[EXECUTION VERSION]
================================================================================
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of July 26, 2002
PROGRESS ENERGY, INC.
(Borrower)
and
THE BANKS LISTED ON THE SIGNATURE PAGES HEREOF
(Banks)
and
CITIBANK, N.A.
(Administrative Agent)
and
SUNTRUST BANK
(Issuing Bank)
================================================================================
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
(Lead Arranger)
TABLE OF CONTENTS
Section Page
Article I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01. Certain Defined Terms..........................................1
Section 1.02. Computation of Time Periods...................................12
Section 1.03. Accounting Terms..............................................12
Article II
AMOUNTS AND TERMS OF THE EXTENSIONS OF CREDIT
Section 2.01. The Commitments...............................................12
Section 2.02. The Advances..................................................12
Section 2.03. Making the Advances...........................................12
Section 2.04. Fees..........................................................14
Section 2.05. Reduction of the Commitments..................................14
Section 2.06. Repayment of Advances.........................................15
Section 2.07. Interest on Advances..........................................15
Section 2.08. Additional Interest on Eurodollar Rate Advances...............15
Section 2.09. Interest Rate Determination...................................15
Section 2.10. Voluntary Conversion of Advances..............................17
Section 2.11. Prepayments of Advances.......................................17
Section 2.12. Increased Costs...............................................18
Section 2.13. Illegality....................................................19
Section 2.14. Payments and Computations.....................................19
Section 2.15. Sharing of Payments, Etc......................................20
Section 2.16. Letters of Credit.............................................20
Article III
CONDITIONS OF LENDING
Section 3.01. Conditions Precedent to Initial Extension of Credit...........25
Section 3.02. Conditions Precedent to Each Extension of Credit..............25
Article IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations and Warranties of the Borrower................26
Article V
COVENANTS OF THE COMPANY
Section 5.01. Affirmative Covenants.........................................28
Section 5.02. Negative Covenants............................................30
Article VI
EVENTS OF DEFAULT
Section 6.01. Events of Default.............................................32
Article VII
THE ADMINISTRATIVE AGENT
Section 7.01. Authorization and Action......................................34
Section 7.02. The Administrative Agent's Reliance, Etc......................34
Section 7.03. The Administrative Agent and its Affiliates...................35
Section 7.04. Lender Credit Decision........................................35
Section 7.05. Indemnification...............................................35
Section 7.06. Successor Administrative Agent................................36
Article VIII
MISCELLANEOUS
Section 8.01. Amendments, Etc...............................................36
Section 8.02. Notices, Etc..................................................37
Section 8.03. No Waiver; Remedies...........................................37
Section 8.04. Costs, Expenses, Taxes and Indemnification....................37
Section 8.05. Right of Set-off..............................................40
Section 8.06. Binding Effect................................................40
Section 8.07. Assignments and Participations................................41
Section 8.08. Governing Law.................................................44
Section 8.09. Waiver of Jury Trial..........................................45
Section 8.10. Execution in Counterparts.....................................45
Section 8.11. Severability..................................................45
Section 8.12. Headings......................................................45
Section 8.13. Entire Agreement..............................................45
SCHEDULES
Schedule I - List of Commitments and Applicable Lending Offices
Schedule II - Permitted Existing Indebtedness
EXHIBITS
Exhibit A-1 - Form of Notice of Borrowing
Exhibit A-2 - Form of Notice of Conversion
Exhibit B - Form of Assignment and Acceptance
Exhibit C-1 - Form of Opinion of General Counsel to the Borrower
Exhibit C-2 - Form of Opinion of Special Counsel for the Borrower
Exhibit D - Form of Opinion of Counsel for the Administrative Agent
and the Lead Arranger
Exhibit E - Form of Compliance Certificate
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of July 26, 2002
This AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement") is made by
PROGRESS ENERGY, INC., a North Carolina corporation (the "Borrower"), the banks
listed on the signature pages hereof (the "Banks"), CITIBANK, N.A. ("Citibank"),
as administrative agent (the "Administrative Agent") for the Lenders (as
hereinafter defined), and SUNTRUST BANK, as Issuing Bank (as hereinafter
defined).
RECITALS
WHEREAS, the Borrower, certain banks and the Administrative Agent entered
into the Credit Agreement dated as of November 13, 2001 (the "Original
Agreement"), pursuant to which the lenders thereunder agreed to extend credit to
the Borrower in an aggregate amount at any time outstanding not in excess of
$450,000,000; and
WHEREAS, the Original Agreement was amended pursuant to an Amendment, dated
as of February 13, 2002 (the "Amendment"), among the Borrower and the Lenders
named therein; and
WHEREAS, the Majority Lenders consented to a departure by the Borrower from
certain of the terms of the Original Agreement pursuant to a Consent, dated as
of January 29, 2002 (the "Consent"), among the Borrower and the Lenders named
therein; and
WHEREAS, the parties hereto now wish to amend the Original Agreement, as
modified by the Consent and the Amendment, to provide for the issuance of
Letters of Credit in an aggregate amount not in excess of $125,000,000.
In order to provide for the issuance of such Letters of Credit as well as
to reflect the Consent and the Amendment, the parties hereto now wish to amend
and restate the Original Agreement as herein set forth:
Article I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01. Certain Defined Terms.
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):
"Administrative Agent" has the meaning specified in the preamble to this
Agreement.
"Advance" means an advance by a Lender to the Borrower as part of a
Borrowing and refers to a Base Rate Advance or a Eurodollar Rate Advance, each
of which shall be a "Type" of Advance.
2
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by, or is under common control with such
Person or is a director or officer of such Person.
"Applicable Lending Office" means, with respect to each Lender, (i) such
Lender's Domestic Lending Office in the case of a Base Rate Advance, or (ii)
such Lender's Eurodollar Lending Office, in the case of a Eurodollar Rate
Advance.
"Applicable Margin" means for each Type of Advance at all times during
which any Applicable Rating Level set forth below is in effect, the interest
rate per annum set forth below next to such Applicable Rating Level :
-------------------------- -------------------------- -------------------------
Applicable Margin for Applicable Margin for
Applicable Rating Level Eurodollar Rate Advances Base Rate Advances
-------------------------- -------------------------- -------------------------
1 0.275% 0%
-------------------------- -------------------------- -------------------------
2 0.390% 0%
-------------------------- -------------------------- -------------------------
3 0.625% 0%
-------------------------- -------------------------- -------------------------
4 0.725% 0%
-------------------------- -------------------------- -------------------------
5 0.925% 0%
-------------------------- -------------------------- -------------------------
6 1.250% 0%
-------------------------- -------------------------- -------------------------
provided, that
(i) the Applicable Margins for Eurodollar Rate Advances set forth
above for each Applicable Rating Level shall increase at any time the
aggregate principal amount of Advances outstanding is greater than 33% of
the aggregate Commitments by 0.125% at Levels 1, 2, 3, 4 and 5 and by
0.250% at ▇▇▇▇▇ ▇,
(▇▇) the Applicable Margins set forth above for each Applicable Rating
Level shall increase upon the occurrence and during the continuance of any
Event of Default by 2.0%, and
(iii) any change in the Applicable Margin resulting from a change in
the Applicable Rating Level shall become effective upon the date of
announcement of a change in the ▇▇▇▇▇'▇ Rating or the S&P Rating that
results in a change in the Applicable Rating Level.
"Applicable Rating Level" at any time shall be determined in accordance
with the then-applicable S&P Rating and the then-applicable ▇▇▇▇▇'▇ Rating as
follows:
3
----------------------------------------- -----------------------------------
S&P Rating/▇▇▇▇▇'▇ Rating Applicable Rating Level
----------------------------------------- -----------------------------------
A or higher or A2 or higher 1
----------------------------------------- -----------------------------------
A- or A3 2
----------------------------------------- -----------------------------------
BBB+ or Baa1 3
----------------------------------------- -----------------------------------
BBB or Baa2 4
----------------------------------------- -----------------------------------
BBB- and Baa3 5
----------------------------------------- -----------------------------------
lower than BBB- and Baa3 or unrated 6
----------------------------------------- -----------------------------------
In the event that the S&P Rating and the ▇▇▇▇▇'▇ Rating are not at the same
Applicable Rating Level but differ by only one Applicable Rating Level, then the
higher of the two ratings shall determine the Applicable Rating Level. In the
event that the S&P Rating and the ▇▇▇▇▇'▇ Rating differ by more than one
Applicable Rating Level, then the Applicable Rating Level immediately below the
higher of the two ratings shall be the Applicable Rating Level. The Applicable
Rating Level shall be redetermined on the date of announcement of a change in
the S&P Rating or the ▇▇▇▇▇'▇ Rating.
"Assignment and Acceptance" means an assignment and acceptance entered into
by a Lender and an Eligible Assignee, and accepted by the Administrative Agent,
in substantially the form of Exhibit B hereto.
"Banks" has the meaning specified in the preamble to this Agreement.
"Base Rate" means, for any Interest Period or any other period, a
fluctuating interest rate per annum as shall be in effect from time to time,
which rate per annum shall at all times be equal to the higher from time to time
of:
(i) the rate of interest announced publicly by Citibank in New York,
New York, from time to time, as Citibank's base rate; and
(ii) 1/2 of one percent per annum above the Federal Funds Rate in
effect from time to time.
"Base Rate Advance" means an Advance that bears interest as provided in
Section 2.07(a).
"Base Rate Borrowing" means a Borrowing comprising Base Rate Advances.
"Borrower" has the meaning specified in the preamble to this Agreement.
4
"Borrowing" means a borrowing consisting of simultaneous Advances of the
same Type made by each of the Lenders pursuant to Section 2.02 or Converted
pursuant to Section 2.09 or 2.10.
"Business Day" means a day of the year on which banks are not required or
authorized to close at the principal office of any Lender and, if the applicable
Business Day relates to any Eurodollar Rate Advances, on which dealings are
carried on in the London interbank market.
"Change of Control" means the occurrence, after the date of this Agreement,
of (i) any Person or "group" (within the meaning of Rule 13(d) or 14(d) of the
Securities and Exchange Commission under the Exchange Act), directly or
indirectly, acquiring beneficial ownership of or control over securities of the
Borrower (or other securities convertible into such securities) representing 30%
or more of the combined voting power of all securities of the Borrower entitled
to vote in the election of directors.
"Citibank" has the meaning specified in the preamble to this Agreement.
"Commitment" has the meaning specified in Section 2.01.
"Consent" has the meaning specified in the recitals to this Agreement.
"Consolidated" refers to the consolidation of the accounts of the Borrower
and its subsidiaries in accordance with generally accepted accounting
principles, including principles of consolidation, consistent with those applied
in the preparation of the financial statements referred to in Section 4.01(e).
"Convert", "Conversion" and "Converted" each refers to a conversion of
Advances of one Type into Advances of another Type, or the selection of a new,
or the renewal of the same, Interest Period for Eurodollar Rate Advances,
pursuant to Section 2.09(g) or 2.10.
"CP&L" means the Carolina Power & Light Company.
"Domestic Lending Office" means, with respect to any Lender, the office of
such Lender specified as its "Domestic Lending Office" opposite its name on
Schedule I hereto or in the Assignment and Acceptance pursuant to which it
became a Lender, or such other office of such Lender as such Lender may from
time to time specify to the Borrower and the Administrative Agent.
"Eligible Assignee" means (i) any other Lender or any Affiliate of a Lender
and (ii) (A) any other commercial bank organized under the laws of the United
States, or any State thereof, and having a combined capital and surplus of at
least $250,000,000 (as established in its most recent report of condition to its
primary regulator), (B) a commercial bank organized under the laws of any other
country that is a member of the OECD or has concluded special lending
arrangements with the International Monetary Fund associated with its General
Arrangements to Borrow of the Cayman Islands, or a political subdivision of any
such country, and having a combined capital and surplus of at least $250,000,000
(as established in its most recent report of condition to its primary
regulator); provided that such bank is acting through a branch or agency located
5
in the United States or in the country in which it is organized or another
country that is described in this clause (B), (C) the central bank of any
country that is a member of the OECD or (D) a finance company, insurance company
or other financial institution or fund (whether a corporation, partnership or
other entity) that is engaged in making, purchasing or otherwise investing in
commercial loans in the ordinary course of its business, whose outstanding
unsecured indebtedness is rated AA- or better by S&P or Aa3 or better by Moody's
(or an equivalent rating by another nationally-recognized credit rating agency
of similar standing if neither of such corporations is then in the business of
rating unsecured indebtedness).
"Environmental Laws" means any federal, state or local laws, ordinances or
codes, rules, orders, or regulations relating to pollution or protection of the
environment, including, without limitation, laws relating to hazardous
substances, laws relating to reclamation of land and waterways and laws relating
to emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or wastes
into the environment (including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata) or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollution, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Eurodollar Lending Office" means, with respect to each Lender, the office
of such Lender specified as its "Eurodollar Lending Office" opposite its name on
Schedule I hereto or in the Assignment and Acceptance pursuant to which it
became a Lender (or, if no such office is specified, its Domestic Lending
Office), or such other office of such Lender as such Lender may from time to
time specify to the Borrower and the Administrative Agent.
"Eurodollar Rate" means, for the Interest Period for each Eurodollar Rate
Advance comprising part of the same Borrowing an interest rate per annum equal
to the average (rounded upward to the nearest whole multiple of 1/8 of 1% per
annum, if such average is not such a multiple) of the rates per annum at which
deposits in U.S. dollars are offered by the principal office of each of the
Reference Banks in London, England to prime banks in the London Interbank market
at 11:00 A.M. (London time) two Business Days before the first day of such
Interest Period for a period equal to such Interest Period and in an amount
substantially equal to the amount of such Eurodollar Rate Advance comprising
part of such Borrowing to be outstanding during such Interest Period from such
Reference Bank. The Eurodollar Rate for the Interest Period for each Eurodollar
Rate Advance comprising part of the same Borrowing shall be determined by the
Administrative Agent on the basis of the applicable rates furnished to and
received by the Administrative Agent from the Reference Banks two Business Days
before the first day of such Interest Period, subject, however, to the
provisions of Section 2.09.
"Eurodollar Rate Advance" means an Advance that bears interest as provided
in Section 2.07(b).
6
"Eurodollar Rate Reserve Percentage" of any Lender for the Interest Period
for any Eurodollar Rate Advance means the reserve percentage applicable during
such Interest Period (or if more than one such percentage shall be so
applicable, the daily average of such percentages for those days in such
Interest Period during which any such percentage shall be so applicable) under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for such Lender with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities having a term equal
to such Interest Period.
"Events of Default" has the meaning assigned to that term in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, and the
regulations promulgated thereunder, in each case as amended and in effect from
time to time.
"Extension of Credit" means (i) the making of an Advance or (ii) the
issuance of a Letter of Credit or the amendment of any Letter of Credit having
the effect of extending the stated termination date thereof or increasing the
maximum amount to be drawn thereunder.
"Facility Fee Percentage" means, at all times during which any Applicable
Rating Level set forth below is in effect, the rate per annum set forth below
next to such Applicable Rating Level:
-------------------- -------------------
Applicable Rating Facility Fee
Level Percentage
-------------------- -------------------
1 0.100%
-------------------- -------------------
2 0.110%
-------------------- -------------------
3 0.125%
-------------------- -------------------
4 0.150%
-------------------- -------------------
5 0.200%
-------------------- -------------------
6 0.250%
-------------------- -------------------
provided, that a change in the Facility Fee Percentage resulting from a change
in the Applicable Rating Level shall become effective upon the date of
announcement of a change in the ▇▇▇▇▇'▇ Rating or the S&P Rating that results in
a change in the Applicable Rating Level.
"Federal Funds Rate" means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
7
"First Mortgage Bonds" means those bonds issued from time to time by CP&L
pursuant to the Mortgage.
"Florida Power" means Florida Power Corporation.
"Florida Power Mortgage" means the Indenture, dated as of January 1, 1944,
between Florida Power, Guaranty Trust Company of New York and the Florida
National Bank of Jacksonville, as modified, amended or supplemented from time to
time.
"Florida Power Mortgage Bonds" means those bonds issued from time to time
by Florida Power pursuant to the Florida Power Mortgage.
"FPC" means Florida Progress Corporation.
"GenCo Financing" means up to $500,000,000 original principal amount of
Indebtedness incurred by or created for the benefit of Progress GenCo Ventures,
LLC, an indirect wholly owned Subsidiary of the Borrower, secured by liens and
security interests on the property of Progress Ventures, Inc. and its
Subsidiaries, including Progress GenCo Ventures, LLC, as to which neither the
Borrower nor any Subsidiary of the Borrower that is not also a Subsidiary of
Progress Ventures, Inc. shall be liable, except as otherwise contemplated by the
Consent.
"Guaranty" of any Person means any obligation, contingent or otherwise, of
such Person (i) to pay any Liability of any other Person or to otherwise
protect, or having the practical effect of protecting, the holder of any such
Liability against loss (whether such obligation arises by virtue of such Person
being a partner of a partnership or participant in a joint venture or by
agreement to pay, to keep well, to purchase assets, goods, securities or
services or to take or pay, or otherwise) or (ii) incurred in connection with
the issuance by a third Person of a Guaranty of any Liability of any other
Person (whether such obligation arises by agreement to reimburse or indemnify
such third Person or otherwise). The word "Guarantee" when used as a verb has
the correlative meaning.
