactions contemplated hereby.
11.3. Application of Proceeds. Except as otherwise specifically
provided herein and in the other Credit Documents, the proceeds of any
collection, sale, disposition, foreclosure or other realization of all or any
part of the Collateral shall be applied by the Collateral Agent to the payment
of any and all taxes, expenses and fees (including reasonable attorneys' fees)
incurred by the Collateral Agent in obtaining, taking possession and disposing
of the Collateral, any and all amounts incurred by the Collateral Agent in
connection therewith and any amounts payable to the Collateral Agents under the
Security Documents and the balance of such proceeds after such application by
the Collateral Agent shall be transferred by the Collateral Agent to the
Administrative Agent not later than two Business Days after receipt thereof to
be applied by the Administrative Agent as follows:
(a) to the payment of any amounts payable to the Agents (other than the
Collateral Agent to the extent of any amounts owed and paid to the
Collateral Agent as provided above) under the Credit Documents;
(b) next, any surplus then remaining to the payment of the other
Obligations in the following order of priority:
(i) accrued and unpaid interest in respect of the Bridge Loans;
(ii) outstanding principal due under the Bridge Loans;
(iii) all other unpaid Fees, if any; and
(iv) all other unpaid Obligations, if any;
(c) any surplus remaining after payment of the foregoing amounts shall
be paid to the Credit Parties by the Administrative Agent, subject,
however, to the rights of the holder of any then existing Lien of which the
Collateral Agent has actual notice (without investigation) and the
Collateral Agent has informed in writing the Administrative Agent; it being
understood that the Borrower shall remain liable to the extent of any
deficiency between the amount of the proceeds of the Collateral and the
aggregate amount of the sums referred to in clauses (a) and (b) of this
Section 11.3.
11.4. Nature of Duties. No Agent shall have any duties or
responsibilities except those expressly set forth in this Agreement and in the
other Credit Documents. Neither any of the Agents nor any of their respective
officers, directors, agents, employees or affiliates shall be liable for any
action taken or omitted by them hereunder or under any other Credit Document or
in connection herewith or therewith,
77
unless it shall have been finally determined by a court of competent
jurisdiction in a judgment that has become final in that it is no longer subject
to appeal or other review, that the action taken or omitted was caused by its or
their gross negligence or willful misconduct. The duties of each Agent shall be
mechanical and administrative in nature, in the case of the Collateral Agent, to
the maximum extent permitted under the law governing the Security Documents; no
Agent shall have by reason of this Agreement or any other Credit Document (other
than as specifically provided in the Security Documents pursuant to the
governing law thereof) a fiduciary relationship in respect of any Lender; and
nothing in this Agreement or any other Credit Document, expressed or implied, is
intended to or shall be so construed as to impose upon any Agent any obligations
in respect of this Agreement or any other Credit Document except as expressly
set forth herein or therein.
11.5. Lack of Reliance on Agents. Independently and without reliance
upon any Agent, each Lender and the holder of each Note, to the extent it deems
appropriate, has made and shall continue to make (i) its own independent
investigation of the financial condition and affairs of the Credit Parties in
connection with the making and the continuance of the Bridge Loans and the
taking or not taking of any action in connection herewith and (ii) its own
appraisal of the creditworthiness of the Credit Parties and, except as expressly
provided in this Agreement, no Agent shall have any duty or responsibility,
either initially or on a continuing basis, to provide any Lender with any credit
or other information with respect thereto, whether coming into its possession
before the making of the Bridge Loans or at any time or times thereafter. No
Agent shall be responsible to any Lender for any recitals, statements,
information, representations or warranties herein or in any document,
certificate or other writing delivered in connection herewith or for the
execution, effectiveness, genuineness, validity, enforceability, perfection,
collectibility, priority or sufficiency of this Agreement or any other Credit
Document or the financial condition of the Credit Parties or be required to make
any inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement or any other Credit Document, or the
financial condition of the Credit Parties or the existence or possible existence
of any Default or Event of Default.
11.6. Certain Rights of the Agents. If any Agent shall request
instructions from the Required Lenders (or if the Collateral Agent shall request
instructions from the Administrative Agent) with respect to any act or action
(including failure to act) in connection with this Agreement or any other Credit
Document, the Agents shall be entitled to refrain from such act or taking such
action unless and until the Agents shall have received instructions from the
Required Lenders (and, in the case of the Collateral Agent, from the
Administrative Agent, as the case may be); and the Agents shall not incur
liability to any Lender (and, in the case of the Collateral Agent, to the
Administrative Agent, as the case may be) by reason of so refraining. Without
limiting the foregoing, no Lender shall have any right of action whatsoever
against the Agents as
78
a result of the Agents acting or refraining from acting hereunder or under any
other Credit Document, where such acting or refraining from acting is in
accordance with the instructions of the Required Lenders (and, in the case of
the Collateral Agent, from the Administrative Agent, as the case may be).
11.7. Reliance. The Agents shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message, electronic mail,
cablegram, radiogram, order or other document, telephone message or other
electronic form of communication signed, sent or made by any Person that the
Agents believed to be the proper Person, and upon advice and statements of legal
counsel (including, without limitation, counsel to any Credit Party or any of
their respective Subsidiaries), independent accountants and other experts
selected by the Agents.