"Indebtedness" of any Person means (i) any obligation of such Person for
borrowed money, (ii) any obligation of such Person evidenced by a bond,
debenture, note or other similar instrument, (iii) any obligation of such Person
to pay the deferred purchase price of property or services, except a trade
account payable that arises in the ordinary course of business but only if and
so long as the same is payable on customary trade terms, (iv) any obligation of
such Person as lessee under a capital lease, (v) any Mandatorily Redeemable
Stock of such Person (the amount of such Mandatorily Redeemable Stock to be
determined for this purpose as the higher of the liquidation preference and the
amount payable upon redemption of such Mandatorily Redeemable Stock), (vi) any
obligation of such Person to purchase securities or other property that arises
out of or in connection with the sale of the same or substantially similar
securities or property, (vii) any non-contingent obligation of such Person to
reimburse any other Person in respect of amounts paid under a letter of credit
or other Guaranty issued by such other Person to the extent that such
reimbursement obligation remains outstanding after it becomes non-contingent,
(viii) any Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by) a
mortgage, lien, pledge, charge or other encumbrance on any asset of such Person,
8
(ix) any Liabilities in respect of unfunded vested benefits under plans covered
by Title IV of ERISA, (x) any Synthetic Lease Obligations of such Person and
(xi) any Indebtedness of others Guaranteed by such Person.
"Interest Period" means, for each Eurodollar Rate Advance comprising part
of the same Borrowing, the period commencing on the date of such Advance or the
date of the Conversion of any Advance into such an Advance and ending on the
last day of the period selected by the Borrower pursuant to the provisions below
and, thereafter, each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the last day of the period
selected by the Borrower pursuant to the provisions below. The duration of each
such Interest Period shall be one, two, three or six months, as the Borrower
may, in the Notice of Borrowing given by the Borrower to the Administrative
Agent pursuant to Section 2.03, select; provided, however, that:
(i) the Borrower may not select any Interest Period that ends after
the Termination Date;
(ii) Interest Periods commencing on the same date for Advances
comprising the same Borrowing shall be of the same duration; and
(iii) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such Interest
Period shall be extended to occur on the next succeeding Business Day;
provided that if such extension would cause the last day of such Interest
Period to occur in the next following calendar month, the last day of such
Interest Period shall occur on the next preceding Business Day.
The Administrative Agent shall promptly advise each Lender by or telecopy
transmission of each Interest Period so selected by the Borrower.
"Issuing Bank" shall mean SunTrust Bank, as issuer of Letters of Credit, or
any other Lender that agrees to act as Issuing Bank hereunder.
"LC Commitment" shall mean that portion of the Commitment that may be used
by the Borrower for the issuance of Letters of Credit in an aggregate face
amount not to exceed $125,000,000.
"LC Disbursement" shall mean a payment made by the Issuing Bank pursuant to
a Letter of Credit.
"LC Documents" shall mean the Letters of Credit and all applications,
agreements and instruments relating to the Letters of Credit.
"LC Exposure" shall mean, at any time, the sum of (i) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (ii) the aggregate
amount of all LC Disbursements that have not been reimbursed by or on behalf of
the Borrower at such time. The LC Exposure of any Lender shall be its Pro Rata
Share of the total LC Exposure at such time.
"Lenders" means the Lenders listed on the signature pages hereof and each
Eligible Assignee that shall become a party hereto pursuant to Section 8.07.
9
"Letter of Credit" shall mean any letter of credit issued pursuant to
Section 2.16 by the Issuing Bank for the account of the Borrower.
"Liability" of any Person means any indebtedness, liability or obligation
of or binding upon, such Person or any of its assets, of any kind, nature or
description, direct or indirect, absolute or contingent, due or not due,
contractual or tortious, liquidated or unliquidated, whether arising under
contract, applicable law, or otherwise, whether now existing or hereafter
arising.
"Majority Lenders" means at any time Lenders holding at least 66-2/3% of
the aggregate principal amount of the Advances then outstanding, or, if no such
principal amount is then outstanding, Lenders having at least 66-2/3% of the
Commitments (provided that, for purposes hereof, neither the Borrower, nor any
of its Affiliates, if a Lender, shall be included in (i) the Lenders holding
such amount of the Advances or having such amount of the Commitments or (ii)
determining the aggregate unpaid principal amount of the Advances or the total
Commitments).
"Mandatorily Redeemable Stock" means, with respect to any Person, any share
of such Person's capital stock to the extent that it is (i) redeemable, payable
or required to be purchased or otherwise retired or extinguished, or convertible
into any Indebtedness or other Liability of such Person, (A) at a fixed or
determinable date, whether by operation of a sinking fund or otherwise, (B) at
the option of any Person other than such Person or (C) upon the occurrence of a
condition not solely within the control of such Person, such as a redemption
required to be made out of future earnings or (ii) convertible into Mandatorily
Redeemable Stock.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., or any successor thereto.
"▇▇▇▇▇'▇ Rating" means, on any date of determination, the debt rating most
recently announced by Moody's with respect to the Borrower's long-term senior
unsecured non-credit-enhanced debt.
"Mortgage" means the Mortgage and Deed of Trust, dated as of May 1, 1940,
from CP&L to The Bank of New York (formerly Irving Trust Company) and to
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (▇.▇. ▇▇▇▇▇▇▇▇▇▇, successor), as modified, amended or
supplemented from time to time.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA.
"Notice of Borrowing" has the meaning specified in Section 2.03(a).
"Notice of Conversion" has the meaning specified in Section 2.10.
"OECD" means the Organization for Economic Cooperation and Development.
"Original Agreement" has the meaning specified in the recitals hereto.
"Outstanding Credits" means, on any date of determination, an amount equal
to the sum of (i) the aggregate principal amount of all Advances outstanding on
10
such date plus (ii) the LC Exposure on such date. The "Outstanding Credits" of
any Lender means, on any date of determination, an amount equal to the sum of
(A) the aggregate principal amount of all outstanding Advances made by such
Lender plus (B) such Lender's LC Exposure on such date.
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a foreign state or
political subdivision thereof or any agency of such state or subdivision.
"Plan" means an employee benefit plan (other than a Multiemployer Plan)
maintained for employees of the Borrower or any of its Affiliates and covered by
Title IV of ERISA.
"Progress Capital" means Progress Capital Holdings, Inc.
"Portfolio Transaction" means the sale of Florida Progress's and CP&L's
portfolio of affordable housing investments.
"Pro Rata Share" shall mean, with respect to any Commitment of any Lender
at any time, a percentage, the numerator of which shall be such Lender's
Commitment (or if the Commitments have been terminated or expired or the
Advances have been declared to be due and payable, the Advances made by such
Lender), and the denominator of which shall be the sum of the Commitments of all
Lenders (or if the Commitments have been terminated or expired or the Advances
have been declared to be due and payable, the Advances made by all Lenders).
"Rail Transaction" means the sale of substantially all of the assets or
capital stock of Progress Rail Services, Inc.
"Reference Banks" means Citibank and JPMorgan Chase Bank.
"Register" has the meaning specified in Section 8.07(c).
"Responsible Officer" means the President, any Vice President, the Chief
Financial Officer, the Treasurer, the Controller or any Assistant Treasurer of
the Borrower the signatures of whom, in each case, have been certified to the
Administrative Agent and each other Lender pursuant to Section 3.01(c), or in a
certificate delivered to the Administrative Agent replacing or amending such
certificate. Each Lender may conclusively rely on each certificate so delivered
until it shall have received a copy of a certificate from the Secretary or an
Assistant Secretary of the Borrower amending, canceling or replacing such
certificate.
"S&P" means Standard & Poor's Ratings Group or any successor thereto.
"S&P Rating" means, on any date of determination, the debt rating most
recently announced by S&P with respect to the Borrower's long-term senior
unsecured non-credit-enhanced debt.
"SEC Order" means Order Nos. 35-27440 and 70-9909 of the Securities and
Exchange Commission issued September 20, 2001.
11
"Significant Subsidiary" means CP&L, FPC, Florida Power, Progress Capital
and any other Subsidiary of the Borrower that at any time constitutes a
"significant subsidiary", as such term is defined in Regulation S-X of the
Securities and Exchange Commission as in effect on the date hereof (17 C.F.R.
Part 210).
"Subsidiary" means, with respect to any Person, any corporation or
unincorporated entity of which more than 50% of the outstanding capital stock
(or comparable interest) having ordinary voting power (irrespective of whether
at the time capital stock (or comparable interest) of any other class or classes
of such corporation or entity shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly owned by
said Person (whether directly or through one or more other Subsidiaries).
"Synthetic Lease" means a lease transaction under which the parties intend
that (i) the lease will be treated as an "operating lease" by the lessee
pursuant to Statement of Financial Accounting Standards No. 13, as amended, and
(ii) the lessee will be entitled to various tax and other benefits ordinarily
available to owners (as opposed to lessees) of like property.
"Synthetic Lease Obligations" means, with respect to any Person, the sum of
(i) all remaining rental obligations of such Person as lessee under Synthetic
Leases that are attributable to principal and, without duplication, (ii) all
rental and purchase price payment obligations of such Person under such
Synthetic Leases assuming such Person exercises the option to purchase the lease
property at the end of the lease term.
"Termination Date" means, with respect to a Lender, the earlier to occur of
(i) November 13, 2004 and (ii) the date of termination in whole of the
Commitments pursuant to Section 2.05 or 6.01.
"Termination Event" means (i) a Reportable Event described in Section 4043
of ERISA and the regulations issued thereunder (other than a Reportable Event
not subject to the provision for 30-day notice to the Pension Benefit Guaranty
Corporation under such regulations), or (ii) the withdrawal of the Borrower or
any of its Affiliates from a Plan during a plan year in which it was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA, or (iii) the
filing of a notice of intent to terminate a Plan or the treatment of a Plan
amendment as a termination under Section 4041 of ERISA, or (iv) the institution
of proceedings to terminate a Plan by the Pension Benefit Guaranty Corporation,
or (v) any other event or condition that might constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan.
"Total Capitalization" means the sum of the value of the common stock,
retained earnings, and preferred and preference stock of the Borrower (in each
case, determined in accordance with generally accepted accounting principles
consistent with those applied in the preparation of the financial statements
referred to in Section 4.01(e)), plus Consolidated Indebtedness of the Borrower.
12
Section 1.02. Computation of Time Periods.
In this Agreement in the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and including" and
the words "to" and "until" each means "to but excluding".
Section 1.03. Accounting Terms.
All accounting terms not specifically defined herein shall be construed in
accordance with generally accepted accounting principles consistent with those
applied in the preparation of the financial statements referred to in Section
4.01(e).
Article II
AMOUNTS AND TERMS OF THE EXTENSIONS OF CREDIT
Section 2.01. The Commitments. Each Lender severally agrees, on the terms
and conditions hereinafter set forth, to make Advances to the Borrower and to
purchase participations in Letters of Credit from time to time on any Business
Day during the period from the date hereof to and including the Termination
Date, in an aggregate amount outstanding not to exceed at any time the amount
set forth opposite such Lender's name on Schedule I hereto or, if such Lender
has entered into any Assignment and Acceptance, set forth for such Lender in the
Register maintained by the Administrative Agent pursuant to Section 8.07(c), as
such amount may be reduced pursuant to Section 2.05 (such Lender's
"Commitment"), and the Issuing Bank agrees to issue Letters of Credit for the
account of the Borrower from time to time on any Business Day during the period
from the date hereof until the tenth Business Day prior to the Termination Date
in an aggregate amount not to exceed the LC Commitment.
Section 2.02. The Advances.
(a) Each Borrowing shall be in an aggregate amount not less than
$10,000,000 or an integral multiple of $1,000,000 in excess thereof and shall
consist of Advances of the same Type made on the same day by the Lenders ratably
according to their respective Commitments. Until the Termination Date, within
the limits of each Lender's Commitment, the Borrower may from time to time
borrow, repay pursuant to Section 2.06 or prepay pursuant to Section 2.11(b) and
reborrow under this Section 2.02.
(b) Any Lender may request that any Advances made by it be evidenced by one
or more promissory notes. In such event, the Borrower shall prepare, execute and
deliver to such Lender one or more promissory notes payable to the order of such
Lender (or, if requested by such Lender, to such Lender and its assignees) and
in a form approved by the Administrative Agent.
Section 2.03. Making the Advances.
(a) Each Borrowing shall be made on notice, given not later than 10:00 A.M.
(New York City time) on the day of such proposed Borrowing, in the case of a
Borrowing comprised of Base Rate Advances, or on the third Business Day prior to
the date of the proposed Borrowing, in the case of a Borrowing comprised of
13
Eurodollar Rate Advances, by the Borrower to the Administrative Agent, which
shall give to each Lender prompt notice thereof by telecopier. Each such notice
of a Borrowing (a "Notice of Borrowing") shall be by telecopier, confirmed
promptly in writing, in substantially the form of Exhibit A-1 hereto, specifying
therein the requested (i) date of such Borrowing, (ii) Type of Advances
comprising such Borrowing, (iii) aggregate amount of such Borrowing, and (iv) in
the case of a Borrowing comprised of Eurodollar Rate Advances, the Interest
Period for each such Advance. In the case of a proposed Borrowing comprised of
Eurodollar Rate Advances, the Administrative Agent shall promptly notify each
Lender of the applicable interest rate under Section 2.07(b). Each Lender shall,
before 12:00 P.M. (New York City time) on the date of such Borrowing, make
available for the account of its Applicable Lending Office to the Administrative
Agent at its address referred to in Section 8.02, in same day funds, such
Lender's ratable portion of such Borrowing. After the Administrative Agent's
receipt of such funds and upon fulfillment of the applicable conditions set
forth in Article III, the Administrative Agent will make such funds available to
the Borrower at the Administrative Agent's aforesaid address.
(b) Each Notice of Borrowing shall be irrevocable and binding on the
Borrower and, in respect of any Borrowing comprised of Eurodollar Rate Advances,
the Borrower shall indemnify each Lender against any loss or expense incurred by
such Lender as a result of any failure by the Borrower to fulfill on or before
the date specified for such Borrowing the applicable conditions set forth in
Article III, including, without limitation, any loss (including loss of
anticipated profits) or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund the
Advance to be made by such Lender as part of such Borrowing when such Advance,
as a result of such failure, is not made on such date.
(c) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's ratable portion of such
Borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the date of such Borrowing in
accordance with subsection (a) of this Section 2.03 and the Administrative Agent
may, in reliance upon such assumption, make available to the Borrower on such
date a corresponding amount. If and to the extent such Lender shall not have so
made such ratable portion available to the Administrative Agent, such Lender and
the Borrower severally agree to repay to the Administrative Agent (without
duplication), forthwith on demand, such corresponding amount, together with
interest thereon for each day from the date such amount is made available to the
Borrower until the date such amount is repaid to the Administrative Agent, at
(x) in the case of the Borrower, the interest rate applicable at the time to
Advances comprising such Borrowing and (y) in the case of such Lender, the
Federal Funds Rate. If such Lender shall repay to the Administrative Agent such
corresponding amount, such amount so repaid shall constitute such Lender's
Advance as part of such Borrowing for purposes of this Agreement.
(d) The failure of any Lender to make the Advance to be made by it as part
of any Borrowing shall not relieve any other Lender of its obligation, if any,
hereunder to make its Advance on the date of such Borrowing, but no Lender shall
be responsible for the failure of any other Lender to make the Advance to be
made by such other Lender on the date of any Borrowing.
14
(e) If, for any reason, a Borrowing is not made on the date specified in
any Notice of Borrowing, the Administrative Agent hereby agrees to repay to each
Lender the amount, if any, that such Lender has made available to the
Administrative Agent as such Lender's ratable portion of such Borrowing,
together with interest thereon for each day from the date such amount is made
available to the Administrative Agent until the date such amount is repaid to
such Lender, at the Federal Funds Rate.
Section 2.04. Fees.
(a) The Borrower agrees to pay to the Administrative Agent for the account
of each Lender a facility fee on each Lender's Commitment, irrespective of
usage, from the date hereof, in the case of each Bank, and from the effective
date specified in the Assignment and Acceptance pursuant to which it became a
Lender, in the case of each other Lender, until the Termination Date at the rate
per annum equal to the Facility Fee Percentage from time to time in effect. Such
fee shall be calculated on the basis of actual number of days elapsed in a year
of 365 or 366 days. Such fee shall be payable quarterly in arrears on the last
day of each March, June, September and December during the term of such Lender's
Commitment, and on the Termination Date.
(b) The Borrower agrees to pay to the Administrative Agent an agency fee in
such amounts and payable at such times, as shall be agreed to between them in
writing.
(c) The Borrower agrees to pay to the Administrative Agent for the account
of each Lender a letter of credit fee at a rate per annum equal to the
Applicable Margin for Eurodollar Rate Advances in effect from time to time on
the average daily amount of each such Lender's LC Exposure from the date hereof
until the later to occur of the Termination Date and the date on which there is
no amount remaining available to be drawn under any Letter of Credit. Such fee
shall be calculated on the basis of actual number of days elapsed in a year of
365 or 366 days. Such fee shall be payable quarterly in arrears on the last day
of each March, June, September and December and on the later to occur of the
Termination Date and the date on which there is no amount remaining available to
be drawn under any Letter of Credit.
(d) The Borrower agrees to pay to the Issuing Bank for its own account a
fronting fee and such other customary fees relating to the issuance and
maintenance of Letters of Credit, in such amounts and payable at such times as
shall be agreed between them in writing.
Section 2.05. Reduction of the Commitments.
The Borrower shall have the right, upon at least three Business Days'
notice to the Administrative Agent, irrevocably to terminate in whole or reduce
ratably in part the unused portions of the respective Commitments of the
Lenders; provided that the aggregate amount of the Commitments of the Lenders
shall not be reduced to an amount that is less than the Outstanding Credits; and
provided, further, that each partial reduction of Commitments shall be in the
aggregate amount of $10,000,000 or an integral multiple of $1,000,000 in excess
thereof. Once terminated or reduced, the Commitments may not be reinstated.
15
Section 2.06. Repayment of Advances.
The Borrower shall repay the principal amount of each Advance made by each
Lender on the Termination Date.
Section 2.07. Interest on Advances.
The Borrower shall pay interest on the unpaid principal amount of each
Advance made by each Lender from the date of such Advance until such principal
amount shall be paid in full, at the following rates per annum:
(a) Base Rate Advances. If such Advance is a Base Rate Advance, a rate per
annum equal at all times to the Base Rate in effect from time to time, plus the
Applicable Margin, payable quarterly in arrears on the last day of each March,
June, September and December and on the date such Base Rate Advance shall be
paid in full; provided, however, that if and for so long as an Event of Default
has occurred and is continuing, interest on the unpaid principal amount of each
Base Rate Advance shall be payable on demand.
(b) Eurodollar Rate Advances. If such Advance is a Eurodollar Rate Advance,
a rate per annum equal at all times during each Interest Period for such Advance
to the sum of the Eurodollar Rate for such Interest Period, plus the Applicable
Margin for such Eurodollar Rate Advance in effect from time to time, payable on
the last day of such Interest Period and, if such Interest Period for such
Advance has a duration of more than three months, on each day that occurs during
such Interest Period every three months from the first day of such Interest
Period; provided, however, that if and for so long as an Event of Default has
occurred and is continuing, interest on the unpaid amount of each Eurodollar
Rate Advance shall be payable on demand.
Section 2.08. Additional Interest on Eurodollar Rate Advances.
The Borrower shall pay to each Lender additional interest on the unpaid
principal amount of each Eurodollar Rate Advance of such Lender, from the date
of such Advance until such principal amount is paid in full, at an interest rate
per annum equal at all times to the remainder obtained by subtracting (i) the
Eurodollar Rate for the Interest Period for such Advance from (ii) the rate
obtained by dividing such Eurodollar Rate by a percentage equal to 100% minus
the Eurodollar Rate Reserve Percentage of such Lender for such Interest Period,
payable on each date on which interest is payable on such Advance. All claims
for such additional interest shall be submitted by such Lender to the Borrower
(with a copy to the Administrative Agent) as soon as is reasonably possible and
in all events within 90 days after the first day of such Interest Period;
provided, however, that if a claim is not submitted to the Borrower within such
90-day period, such Lender shall thereby waive its claim to such additional
interest incurred during such 90-day period but not to any such additional
interest incurred thereafter. A certificate as to the amount of such additional
interest, submitted to the Borrower (with a copy to the Administrative Agent) by
such Lender, shall be conclusive and binding for all purposes, absent manifest
error.
Section 2.09. Interest Rate Determination.
(a) Each Reference Bank agrees to furnish to the Administrative Agent
timely information for the purpose of determining the Eurodollar Rate. If any
16
one or more of the Reference Banks shall not furnish such timely information to
the Administrative Agent for determination of any such interest rate, the
Administrative Agent shall determine such interest rate on the basis of timely
information furnished by the remaining Reference Banks.
(b) The Administrative Agent shall give prompt notice to the Borrower and
the Lenders of the applicable interest rate determined by the Administrative
Agent for purposes of Section 2.07(a) or (b), and the applicable rate, if any,
furnished by each Reference Bank for determining the applicable interest rate
under Section 2.07(b).
(c) If fewer than two Reference Banks furnish timely information to the
Administrative Agent for determining the Eurodollar Rate for any Eurodollar Rate
Advances,
(i) the Administrative Agent shall forthwith notify the Borrower and
the Lenders that the interest rate cannot be determined for such Eurodollar
Rate Advances,
(ii) each such Advance will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base Rate Advance (or if
such Advance is then a Base Rate Advance, will continue as a Base Rate
Advance), and
(iii) the obligation of the Lenders to make, or to Convert Advances
into, Eurodollar Rate Advances shall be suspended until the Administrative
Agent shall notify the Borrower and the Lenders that the circumstances
causing such suspension no longer exist.
(d) If, with respect to any Eurodollar Rate Advances, the Majority Lenders
notify the Administrative Agent that the Eurodollar Rate for any Interest Period
for such Advances will not adequately reflect the cost to such Majority Lenders
of making, funding or maintaining their respective Eurodollar Rate Advances for
such Interest Period, the Administrative Agent shall forthwith so notify the
Borrower and the Lenders, whereupon
(i) each Eurodollar Rate Advance will automatically, on the last day
of the then existing Interest Period therefor, Convert into a Base Rate
Advance, and
(ii) the obligation of the Lenders to make, or to Convert Advances
into, Eurodollar Rate Advances shall be suspended until the Administrative
Agent shall notify the Borrower and the Lenders that the circumstances
causing such suspension no longer exist.
(e) If the Borrower shall fail to select the duration of any Interest
Period for any Eurodollar Rate Advances in accordance with the provisions
contained in the definition of "Interest Period" in Section 1.01, the
Administrative Agent will forthwith so notify the Borrower and the Lenders and
such Advances will automatically, on the last day of the then existing Interest
Period therefor, Convert into Base Rate Advances.
(f) On the date on which the aggregate unpaid principal amount of Advances
comprising any Borrowing shall be reduced, by prepayment or otherwise, to less
than $20,000,000, such Advances shall, if they are Advances of a Type other than
Base Rate Advances, automatically Convert into Base Rate Advances, and on and
after such date the right of the Borrower to Convert such Advances into Advances
17
of a Type other than Base Rate Advances shall terminate; provided, however, that
if and so long as each such Advance shall be of the same Type and have the same
Interest Period as Advances comprising another Borrowing or other Borrowings,
and the aggregate unpaid principal amount of all such Advances shall equal or
exceed $20,000,000, the Borrower shall have the right to continue all such
Advances as, or to Convert all such Advances into, Advances of such Type having
such Interest Period.
(g) If an Event of Default has occurred and is continuing, (i) each
Eurodollar Rate Advance will automatically, on the last day of the then existing
Interest Period therefor, Convert into a Base Rate Advance and (ii) the
obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended.
Section 2.10. Voluntary Conversion of Advances.
The Borrower may, on any Business Day prior to the Termination Date, upon
notice given to the Administrative Agent not later than 10:00 A.M. (New York
City time) on the third Business Day prior to the date of the proposed
Conversion, in the case of any proposed Conversion into Eurodollar Rate
Advances, and on the date of the proposed Conversion, in the case of any
proposed Conversion into Base Rate Advances, and subject to the provisions of
Sections 2.09 and 2.13, Convert all Advances of one Type comprising the same
Borrowing into Advances of another Type; provided, however, that any Conversion
of any Eurodollar Rate Advances into Advances of another Type shall be made on,
and only on, the last day of an Interest Period for such Eurodollar Rate
Advances, except as otherwise provided in Section 2.13. Each such notice of a
Conversion (a "Notice of Conversion") shall be by telecopier, confirmed promptly
in writing, in substantially the form of Exhibit A-2 hereto and shall, within
the restrictions specified above, specify (i) the date of such Conversion, (ii)
the aggregate amount of, Type of, and Interest Periods applicable to the
Advances to be Converted, (iii) the Type of Advance to which such Advances (or
portions thereof) are proposed to be Converted, and (iv) if such Conversion is
into or with respect to Eurodollar Rate Advances, the duration of the Interest
Period for each such Advance.
Section 2.11. Prepayments of Advances.
(a) The Borrower shall have no right to prepay any principal amount of any
Advances other than as provided in subsection (b) below.
(b) The Borrower may, upon notice given to the Administrative Agent at
least two Business Days prior to the proposed prepayment, in the case of any
Eurodollar Rate Advance, and on the date of the proposed prepayment, in the case
of any Base Rate Advance, and if such notice is given the Borrower shall, prepay
the outstanding principal amounts of the Advances comprising the same Borrowing
in whole or ratably in part, together with accrued interest to the date of such
prepayment on the amount prepaid and, in the case of any Eurodollar Rate
Advance, any amount payable pursuant to Section 8.04(b); provided, however, that
(i) each partial prepayment shall be in an aggregate principal amount not less
than $5,000,000 and in integral multiples of $1,000,000 in excess thereof and
(ii) in the case of any such prepayment of a Eurodollar Rate Advance, the
Borrower shall be obligated to reimburse the Lenders in respect thereof pursuant
to Section 8.04(b) on the date of such prepayment.
18
Section 2.12. Increased Costs.
(a) If, due to either (i) the introduction of or any change (other than any
change by way of imposition or increase of reserve requirements, in the case of
Eurodollar Rate Advances, included in the Eurodollar Rate Reserve Percentage),
in or in the interpretation of any law or regulation, or (ii) the compliance
with any guideline or request from any central bank or other governmental
authority (whether or not having the force of law), there shall be any increase
in the cost to any Lender of agreeing to make or making, funding or maintaining
Eurodollar Rate Advances or any increase in the cost to such Lender or the
Issuing Bank of participating in or issuing any Letter of Credit, then the
Borrower shall from time to time, upon demand by such Lender or the Issuing Bank
(with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender or Issuing Bank additional
amounts sufficient to reimburse such Lender or Issuing Bank for such increased
cost. All claims for increased cost shall be submitted by such Lender or Issuing
Bank to the Borrower (with a copy to the Administrative Agent) as soon as is
reasonably possible and in all events within 90 days after such introduction,
such change, or the beginning of such compliance, the occurrence of which
resulted in such increased cost, and the Borrower shall make such payment within
five Business Days after notice of such claim is received; provided, however,
that if a claim is not submitted to the Borrower within such 90-day period, such
Lender or Issuing Bank shall thereby waive its claim to such increased cost
incurred during such 90-day period but not to any such increased cost incurred
thereafter. A certificate as to the amount of such increased cost, submitted to
the Borrower (with a copy to the Administrative Agent) by such Lender or Issuing
Bank, shall be conclusive and binding for all purposes, absent manifest error.
(b) If any Lender or the Issuing Bank determines that compliance with any
law or regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) affects or would
affect the amount of capital required or expected to be maintained by such
Lender or Issuing Bank or any corporation controlling such Lender or Issuing
Bank and that the amount of such capital is increased by or based upon the
existence of such Lender's commitment to lend or participate in Letters of
Credit or the obligation of Issuing Bank to issue Letters of Credit hereunder
and other commitments of this type, then, upon demand by such Lender or the
Issuing Bank (with a copy of such demand to the Administrative Agent), the
Borrower shall immediately pay to the Administrative Agent for the account of
such Lender or Issuing Bank, from time to time as specified by such Lender or
Issuing Bank, additional amounts sufficient to compensate such Lender or Issuing
Bank or such corporation in the light of such circumstances, to the extent that
such Lender or Issuing Bank reasonably determines such increase in capital to be
allocable to the existence of such Lender's commitment to lend or participate in
Letters of Credit or the obligation of the Issuing Bank to issue Letters of
Credit hereunder. All claims for such additional amounts shall be submitted by
such Lender or Issuing Bank (with a copy to the Administrative Agent) as soon as
is reasonably possible and in all events within 90 days after such determination
by such Lender or Issuing Bank, and the Borrower shall make such payment within
five Business Days after notice of such claim is received; provided, however,
that if a claim is not submitted to the Borrower within such 90-day period, such
Lender or Issuing Bank shall thereby waive its claim to such additional amounts
incurred during such 90-day period but not to any such additional amounts
incurred thereafter. A certificate as to such amounts submitted to the Borrower
19
and the Administrative Agent by such Lender or Issuing Bank shall be conclusive
and binding for all purposes, absent manifest error.
Section 2.13. Illegality.
Notwithstanding any other provision of this Agreement, if any Lender shall
notify the Administrative Agent that the introduction of, any change in or in
the interpretation of any law or regulation makes it unlawful, or any central
bank or other governmental authority asserts that it is unlawful, for such
Lender or its Eurodollar Lending Office to perform its obligations hereunder to
make Eurodollar Rate Advances or to fund or maintain Eurodollar Rate Advances
hereunder, (i) the obligation of the Lenders to make Eurodollar Rate Advances or
to Convert Advances into Eurodollar Rate Advances shall be suspended until the
Administrative Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist, and (ii) the Borrower
shall forthwith prepay in full all Eurodollar Rate Advances of all Lenders then
outstanding, together with interest accrued thereon, unless the Borrower, within
five Business Days of notice from the Administrative Agent, Converts all
Eurodollar Rate Advances of all Lenders then outstanding into Advances of
another Type in accordance with Section 2.10.
Section 2.14. Payments and Computations.
(a) The Borrower shall make each payment hereunder, without condition or
deduction for any counterclaim, defense, recoupment or setoff, not later than
11:00 A.M. (New York City time) on the day when due in U.S. dollars to the
Administrative Agent at its address referred to in Section 8.02 in same day
funds. The Administrative Agent will promptly thereafter cause to be distributed
like funds relating to the payment of principal or interest or fees (other than
pursuant to Section 2.03(c), 2.04(d), 2.08 or 2.12) ratably to the Lenders for
the account of their respective Applicable Lending Offices, and like funds
relating to the payment of any other amount payable to the Issuing Bank or to
any Lender to such Lender for the account of its Applicable Lending Office, in
each case to be applied in accordance with the terms of this Agreement. Upon its
acceptance of an Assignment and Acceptance and recording of the information
contained therein in the Register pursuant to Section 8.07(d), from and after
the effective date specified in such Assignment and Acceptance, the
Administrative Agent shall make all payments hereunder in respect of the
interest assigned thereby to the Lender assignee thereunder, and the parties to
such Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves.
(b) All computations of interest based on the base rate referred to in
clause (i) of the definition of Base Rate shall be made by the Administrative
Agent on the basis of a year of 365 or 366 days, as the case may be, and all
computations of interest based on the Eurodollar Rate or Federal Funds Rate or
of fees payable hereunder shall be made by the Administrative Agent, and all
computations of interest pursuant to Section 2.08 shall be made by a Lender, on
the basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period of
which such interest or fees are payable. Each determination by the
Administrative Agent (or, in the case of Section 2.08, by a Lender) of an
interest rate hereunder shall be conclusive and binding for all purposes.
20
(c) Whenever any payment hereunder shall be stated to be due on a day other
than a Business Day, such payment shall be made on the next succeeding Business
Day, and such extension of time shall in such case be included in the
computation of payment of interest or fees, as the case may be; provided,
however, that if such extension would cause payment of interest on or principal
of Eurodollar Rate Advances to be made in the next following calendar month,
such payment shall be made on the next preceding Business Day.
(d) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Lenders hereunder
that the Borrower will not make such payment in full, the Administrative Agent
may assume that the Borrower has made such payment in full to the Administrative
Agent on such date and the Administrative Agent may, in reliance upon such
assumption, cause to be distributed to each Lender on such due date an amount
equal to the amount then due such Lender. If and to the extent the Borrower
shall not have so made such payment in full to the Administrative Agent, each
Lender shall repay to the Administrative Agent forthwith on demand such amount
distributed to such Lender, together with interest thereon for each day from the
date such amount is distributed to such Lender until the date such Lender repays
such amount to the Administrative Agent at the Federal Funds Rate.
Section 2.15. Sharing of Payments, Etc.
If any Lender shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise) on account of the
Advances made by it (other than pursuant to Section 2.03(c), 2.08 or 2.12) in
excess of its ratable share of payments on account of the Extensions of Credit
obtained by all the Lenders, such Lender shall forthwith purchase from the other
Lenders such participation in the Extensions of Credit made by them as shall be
necessary to cause such purchasing Lender to share the excess payment ratably
with each of them; provided, however, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Lender, such purchase from
each Lender shall be rescinded and such Lender shall repay to the purchasing
Lender the purchase price to the extent of such recovery, together with an
amount equal to such Lender's ratable share (according to the proportion of (i)
the amount of such Lender's required repayment to (ii) the total amount so
recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered.
The Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 2.15 may, to the fullest extent permitted by
law, exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.
Section 2.16. Letters of Credit.
(a) From time to time and on any Business Day during the period from the
date hereof to the tenth Business Day preceding the Termination Date, the
Issuing Bank, in reliance upon the agreements of the other Lenders pursuant to
subsection (d) of this Section 2.16, agrees to issue, at the request of the
Borrower, Letters of Credit for the account of the Borrower on the terms and
conditions hereinafter set forth; provided, that (i) each Letter of Credit shall
expire on the earlier of (A) the date one year after the date of issuance of
such Letter of Credit (or in the case of any renewal or extension thereof, one
year after such renewal or extension) and (B) the date that is five Business
21
Days prior to the Termination Date; (ii) each Letter of Credit shall be in a
stated amount of at least $25,000; and (iii) the Borrower may not request any
Extension of Credit relating to a Letter of Credit if, after giving effect to
such Extension of Credit, (X) the aggregate LC Exposure would exceed the LC
Commitment or (Y) the aggregate Outstanding Credits would exceed the
Commitments. Upon each Extension of Credit relating to a Letter of Credit, each
Lender shall be deemed, and hereby irrevocably and unconditionally agrees, to
purchase from the Issuing Bank without recourse a participation in such Letter
of Credit equal to such Lender's Pro Rata Share of the aggregate amount
available to be drawn under such Letter of Credit. Each Letter of Credit shall
utilize the Commitment of each Lender by an amount equal to the amount of such
participation.