11.8. Indemnification. To the extent any Agent is not reimbursed and
indemnified by the Credit Parties, the Lenders will reimburse and indemnify such
Agent in proportion to their respective "percentage" as used in determining the
Required Lenders for and against any and all liabilities, obligations, losses,
damages, penalties, claims, actions, judgments, costs, expenses or disbursements
of whatsoever kind or nature which may be imposed on, asserted against or
incurred by such Agent in performing its duties hereunder or under any other
Credit Document or in any way relating to or arising out of this Agreement or
any other Credit Document; provided, however, that no Lender shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from such
Agent's gross negligence or willful misconduct. If any indemnity furnished to
any Agent for any purpose shall, in the opinion of such Agent be insufficient or
become impaired, such Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished. The agreements in this Section 11.8 shall survive the payment of all
Obligations.
11.9. The Agents in Their Respective Individual Capacities. With
respect to its obligation to make Bridge Loans under this Agreement, each Agent
shall have the rights and powers specified herein for a "Lender" and may
exercise the same rights and powers as though it were not performing the duties
specified herein; and the term "Lenders," "Required Lenders," "holders of Notes"
or any similar terms shall, unless the context clearly otherwise indicates,
include each Agent in its individual capacity. Each Agent and its affiliates may
accept deposits from, lend money to, and generally engage in any kind of
banking, investment banking, trust or other business with, or provide debt
financing, equity capital or other services (including financial advisory
services) to, any Credit Party or any Affiliate of any Credit Party (or any
Person engaged in a similar business with any Credit Party or any Affiliate
thereof) as if they were not performing the duties specified herein, and may
accept fees and other
79
consideration from any Credit Party or any Affiliate of any Credit Party for
services in connection with this Agreement and otherwise without having to
account for the same to the Lenders.
11.10. Holders. The Agents may deem and treat the payee of any Note as
the owner thereof for all purposes hereof unless and until a written notice of
the assignment, transfer or endorsement thereof, as the case may be, shall have
been recorded in the Register, in accordance with Section 12.18. Any request,
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall be conclusive
and binding on any subsequent holder, transferee, assignee or endorsee, as the
case may be, of such Note or of any Note or Notes issued in exchange therefor.
11.11. Resignation by the Agents.
(a) The Administrative Agent may resign from the performance of all its
respective functions and duties hereunder and/or under the other Credit
Documents at any time by giving 15 Business Days' prior written notice to the
Lenders and the Borrower. Such resignation shall take effect upon the
appointment of a successor Administrative Agent pursuant to clauses (b) and (c)
below or as otherwise provided below.
(b) Upon any such notice of resignation by the Administrative Agent,
the Required Lenders shall appoint a successor Administrative Agent hereunder or
thereunder who shall be a commercial bank or trust company reasonably acceptable
to the Borrower.
(c) If a successor Administrative Agent shall not have been so
appointed within such 15 Business Day period, the Administrative Agent with the
consent of the Borrower (which consent shall not be unreasonably withheld or
delayed), shall then appoint a successor Administrative Agent who shall serve as
Administrative Agent hereunder or thereunder until such time, if any, as the
Required Lenders appoint a successor Administrative Agent as provided above.
(d) If no successor Administrative Agent has been appointed pursuant to
clause (b) or (c) above by the 20th Business Day after the date such notice of
resignation was given by the Administrative Agent, the Administrative Agent's
resignation shall become effective and the Required Lenders shall thereafter
perform all the duties of the Administrative Agent hereunder and/or under any
other Credit Document until such time, if any, as the Required Lenders appoint a
successor Administrative Agent as provided above.
80
(e) The Collateral Agent may resign from the performance of all its
respective functions and duties under the Security Documents or be removed as
Collateral Agent in accordance with the applicable provisions of the Security
Documents.
11.12. The Arranger. The Arranger shall have no rights or obligations
under this Agreement other than the rights set forth in Section 12.
11.13. Notice of Default. The Agents shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default unless
(i) in the case of the Administrative Agent, the Administrative Agent has
actually received notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default" and (ii) in the case of the Collateral Agent,
the Collateral Agent has actually received notice from the Administrative Agent
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default." In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall give
prompt notice thereof to the other Lenders, the Borrower and the Collateral
Agent (if received from a Lender) or to the Lenders and the Collateral Agent (if
received from the Borrower).
SECTION 12. Miscellaneous.