(b) To request an Extension of Credit relating to a Letter of Credit, the
Borrower shall give the Issuing Bank and the Administrative Agent irrevocable
written notice at least three Business Days prior to the requested date of such
Extension of Credit specifying the date (which shall be a Business Day) on which
such Extension of Credit is to occur, the expiration date of such Letter of
Credit, the amount of such Letter of Credit, the name and address of the
beneficiary thereof and such other information as shall be necessary to prepare,
amend, renew or extend such Letter of Credit. In addition to the satisfaction of
the conditions in Section 3.02, such Extension of Credit will be subject to the
further conditions that such Letter of Credit shall be in such form and contain
such terms as the Issuing Bank shall approve and that the Borrower shall have
executed and delivered any additional applications, agreements and instruments
relating to such Extension of Credit as the Issuing Bank shall reasonably
require; provided, that in the event of any conflict between such applications,
agreements or instruments and this Agreement, the terms of this Agreement shall
control.
(c) At least two Business Days prior to each Extension of Credit relating
to a Letter of Credit, the Issuing Bank will confirm with the Administrative
Agent (by telephone or in writing) that the Administrative Agent has received
such notice and, if it has not, the Issuing Bank will provide the Administrative
Agent with a copy thereof. Unless the Issuing Bank has received notice from the
Administrative Agent on or before the Business Day immediately preceding the
date on which the Issuing Bank is to make the requested Extension of Credit
relating to such Letter of Credit directing the Issuing Bank not to make such
Extension of Credit because such Extension of Credit is not then permitted
hereunder because of the limitations set forth in subsection (a) of this Section
2.16, or that one or more conditions specified in Section 3.02 are not then
satisfied, then, subject to the terms and conditions hereof, the Issuing Bank
shall, on the requested date, make such Extension of Credit in accordance with
the Issuing Bank's usual and customary business practices.
(d) The Issuing Bank shall examine all documents purporting to represent a
demand for payment under a Letter of Credit promptly following its receipt
thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent
(i) of such demand for payment and (ii) whether the Issuing Bank has made or
will make a LC Disbursement thereunder; provided, that any failure to give or
delay in giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Bank and the Lenders with respect to such LC Disbursement.
The Borrower shall be irrevocably and unconditionally obligated to reimburse the
Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of
such drawing, without presentment, demand or other formalities of any kind.
Unless the Borrower shall have notified the Issuing Bank and the Administrative
22
Agent prior to 10:00 a.m. on the Business Day immediately prior to the date on
which such drawing is honored that the Borrower intends to reimburse the Issuing
Bank for the amount of such drawing in funds other than from the proceeds of
Advances, the Borrower shall be deemed to have timely given a Notice of
Borrowing to the Administrative Agent requesting a Borrowing compromising Base
Rate Advances on the date on which such drawing is honored in the amount payable
to the Issuing Bank in respect of such LC Disbursement; provided, that for
purposes solely of such Borrowing, the conditions precedents set forth in
Section 3.02 hereof shall not be applicable. The Administrative Agent shall
notify the Lenders of such Borrowing in accordance with Section 2.03(a), and
each Lender shall make the proceeds of its Base Rate Advance included in such
Borrowing available to the Administrative Agent for the account of the Issuing
Bank in accordance with Section 2.03(a). The proceeds of such Borrowing shall be
applied directly by the Administrative Agent to reimburse the Issuing Bank for
such LC Disbursement.
(e) If for any reason a Borrowing may not be (as determined in the sole
discretion of the Administrative Agent), or is not, made in accordance with the
foregoing provisions, then each Lender shall be obligated to fund the
participation that such Lender purchased pursuant to subsection (a) in an amount
equal to its Pro Rata Share of such LC Disbursement on and as of the date on
which such Borrowing should have occurred. Each Lender's obligation to fund its
participation shall be absolute and unconditional and shall not be affected by
any circumstance, including without limitation (i) any setoff, counterclaim,
recoupment, defense or other right that such Lender or any other Person may have
against the Issuing Bank or any other Person for any reason whatsoever, (ii) the
existence of an Event of Default or the termination of the Commitments, (iii)
any adverse change in the condition (financial or otherwise) of the Borrower or
any of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or
any other Lender, (v) any amendment, renewal or extension of any Letter of
Credit or (vi) any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing. On the date that such participation is
required to be funded, each Lender shall promptly transfer, in immediately
available funds, the amount of its participation to the Administrative Agent for
the account of the Issuing Bank. Whenever, at any time after the Issuing Bank
has received from any such Lender the funds for its participation in a LC
Disbursement, the Issuing Bank (or the Administrative Agent on its behalf)
receives any payment on account thereof, the Administrative Agent or the Issuing
Bank, as the case may be, will distribute to such Lender its Pro Rata Share of
such payment; provided, that if such payment is required to be returned for any
reason to the Borrower or to a trustee, receiver, liquidator, custodian or
similar official in any bankruptcy proceeding, such Lender will return to the
Administrative Agent or the Issuing Bank any portion thereof previously
distributed by the Administrative Agent or the Issuing Bank to it.
(f) To the extent that any Lender shall fail to pay when due any amount
required to be paid pursuant to subsection (d) of this Section 2.16, such Lender
shall pay interest to the Issuing Bank (through the Administrative Agent) on
such amount from the date such amount became due and payable to the date such
payment is made at a rate per annum equal to the Federal Funds Rate; provided,
that if such Lender shall fail to make such payment to the Issuing Bank three
Business Days after the date such amount became due and payable, then,
retroactively to such date, such Lender shall pay interest on such amount at a
rate per annum equal to the Base Rate in effect from time to time plus 2%.
23
(g) If any Event of Default shall occur and be continuing, on the Business
Day that the Borrower receives notice from the Administrative Agent or the
Majority Lenders demanding the deposit of cash collateral pursuant to this
paragraph, the Borrower shall deposit in an account with the Administrative
Agent, in the name of the Administrative Agent and for the benefit of the
Issuing Bank and the Lenders, an amount in cash equal to the LC Exposure as of
such date plus any accrued and unpaid fees thereon; provided, that the
obligation to deposit such cash collateral shall become effective immediately,
and such deposit shall become immediately due and payable, without demand or
notice of any kind, upon the occurrence of any Event of Default described in
subsection (e) of Section 6.01. Such deposit shall be held by the Administrative
Agent as collateral for the payment and performance of the obligations of the
Borrower under this Agreement. The Administrative Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal, over such
account. The Borrower agrees to execute any documents and/or certificates to
effectuate the intent of this subsection. Other than any interest earned on the
investment of such deposits, which investments shall be made at the option and
sole discretion of the Administrative Agent and at the Borrower's risk and
expense, such deposits shall not bear interest. Interest and profits, if any, on
such investments shall accumulate in such account. Moneys in such account shall
be applied by the Administrative Agent to reimburse the Issuing Bank for LC
Disbursements for which it had not been reimbursed and, to the extent so
applied, shall be held for the satisfaction of the reimbursement obligations of
the Borrower for the LC Exposure at such time or, if the maturity of the
Advances has been accelerated, with the consent of the Majority Lenders, be
applied to satisfy other obligations of the Borrower under this Agreement. If
the Borrower is required to provide an amount of cash collateral hereunder as a
result of the occurrence of an Event of Default, such amount (to the extent not
so applied as aforesaid) shall be returned to the Borrower promptly after all
Events of Default have been cured or waived.
(h) Promptly following the end of each fiscal quarter of the Borrower, the
Issuing Bank shall deliver (through the Administrative Agent) to each Lender and
the Borrower a report describing the Letters of Credit outstanding and the LC
Exposure at the end of such fiscal quarter. Upon the request of any Lender from
time to time, the Issuing Bank shall deliver to such Lender any other
information reasonably requested by such Lender with respect to each Letter of
Credit then outstanding.
(i) The Borrower's obligation to reimburse LC Disbursements hereunder shall
be absolute, unconditional and irrevocable and shall be performed strictly in
accordance with the terms of this Agreement under all circumstances whatsoever
and irrespective of any of the following circumstances:
(i) any lack of validity or enforceability of any Letter of Credit or
this Agreement;
(ii) the existence of any claim, set-off, defense or other right that
the Borrower or any Subsidiary or Affiliate of the Borrower may have at any
time against a beneficiary or any transferee of any Letter of Credit (or
any Person or entity for which any such beneficiary or transferee may be
acting), any Lender (including the Issuing Bank) or any other Person,
whether in connection with this Agreement or any Letter of Credit or any
document related hereto or thereto or any unrelated transaction;
24
(iii) any draft or other document presented under a Letter of Credit
proving to be forged, fraudulent or invalid in any respect or any statement
therein being untrue or inaccurate in any respect;
(iv) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document to the Issuing Bank that does not
comply with the terms of such Letter of Credit;
(v) any other event or circumstance whatsoever, whether or not similar
to any of the foregoing, that might, but for the provisions of this
Section, constitute a legal or equitable discharge of, or provide a right
of setoff against, the Borrower's obligations hereunder; or
(vi) the existence of an Event of Default.
Neither the Administrative Agent, the Issuing Bank, any Lender nor any Affiliate
of the foregoing Persons, nor any director, officer, employee, agent of any such
Person or Affiliate shall have any liability or responsibility by reason of or
in connection with the issuance or transfer of any Letter of Credit or any
payment or failure to make any payment thereunder (irrespective of any of the
circumstances referred to above), or any error, omission, interruption, loss or
delay in transmission or delivery of any draft, notice or other communication
under or relating to any Letter of Credit (including any document required to
make a drawing thereunder), any error in interpretation of technical terms or
any consequence arising from causes beyond the control of the Issuing Bank;
provided, that the foregoing shall not be construed to excuse the Issuing Bank
from liability to the Borrower to the extent of any direct damages (as opposed
to consequential damages, claims in respect of which are hereby waived by the
Borrower to the extent permitted by applicable law) suffered by the Borrower
that are caused by the Issuing Bank's failure to exercise care when determining
whether drafts or other documents presented under a Letter of Credit comply with
the terms thereof. The parties hereto expressly agree, that in the absence of
gross negligence or willful misconduct on the part of the Issuing Bank (as
finally determined by a court of competent jurisdiction), the Issuing Bank shall
be deemed to have exercised care in each such determination. In furtherance of
the foregoing and without limiting the generality thereof, the parties agree
that, with respect to documents presented that appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Bank
may, in its sole discretion, either accept and make payment upon such documents
without responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.
(j) Each Letter of Credit shall be subject to the Uniform Customs and
Practices for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500, as the same may be amended from time to time, and,
to the extent not inconsistent therewith, the governing law of this Agreement
set forth in Section 8.08.
25
Article III
CONDITIONS OF EXTENSIONS OF CREDIT
Section 3.01. Conditions Precedent to Initial Extension of Credit.
The obligation of each Lender to make its initial Advance and of the
Issuing Bank to issue its initial Letter of Credit shall not become effective
unless and until all fees due and payable by the Borrower in connection with
this Agreement have been paid and the Administrative Agent shall have received
the following:
(a) Promissory notes, in a form acceptable to the Administrative Agent,
payable to the order of each Lender that has requested such a note.
(b) Copies of the resolutions of the Board of Directors of the Borrower
approving this Agreement and all documents evidencing other necessary corporate
action, certified by the Secretary or an Assistant Secretary of the Borrower to
be true and correct, and in full force and effect on and as of the date hereof.
(c) A certificate of the Secretary or an Assistant Secretary of the
Borrower, dated as of the date hereof, certifying the names and true signatures
of the officers of the Borrower authorized to sign this Agreement and the other
documents to be delivered hereunder.
(d) A certificate of a Responsible Officer of the Borrower, dated as of the
date hereof, certifying (i) the accuracy of the representations and warranties
contained herein and (ii) that no event has occurred and is continuing that
constitutes an Event of Default or that would constitute an Event of Default but
for the requirement that notice be given or time elapse, or both.
(e) Certified copies of all governmental approvals and authorizations
required to be obtained in connection with the execution, delivery and
performance by the Borrower of this Agreement.
(f) Certified copies of the Restated Charter and By-Laws of the Borrower.
(g) Favorable opinions of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, General Counsel of the
Borrower, and of Hunton & ▇▇▇▇▇▇▇▇, counsel for the Borrower, substantially in
the forms of Exhibit C-1 and C-2, respectively, hereto and as to such other
matters as the Issuing Bank or any Lender through the Administrative Agent may
reasonably request.
(h) A favorable opinion of King & Spalding, counsel for the Administrative
Agent, substantially in the form of Exhibit D hereto.
Section 3.02. Conditions Precedent to Each Extension of Credit.
The obligation of each Lender to make an Advance on the occasion of each
Borrowing (including the initial Borrowing) and of the Issuing Bank to make any
Extension of Credit relating to a Letter of Credit shall be subject to the
further conditions precedent that (a) in the case of the making of an Advance,
the Administrative Agent shall have received the written confirmatory Notice of
Borrowing with respect thereto, (b) on the date of such Extension of Credit, the
26
following statements shall be true (and the giving of the Notice of Borrowing
and the acceptance by the Borrower of the proceeds of such Borrowing shall
constitute a representation and warranty by the Borrower that on the date of
such Borrowing such statements are true):
(i) The representations and warranties contained in Section 4.01 are
correct on and as of the date of such Extension of Credit before and after
giving effect to such Extension of Credit and to the application of the
proceeds therefrom, as though made on and as of such date; and
(ii) No event has occurred and is continuing, or would result from
such Extension of Credit from the application of the proceeds therefrom,
that constitutes an Event of Default or that would constitute an Event of
Default but for the requirement that notice be given or time elapse, or
both;
and (c) the Administrative Agent shall have received such other approvals,
opinions and documents as the Issuing Bank or any Lender through the
Administrative Agent may reasonably request.
Article IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations and Warranties of the Borrower.
The Borrower represents and warrants as follows:
(a) Each of the Borrower and each Significant Subsidiary is a corporation
duly incorporated, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated and is duly qualified to do business in
and is in good standing under the laws of each other jurisdiction where the
nature of its business or the nature of property owned or used by it makes such
qualification necessary (except where failure to so qualify would not have a
material adverse affect on the financial condition, operations or properties of
the Borrower and its Subsidiaries, taken as a whole).
(b) The execution, delivery and performance by the Borrower of this
Agreement are within the Borrower's corporate powers, have been duly authorized
by all necessary corporate action, and do not contravene (i) the Borrower's
charter or by-laws or (ii) any law or contractual restriction binding on or
affecting the Borrower or its properties.
(c) No authorization or approval or other action by, and no notice to or
filing with any governmental authority or regulatory body is required for the
due execution, delivery and performance by the Borrower of this Agreement, other
than, the SEC Order, which has been duly issued and in full force and effect.
(d) This Agreement has been duly executed and delivered by the Borrower and
is, and any promissory note when delivered pursuant to Section 2.02(b) will be,
the legal, valid and binding obligations of the Borrower enforceable against the
Borrower in accordance with their respective terms.
27
(e) The Consolidated balance sheets of the Borrower and its Subsidiaries as
at December 31, 2001, and the related Consolidated statements of income and
retained earnings of the Borrower and its Subsidiaries for the fiscal year then
ended, and the Consolidated balance sheets of the Borrower and its Subsidiaries
as at March 31, 2002, and the related Consolidated statements of income and
retained earnings of the Borrower and its Subsidiaries, copies of each of which
have been furnished to each Lender and the Issuing Bank, fairly present
(subject, in the case of such financial statements dated March 31, 2002, to year
end adjustments) the financial condition of the Borrower and its Subsidiaries as
at such dates and the results of the operations of the Borrower and its
Subsidiaries for the periods ended on such dates, all in accordance with
generally accepted accounting principles consistently applied. Since December
31, 2001, there has been no material adverse change in the financial condition,
operations or properties of the Borrower and its Subsidiaries, taken as a whole.
(f) Except as described in the reports and registration statements that the
Borrower, CP&L, FPC and Florida Power have filed with the Securities and
Exchange Commission prior to the date of this Agreement, there is no pending or
threatened action or proceeding affecting the Borrower or any Subsidiary before
any court, governmental agency or arbitrator, that may materially adversely
affect the financial condition, operations or properties of the Borrower and its
Subsidiaries, taken as a whole.
(g) No proceeds of any Extension of Credit will be used to acquire any
security in any transaction that is subject to Sections 13 and 14 of the
Exchange Act.
(h) The Borrower is not engaged in the business of extending credit for the
purpose of buying or carrying margin stock (within the meaning of Regulation U
issued by the Board of Governors of the Federal Reserve System), and no proceeds
of any Advance will be used to buy or carry any margin stock or to extend credit
to others for the purpose of buying or carrying any margin stock.
(i) Following application of the proceeds of each Extension of Credit, not
more than 5% of the value of the assets (either of the Borrower only or of the
Borrower and the Subsidiaries on a Consolidated basis) subject to the provisions
of Section 5.02(a) or 5.02(e) will be margin stock (within the meaning of
Regulation U issued by the Board of Governors of the Federal Reserve System).
(j) No Termination Event has occurred or is reasonably expected to occur
with respect to any Plan.
(k) The Borrower is not an "investment company" or a company "controlled"
by an "investment company", within the meaning of the Investment Company Act of
1940, as amended.
(l) The Borrower is in substantial compliance with all applicable laws,
rules, regulations and orders of any governmental authority, the noncompliance
with which would materially and adversely affect the business or condition of
the Borrower, such compliance to include, without limitation, substantial
compliance with ERISA, Environmental Laws and paying before the same become
delinquent all material taxes, assessments and governmental charges imposed upon
it or upon its property, except to the extent compliance with any of the
28
foregoing is then being contested in good faith by appropriate legal
proceedings.
(m) All written information furnished by the Borrower to the Administrative
Agent and the Lenders in connection with this Agreement (the "Disclosed
Information") was (and all information furnished in the future by the Borrower
to the Administrative Agent, the Issuing Bank and the Lenders will be) complete
and correct in all respects material to the creditworthiness of the Borrower
when delivered. As of the date hereof, the Disclosed Information does not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements contained therein not misleading in light of
the circumstances under which made.
Article V
COVENANTS OF THE COMPANY
Section 5.01. Affirmative Covenants.
So long as there shall be any Outstanding Credits, any amount payable by
the Borrower hereunder shall remain unpaid or any Lender shall have any
Commitment hereunder, the Borrower shall, unless the Majority Lenders shall
otherwise consent in writing:
(a) Compliance with Laws, Etc. Except to the extent contested in good
faith, comply, and cause each Subsidiary to comply, with all applicable laws,
rules, regulations and orders (such compliance to include, without limitation,
paying before the same become delinquent all taxes, assessments and governmental
charges imposed upon it or upon its property), the non-compliance with which
would materially adversely affect the Borrower's business or credit.
(b) Preservation of Corporate Existence, Etc. Except as provided in Section
5.02(d), preserve and maintain, and cause each Significant Subsidiary to
preserve and maintain, its corporate existence, rights (charter and statutory)
and franchises.
(c) Visitation Rights. At any reasonable time and from time to time, permit
the Administrative Agent, the Issuing Bank or any of the Lenders or any agents
or representatives thereof to examine and make copies of and abstracts from the
records and books of account of, and visit the properties of, the Borrower and
any Subsidiary, and to discuss the affairs, finances and accounts of the
Borrower and any Subsidiary with any of their respective officers or directors.
(d) Keeping of Books. Keep, and cause each Subsidiary to keep, proper books
of record and account, in which full and correct entries shall be made of all
financial transactions and the assets and business of the Borrower and such
Subsidiary in accordance with generally accepted accounting principles
consistently applied.
(e) Maintenance of Properties, Etc. Maintain and preserve, and cause each
Subsidiary to maintain and preserve, all of its properties that are used or
useful in the conduct of its business in good working order and condition,
ordinary wear and tear excepted.
29
(f) Maintenance of Insurance. Maintain, and cause each Subsidiary to
maintain, insurance with responsible and reputable insurance companies or
associations in such amounts and covering such risks as is usually carried by
companies engaged in similar businesses and owning similar properties in the
same general areas in which the Borrower or such Subsidiary operates.
(g) Taxes. File, and cause each Subsidiary to file, all tax returns
(federal, state and local) required to be filed and paid and pay all taxes shown
thereon to be due, including interest and penalties except, in the case of
taxes, to the extent the Borrower or such Subsidiary is contesting the same in
good faith and by appropriate proceedings and has set aside adequate reserves
for the payment thereof in accordance with generally accepted accounting
principles.
(h) Material Obligations. Pay, and cause each Significant Subsidiary to
pay, promptly as the same shall become due each material obligation of the
Borrower or such Significant Subsidiary.
(i) Reporting Requirements. Furnish to the Issuing Bank and the Lenders:
(i) as soon as available and in any event within 60 days after the end
of each of the first three quarters of each fiscal year of the Borrower, a
Consolidated balance sheet of the Borrower and the Subsidiaries as at the
end of such quarter and Consolidated statements of income and retained
earnings of the Borrower and the Subsidiaries for the period commencing at
the end of the previous fiscal year and ending with the end of such
quarter, certified by the treasurer or the chief financial officer of the
Borrower, together with a certificate of the treasurer or chief financial
officer of the Borrower, setting forth in reasonable detail the calculation
of the Borrower's compliance with Section 5.01(j) and stating that no Event
of Default and no event that, with the giving of notice or lapse of time or
both, would constitute an Event of Default has occurred and is continuing,
or if an Event of Default or such event has occurred and is continuing, a
statement setting forth details of such Event of Default or event and the
action that the Borrower has taken and proposes to take with respect
thereto;
(ii) as soon as available and in any event within 120 days after the
end of each fiscal year of the Borrower, a copy of the annual report for
such year for the Borrower and the Subsidiaries, containing Consolidated
financial statements for such year certified by Deloitte & Touche or other
independent public accountants acceptable to the Majority Lenders, together
with a certificate of the treasurer or chief financial officer of the
Borrower, substantially in the form of Exhibit E hereto, setting forth in
reasonable detail the calculation of the Borrower's compliance with Section
5.01(j) and stating that no Event of Default and no event that, with the
giving of notice or lapse of time or both, would constitute an Event of
Default has occurred and is continuing, or if an Event of Default or such
event has occurred and is continuing, a statement setting forth details of
such Event of Default or event and the action that the Borrower has taken
and proposes to take with respect thereto;
(iii) promptly after the sending or filing thereof, copies of all
reports that the Borrower sends to any of its security holders, and copies
of all reports and registration statements that the Borrower or any
30
Subsidiary files with the Securities and Exchange Commission or any
national securities exchange, to the extent not delivered by the Borrower
pursuant to clause (i) or (ii) of this Section 5.01(i);
(iv) immediately upon any Responsible Officer's obtaining knowledge of
the occurrence of any Event of Default or any event that, with the giving
of notice or lapse of time, or both, would constitute an Event of Default,
a statement of the chief financial officer or treasurer of the Borrower
setting forth details of such Event of Default or event and the action that
the Borrower proposes to take with respect thereto;
(v) immediately upon obtaining knowledge thereof, notice of any change
in either the ▇▇▇▇▇'▇ Rating or the S&P Rating;
(vi) as soon as possible and in any event within five days after the
commencement thereof or any adverse determination or development therein,
notice of all actions, suits and proceedings that may adversely affect the
Borrower's ability to perform its obligations under this Agreement;
(vii) as soon as possible and in any event within five days after the
occurrence of a Termination Event, notice of such Termination Event; and
(viii) such other information respecting the condition or operations,
financial or otherwise, of the Borrower or any Subsidiary as any Lender or
the Issuing Bank through the Administrative Agent may from time to time
reasonably request.
(j) Indebtedness to Total Capitalization. Maintain at all times a ratio of
Consolidated Indebtedness of the Borrower and its Subsidiaries to Total
Capitalization of not more than .70:1.0.
(k) Use of Proceeds. Use the proceeds of each Advance solely for general
corporate purposes (including, in each case, without limitation, as a commercial
paper back-up). No proceeds of any Advance will be used to acquire any equity
security of a class that is registered pursuant to Section 12 of the Exchange
Act, or any security in any transaction that is subject to Sections 13 and 14 of
the Exchange Act.
(l) Ownership of Subsidiaries. Own at all times, directly or indirectly and
free and clear of all liens and encumbrances, 100% of the common stock of CP&L,
FPC and Florida Power.
Section 5.02. Negative Covenants.
So long as there shall be any Outstanding Credits, any other amount payable
by the Borrower hereunder shall remain unpaid or any Lender shall have any
Commitment hereunder, the Borrower will not, without the written consent of the
Majority Lenders:
(a) Liens, Etc. Create, incur, assume or suffer to exist, or permit any
Subsidiary to create, incur, assume or suffer to exist, any lien, security
interest or other charge or encumbrance, or any other type of preferential
arrangement, upon or with respect to any of its properties, whether now owned or
hereafter acquired, or assign, or permit any Subsidiary to assign, any right to
31
receive income, in each case to secure any Indebtedness of any Person, other
than (i) liens, mortgages and security interests created by the Mortgage and the
Florida Power Mortgage, (ii) liens and security interests against the fuel used
by the Borrower in its power generating operations in favor of the suppliers
thereof, (iii) liens and security interests created in connection with the GenCo
Financing, and (iv) liens, mortgages and security interests securing other
Indebtedness of the Borrower and its Subsidiaries not exceeding $100,000,000 in
the aggregate.
(b) Indebtedness. Create, incur, assume or suffer to exist, or permit any
Subsidiary to create, incur, assume or suffer to exist, any Indebtedness other
than (i) Indebtedness hereunder, (ii) Indebtedness secured by liens and security
interests permitted pursuant to clauses (ii), (iii) and (iv) of subsection
5.02(a), (iii) Indebtedness evidenced by the First Mortgage Bonds and the
Florida Power Mortgage Bonds, (iv) unsecured Indebtedness, including guarantees
issued in connection with the financing of pollution control facilities operated
by CP&L, FPC or Florida Power, guarantees of Indebtedness incurred by any
wholly-owned Subsidiary and guarantees of debt securities issued by any
financing Subsidiary established to secure debt financing in the offshore
markets, and (v) other Indebtedness outstanding on the date of this Agreement,
as described on Schedule II hereto.
(c) Lease Obligations. Create, incur, assume or suffer to exist, or permit
any Subsidiary to create, incur, assume or suffer to exist, any obligations for
the payment of rental for any property under leases or agreements to lease
having a term of one year or more that would cause the direct or contingent
Consolidated liabilities of the Borrower and its Subsidiaries in respect of all
such obligations payable in any calendar year to exceed 10% of the Consolidated
operating revenues of the Borrower and its Subsidiaries for the immediately
preceding calendar year.
(d) Mergers, Etc. Merge with or into or consolidate with or into, or
acquire all or substantially all of the assets or securities of, any Person,
unless, in each case, (i) immediately after giving effect thereto, no event
shall occur and be continuing that constitutes an Event of Default or an event
that with the giving of notice or lapse of time, or both, would constitute an
Event of Default, and (ii) in the case of any such merger to which the Borrower
is a party, such other Person is a utility company and the resulting or
surviving corporation, if not the Borrower, (x) is organized and existing under
the laws of the United States of America or any State thereof, (y) is a
corporation satisfactory to the Majority Lenders, and (z) shall have expressly
assumed, by an instrument satisfactory in form and substance to the Majority
Lenders, the due and punctual payment of all amounts due under this Agreement
and the performance of every covenant and undertaking of the Borrower contained
in this Agreement.
(e) Sales, Etc. of Assets. Sell, lease, transfer or otherwise dispose of,
or permit any Subsidiary to sell, lease, transfer or otherwise dispose of, any
of its assets, other than the following sales: (i) sales of generating capacity
to the wholesale customers of the Borrower and the Subsidiaries, (ii) sales of
nuclear fuel, (iii) sales of accounts receivable, (iv) sales in connection with
a transaction authorized by subsection (d) of this Section, (v) the Portfolio
Transaction, (vi) the Rail Transaction, (vii) sales of investments in securities
with a maturity of less than one year, or (viii) other sales not exceeding
$150,000,000 in the aggregate in any fiscal year of the Borrower.
32
(f) Margin Stock. Use any proceeds of any Advance to buy or carry margin
stock (within the meaning of Regulation U issued by the Board of Governors of
the Federal Reserve System).
(g) Change in Nature of Business. Engage, or cause or permit CP&L or
Florida Power to engage, in a material manner in businesses other than those in
which they are engaged on the date hereof and businesses reasonably related
thereto.
Article VI
EVENTS OF DEFAULT
Section 6.01. Events of Default.
If any of the following events ("Events of Default") shall occur and be
continuing:
(a) The Borrower shall fail to pay any principal of any Advance or LC
Disbursement when due, or shall fail to pay any interest on the principal amount
of any Advance or LC Disbursement or any fees or other amount payable hereunder
within five Business Days after such interest or fees or other amount shall
become due; or
(b) Any representation or warranty made by the Borrower herein or by the
Borrower (or any of its officers) in any document delivered pursuant to this
Agreement shall prove to have been incorrect in any material respect when made
or deemed made; or
(c) The Borrower shall fail to perform or observe any other term, covenant
or agreement contained in Section 5.01(b), 5.01(i)(iv), 5.01(j), 5.01(l) or 5.02
on its part to be performed or observed; or the Borrower shall fail to perform
or observe any other term, covenant or agreement contained in this Agreement on
its part to be performed or observed and any such failure shall remain
unremedied for 30 days after written notice thereof shall have been given to the
Borrower by the Administrative Agent or any Lender; or
(d) The Borrower or any Significant Subsidiary shall fail to pay any amount
in respect of any Indebtedness in excess of $10,000,000 (but excluding
Indebtedness hereunder) of the Borrower or such Significant Subsidiary (as the
case may be), or any interest or premium thereon, when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) and such
failure shall continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such Indebtedness; or any other default
under any agreement or instrument relating to any such Indebtedness, or any
other event, shall occur and shall continue after the applicable grace period,
if any, specified in such agreement or instrument, if the effect of such default
or event is to accelerate, or to permit the acceleration of, the maturity of
such Indebtedness; or any such Indebtedness shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof; or
(e) The Borrower or any Significant Subsidiary shall generally not pay its
debts as such debts become due, or shall admit in writing its inability to pay
its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the Borrower or
any Significant Subsidiary seeking to adjudicate it a bankrupt or insolvent, or
33
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee, or other
similar official for it or for any substantial part of its property; or the
Borrower or any Significant Subsidiary shall take any corporate action to
authorize any of the actions set forth above in this subsection (e); or
(f) Any judgment or order for the payment of money in excess of $10,000,000
shall be rendered against the Borrower or any Significant Subsidiary and either
(i) enforcement proceedings shall have been commenced by any creditor upon such
judgment or order or (ii) there shall be any period of 30 consecutive days
during which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; or
(g) Any Termination Event with respect to a Plan shall have occurred, and,
30 days after the occurrence thereof, (i) such Termination Event (if
correctable) shall not have been corrected and (ii) the then present value of
such Plan's vested benefits exceeds the then current value of assets accumulated
in such Plan by more than the amount of $20,000,000 (or in the case of a
Termination Event involving the withdrawal of a "substantial employer" (as
defined in Section 4001(a)(2) of ERISA), the withdrawing employer's
proportionate share of such excess shall exceed such amount); or
(h) The Borrower or any of its Affiliates as employer under a Multiemployer
Plan shall have made a complete or partial withdrawal from such Multiemployer
Plan and the plan sponsor of such Multiemployer Plan shall have notified such
withdrawing employer that such employer has incurred a withdrawal liability in
an annual amount exceeding $20,000,000; or
(i) A Change of Control shall occur;
then, and in any such event, the Administrative Agent shall at the request, or
may with the consent, of the Majority Lenders, by notice to the Borrower, (i)
declare the Commitments and the obligation of each Lender and the Issuing Bank
to make Extensions of Credit to be terminated, whereupon the same shall
forthwith terminate, (ii) declare the Outstanding Credits all interest thereon
and all other amounts payable under this Agreement to be forthwith due and
payable, whereupon such principal amount, all such interest and all such amounts
shall become and be forthwith due and payable, without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived
by the Borrower, and (iii) exercise the remedies specified in Section 2.16(g);
provided, however, that in the event of an actual or deemed entry of an order
for relief with respect to the Borrower or any Subsidiary under the Federal
Bankruptcy Code, (A) the obligation of each Lender to make Extensions of Credit
shall automatically be terminated and (B) the Outstanding Credits, all such
interest and all such other amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower.
34
Article VII
THE administrative AGENT
Section 7.01. Authorization and Action.
(a) The Issuing Bank and each Lender hereby appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Administrative Agent by
the terms hereof, together with such powers as are reasonably provided for by
this Agreement (including, without limitation, enforcement or collection of the
Advances), the Administrative Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Majority Lenders, and such instructions shall be
binding upon the Issuing Bank and all Lenders; provided, however, that the
Administrative Agent shall not be required to take any action that exposes the
Administrative Agent to personal liability or that is contrary to this Agreement
or applicable law.
(b) The Issuing Bank shall act on behalf of the Lenders with respect to any
Letters of Credit issued by it and the documents associated therewith until such
time and except for so long as the Administrative Agent may agree at the request
of the Majority Lenders to act for the Issuing Bank with respect thereto;
provided, that the Issuing Bank shall have all the benefits and immunities (i)
provided to the Administrative Agent in this Article VII with respect to any
acts taken or omissions suffered by the Issuing Bank in connection with Letters
of Credit issued by it or proposed to be issued by it and the application and
agreements for letters of credit pertaining to the Letters of Credit as fully as
the term "Administrative Agent" as used in this Article VII included the Issuing
Bank with respect to such acts or omissions and (ii) as additionally provided in
this Agreement with respect to the Issuing Bank.
Section 7.02. The Administrative Agent's Reliance, Etc.