12.1. Payment of Expenses, etc. Each Credit Party, jointly and
severally, agrees to: (i) whether or not the transactions herein contemplated
are consummated, pay all reasonable out-of-pocket costs and expenses of the
Administrative Agent (including, without limitation, the reasonable fees and
disbursements of Debevoise & ▇▇▇▇▇▇▇▇, as special U.S. counsel to the
Administrative Agent, Guerrero Olivos ▇▇▇▇▇ y Errazuriz, as special Chilean
counsel to the Administrative Agent, and Walkers, as special Cayman Islands
counsel to the Administrative Agent) in connection with the preparation,
execution and delivery of this Agreement and the other Credit Documents and the
documents and instruments referred to herein and therein and any amendment,
waiver or consent relating hereto or thereto, of the Arranger in connection with
its syndication efforts with respect to this Agreement and of each Agent and
each of the Lenders in connection with the enforcement of this Agreement and the
other Credit Documents and the documents and instruments referred to herein and
therein (including, without limitation, the reasonable fees and disbursements of
counsel for the Administrative Agent, the Collateral Agent and for each of the
Lenders); (ii) pay and hold each of the Lenders harmless from and against any
and all present and future stamp, excise and other similar taxes (including,
without limitation, value added taxes due in respect of interest payments under
the Bridge Loans) with respect to the foregoing matters and save each of the
Lenders harmless from and against any and all liabilities with respect to or
resulting from any delay or omission (other than to the extent attributable to
such Lender) to pay such taxes; and (iii) indemnify each Agent, the
81
Arranger and each Lender, and each of their respective officers, directors,
employees, representatives from and hold each of them harmless against any and
all liabilities, obligations (including removal or remedial actions), losses,
damages, penalties, claims, actions, judgments, suits, costs, expenses and
disbursements (including reasonable attorneys' fees and disbursements) incurred
by, imposed on or assessed against any of them as a result of, or arising out
of, or in any way related to, or by reason of, any investigation, litigation or
other proceeding (whether or not any Agent, the Arranger or any Lender is a
party thereto) related to the entering into and/or performance of this Agreement
or any other Credit Document or the use of proceeds of the Bridge Loans or the
consummation of any of the transactions contemplated hereby, or in any other
Credit Document or the exercise of any of their rights or remedies provided
herein or in the other Credit Documents, including, in each case, without
limitation, the reasonable fees and disbursements of counsel and other
consultants incurred in connection with any such investigation, litigation or
other proceeding (but excluding any losses, liabilities, claims, damages or
expenses to the extent incurred by reason of the gross negligence or willful
misconduct of the Person to be indemnified or its Affiliates or employees). To
the extent that the undertaking to indemnify, pay or hold harmless any Agent,
the Arranger or any Lender set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, the Credit
Parties, jointly and severally, shall make the maximum contribution to the
payment and satisfaction of each of the indemnified liabilities which is
permissible under applicable law.
12.2. Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence and during the continuance of an Event of
Default, each Lender, and each its Affiliates, are hereby authorized at any time
or from time to time, without presentment, demand, protest or other notice of
any kind to any Credit Party or to any other Person, any such notice being
hereby expressly waived, to set off and to appropriate and apply any and all
deposits (general or special) and any other Indebtedness at any time held or
owing by such Lender or such Affiliate (including, without limitation, by
branches and agencies of such Lender or Affiliate wherever located) to or for
the credit or the account of any Credit Party against and on account of the
Obligations and liabilities of the Credit Parties to such Lender or Affiliate
under this Agreement or under any of the other Credit Documents, including,
without limitation, all interests in Obligations purchased by such Lender
pursuant to Section 12.4(b), and all other claims of any nature or description
arising out of or connected with this Agreement or any other Credit Document,
irrespective of whether or not such Lender shall have made any demand hereunder
and although said Obligations, liabilities or claims, or any of them, shall be
contingent or unmatured.
12.3. Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed,
82
telecopied, cabled or delivered: if to any Credit Party or the Arranger, at the
address specified opposite its signature below or in the other relevant Credit
Documents; if to any Lender, at its address specified on Schedule B; if to the
Administrative Agent or the Collateral Agent, at the Notice Office; or, as to
any Credit Party, the Arranger or any Agent at such other address as shall be
designated by such party in a written notice to the other parties hereto, and,
as to each Lender, at such other address as shall be designated by such Lender
in a written notice to the Borrower and the Administrative Agent. All such
notices and communications shall, when mailed, telegraphed, telexed, telecopied
or cabled or sent by overnight courier, be effective when deposited in the
mails, delivered to the telegraph company, cable company or overnight courier,
as the case may be, or sent by telex or telecopier, except that notices and
communications to the Administrative Agent or any Lender shall not be effective
until received.
12.4. Benefit of Agreement; Assignments; Participations.
(a) This Agreement shall be binding upon and inure to the benefit of
and be enforceable by the respective successors and assigns of the parties
hereto; provided, however, that no Credit Party may assign or transfer any of
its rights, obligations or interest hereunder or under any other Credit Document
without the prior written consent of all of the Lenders; and provided, further,
that no Lender may assign or transfer all or any portion of its Commitment
hereunder except as provided in Sections 1.8 and 12.4(b); and provided, further,
that although any Lender may grant participations in its rights hereunder in
accordance with this Section 12.4, such Lender shall remain a "Lender" for all
purposes hereunder and the participant shall not constitute a "Lender"
hereunder; and provided, further, that no Lender shall grant any participation
under which the participant shall have rights to approve any amendment to or
waiver of this Agreement or any other Credit Document except to the extent such
amendment or waiver would (i) extend the final scheduled maturity of any Bridge
Loan or Note in which such participant is participating, or reduce the rate or
extend the time of payment of interest or Fees thereon (except in connection
with a waiver of applicability of any post-default increase in interest rates)
or reduce the principal amount thereof, or increase the amount of the
participant's participation over the amount thereof then in effect (it being
understood that a waiver of any Default or Event of Default shall not constitute
a change in the terms of such participation, and that an increase in any
Commitment or Bridge Loan shall be permitted without the consent of any
participant if the participant's participation is not increased as a result
thereof), (ii) consent to the assignment or transfer by the Borrower of any of
its respective rights and obligations under this Agreement, (iii) release all or
substantially all of the Collateral (except as expressly provided in the
Security Documents) or (iv) release any Guarantor from its obligations under its
Guaranty supporting the Bridge Loans hereunder in which such participant is
participating. In the case of any such participation, the participant shall not
have any rights under this Agreement or any of the other Credit Documents (the
participant's rights against such Lender in respect of such participation to be
those set forth in the agreement
83
executed by such Lender in favor of the participant relating thereto) and all
amounts payable by any Credit Party hereunder shall be determined as if such
Lender had not sold such participation, except that the participant shall be
entitled to the benefits of Sections 1.5, 1.6 and 3.5 of this Agreement to the
extent that such Lender would be entitled to such benefits if the participation
had not been transferred, granted or assigned.