Neither the Administrative Agent nor any of its directors, officers, agents
or employees shall be liable for any action taken or omitted to be taken by each
or any of them under or in connection with this Agreement, except for their own
gross negligence or willful misconduct. Without limitation of the generality of
the foregoing, the Administrative Agent: (i) may consult with legal counsel
(including counsel for the Borrower), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (ii) makes no warranty or representation to the Issuing
Bank or any Lender and shall not be responsible to the Issuing Bank or any
Lender for any statements, warranties or representations made in or in
connection with this Agreement; (iii) shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or
conditions of this Agreement on the part of the Borrower or to inspect the
property (including the books and records) of the Borrower; (iv) shall not be
responsible to the Issuing Bank or any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
any other instrument or document furnished pursuant hereto; and (v) shall incur
no liability under or in respect of this Agreement by acting upon any notice,
35
consent, certificate or other instrument or writing (which may be by telegram,
telecopy or e-mail) believed by it to be genuine and signed or sent by the
proper party or parties.
Section 7.03. The Administrative Agent and its Affiliates.
With respect to its Commitments and the Advances made by it, the
Administrative Agent shall have the same rights and powers under this Agreement
as any other Lender and may exercise the same as though it were not an
Administrative Agent; and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated, include the Administrative Agent in its individual
capacity, as applicable. The Administrative Agent and its Affiliates may accept
deposits from, lend money to, act as trustee under indentures of, and generally
engage in any kind of business with, the Borrower, any Subsidiary and any Person
who may do business with or own securities of the Borrower or any Subsidiary,
all as if the Administrative Agent were not the Administrative Agent and without
any duty to account therefor to the Lenders.
Section 7.04. Lender Credit Decision.
Each of the Issuing Bank and each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent, the Issuing
Bank or any other Lender (as applicable) and based on the financial statements
referred to in Section 4.01(e) and such other documents and information as it
has deemed appropriate, made its own credit analysis and decision to enter into
this Agreement. Each of the Issuing Bank and each Lender also acknowledges that
it will, independently and without reliance upon the Administrative Agent, the
Issuing Bank or any other Lender and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement.
Section 7.05. Indemnification.
The Lenders agree to indemnify the Administrative Agent (to the extent not
reimbursed by the Borrower) and the Issuing Bank, ratably according to the
respective principal amounts of the Outstanding Credits then held by each of
them (or if there are no Outstanding Credits at the time, ratably according to
the respective amounts of their Commitments), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against the Administrative Agent and the
Issuing Bank in any way relating to or arising out of this Agreement or any
action taken or omitted by the Administrative Agent or the Issuing Bank (as the
case may be) under this Agreement; provided 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 the
Administrative Agent's or the Issuing Bank's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender agrees to reimburse
the Administrative Agent or the Issuing Bank (as the case may be) promptly upon
demand for its ratable share of any out-of-pocket expenses (including reasonable
counsel fees) incurred by the Administrative Agent or the Issuing Bank (as the
case may be) in connection with the preparation, execution, administration, or
36
enforcement of, or legal advice in respect of rights or responsibility under,
this Agreement, to the extent that the Administrative Agent or the Issuing Bank
(as the case may be) is not reimbursed for such expenses by the Borrower.
Section 7.06. Successor Administrative Agent.
The Administrative Agent may resign at any time by giving written notice
thereof to the Lenders, the Issuing Bank and the Borrower and may be removed at
any time with or without cause by the Majority Lenders. Upon any such
resignation or removal, the Majority Lenders shall have the right to appoint a
successor Administrative Agent. If no successor Administrative Agent shall have
been so appointed by the Majority Lenders, and shall have accepted such
appointment, within 30 days after the retiring Administrative Agent's giving of
notice of resignation or the Majority Lenders' removal of the retiring
Administrative Agent, the Administrative Agent may appoint a successor
Administrative Agent, which shall be a commercial bank organized under the laws
of the United States of America or of any State thereof and having a combined
capital and surplus of at least $500,000,000. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations under this Agreement. After any retiring
Administrative Agent's resignation or removal hereunder as Administrative Agent,
the provisions of this Article VII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent under this
Agreement.
Article VIII
MISCELLANEOUS
Section 8.01. Amendments, Etc.
No amendment or waiver of any provision of this Agreement, nor consent to
any departure by the Borrower therefrom, shall in any event be effective unless
the same shall be in writing and signed by the Majority Lenders, in the case of
any such amendment, waiver or consent of or in respect of this Agreement, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that no amendment,
waiver or consent shall, unless in writing and signed by all of the Lenders, do
any of the following: (i) waive any of the conditions specified in Section 3.01
or 3.02, (ii) increase the Commitment of any Lender or subject any Lender to any
additional obligations, (iii) reduce, or waive the payment of, the principal of,
or interest on, the Advances, reimbursement obligations in respect of LC
Disbursements, or any fees or other amounts payable to the Lenders ratably
hereunder, (iv) postpone any date fixed for any payment of principal of, or
interest on, the Advances, reimbursement obligations in respect of LC
Disbursements, or any fees or other amounts payable to the Lenders ratably
hereunder, (v) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Advances, or the number of Lenders, which shall
be required for the Lenders or any of them to take any action under this
Agreement, or (vi) amend, waive, or in any way modify or suspend any provision
requiring the pro rata application of payments or of this Section 8.01; provided
37
further, that no amendment, waiver or consent shall, unless in writing and
signed by each Lender affected thereby, reduce, waive or postpone the date of
payment of any amount payable to such Lender, other than any such amount payable
to the Lenders ratably; and provided, further, that (A) no amendment, waiver or
consent shall, unless in writing and signed by the Administrative Agent and the
Issuing Bank in addition to the Lenders required hereinabove to take such
action, affect the rights or duties of such Administrative Agent or the Issuing
Bank under this Agreement and (B) this Agreement may be amended and restated
without the consent of any Lender or the Administrative Agent if, upon giving
effect to such amendment and restatement, such Lender or Administrative Agent,
as the case may be, shall no longer be a party to this Agreement (as so amended
and restated) or have any Commitment or other obligation hereunder and shall
have been paid in full all amounts payable hereunder to such Lender or the
Administrative Agent, as the case may be.
Section 8.02. Notices, Etc.
All notices and other communications provided for hereunder shall, unless
otherwise stated herein, be in writing (including telegraphic communication) and
mailed, telecopied, e-mailed or delivered, if to the Borrower, at its address at
410 S. Wilmington Street, PEB 19A3, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Director of Financial Operations, Treasury Department, Facsimile no.: (919)
546-7826, e-mail: ▇▇▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇; if to any Lender, at its Domestic
Lending Office set forth opposite its name on Schedule I hereto; if to the
Issuing Bank, at its address at ▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇, Facsimile no.: (▇▇▇) ▇▇▇-▇▇▇▇; and if to the
Administrative Agent, at its address at ▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Bank Loan Syndications, Facsimile no.: (212)
816-8098, e-mail: ▇.▇▇▇▇▇▇▇▇.▇▇▇▇▇@▇▇▇▇.▇▇▇; or, as to each party, at such other
address as shall be designated by such party in a written notice to the other
parties. All such notices and communications shall be effective when received by
the addressee thereof.
Section 8.03. No Waiver; Remedies.
No failure on the part of any Lender, the Issuing Bank or the
Administrative Agent to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.
Section 8.04. Costs, Expenses, Taxes and Indemnification.
(a) The Borrower agrees to pay on demand all costs and expenses of the
Administrative Agent (and as described in clause (iv) below, the Lenders and the
Issuing Bank) in connection with (i) the preparation, execution, negotiation,
syndication and delivery of this Agreement and the other documents to be
delivered hereunder, (ii) the first Borrowing under this Agreement, (iii) any
modification, amendment or supplement to this Agreement and the other documents
to be delivered hereunder and (iv) the enforcement of the rights and remedies of
the Lenders, the Issuing Bank and the Administrative Agent under this Agreement
and the other documents to be delivered hereunder (whether through negotiations
or legal proceedings), all the above costs and expenses to include, without
limitation, the reasonable fees and out-of-pocket expenses of counsel for the
Administrative Agent, the Issuing Bank and each of the Lenders with respect
thereto. In addition, the Borrower shall pay any and all stamp and other taxes
38
payable or determined to be payable in connection with the execution and
delivery of this Agreement and the other documents to be delivered hereunder,
and agrees to save the Administrative Agent, the Issuing Bank and each Lender
harmless from and against any and all liabilities with respect to or resulting
from any delay in paying or omission to pay such taxes.
(b) If (i) due to payments made by the Borrower due to the acceleration of
the maturity of the Advances pursuant to Section 6.01 or due to any other
reason, any Lender receives payments of principal of any Eurodollar Rate Advance
based upon the Eurodollar Rate other than on the last day of the Interest Period
for such Advance, or (ii) due to any Conversion of Eurodollar Advance other than
on the last day of an Interest Period pursuant to Section 2.13, the Borrower
shall, upon demand by such Lender (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender any amounts required to compensate such Lender for any additional losses,
costs or expenses that it may reasonably incur as a result of such payment,
including, without limitation, any loss (including loss of anticipated profits),
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any Lender to fund or maintain such Advance.
In addition, if the Borrower fails to prepay any Advance on the date for which
notice of prepayment has been given, the Borrower shall, upon demand by any
Lender (with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender any amounts required to
compensate such Lender for any losses, costs or expenses (including loss of
anticipated profits) that it may reasonably incur as a result of such prepayment
not having been made on the date specified by the Borrower for such prepayment.
(c) Any and all payments by the Borrower hereunder shall be made, in
accordance with Section 2.14, free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Lender, the Issuing Bank and the Administrative Agent, taxes imposed on
its income, and franchise taxes imposed on it, by the jurisdiction under the
laws of which such Lender, Issuing Bank or Administrative Agent (as the case may
be) is organized or any political subdivision thereof and, in the case of each
Lender, taxes imposed on its income, and franchise taxes imposed on it, by the
jurisdiction of such Lender's Applicable Lending Office or any political
subdivision thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as "Taxes").
If the Borrower shall be required by law to deduct any Taxes from or in respect
of any sum payable hereunder to any Lender, Issuing Bank or Administrative
Agent, (i) the sum payable shall be increased as may be necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 8.04) such Lender, Issuing Bank or
Administrative Agent (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrower shall
make such deductions and (iii) the Borrower shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance with
applicable law.
(d) The Borrower will indemnify each Lender, the Issuing Bank and the
Administrative Agent for the full amount of Taxes (including, without
limitation, any Taxes imposed by any jurisdiction on amounts payable under this
Section 8.04) paid by such Lender, Issuing Bank or Administrative Agent (as the
case may be) and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto, whether or not such Taxes were
39
correctly or legally asserted. This indemnification shall be made within 30 days
from the date such Lender, Issuing Bank or Administrative Agent (as the case may
be) makes written demand therefor.
(e) Prior to the date of the initial Borrowing or on the date of the
Assignment and Acceptance pursuant to which it became a Lender, in the case of
each Lender that becomes a Lender by virtue of entering into an Assignment and
Acceptance, and from time to time thereafter if requested by the Borrower or the
Administrative Agent, each Lender organized under the laws of a jurisdiction
outside the United States shall provide the Administrative Agent and the
Borrower with the forms prescribed by the Internal Revenue Service of the United
States certifying that such Lender is exempt from United States withholding
taxes with respect to all payments to be made to such Lender hereunder. If for
any reason during the term of this Agreement, any Lender becomes unable to
submit the forms referred to above or the information or representations
contained therein are no longer accurate in any material respect, such Lender
shall notify the Administrative Agent and the Borrower in writing to that
effect. Unless the Borrower and the Administrative Agent have received forms or
other documents satisfactory to them indicating that payments hereunder are not
subject to United States withholding tax, the Borrower or the Administrative
Agent shall withhold taxes from such payments at the applicable statutory rate
in the case of payments to or for any Lender organized under the laws of a
jurisdiction outside the United States.
(f) Any Lender claiming any additional amounts payable pursuant to Section
8.04(c) or (d) shall use its reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) (i) to change the jurisdiction of
its Applicable Lending Office if the making of such a change would avoid the
need for, or reduce the amount of, any such additional amounts that may
thereafter accrue and would not, in the reasonable judgment of such Lender, be
otherwise disadvantageous to such Lender and (ii) to otherwise minimize the
amounts due, or to become due, under Sections 8.04(c) and (d).
(g) If the Borrower makes any additional payment to the Issuing Bank or any
Lender pursuant to Sections 8.04(c) and (d) in respect of any Taxes, and the
Issuing Bank or such Lender determines that it has received (i) a refund of such
Taxes or (ii) a credit against or relief or remission for, or a reduction in the
amount of, any tax or other governmental charge solely as a result of any
deduction or credit for any Taxes with respect to which it has received payments
under Sections 8.04(c) and (d), the Issuing Bank or such Lender shall, to the
extent that it can do so without prejudice to the retention of such refund,
credit, relief, remission or reduction, pay to the Borrower such amount as the
Issuing Bank or such Lender shall have determined to be attributable to the
deduction or withholding of such Taxes. If the Issuing Bank or such Lender later
determines that it was not entitled to such refund, credit, relief, remission or
reduction to the full extent of any payment made pursuant to the first sentence
of this Section 8.04(g), the Borrower shall upon demand of the Issuing Bank or
such Lender promptly repay the amount of such overpayment. Any determination
made by the Issuing Bank or such Lender pursuant to this Section 8.04(g) shall
in the absence of bad faith or manifest error be conclusive, and nothing in this
Section 8.04(g) shall be construed as requiring the Issuing Bank or any Lender
to conduct its business or to arrange or alter in any respect its tax or
financial affairs so that it is entitled to receive such a refund, credit or
reduction or as allowing any Person to inspect any records, including tax
returns, of the Issuing Bank or any Lender.
40
(h) The Borrower hereby agrees to indemnify and hold harmless each Lender,
the Issuing Bank, the Administrative Agent, counsel to the Administrative Agent
and their respective officers, directors, partners, employees, Affiliates and
advisors (each, an "Indemnified Person") from and against any and all claims,
damages, losses, liabilities, costs, or expenses (including reasonable
attorney's fees and expenses, whether or not such Indemnified Person is named as
a party to any proceeding or is otherwise subjected to judicial or legal process
arising from any such proceeding), joint and several, that may actually be
incurred by or asserted or awarded against any Indemnified Person (including,
without limitation, in connection with any investigation, litigation or
proceeding or the preparation of a defense in connection therewith) in each case
by reason of or in connection with the execution, delivery, or performance of
this Agreement, or the use by the Borrower of the proceeds of any Extension of
Credit (including any refusal by the Issuing Bank to honor a demand for payment
under a Letter of Credit if the documents presented in connection with such
demand do not strictly comply with the terms of such Letter of Credit), except
to the extent that such claims, damages, losses, liabilities, costs, or expenses
are determined in a final non-appealable judgment by a court of competent
jurisdiction to have resulted solely from the gross negligence or willful
misconduct of the party seeking indemnification.
(i) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 8.04 shall survive the payment in full of principal and interest
hereunder and the termination of the Commitments.
Section 8.05. Right of Set-off.
Upon (i) the occurrence and during the continuance of any Event of Default
and (ii) the making of the request or the granting of the consent specified by
Section 6.01 to authorize the Administrative Agent to declare the Outstanding
Credits due and payable pursuant to the provisions of Section 6.01, each Lender
and the Issuing Bank are hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Lender or Issuing Bank to or for
the credit or the account of the Borrower now or hereafter existing under this
Agreement, irrespective of whether or not such Lender or the Issuing Bank shall
have made any demand under this Agreement and although such obligations may be
unmatured. Each Lender and the Issuing Bank agree promptly to notify the
Borrower after any such set-off and application made by such Lender or Issuing
Bank; provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender and the
Issuing Bank under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) that such Lender or
Issuing Bank may have.
Section 8.06. Binding Effect.
This Agreement shall become effective when it shall have been executed by
the Borrower and the Administrative Agent and when the Administrative Agent
shall have been notified by each Lender and the Issuing Bank that such Lender or
Issuing Bank has executed it and thereafter shall be binding upon and inure to
the benefit of the Borrower, the Administrative Agent, the Issuing Bank and each
Lender and their respective successors and assigns, except that the Borrower
41
shall not have the right to assign its rights hereunder or any interest herein
without the prior written consent of the Issuing Bank and each Lender.
Section 8.07. Assignments and Participations.
(a) Each Lender may, with the consent of the Administrative Agent, the
Issuing Bank and the Borrower (such consent not to be unreasonably withheld and,
in the case of the Borrower, such consent shall not be required if an Event of
Default has occurred and is continuing), assign to one or more banks or other
entities all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitment and the
Advances owing to it); provided, however, that (i) each such assignment shall be
of a constant, and not a varying, percentage of all rights and obligations under
this Agreement, (ii) the amount of the Commitment of the assigning Lender being
assigned pursuant to each such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event be
less than the lesser of (A) $10,000,000 and (B) all of such Lender's rights and
obligations and, if the preceding clause (A) is applicable, shall be an integral
multiple of $1,000,000, (iii) each such assignment shall be to an Eligible
Assignee, and (iv) the parties to each such assignment shall execute and deliver
to the Administrative Agent, for its acceptance and recording in the Register,
an Assignment and Acceptance and such parties (other than when Citibank is an
assigning party) shall also deliver to the Administrative Agent a processing and
recordation fee of $3,500. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Assignment and
Acceptance, (x) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder and (y) the Lender assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto).
(b) By executing and delivering an Assignment and Acceptance, the Lender
assignor thereunder and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or the performance or observance by the Borrower of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to in
Section 4.01(e) and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Administrative Agent, such assigning Lender or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (v) such assignee confirms that it is an Eligible
42
Assignee; (vi) such assignee appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Administrative Agent by the terms hereof,
together with such powers as are reasonably incidental thereto; and (vii) such
assignee agrees that it will perform in accordance with their terms all of the
obligations that by the terms of this Agreement are required to be performed by
it as a Lender.
(c) The Administrative Agent shall maintain at its address referred to in
Section 8.02 a copy of each Assignment and Acceptance (and copies of the related
consents of the Borrower and the Administrative Agent to such assignment)
delivered to and accepted by it and a register for the recordation of the names
and addresses of the Lenders and the Commitment of, and principal amount of the
Advances owing to, each Lender from time to time (the "Register"). The entries
in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrower, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register as a Lender hereunder
for all purposes of this Agreement. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee representing that it is an Eligible Assignee,
the Administrative Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit B hereto, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Borrower.
(e) Each Lender may assign to one or more banks or other entities any
Advance made by it.
(f) Each Lender may sell participations to one or more banks or other
entities in or to all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitment,
the Advances owing to it); provided, however, that (i) such Lender's obligations
under this Agreement (including, without limitation, its Commitment to the
Borrower hereunder) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender shall remain the holder of any promissory note held pursuant
to Section 2.02(b) for all purposes of this Agreement, (iv) the Borrower, the
Issuing Bank, the Administrative Agent and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and (v) the holder of any such
participation, other than an Affiliate of such Lender, shall not be entitled to
require such Lender to take or omit to take any action hereunder, except action
(A) extending the time for payment of interest on, or the final maturity of any
portion of the principal amount of, the Advances or (B) reducing the principal
amount of or the rate of interest payable on the Advances. Without limiting the
generality of the foregoing: (i) such participating banks or other entities
shall be entitled to the cost protection provisions contained in Sections 2.09,
2.13 and 8.04(b) only if, and to the same extent, the Lender from which such
participating banks or other entities acquired its participation would, at the
time, be entitled to claim thereunder; and (ii) such participating banks or
other entities shall also, to the fullest extent permitted by law, be entitled
43
to exercise the rights of set-off contained in Section 8.05 as if such
participating banks or other entities were Lenders hereunder.
(g) If any Lender (or any bank, financial institution, or other entity to
which such Lender has sold a participation) shall make any demand for payment
under Section 2.12(b), then within 30 days after any such demand (if, but only
if, such demanded payment has been made by the Borrower), the Borrower may, with
the approval of the Administrative Agent (which approval shall not be
unreasonably withheld) demand that such Lender assign in accordance with this
Section 8.07 to one or more Eligible Assignees designated by the Borrower all
(but not less than all) of such Lender's Commitment (if any) and the Advances
owing to it within the period ending on the later to occur of such 30th day and
the last day of the longest of the then current Interest Periods for such
Advances, provided that (i) no Event of Default or event that, with the passage
of time or the giving of notice, or both, would constitute an Event of Default
shall then have occurred and be continuing, (ii) the Borrower shall have
satisfied all its presently due obligations to such Lender under this Agreement,
and (iii) if such Eligible Assignee designated by the Borrower is not an
existing Lender on the date of such demand, the Borrower shall have delivered to
the Administrative Agent an administrative fee of $3,500. If any such Eligible
Assignee designated by the Borrower shall fail to consummate such assignment on
terms acceptable to such Lender, or if the Borrower shall fail to designate any
such Eligible Assignees for all or part of such Lender's Commitment or Advances,
then such demand by the Borrower shall become ineffective; it being understood
for purposes of this subsection (g) that such assignment shall be conclusively
deemed to be on terms acceptable to such Lender, and such Lender shall be
compelled to consummate such assignment to an Eligible Assignee designated by
the Borrower, if such Eligible Assignee (i) shall agree to such assignment by
entering into an Assignment and Acceptance in substantially the form of Exhibit
B hereto with such Lender and (ii) shall offer compensation to such Lender in an
amount equal to all amounts then owing by the Borrower to such Lender hereunder
made by the Borrower to such Lender, whether for principal, interest, fees,
costs or expenses (other than the demanded payment referred to above and payable
by the Borrower as a condition to the Borrower's right to demand such
assignment), or otherwise.
(h) Any Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 8.07, disclose to
the assignee or participant or proposed assignee or participant, any information
relating to the Borrower furnished to such Lender by or on behalf of the
Borrower; provided that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree to preserve the
confidentiality of any confidential information relating to the Borrower
received by it from such Lender.
(i) Anything in this Section 8.07 to the contrary notwithstanding, any
Lender may (i) assign and pledge all or any portion of its Commitment and the
Advances owing to it to any Federal Reserve Bank (and its transferees) as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal Reserve
Bank; provided, that no such assignment shall release the assigning Lender from
its obligations hereunder; or (ii) assign its Commitments, Advances and other
rights and obligations hereunder to any of its Affiliates upon notice to, but
without the consent of, the Borrower and the Administrative Agent.
44
(j) Notwithstanding anything to the contrary contained herein, any Lender
(a "Granting Lender") may grant to a special purpose funding vehicle (an "SPC")
of such Granting Lender identified as such in writing from time to time by the
Granting Lender to the Administrative Agent, the Issuing Bank and the Borrower,
the option to provide to the Borrower all or any part of any Advance that such
Granting Lender would otherwise be obligated to make to the Borrower pursuant to
this Agreement; provided that (i) nothing herein shall constitute a commitment
by any such SPC to make any Advance, (ii) if such SPC elects not to exercise
such option or otherwise fails to provide all or any part of such Advance, the
Granting Lender shall be obligated to make such Advance pursuant to the terms
hereof and (iii) no SPC or Granting Lender shall be entitled to receive any
greater amount pursuant to Section 2.08 or 2.12 than the Granting Lender would
have been entitled to receive had the Granting Lender not otherwise granted such
SPC the option to provide any Advance to the Borrower. The making of an Advance
by an SPC hereunder shall utilize the Commitment of the Granting Lender to the
same extent, and as if, such Advance were made by such Granting Lender. Each
party hereto hereby agrees that no SPC shall be liable for any indemnity or
similar payment obligation under this Agreement for which a Lender would
otherwise be liable so long as, and to the extent that, the related Granting
Lender provides such indemnity or makes such payment. In furtherance of the
foregoing, each party hereto hereby agrees (which agreement shall survive the
termination of this Agreement) that, prior to the date that is one year and one
day after the payment in full of all outstanding commercial paper or other
senior indebtedness of any SPC, it will not institute against or join any other
person in instituting against such SPC any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under the laws of the United
States or any State thereof. Notwithstanding the foregoing, the Granting Lender
unconditionally agrees to indemnify the Borrower, the Administrative Agent, the
Issuing Bank and each Lender against all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever that may be incurred by or asserted against the
Borrower, the Administrative Agent, the Issuing Bank or such Lender, as the case
may be, in any way relating to or arising as a consequence of any such
forbearance or delay in the initiation of any such proceeding against its SPC.
Each party hereto hereby acknowledges and agrees that no SPC shall have the
rights of a Lender hereunder, such rights being retained by the applicable
Granting Lender. Accordingly, and without limiting the foregoing, each party
hereby further acknowledges and agrees that no SPC shall have any voting rights
hereunder and that the voting rights attributable to any Advance made by an SPC
shall be exercised only by the relevant Granting Lender and that each Granting
Lender shall serve as the administrative agent and attorney-in-fact for its SPC
and shall on behalf of its SPC receive any and all payments made for the benefit
of such SPC and take all actions hereunder to the extent, if any, such SPC shall
have any rights hereunder. In addition, notwithstanding anything to the contrary
contained in this Agreement any SPC may with notice to, but without the prior
written consent of any other party hereto, assign all or a portion of its
interest in any Advances to the Granting Lender. This Section may not be amended
without the prior written consent of each Granting Lender, all or any part of
whose Advance is being funded by an SPC at the time of such amendment.
Section 8.08. Governing Law.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York. The Borrower (i) irrevocably submits to the
non-exclusive jurisdiction of any New York State court or Federal court sitting
in New York City in any action arising out of this Agreement, (ii) agrees that
45
all claims in such action may be decided in such court, (iii) waives, to the
fullest extent it may effectively do so, the defense of an inconvenient forum
and (iv) consents to the service of process by mail. A final judgment in any
such action shall be conclusive and may be enforced in other jurisdictions.
Nothing herein shall affect the right of any party to serve legal process in any
manner permitted by law or affect its right to bring any action in any other
court.
Section 8.09. Waiver of Jury Trial.
THE BORROWER, THE ADMINISTRATIVE AGENT, THE ISSUING BANK AND EACH LENDER
EACH HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY AND
LAWFULLY DO SO, ALL RIGHT TO TRIAL BY JURY AS TO ANY ISSUE RELATING TO THIS
AGREEMENT IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER INSTRUMENT OR DOCUMENT DELIVERED HEREUNDER OR
THEREUNDER.
Section 8.10. Execution in Counterparts.
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
Section 8.11. Severability.
Any provision of this Agreement that is prohibited, unenforceable or not
authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition, unenforceability or non-authorization without
invalidating the remaining provisions hereof or affecting the validity,
enforceability or legality of such provision in any other jurisdiction.
Section 8.12. Headings.
Section headings in this Agreement are included herein for convenience of
reference only and shall not constitute a part of this Agreement for any other
purpose.
Section 8.13. Entire Agreement.
This Agreement constitutes the entire contract between the parties relative
to the subject matter hereof. Any previous agreement among the parties with
respect to the subject matter hereof is superseded by this Agreement. Except as
is expressly provided for herein, nothing in this Agreement, expressed or
implied, is intended to confer upon any party other than the parties hereto any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
[Signature Pages to Follow]
S-1
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers, all as of the day and year
first above written.
CITIBANK, N.A.
By
------------------------------------------
Name:
Title:
S-2
JPMORGAN CHASE BANK
By
------------------------------------------
Name:
Title:
S-3
BANK ONE, N.A.
By
------------------------------------------
Name:
Title:
S-4
BANK OF AMERICA, N.A.
By
------------------------------------------
Name:
Title:
S-5
BANK OF TOKYO-MITSUBISHI TRUST COMPANY
By
------------------------------------------
Name:
Title:
S-6
WACHOVIA BANK, N.A.
By
------------------------------------------
Name:
Title:
S-7
SUNTRUST BANK
By
------------------------------------------
Name:
Title:
S-8
MIZUHO CORPORATE BANK, LIMITED
By
------------------------------------------
Name:
Title:
S-9
MELLON BANK, N.A.
By
------------------------------------------
Name:
Title:
S-10
PROGRESS ENERGY, INC.
By_______________________________
Name:
Title:
SCHEDULE I
PROGRESS ENERGY, INC.
List of Commitments and Applicable Lending Offices
Eurodollar Domestic
Name of Bank Lending Office Lending Office Commitment
------------ -------------- -------------- ----------
Citibank, N.A. Two Pennsway, Ste. 200 Same as Eurodollar Lending $80,526,315.78
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Office
Attention: Bank Loan Syndications
JPMorgan Chase Bank ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Same as Eurodollar Lending $80,526,315.78
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ Office
Attention:
Bank One, NA ▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ Same as Eurodollar Lending $59,210,526.32
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ Office
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Bank of America, N.A. Bank of America Plaza Same as Eurodollar Lending $68,684,210.53
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Bank of Tokyo-Mitsubishi Trust 1251 Avenue of the Americas Same as Eurodollar Lending $59,210,526.32
Company ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Wachovia Bank. N.A. ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇. Same as Eurodollar Lending $42,631,578.95
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Office
Attention: Loan Administration
SunTrust Bank ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Same as Eurodollar Lending $23,684,210.53
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Office
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
Mizuho Corporate Bank, Limited 1251 Avenue of the Americas Same as Eurodollar Lending $23,684,210.53
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Office
Attention: Loan Administration
Mellon Bank, N.A. Three Mellon Center, Rm. 1203 Same as Eurodollar Lending $11,842,105.26
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Office
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
SCHEDULE II
Permitted Existing Indebtedness
None.
EXHIBIT A-1
Form of Notice of Borrowing
NOTICE OF BORROWING
[Date]
Citibank, N.A., as Administrative Agent
for the Lenders parties to the
Agreement referred to below
▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Bank Loan Syndications
Ladies and Gentlemen:
The undersigned, Progress Energy, Inc. refers to the Amended and Restated
Credit Agreement, dated as of July 26, 2002 (the "Agreement", the terms defined
therein being used herein as therein defined), among the undersigned, the
Lenders thereunder, Citibank, N.A., as administrative agent for the Lenders, and
SunTrust Bank, as issuing Bank for Letters of Credit issued thereunder, and
hereby gives you notice pursuant to Section 2.03 of the Agreement that the
undersigned hereby requests a Borrowing under the Agreement, and in that
connection sets forth below the information relating to such Borrowing (the
"Proposed Borrowing") as required by Section 2.02(a) of the Agreement:
(i) The Business Day of the Proposed Borrowing is ___________, 20____.
(ii) The Type of Advances comprising the Proposed Borrowing is [Base
Rate Advances][Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed Borrowing is $________.
(iv) The Interest Period for each Eurodollar Rate Advance that is an
Advance made as part of the Proposed Borrowing is months.
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the Proposed Borrowing:
(i) the representations and warranties contained in Section 4.01 of
the Agreement are correct, before and after giving effect to the Proposed
Borrowing and to the application of the proceeds therefrom, as though made
on and as of such date; and
(ii) no event has occurred and is continuing, or would result from
such Proposed Borrowing or from the application of the proceeds therefrom,
that constitutes an Event of Default or would constitute an Event of
Default but for the requirement that notice be given or time elapse or
both.
Very truly yours,
PROGRESS ENERGY, INC.
By
---------------------------------------------
Name:
Title:
EXHIBIT A-2
Form of Notice of Conversion
NOTICE OF CONVERSION
[Date]
Citibank, N.A., as Administrative Agent
for the Lenders parties to the
Agreement referred to below
▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Bank Loan Syndications
Ladies and Gentlemen:
The undersigned, Progress Energy, Inc. refers to the Amended and Restated
Credit Agreement, dated as of July 26, 2002 (the "Agreement", the terms defined
therein being used herein as therein defined), among the undersigned, the
Lenders thereunder, Citibank, N.A., as administrative agent for the Lenders, and
SunTrust Bank, as issuing bank for the Letters of Credit issued thereunder, and
hereby gives you notice pursuant to Section 2.10 of the Agreement that the
undersigned hereby requests a Conversion under the Agreement, and in that
connection sets forth the terms on which such Conversion (the "Proposed
Conversion") is requested to be made:
(i) The Business Day of the Proposed Conversion is ______________,
20____.
(ii) The Type of, and Interest Period applicable to, the Advances (or
portions thereof) proposed to be Converted:_________________.
(iii) The Type of Advance to which such Advances (or portions thereof)
are proposed to be Converted: ________________________.
(iv) Except in the case of a Conversion to Base Rate Advances, the
initial Interest Period to be applicable to the Advances resulting from
such Conversion: ______________________________.
(v) The aggregate amount of Advances (or portions thereof) proposed to
be Converted is $_______________________.
The undersigned hereby certifies that, on the date hereof, and on the date
of the Proposed Conversion, no event has occurred and is continuing, or would
result from such Proposed Conversion, that constitutes an Event of Default.
Very truly yours,
PROGRESS ENERGY, INC.
By
---------------------------------------------
Name:
Title:
EXHIBIT B
Form of Assignment and Acceptance
ASSIGNMENT AND ACCEPTANCE
Dated , 20___
Reference is made to the Amended and Restated Credit Agreement, dated as of
July 26, 2002 (as amended, modified and supplemented from time to time, the
"Agreement", the terms defined therein being used herein as therein defined),
among Progress Energy, Inc., the Lenders (as defined in the Agreement)
thereunder, Citibank, N.A., as administrative agent for the Lenders thereunder
(the "Administrative Agent") and SunTrust Bank, as issuing bank for Letters of
Credit issued thereunder.
(the "Assignor") and (the "Assignee") agree as follows:
---------- ----------
1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, that interest in and to all of
the Assignor's rights and obligations under the Agreement as of the date hereof
that represents the percentage interest specified on Schedule 1 of all
outstanding rights and obligations under the Agreement, including, without
limitation, such interest in the Assignor's Commitment (to the extent it has not
been terminated), the Advances owing to the Assignor. After giving effect to
such sale and assignment, the Assignee's Commitment (if any) and the amount of
the Advances owing to the Assignee will be as set forth in Section 2 of Schedule
1.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Agreement or any other instrument or document furnished pursuant thereto;
and (iii) makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under the Agreement or any
other instrument or document furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of the Agreement,
together with copies of the financial statements referred to in Section 4.01(e)
thereof and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this Assignment and
Acceptance; (ii) agrees that it will, independently and without reliance upon
the Administrative Agent, the Assignor or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the
Agreement; (iii) confirms that it is an Eligible Assignee; (iv) appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under the Agreement as are delegated to the
Administrative Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; (v) agrees that it will perform in accordance
with their terms all of the obligations that by the terms of the Agreement are
required to be performed by it as a Lender; [and] (vi) specifies as its Domestic
Lending Office (and address for notices) and Eurodollar Lending Office the
offices set forth beneath its name on the signature pages hereof [and (vii)
attaches the forms prescribed by the Internal Revenue Service of the United
States certifying as to the Assignee's status for purposes of determining
exemption from United States withholding taxes with respect to all payments to
be made to the Assignee under the Agreement or such other documents as are
necessary to indicate that all such payments are subject to such rates at a rate
reduced by an applicable tax treaty].(1)
4. Following the execution of this Assignment and Acceptance by the
Assignor and the Assignee, it will be delivered to the Administrative Agent for
acceptance and recording by the Administrative Agent. The effective date of this
Assignment and Acceptance shall be the date of acceptance thereof by the
Administrative Agent, unless otherwise specified on Schedule 1 hereto (the
"Effective Date").