(b) Notwithstanding the foregoing, any Lender (or any Lender together
with one or more other Lenders) may (x) assign all or a portion of its
Commitment and related outstanding Obligations (or, if the Commitments have
terminated, outstanding Obligations) hereunder to (i) its parent company and/or
any affiliate of such Lender which is at least 50% owned by such Lender or its
parent company or to one or more Lenders or (ii) in the case of any Lender that
is a fund that invests in bank loans, any other fund that invests in bank loans
and is managed by the same investment advisor of such Lender or by an Affiliate
of such investment advisor or (y) with prior consent of the Borrower (which
consent shall not be unreasonably withheld or delayed and which consent shall
not be required when an Event of Default has occurred and is continuing), assign
all, or if less than all, a portion equal to at least $3.0 million in the
aggregate for the assigning Lender or assigning Lenders, of such Commitments,
and related outstanding Obligations (or, if the Commitments have terminated,
outstanding Obligations), hereunder to one or more Eligible Transferees, each of
which assignees shall become a party to this Agreement as a Lender by execution
of an Assignment and Assumption Agreement and a Power of Attorney in a form to
be agreed prior to the Initial Borrowing Date; provided, however, that (i) at
such time Schedule A shall be deemed modified to reflect the Commitments and/or
outstanding Bridge Loans, as the case may be, of such new Lender and of the
existing Lenders, (ii) upon the surrender of the relevant Notes by the assigning
Lender (or, upon such assigning Lender indemnifying the Borrower for any lost
Note pursuant to a customary indemnification agreement), new Notes will be
issued, at the Borrower's expense, to such new Lender and to the assigning
Lender upon the request of such new Lender or assigning Lender, such new Notes
to be in conformity with the requirements of Section 1.1(d) (with appropriate
modifications) to the extent needed to reflect the revised Commitments and/or
outstanding Bridge Loans, as the case may be, (iii) the consent of the
Administrative Agent shall be required (which shall not be unreasonably withheld
or delayed) in connection with any assignment to an Eligible Transferee pursuant
to clause (y) above, (iv) the Administrative Agent shall receive at the time of
each such assignment, from the assigning or assignee Lender, the payment of a
non-refundable assignment fee of $3,500 and (v) no such transfer or assignment
will be effective until recorded by the Administrative Agent on the Register
pursuant to Section 12.18. To the extent of any assignment pursuant to this
Section 12.4(b), the assigning Lender shall be relieved of its obligations
hereunder with respect to its assigned Commitment, provided further that upon an
Event of Default or Default any Lender may assign all or a portion of its
Commitment and related outstanding Obligations (or, if the Commitments have
terminated, outstanding Obligations) hereunder to any Person, including any fund
84
that invests in bank loans or any other "accredited investor" (as defined in
Regulation D of the Securities Act of 1933, as amended).
(c) Nothing in this Agreement shall prevent or prohibit any Lender from
pledging its Bridge Loans and Notes hereunder to a Federal Reserve Bank or
Central Bank in support of borrowings made by such Lender from such Federal
Reserve Bank or Central Bank and, with the consent of the Administrative Agent,
any Lender which is a fund may pledge all or any portion of its Bridge Loans and
Notes to its trustee in support of its obligations to its trustee. No pledge
pursuant to this clause (c) shall release the transferor Lender from any of its
obligations hereunder.
(d) Each Lender as of the date of this Agreement represents and
warrants (as to itself only) as of the date of this Agreement that it is a Basel
Bank.
12.5. No Waiver; Remedies Cumulative. No failure or delay on the part
of the Administrative Agent or any Lender in exercising any right, power or
privilege hereunder or under any other Credit Document and no course of dealing
between any Credit Party and the Administrative Agent or any Lender shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege hereunder or under any other Credit Document preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege hereunder or thereunder. The rights, powers and remedies herein or
in any other Credit Document expressly provided are cumulative and not exclusive
of any rights, powers or remedies which the Administrative Agent or any Lender
would otherwise have. No notice to or demand on any Credit Party in any case
shall entitle any Credit Party to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the
Administrative Agent or any Lender to any other or further action in any
circumstances without notice or demand.
12.6. Payments Pro Rata.
(a) Except as otherwise provided in this Agreement or the Fee Letter,
the Administrative Agent agrees that promptly after its receipt of each payment
from or on behalf of any Credit Party in respect of any Obligations of such
Credit Party, it shall distribute such payment to the Lenders (other than any
Lender that has consented in writing to waive its pro rata share of any such
payment) pro rata based upon their respective shares, if any, of the Obligations
with respect to which such payment was received.
(b) Each of the Lenders agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the
85
payment of the principal of, or interest on, the Bridge Loans or Fees, of a sum
which with respect to the related sum or sums received by other Lenders is in a
greater proportion than the total of such Obligation then owed and due to such
Lender bears to the total of such Obligation then owed and due to all of the
Lenders immediately prior to such receipt (an "Excess Amount"), then such Lender
receiving such Excess Amount shall purchase for cash without recourse or
warranty from the other Lenders an interest in the Obligations of the respective
Credit Party to such Lenders in such amount as shall result in a proportional
participation by all of the Lenders in such amount; provided, however, that if
all or any portion of such Excess Amount is thereafter recovered from such
Lender, such purchase shall be rescinded and the purchase price restored to the
extent of such recovery, but without interest.
12.7. Calculations; Computations; Accounting Terms.
(a) The financial statements to be furnished to the Lenders pursuant
hereto shall be made and prepared in accordance with Chilean GAAP, consistently
applied throughout the periods involved (except as set forth in the notes
thereto or as otherwise disclosed in writing by the Borrower to the Lenders);
provided, however, that such financial statements shall also be accompanied by
convenience translations pursuant to which all Peso amounts will be converted
into Dollars both (i) using the Noon Buying Rate as in effect on the last day of
the respective fiscal quarter or year of the Borrower, as the case may be, and
(ii) on the basis provided in Section 12.7(b)(ii).
(b) (i) Notwithstanding anything to the contrary contained in clause
(a) of this Section 12.7, for purposes of determining compliance with any
incurrence tests set forth in Sections 7.1 through 7.7, inclusive, any amounts
so incurred or expended (to the extent incurred or expended in a currency other
than Dollars) shall be converted into Dollars on the basis of the Noon Buying
Rate as in effect on the date of such incurrence or expenditure under any
provision of any such Section that has an aggregate Dollar limitation provided
for therein for any fiscal period, and any incurrences or expenditures
theretofore made during such fiscal period shall be recalculated based on the
Noon Buying Rate on the date on which any additional incurrence or expenditure
is to be made, (ii) for purposes of determining compliance with any other
restriction stated in Dollars in this Agreement, the dollar equivalent amount of
any amounts in any other foreign currency shall be converted on the basis of the
Noon Buying Rate as in effect on the date of determination and (iii) except as
otherwise specifically provided herein, all computations determining compliance
with Sections 7.1 through 7.7, inclusive, shall utilize accounting principles
and policies in conformity with those used to prepare the historical financial
statements delivered to the Lenders but shall be made in accordance with the
requirements of clause (i) or (ii), as the case may be, of this Section 12.7(b).
(c) Interest on LIBOR Loans and Fees shall be computed on the basis of
a year of 360 days and actual days elapsed (including the first day but
excluding the
86
last day) occurring in the period for which payable and interest on Base Rate
Loans shall be computed on the basis of a year of 365 or 366 days, as the case
may be, and actual days elapsed (including the first day but excluding the last
day) occurring in the period for which payable. Notwithstanding the foregoing,
for each day that the Base Rate is calculated by reference to the Federal Funds
Rate, interest on Base Rate Loans shall be computed on the basis of a year of
360 days and actual days elapsed (including the first day but excluding the last
day).
12.8. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
TRIAL.
(a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF
THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW TO THE
EXTENT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR
OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION
AND DELIVERY OF THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT, EACH OF THE
BORROWER AND THE INITIAL GUARANTORS HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS. EACH OF THE BORROWER AND THE INITIAL GUARANTORS HEREBY FURTHER
IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL JURISDICTION
OVER SUCH CREDIT PARTY, AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL ACTION
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENTS BROUGHT
IN ANY OF THE AFOREMENTIONED COURTS, THAT SUCH COURTS LACK PERSONAL JURISDICTION
OVER SUCH CREDIT PARTY. EACH OF THE BORROWER AND THE INITIAL GUARANTORS FURTHER
IRREVOCABLY AGREES THAT SERVICE OF ALL WRITS, PROCESS AND SUMMONSES IN ANY
PROCEEDING OR ANY SUIT, ACTION, PROCEEDING TO ENFORCE OR EXECUTE ANY JUDGMENT
BROUGHT AGAINST IT IN THE STATE OF NEW YORK MAY BE MADE UPON CT CORPORATION
SYSTEM, PRESENTLY LOCATED AT ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇,
WHICH IS HEREBY IRREVOCABLY APPOINTED AGENT OF EACH OF THE BORROWER AND THE
INITIAL GUARANTORS FOR SERVICE OF PROCESS IN THE STATE OF NEW YORK WITH RESPECT
TO THIS AGREEMENT AND THE NOTES AND ALL MATTERS RELATED THERETO AND/OR
CONTEMPLATED THEREBY. EACH OF THE BORROWER AND THE INITIAL GUARANTORS HEREBY
IRREVOCABLY
87
WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES
AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER
OR UNDER ANY OTHER CREDIT DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY
INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY AGENT, ANY
LENDER OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED
BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY CREDIT
PARTY IN ANY OTHER JURISDICTION.
(b) EACH OF THE BORROWER AND THE INITIAL GUARANTORS 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 OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED
TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY, TO THE EXTENT PERMITTED
BY APPLICABLE LAW, 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.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
(d) EACH OF THE BORROWER AND THE INITIAL GUARANTORS HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE RIGHT TO DEMAND THAT
ANY OF THE AGENTS OR ANY OF THE LENDERS POST A PERFORMANCE BOND OR GUARANTY
(EXCEPCION DE ARRAIGO) IN ANY ACTION OR PROCEEDING INITIATED AGAINST ANY SUCH
PARTY IN CHILE AND TO RECUSE WITHOUT CAUSE ANY MEMBERS OF THE COURTS HAVING
JURISDICTION OVER ANY AND ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT.
12.9. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. Delivery of an executed
counterpart of a signature page of this Agreement by telecopier shall be
effective as delivery of a manually executed counterpart of this Agreement. A
complete set of counterparts
88
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.
12.10. Effectiveness. This Agreement shall become effective on the date
(the "Effective Date") on which the Borrower, the Initial Guarantors, each
Agent, the Arranger and each of the Lenders shall have signed a counterpart
hereof (whether the same or different counterparts) and shall have delivered the
same to the Administrative Agent at its Notice Office or, in the case of the
Lenders, shall have given to the Administrative Agent telephonic (confirmed in
writing), written, telex or facsimile notice (actually received) at such office
that the same has been signed and mailed to it. The Administrative Agent will
give the Borrower and each Lender prompt written notice of the occurrence of the
Effective Date.
12.11. Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
12.12. Amendment or Waiver. Neither this Agreement nor any other Credit
Document nor any terms hereof or thereof may be changed, waived, discharged or
terminated unless such change, waiver, discharge or termination is in writing
signed by the respective Credit Parties party thereto and the Required Lenders;
provided, however, that no such change, waiver, discharge or termination shall,
without the consent of each Lender (with Obligations being directly affected in
the case of following clause (i)), (i) extend the final scheduled maturity of
any Bridge Loan or Note or reduce the amount of interest, Fees and other amounts
payable to the Lenders hereunder or extend the time of payment thereof, or
reduce the principal amount thereof (except to the extent repaid in cash), (ii)
release all or substantially all of the Collateral (except as expressly provided
in the Security Documents) under the Security Documents, (iii) release any
Guarantor from its obligations under its Guaranty, (iv) amend, modify or waive
any provision of this Section 12.12 or Section 12.1, 12.2, 12.4, 12.6, 12.7(b)
or 12.13, (v) reduce the percentage specified in the definition of Required
Lenders or (vi) consent to the assignment or transfer by any Credit Party of any
of its rights and obligations under this Agreement; provided, further, that no
such change, waiver, discharge or termination shall (x) increase the Commitment
of any Lender over the amount thereof then in effect without the consent of such
Lender (it being understood that waivers or modifications of conditions
precedent, covenants, Defaults or Events of Default shall not constitute an
increase of the Commitment of any Lender) or (y) without the consent of the
Administrative Agent or the Collateral Agent, as the case may be, amend, modify
or waive any provision of Section 11 as same applies to the Administrative Agent
or the Collateral Agent, or any other provision as same relates to the rights or
obligations of the Administrative Agent or the Collateral Agent.
89
12.13. Survival. All indemnities set forth herein, including, without
limitation, in Sections 1.5, 1.6, 3.5, 11.8, 12.1, 12.6, 12.15 and 12.18, shall
survive the execution, delivery and termination of this Agreement and Notes and
the making and repayment of the Bridge Loans.
12.14. Domicile of Bridge Loans. Each Lender may transfer and carry its
Bridge Loans at, to or for the account of any office, Subsidiary or Affiliate of
such Lender.
12.15. Judgment Currency. Each of the Borrower's and the Initial
Guarantors' obligations hereunder and under the other Credit Documents to make
payments in Dollars shall not be discharged or satisfied by any tender or
recovery pursuant to any judgment expressed in or converted into any currency
other than Dollars, except to the extent that such tender or recovery results in
the effective receipt by the Administrative Agent or the respective Lender of
the full amount of Dollars expressed to be payable to the Administrative Agent
or such Lender under this Agreement or the other Credit Documents. The
obligation of each of the Borrower and the Initial Guarantors to make payments
in Dollars as aforesaid shall be enforceable as an alternative or additional
cause of action for the purpose of recovery in Dollars of the amount, if any, by
which such actual receipt shall fall short of the full amount of Dollars
expressed to be payable in respect of the principal of and interest on the
Bridge Loans and any other amounts due under any other Credit Document, and
shall not be affected by judgment being obtained for any other sums due under
this Agreement or under any other Credit Document. Each of the Borrower and the
Initial Guarantors waives the right to invoke any defense of payment
impossibility.
12.16. Waiver of Sovereign Immunity. Each of the Borrower and the
Guarantors, in respect of itself, its Subsidiaries, its process agents, and its
properties and revenues, hereby irrevocably agrees that, to the extent that such
Credit Party, its Subsidiaries or any of its properties has or may hereafter
acquire any right of immunity, whether characterized as sovereign immunity or
otherwise, from any legal proceedings, whether in the United States, Chile, or
elsewhere, to enforce or collect upon the Bridge Loans or any Credit Document or
any other liability or obligation of such Credit Party or any of its
Subsidiaries related to or arising from the transactions contemplated by any of
the Credit Documents, including, without limitation, immunity from service of
process, immunity from jurisdiction or judgment of any court or tribunal,
immunity from execution of a judgment, and immunity of any of its property from
attachment prior to any entry of judgment, or from attachment in aid of
execution upon a judgment, such Credit Party, for itself and on behalf of its
Subsidiaries, hereby expressly waives any such immunity, and agrees not to
assert any such right or claim in any such proceeding, whether in the United
States, Chile, the Cayman Islands or elsewhere.
90
12.17. English Language. This Agreement and all other Credit Documents
(other than the Security Documents) shall be in the English language, except as
required by Chilean law (in which event certified English translations thereof
shall be provided by the Borrower to each Lender). Except in connection with the
enforcement thereof in Chile as may be required by Chilean law, any non-English
translation of this Agreement or any other Credit Document (other than the
Security Documents) shall have no legal validity. All documents, certificates,
reports or notices to be delivered or communications to be given or made by any
party hereto pursuant to the terms of this Agreement or any other Credit
Document shall be in the English language or, if originally written in another
language, shall be accompanied by an accurate English translation upon which the
other parties hereto shall have the right to rely for all purposes of this
Agreement and the other Credit Documents.
12.18. Register. The Borrower hereby designates the Administrative
Agent to serve as the Borrower's agent, solely for purposes of this Section
12.18, to maintain a register (the "Register") on which it will record the
Commitments from time to time of each of the Lenders, the Bridge Loans made by
each of the Lenders and each repayment in respect of the principal amount of the
Bridge Loans of each Lender. Failure to make any such recordation, or any error
in such recordation, shall not affect the Borrower's obligations in respect of
such Bridge Loans. With respect to any Lender, the transfer of the Commitments
of such Lender and the rights to the principal of, and interest on, any Bridge
Loan made pursuant to such Commitments shall not be effective until such
transfer is recorded on the Register maintained by the Administrative Agent with
respect to ownership of such Commitments and Bridge Loans and prior to such
recordation all amounts owing to the transferor with respect to such Commitments
and Bridge Loans shall remain owing to the transferor. The registration of
assignment or transfer of all or part of any Commitments and Bridge Loans shall
be recorded by the Administrative Agent on the Register only upon the acceptance
by the Administrative Agent of a properly executed and delivered Assignment and
Assumption Agreement pursuant to Section 12.4(b). Coincident with the delivery
of such an Assignment and Assumption Agreement to the Administrative Agent for
acceptance and registration of assignment or transfer of all or part of a Bridge
Loan, the assigning or transferor Lender shall surrender the Note or Notes
evidencing such Bridge Loan, and thereupon one or more new Notes in the same
aggregate principal amount shall be issued to the assigning or transferor Lender
and/or the new Lender and the old Notes shall be returned to the Borrower marked
"cancelled." The Borrower agrees to indemnify the Administrative Agent from and
against any and all losses, claims, damages and liabilities of whatsoever nature
which may be imposed on, asserted against or incurred by the Administrative
Agent in performing its duties under this Section 12.18 other than those
resulting from its gross negligence or willful misconduct.
12.19. Confidentiality. Each of the Lenders and each Agent agrees (on
behalf of itself and each of its Affiliates, directors, officers, employees and
91
representatives) to keep confidential, in accordance with its customary
procedures of handling confidential information of the same nature and in
accordance with safe and sound banking practices, any non-public information
supplied to it by any Credit Party or any of its Subsidiaries pursuant to this
Agreement; provided, however, that nothing herein shall limit the disclosure of
any such information (i) to the extent required by statute, rule, regulation or
judicial process, (ii) to directors, officers, employees, agents, accountants,
counsel and any other advisors of any of the Lenders so long as such Person
confirms it shall keep the non-public information confidential in accordance
with these provisions, (iii) to bank examiners, auditors or accountants or to
any other regulatory agency or body with proper authority (including
nongovernmental regulatory agencies or bodies), (iv) to any Lender or any Agent,
(v) in connection with any litigation to which any one or more of the Lenders or
Agents is a party where disclosure of such information is, in the opinion of
counsel for any Lender or any Agent, necessary or advisable in connection with
any action, claim, suit or proceeding, directly or indirectly, involving or
potentially involving such Lenders or Agents and arising out of, based upon,
relating to or involving this Agreement or any other Credit Document, or any
transactions contemplated hereby or arising hereunder, (vi) to a Subsidiary or
Affiliate of any Lender or any Agent in connection with a transfer permitted by
Section 12.14, (vii) to any assignee or participant (or prospective assignee or
participant) so long as the Lender making such assignment or selling such
participation shall procure that such assignee or participant (or prospective
assignee or participant) first executes and delivers to such Lender an
acknowledgment to the effect that it is bound by the provisions of this Section
12.19, (viii) to any credit rating agency that rates the financial condition of
any Lender or the claims paying ability of any Lender or the financial condition
of the Borrower; provided further, that in no event shall any Lender or Agent be
obligated or required to return any materials furnished by any Credit Party,
(ix) with the consent of the relevant Credit Party or (x) to the extent that
such information has become public other than through a breach of this Section
12.19. The obligations of any assignee that has executed an acknowledgment
pursuant to this Section 12.19 shall be superseded by this Section 12.19 upon
the date upon which such assignee becomes a Lender hereunder pursuant to Section
12.4(b). To the extent disclosure is required under clauses (i), (iii) and (v)
above, each Lender and Agent agrees to use its best efforts to give the Borrower
prompt prior notice thereof.
12.20. Independence. Each Lender is acting hereunder individually.
Nothing herein, and no action taken by the Administrative Agent or any Lender,
shall be construed to constitute them or any of them a partnership, an
association, any other entity or a joint venture. Without limiting the
generality of the foregoing, the Administrative Agent and each Lender shall be
entitled to act independently, whether by court action or otherwise, to enforce
or protect their rights under this Agreement and the Notes, subject, in the case
of each Lender, to the provisions of Section 8 regarding any declaration that
any unmatured obligations of the Borrower hereunder or under the Notes shall be
immediately due and payable upon the occurrence of an Event of Default.
92
[SIGNATURE PAGES FOLLOW]
93
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address:
--------
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ INVERSIONES OEA LIMITADA,
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ as Borrower
Attention: ▇▇▇ ▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
By: /s/ ▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: Attorney-in-fact
STATE OF NEW YORK )
) SS:
COUNTY OF NEW YORK )
On this 28th day of December, before me personally appeared ▇▇▇ ▇▇▇▇▇▇, of
Inversiones OEA Limitada, known to me to be the person that executed this Credit
Agreement and acknowledged to me that he executed the same.
/s/ ▇▇▇▇▇ ▇▇▇▇
---------------
Notary Public
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ LIMITADA, as Principal Guarantor
Attention: ▇▇▇ ▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
By: /s/ ▇▇▇ ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: Attorney-in-fact
STATE OF NEW YORK )
) SS:
COUNTY OF NEW YORK )
On this 28th day of December, before me personally appeared ▇▇▇ ▇▇▇▇▇▇, of
Inversiones Cachagua Limitada, known to me to be the person that executed this
Credit Agreement and acknowledged to me that he executed the same.
/s/ ▇▇▇▇▇ ▇▇▇▇
---------------
Notary Public
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ MERCURY CAYMAN CO. III, LTD.,
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ as Guarantor
Attention: ▇▇▇ ▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
By: /s/ ▇▇▇ ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: Vice President and
Chief Financial Officer
STATE OF NEW YORK )
) SS:
COUNTY OF NEW YORK )
On this 28th day of December, before me personally appeared ▇▇▇ ▇▇▇▇▇▇, of
Mercury Cayman Co. III, Ltd, known to me to be the person that executed this
Credit Agreement and acknowledged to me that he executed the same.
/s/ ▇▇▇▇▇ ▇▇▇▇
---------------
Notary Public
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ MERCURY CAYMAN HOLDCO, LTD.,
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ as Guarantor
Attention: ▇▇▇ ▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
By: /s/ ▇▇▇ ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: Vice President and
Chief Financial Officer
STATE OF NEW YORK )
) SS:
COUNTY OF NEW YORK )
On this 28th day of December, before me personally appeared ▇▇▇ ▇▇▇▇▇▇, of
Mercury Cayman Holdco, Ltd., known to me to be the person that executed this
Credit Agreement and acknowledged to me that he executed the same.
/s/ ▇▇▇▇▇ ▇▇▇▇
--------------
Notary Public
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ BANKERS TRUST COMPANY, as
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Administrative Agent and Collateral
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Agent, and, individually, as Lender
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
STATE OF NEW YORK )
) SS:
COUNTY OF NEW YORK )
On this 28th day of December, before me personally appeared ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, of
Bankers Trust Company, known to me to be the person that executed this Credit
Agreement and acknowledged to me that he executed the same.
/s/ ▇▇▇▇▇ ▇▇▇▇
---------------
Notary Public
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ DEUTSCHE BANK SECURITIES INC.,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ as Arranger
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Director
STATE OF NEW YORK )
) SS:
COUNTY OF NEW YORK )
On this 28th day of December, before me personally appeared ▇▇▇▇▇ ▇▇▇▇▇▇▇, of
Deutsche Bank Securities Inc., known to me to be the person that executed this
Credit Agreement and acknowledged to me that he executed the same.
/s/ ▇▇▇▇▇ ▇▇▇▇
---------------
Notary Public
DEUTSCHE BANK SECURITIES INC.,
as Arranger
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Director
STATE OF NEW YORK )
) SS:
COUNTY OF NEW YORK )
On this 28th day of December, before me personally appeared ▇▇▇▇▇ ▇▇▇▇▇▇▇, of
Deutsche Bank Securities Inc., known to me to be the person that executed this
Credit Agreement and acknowledged to me that he executed the same.
/s/ ▇▇▇▇▇ ▇▇▇▇
---------------
Notary Public
SCHEDULE A
----------
COMMITMENTS
-----------
Bridge Loan
Lender Commitment
------ ----------
Bankers Trust Company $400,000,000
TOTAL: $400,000,000
============
SCHEDULE B
----------
LENDER ADDRESSES
----------------
Lender Address
------ -------
Bankers Trust Company ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