5. Upon such acceptance and recording by the Administrative Agent, as of
the Effective Date, (i) the Assignee shall be a party to the Agreement and, to
the extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Agreement.
6. Upon such acceptance and recording by the Administrative Agent, from and
after the Effective Date, the Administrative Agent shall make all payments under
the Agreement in respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest and commitment fees with respect
thereto) to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Agreement for periods prior to the Effective
Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of New York.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
-----------------------
(1) If the Assignee is organized under the laws of a jurisdiction outside the
United States.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed by their respective officers thereunto duly
authorized, as of the date first above written, such execution being made on
Schedule 1 hereto.
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By______________________ By______________________
Name: Name:
Title: Title:
Domestic Lending Office (and
address for notices):
[Address]
Eurodollar Lending Office:
[Address]
Accepted this day of , 20
---- ------------ ---
CITIBANK, N.A., as Administrative Agent
By_________________________
Name:
Title:
SUNTRUST BANK, as Issuing Bank
By_________________________
Name:
Title:
PROGRESS ENERGY, INC.(2)
By__________________________
Name:
Title:
-----------------
(2) If required.
SCHEDULE 1
TO
ASSIGNMENT AND ACCEPTANCE
Dated , 20____
Section 1
Percentage Interest Assigned: %
------
Section 2
Assignee's Commitment(3): $
Aggregate Outstanding Principal Amount of
Advances owing to Assignee [specify Facility]: $
Section 3
Effective Date(4)
------------------
(3) For use in connection with the Extension.
(4) This date should be no earlier than the date of acceptance by the
Administrative Agent.
EXHIBIT C-1
Form of Opinion of General Counsel to The Company
July 26, 2002
To each of the Lenders parties to
the Agreement referred to below,
Citibank, N.A., as Administrative
Agent, and SunTrust Bank, as Issuing Bank
Re: Progress Energy, Inc.
Ladies and Gentlemen:
This opinion is furnished to you by me as General Counsel to Progress
Energy, Inc. (the "Borrower") pursuant to Section 3.01(g) of the Amended and
Restated Credit Agreement, dated as of July 26, 2002 (the "Agreement", the terms
defined therein being used herein as therein defined), among Progress Energy,
Inc., certain lenders thereunder (the "Lenders"), Citibank, N.A., as
administrative agent for the Lenders, and SunTrust Bank, as issuing bank for
Letters of Credit issued thereunder.
In connection with the preparation, execution and delivery of the
Agreement, I have examined:
(1) The Agreement.
(2) The documents furnished by the Borrower pursuant to Section 3.01 of the
Agreement.
(3) The Amended and Restated Articles of Incorporation of the Borrower (the
"Charter").
(4) The By-Laws of the Borrower and all amendments thereto (the "By-Laws").
I have also examined the originals, or copies of such other corporate
records of the Borrower, certificates of public officials and of officers of the
Borrower and agreements, instruments and other documents as I have deemed
necessary as a basis for the opinions expressed below. As to questions of fact
material to such opinions, I have, when relevant facts were not independently
established by me, relied upon certificates of the Borrower or its officers or
of public officials. I have assumed the authenticity of all documents submitted
to me as originals, the conformity to originals of all documents submitted as
certified or photostatic copies and the authenticity of signatures (other than
those of the Borrower), and the due execution and delivery, pursuant to due
authorization, of the Agreement by the Lenders and the Administrative Agent and
the validity and binding effect thereof on such parties. For purposes of my
opinions expressed in paragraph 1 below as to existence and good standing, I
have relied as of their respective dates on certificates of public officials,
copies of which are attached hereto as Exhibit A. Whenever the phrase "to my
knowledge" is used in this opinion it refers to my actual knowledge and the
actual knowledge of the attorneys who work under my supervision and who were
involved in the representation of the Borrower in connection with the
transactions contemplated by the Agreement.
I or attorneys working under my supervision are qualified to practice law
in the States of North Carolina and Florida, and the opinions expressed herein
are limited to the law of the States of North Carolina and Florida, the Federal
law of the United States and, in reliance on a certificate issued by the
Secretary of State of South Carolina and attached hereto as part of Exhibit A,
the laws of the State of South Carolina for purposes of the first sentence of
opinion paragraph 1 below.
Based upon the foregoing and upon such investigation as I have deemed
necessary, I am of the following opinion:
1. Each of the Borrower and CP&L is a corporation duly organized, validly
existing and in good standing under the laws of the State of North Carolina, and
CP&L is duly qualified to do business and in good standing in the State of South
Carolina. Each of Florida Power and FPC is a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida. Progress
Capital is a corporation duly organized, validly existing and in good standing
under the laws of the State of Florida. The Borrower has the corporate power and
authority to enter into the transactions contemplated by the Agreement.
2. The execution, delivery and performance of the Agreement by the Borrower
have been duly authorized by all necessary corporate action on the part of the
Borrower and the Agreement has been duly executed and delivered by the Borrower.
3. The execution, delivery and performance of the Agreement by the Borrower
will not (i) violate the Charter or the By-Laws or any law, rule or regulation
applicable to the Borrower (including, without limitation, Regulation X of the
Board of Governors of the Federal Reserve System) or (ii) result in a breach of,
or constitute a default under, any judgment, decree or order binding on the
Borrower, or any indenture, mortgage, contract or other instrument to which it
is a party or by which it is bound.
4. No authorization, approval or other action by, and no notice to or
filing with any governmental authority or regulatory body is required for the
due execution, delivery and performance by the Borrower of the Agreement, other
than the SEC Order, which has been duly issued and is in full force and effect.
5. To my knowledge, except as described in the reports and registration
statements that the Borrower, CP&L, FPC and Florida Power have filed with the
Securities and Exchange Commission, there are no pending or overtly threatened
actions or proceedings against the Borrower or any of such Subsidiaries before
any court, governmental agency or arbitrator, that may materially adversely
affect the financial condition, operations or properties of the Borrower and its
Subsidiaries, taken as a whole.
The opinions set forth above are subject to the qualification that no
opinion is expressed herein as to the enforceability of the Agreement or any
other document.
The foregoing opinions are solely for your benefit and may not be relied
upon by any other Person other than (i) any other Person that may become a
Lender under the Agreement after the date hereof and (ii) Hunton & ▇▇▇▇▇▇▇▇ and
▇▇▇▇ & ▇▇▇▇▇▇▇▇, in connection with their respective opinions delivered on the
date hereof under Section 3.01 of the Agreement.
Very truly yours,
EXHIBIT C-2
Form of Opinion of Special Counsel for the Company
July 26, 2002
To each of the Lenders parties to the
Agreement referred to below, Citibank,
N.A., as Administrative Agent, and
SunTrust Bank, as Issuing Bank
Re: Progress Energy, Inc.
Ladies and Gentlemen:
This opinion is furnished to you by us as counsel for Progress Energy, Inc.
(the "Borrower") pursuant to Section 3.01(g) of the Amended and Restated Credit
Agreement, dated as of July 26, 2002 (the "Agreement", the terms defined therein
being used herein as therein defined), among Progress Energy, Inc., certain
lenders thereunder (the "Lenders"), Citibank, N.A., as administrative agent for
the Lenders, and SunTrust Bank, as issuing bank for Letters of Credit issued
thereunder.
In connection with the preparation, execution and delivery of the
Agreement, we have examined:
(1) The Agreement.
(2) The documents furnished by the Borrower pursuant to Section 3.01 of the
Agreement.
(3) The opinion letter of even date herewith, addressed to you by ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, General Counsel to the Company and delivered in connection with the
transactions contemplated by the Agreement (the "Company Opinion Letter").
We have also examined the originals, or copies of such other corporate
records of the Borrower, certificates of public officials and of officers of the
Borrower and agreements, instruments and other documents as we have deemed
necessary as a basis for the opinions expressed below. As to questions of fact
material to such opinions, we have, when relevant facts were not independently
established by us, relied upon certificates of the Borrower or its officers or
of public officials. We have assumed the authenticity of all documents submitted
to us as originals, the conformity to originals of all documents submitted as
certified or photostatic copies and the authenticity of the originals (other
than those of the Borrower), and the due execution and delivery, pursuant to due
authorization, of the Agreement by the Lenders and the Administrative Agent and
the validity and binding effect thereof on such parties. Whenever the phrase "to
our knowledge" is used in this opinion it refers to the actual knowledge of the
attorneys of this firm involved in the representation of the Borrower without
independent investigation.
We are qualified to practice law in the States of North Carolina, Florida
and New York, and the opinions expressed herein are limited to the law of the
States of North Carolina, Florida and New York and the federal law of the United
States. To the extent that our opinions expressed herein depend upon opinions
expressed in paragraphs 1 through 4 of the Company Opinion Letter, we have
relied without independent investigation on the accuracy of the opinions
expressed in the Company Opinion Letter, subject to the assumptions,
qualifications and limitations set forth in the Company Opinion Letter.
Based upon the foregoing and upon such investigation as we have deemed
necessary, we are of the opinion that the Agreement constitutes the legal, valid
and binding obligation of the Borrower enforceable against the Borrower in
accordance with its terms except as enforcement may be limited or otherwise
affected by (a) bankruptcy, insolvency, reorganization, fraudulent transfer,
moratorium or other similar laws affecting the rights of creditors generally and
(b) principles of equity, whether considered at law or in equity.
The opinion set forth above is subject to the following qualifications:
(a) In addition to the application of equitable principles described above,
courts have imposed an obligation on contracting parties to act reasonably and
in good faith in the exercise of their contractual rights and remedies, and may
also apply public policy considerations in limiting the right of parties seeking
to obtain indemnification under circumstances where the conduct of such parties
is determined to have constituted negligence.
(b) No opinion is expressed herein as to (i) Section 8.05 of the Agreement,
(ii) the enforceability of provisions purporting to grant to a party conclusive
rights of determination, (iii) the availability of specific performance or other
equitable remedies, (iv) the enforceability of rights to indemnity under federal
or state securities laws or (v) the enforceability of waivers by parties of
their respective rights and remedies under law.
(c) No opinion is expressed herein as to provisions, if any, in the
Agreement, which (A) purport to excuse, release or exculpate a party for
liability for or indemnify a party against the consequences of its own acts, (B)
purport to make void any act done in contravention thereof, (C) purport to
authorize a party to make binding determinations in its sole discretion, (D)
relate to the effects of laws which may be enacted in the future, (E) require
waivers, consents or amendments to be made only in writing, (F) purport to waive
rights of offset or to create rights of set off other than as provided by
statute, or (G) purport to permit acceleration of indebtedness and the exercise
of remedies by reason of the occurrence of an immaterial breach of the Agreement
or any related document. Further, we express no opinion as to the necessity for
any Lender, by reason of such Lender's particular circumstances, to qualify to
transact business in the State of New York or as to any Lender's liability for
taxes in any jurisdiction.
The foregoing opinion is solely for your benefit and may not be relied upon
by any other Person other than (i) any other Person that may become a Lender
under the Agreement after the date hereof in accordance with the provisions
thereof and (ii) King & Spalding, in connection with their opinion delivered on
the date hereof under Section 3.01 of the Agreement.
Very truly yours,
EXHIBIT D
Form of Opinion of Counsel to the Administrative Agent
and the Lead Arranger
July 26, 2002
To each of the Lenders parties to the
Agreement referred to below, Citibank, N.A.
("Citibank"), as Administrative Agent,
and SunTrust Bank, as Issuing Bank
Re: Progress Energy, Inc.
Ladies and Gentlemen:
We have acted as counsel to the Administrative Agent and the Lead Arranger
in connection with the preparation, execution and delivery of the Amended and
Restated Credit Agreement, dated as of July 26, 2002 (the "Agreement", the terms
defined therein being used herein as therein defined), among Progress Energy,
Inc., the Lenders thereunder, Citibank, N.A., as administrative agent for the
Lenders, and SunTrust Bank, as issuing bank for Letters of Credit issued
thereunder.
In this connection, we have examined the following documents:
1. a counterpart of the Agreement, executed by the parties thereto;
2. the documents furnished by or on behalf of the Borrower pursuant to
subsections (b) through (g) of Section 3.01 of the Agreement, including, without
limitation, the opinion of Hunton & ▇▇▇▇▇▇▇▇ (the "Borrower Opinion").
In our examination of the documents referred to above, we have assumed the
authenticity of all such documents submitted to us as originals, the genuineness
of all signatures, the due authority of the parties executing such documents and
the conformity to the originals of all such documents submitted to us as copies.
We have also assumed that you have independently evaluated, and are satisfied
with, the creditworthiness of the Borrower and the business terms reflected in
the Agreement. We have relied, as to factual matters, on the documents we have
examined.
To the extent that our opinions expressed below involve conclusions as to
matters governed by law other than the law of the State of New York, we have
relied upon the Borrower Opinion and have assumed without independent
investigation the correctness of the matters set forth therein, our opinions
expressed below being subject to the assumptions, qualifications and limitations
set forth in the Borrower Opinion.
Based upon and subject to the foregoing, and subject to the qualifications
set forth below, we are of the opinion that the Agreement is the legal, valid
and binding obligation of the Borrower, enforceable against the Borrower in
accordance with its terms.
Our opinion is subject to the following qualifications:
(b) The enforceability of the Borrower's obligations under the Agreement is
subject to the effect of any applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or similar law affecting creditors'
rights generally.
(c) The enforceability of the Borrower's obligations under the Agreement is
subject to the effect of general principles of equity, including (without
limitation) concepts of materiality, reasonableness, good faith and fair dealing
(regardless of whether considered in a proceeding in equity or at law). Such
principles of equity are of general application, and, in applying such
principles, a court, among other things, might not allow a contracting party to
exercise remedies in respect of a default deemed immaterial, or might decline to
order an obligor to perform covenants.
(d) We note further that, in addition to the application of equitable
principles described above, courts have imposed an obligation on contracting
parties to act reasonably and in good faith in the exercise of their contractual
rights and remedies, and may also apply public policy considerations in limiting
the right of parties seeking to obtain indemnification under circumstances where
the conduct of such parties is determined to have constituted negligence.
(e) We express no opinion herein as to (i) the enforceability of Section
8.05 of the Agreement, (ii) the enforceability of provisions purporting to grant
to a party conclusive rights of determination, (iii) the availability of
specific performance or other equitable remedies, (iv) the enforceability of
rights to indemnity under federal or state securities laws, or (v) the
enforceability of waivers by parties of their respective rights and remedies
under law.
(f) Our opinions expressed above are limited to the law of the State of New
York, and we do not express any opinion herein concerning any other law.
The foregoing opinion is solely for your benefit and may not be relied upon
by any other person or entity.
Very truly yours,
EXHIBIT E
Form of Compliance Certificate
[Letterhead of Progress Energy, Inc.]
[Date]
To each of the Lenders parties to the
Agreement referred to below, Citibank,
N.A., as Administrative Agent, and
SunTrust Bank, as Issuing Bank
Progress Energy, Inc.
Ladies and Gentlemen:
This compliance certificate is furnished to you pursuant to Section 5.01(i)(ii)
of the Amended and Restated Credit Agreement, dated as of July 26, 2002 (the
"Agreement"), among Progress Energy, Inc., a North Carolina corporation (the
"Borrower"), the banks listed on the signature pages thereof (the "Banks"),
Citibank, N.A. ("Citibank"), as administrative agent (the "Administrative
Agent") for the Lenders (as hereinafter defined), and SunTrust Bank, as issuing
bank for Letters of Credit issued thereunder. Terms defined in the Agreement are
used herein as therein defined.
1. As of [_______], 2001, the ratio of Consolidated Indebtedness of the Borrower
and its Subsidiaries to Total Capitalization was _____ to 1.0, calculated, in
accordance with Section 5.01(j) of the Agreement, as follows:
A. Indebtedness as of such date was $________, calculated as follows:
Current Indebtedness: Amount
------
[List all forms of current Debt]
---------------------------------- $
----------------------------------
---------------------------------- ---------
Total current Indebtedness $________
Long-term Indebtedness : Amount
------
[list all forms of long-term Indebtedness ]
---------------------------------- $
----------------------------------
---------------------------------- --------
Total long-term Indebtedness $________
Total Indebtedness (current Indebtedness plus $________
----
long-term Indebtedness )
B. Total Capitalization as of such date was $_____, calculated as follows:
Consolidated Indebtedness $
Preferred Stock $
Common Stock $
Retained Earnings $________
2. As of [_______], 2001, and as of the date hereof, no Event of Default and no
event that, with the giving of notice or lapse of time or both, will constitute
an Event of Default, has occurred and in continuing.
I hereby certify that the calculations set forth in paragraph 1 hereof were
prepared in accordance with generally accepted accounting principles consistent
with those applied in the preparation of the financial statements referred to in
Section 4.01(e) of the Agreement.
Very truly yours,
PROGRESS ENERGY, INC.
By______________________________________
Name:
Title: