1
Exhibit No. 10.129
AMENDED AND RESTATED CREDIT AGREEMENT
among
COGENTRIX ENERGY, INC.,
The Several Lenders
from Time to Time Parties Hereto
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED,
THE BANK OF NOVA SCOTIA, AND
CIBC ▇▇▇▇▇▇▇▇▇▇▇ CORPORATION
as Lead Arrangers
and
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED,
as Agent and as the Issuing Bank
DATED AS OF OCTOBER 29, 1998
2
TABLE OF CONTENTS
Page
----
SECTION 1. DEFINITIONS........................................................1
1.1 Defined Terms...................................................1
1.2 Other Definitional Provisions..................................26
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS...................................26
2.1 Revolving Credit Commitments...................................26
2.2 Procedure for Revolving Credit Borrowing.......................27
2.3 Fees...........................................................28
2.4 Termination or Reduction of Commitments........................28
2.5 Repayment of Revolving Credit Loans; Evidence of Debt..........28
2.6 Prepayments....................................................29
2.7 Conversion and Continuation Options............................30
2.8 Minimum Amounts and Maximum Number of Tranches.................31
2.9 Interest Rates and Payment Dates...............................31
2.10 Computation of Interest and Fees...............................31
2.11 Inability to Determine Interest Rate...........................32
2.12 Pro Rata Treatment and Payments................................32
2.13 Illegality.....................................................33
2.14 Requirements of Law............................................33
2.15 Taxes..........................................................35
2.16 Indemnity......................................................36
2.17 Change of Lending Office.......................................36
2.18 Use of Proceeds................................................37
2.19 Revolving Credit Commitment Increases..........................37
SECTION 3. LETTERS OF CREDIT.................................................38
3.1 L/C Commitment.................................................38
3.2 Procedure for Issuance of Letters of Credit....................39
3.3 Fees, Commissions and Other Charges............................39
3.4 L/C Participations.............................................40
3.5 Reimbursement Obligation of the Borrower.......................41
3.6 Obligations Absolute...........................................41
3.7 Letter of Credit Payments......................................42
3.8 Issuance Request...............................................42
3.9 Collateralization..............................................42
3.10 Substitution/Replacement of Issuing Bank.......................43
SECTION 4. REPRESENTATIONS AND WARRANTIES....................................44
4.1 Financial Information..........................................44
4.2 No Change......................................................46
4.3 Corporate Existence; Compliance with Law.......................46
4.4 Corporate Power; Authorization; Enforceable Obligations........47
3
Page
----
4.5 No Legal Bar...................................................47
4.6 No Material Litigation.........................................47
4.7 No Default.....................................................47
4.8 Ownership of Property; Liens...................................48
4.9 Taxes..........................................................48
4.10 Federal Regulations............................................48
4.11 ERISA..........................................................48
4.12 Investment Company Act; Public Utility Holding Company Act;
Other Regulations............................................49
4.13 Subsidiaries...................................................49
4.14 Purpose of the Revolving Credit Loans..........................49
4.15 Environmental Matters..........................................49
4.16 Accuracy of Information; Full Disclosure.......................50
4.17 Security Documents.............................................51
4.18 Year 2000 Matters..............................................51
SECTION 5. CONDITIONS PRECEDENT..............................................51
5.1 Conditions to Effectiveness of Agreement.......................51
5.2 Conditions to Each Revolving Credit Loan and
Each Letter of Credit........................................53
SECTION 6. AFFIRMATIVE COVENANTS.............................................54
6.1 Financial Statements...........................................54
6.2 Certificates; Other Information................................55
6.3 Payment of Obligations.........................................57
6.4 Conduct of Business and Maintenance of Existence...............57
6.5 Maintenance of Property; Insurance.............................57
6.6 Inspection of Property; Books and Records; Discussions.........57
6.7 Notices........................................................57
6.8 Environmental Laws.............................................58
6.9 Indemnification................................................58
SECTION 7. NEGATIVE COVENANTS................................................60
7.1 Financial Condition............................................60
7.2 Limitation on Debt.............................................60
7.3 Limitation on Subsidiary Debt..................................62
7.4 Limitation on Restricted Payments..............................64
7.5 Limitations on Dividends and Other Payment Restrictions
Affecting Subsidiaries.......................................65
7.6 Restrictions on Dispositions...................................66
7.7 Limitations on Transactions with Affiliates....................66
7.8 Limitations on Liens...........................................67
7.9 Limitations on Mergers, Consolidations, Sales or
Transfers of Assets by or Involving Borrower.................68
7.10 Limitations on Certain Mergers, Consolidations and
Investments by Subsidiaries..................................68
7.11 CDH Permitted Investments......................................69
-ii-
4
Page
----
SECTION 8. EVENTS OF DEFAULT.................................................69
SECTION 9. THE AGENT.........................................................73
9.1 Appointment....................................................73
9.2 Delegation of Duties...........................................73
9.3 Exculpatory Provisions.........................................74
9.4 Reliance by Agent..............................................74
9.5 Notice of Default..............................................74
9.6 Non-Reliance on Agent and Other Lenders........................75
9.7 Indemnification................................................75
9.8 Agent in Its Individual Capacity...............................76
9.9 Successor Agent................................................76
9.10 Lead Arrangers.................................................76
SECTION 10. MISCELLANEOUS....................................................76
10.1 Amendments and Waivers.........................................76
10.2 Notices........................................................77
10.3 No Waiver; Cumulative Remedies.................................78
10.4 Survival of Representations and Warranties;
Survival of Certain Agreements and Covenants.................78
10.5 Payment of Expenses and Taxes..................................78
10.6 Successors and Assigns; Participations and Assignments.........79
10.7 Adjustments; Set-off...........................................81
10.8 Counterparts...................................................81
10.9 Severability...................................................82
10.10 Integration....................................................82
10.11 GOVERNING LAW..................................................82
10.12 Submission To Jurisdiction; Waivers............................82
10.13 Acknowledgments................................................83
10.14 WAIVERS OF JURY TRIAL..........................................83
10.15 Confidentiality................................................83
10.16 Rank...........................................................84
SCHEDULES
Schedule I - Lenders' Commitment Percentages and Addresses for Notices
Schedule II - Applicable Margin
Schedule III - Financial Disclosure
Schedule IV - Material Litigation
Schedule V - Subsidiaries of the Borrower
Schedule VI - Environmental Matters
EXHIBITS
Exhibit A - Form of Note
-iii-
5
Exhibit B - Form of New Lender Supplement
Exhibit C - Form of CDH Guarantee
Exhibit D - Form of Extension Agreement
Exhibit E-1 - Form of Borrowing Request
Exhibit E-2 - Form of Issuance Request
Exhibit F - Form of Opinion of Fennebresque, Clark, ▇▇▇▇▇▇▇▇ & Hay
Exhibit G - Form of Assignment and Acceptance
Exhibit H - Form of Account Pledge Agreement
Exhibit I - Form of Securities Account Control Agreement
-iv-
6
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of October 29,
1998, among (i) COGENTRIX ENERGY, INC., a North Carolina corporation (the
"Borrower"), (ii) the several banks and other financial institutions from time
to time parties to this Agreement (the "Lenders"), (iii) AUSTRALIA AND NEW
ZEALAND BANKING GROUP LIMITED ("ANZ"), CIBC ▇▇▇▇▇▇▇▇▇▇▇ CORPORATION, AND THE
BANK OF NOVA SCOTIA, as the lead arrangers and (iv) AUSTRALIA AND NEW ZEALAND
BANKING GROUP LIMITED, as the issuer hereunder of the Letters of Credit (as
hereinafter defined) and as agent for the Lenders hereunder.
W I T N E S S E T H :
WHEREAS, the Borrower, ANZ, CIBC Inc., Dresdner Bank AG, New York
Branch, and The Royal Bank of Scotland plc (the "Existing Lenders"), as Lenders,
and ANZ, as Agent and as Issuing Bank, are parties to the Credit Agreement,
dated as of May 22, 1997 (the "Existing Credit Agreement"); and
WHEREAS, the Borrower, the Existing Lenders and ANZ, as Agent and
as Issuing Bank, desire to amend and restate the Existing Credit Agreement in
its entirety and to add The Bank of Nova Scotia as a Lead Arranger and as a
Lender;
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants herein contained and for other good and valuable consideration,
the receipt and adequacy of which is hereby acknowledged, each of the parties
hereto hereby agrees that, from and after the Closing Date, the Existing Credit
Agreement (including all Exhibits and Schedules thereto) shall be, and the same
hereby is, amended and restated in its entirety to read as follows:
1. SECTION I. DEFINITIONS
1.1 Defined Terms . As used in this Agreement, the following
terms shall have the following meanings:
"ABR": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the higher of (a) the
Prime Rate in effect on such day and (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1%. For purposes hereof: "Prime
Rate" shall mean the rate of interest per annum publicly announced
from time to time by the Agent as its prime rate in effect at its
principal office in New York City (the Prime Rate not being intended
to be the lowest rate of interest charged by the Agent in connection
with extensions of credit to debtors); and "Federal Funds Effective
Rate" shall mean, for any day, the weighted average of the rates on
overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a Business
Day, the average of the quotations for the day of such transactions
received by the Agent from three federal funds brokers of recognized
standing selected by it. Any change in the ABR due to a change in the
7
Prime Rate or the Federal Funds Effective Rate shall be effective as
of the opening of business on the effective day of such change in the
Prime Rate or the Federal Funds Effective Rate, respectively.
"ABR Loans": Revolving Credit Loans the rate of interest
applicable to which is based upon the ABR.
"Acceptable Acquisition Premium ": any Acquisition Premium with
respect to any Capital Stock acquired after the Closing Date by the
Borrower (or any of its Subsidiaries) in any Person owning one or more
Power Generation Facilities; provided, that such Acquisition Premium
may not exceed the excess (if any) of the Maximum Value with respect
to such Capital Stock over the book value of the net tangible assets
underlying such Capital Stock, all as determined in accordance with
GAAP; and "Maximum Value" shall mean an amount (as certified to the
Lenders by a Responsible Officer of the Borrower within thirty days of
the acquisition of such Capital Stock by the Borrower or such
Subsidiary) equal to the net present value of all dividends,
distributions and other payments reasonably projected (using
assumptions reasonably acceptable to the Agent) to be received by the
Borrower or such Subsidiary in respect of such Capital Stock after its
acquisition, calculated by discounting to the date of such acquisition
the amount of all such dividends, distributions and other payments
using an assumed discount rate proposed by the Borrower and reasonably
acceptable to the Agent; provided, that for purposes of projecting the
amount of such dividends, distributions and payments in respect of
such Capital Stock, revenue shall be assumed to be received by such
Person from the sale of power from such Power Generation Facilities
only to the extent that such revenue would be received pursuant to a
written power sales agreement and (even if pursuant to a written power
sales agreement) no revenue shall be assumed to be received by such
Person from the sale of electricity into any power exchange or to the
extent the price for such electricity is based on any power exchange
price.
"Account Pledge Agreement": as defined in subsection 3.9(b).
"Acquisition": the acquisition by the Borrower (through one or
more Wholly-Owned Subsidiaries) from Bechtel Generating Company, Inc.,
of its interests in twelve electric generating plants located in the
Eastern United States and in the Iroquois gas pipeline.
"Acquisition Debt": Debt of any Person existing at the time such
Person became a Subsidiary of the Borrower (or such Person is merged
into the Borrower or one of its Subsidiaries) or assumed in connection
with the acquisition of assets from any such Person (other than assets
acquired in the ordinary course of business), including Debt Incurred
in connection with, or in contemplation of, such Person becoming a
Subsidiary of the Borrower (but excluding Debt of such Person which is
extinguished, retired or repaid in connection with such Person
becoming a Subsidiary of the Borrower).
2
8
"Acquisition Premium": with respect to any Capital Stock owned by
the Borrower (or any of its Subsidiaries) in any Person (including,
without limitation, any Subsidiary or Affiliate of the Borrower or any
Joint Venture in which the Borrower or any of its Subsidiaries has an
interest), the cost of acquiring such Capital Stock in excess of the
net tangible assets underlying such Capital Stock, as determined in
accordance with GAAP.
"Adjusted Consolidated Net Income": for any period, for any
Person the aggregate Net Income (or loss) of such Person and its
consolidated Subsidiaries for such period determined in conformity
with GAAP plus the Net Income of any Subsidiary of such Person for
prior periods to the extent such Net Income is actually paid in cash
to such Person during such period plus the Net Income of such Person
(other than a Subsidiary thereof) in which any third Person has a
joint interest for prior periods to the extent such Net Income is
actually paid in cash to such Person during such period; provided that
the following items shall be excluded in computing Adjusted
Consolidated Net Income (without duplication): (i) the Net Income (or
loss) of such Person (other than a Subsidiary thereof) in which any
third Person has a joint interest, except to the extent of the amount
of dividends or other distributions actually paid in cash to such
Person during such period by such Person in which the joint interest
is held, which dividends and distributions shall be included in such
computation; (ii) solely for the purposes of calculating the amount of
Restricted Payments that may be made pursuant to clause (c)(i) or
(c)(ii) of subsection 7.4 (and in such case, except to the extent
includable pursuant to clause (i) above), the Net Income (if positive)
of such Person accrued prior to the date it becomes a Subsidiary of
any other Person or is merged into or consolidated with such other
Person or any of its Subsidiaries or all or substantially all of the
property and assets of such Person are acquired by such other Person
or any of its Subsidiaries; (iii) the Net Income of any Subsidiary of
such Person, except to the extent that (A) such Net Income (if
positive) is actually paid in cash to such Person during such period
and (B) such Net Income (if negative) is actually paid in cash to such
Subsidiary during such period; (iv) any gains or losses (on an
after-tax basis) attributable to Asset Sales; (v) the cumulative
effect of a change in accounting principle; and (vi) any amounts paid
or accrued as dividends on Preferred Stock of such Person or Preferred
Stock of any Subsidiary of such Person.
"Adjusted Parent Operating Cash Flow": for any period, (i) Parent
Operating Cash Flow for such period less (ii) the sum of the following
expenses (determined without duplication), in each case to the extent
paid by the Borrower during such period and regardless of whether any
such amount was accrued during such period:
(a) development expenses for such period of the Borrower and
its Subsidiaries paid directly by the Borrower or paid indirectly
by the transferring of funds or other assets (whether through a
loan, capital contribution or otherwise) to any Subsidiary of the
Borrower (whether by the Borrower or by any of its Subsidiaries)
3
9
for the purpose of enabling such Subsidiary or another Subsidiary
to pay any such expense;
(b) income tax expenses of the Borrower and its Subsidiaries
(computed on a consolidated basis) for such period; and
(c) corporate overhead expenses of the Borrower and its
Subsidiaries for such period.
"Adjusted Tangible Net Worth ": with respect to the Borrower, as
of the date of determination, the Tangible Net Worth of the Borrower
at such date plus the sum of all Acquisition Premiums included in the
Net Worth of the Borrower as reflected in the Pro Forma Balance Sheet
plus the sum of all Acceptable Acquisition Premiums (if any) at such
date.
"Administration Fee": as defined in subsection 2.3(c).
"Affiliate": as to any Person, any other Person directly or
indirectly controlling or controlled by or under direct or indirect
common control with such Person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms
"controlling," "controlled by" and "under common control with") when
used with respect to any Person means the possession, directly or
indirectly, of the power either (a) to vote 10% or more of the
securities having ordinary voting power for the election of directors
of such Person or (b) to direct or cause the direction of the
management and policies of such Person, whether through the ownership
of voting securities, by contract or otherwise.
"Agent": ANZ in its capacity as the agent for the Lenders under
this Agreement and the other Loan Documents and its successors in such
capacity.
"Aggregate Outstanding Extensions of Credit ": as to any Lender
at any time, an amount equal to the sum of (a) the aggregate principal
amount of all Revolving Credit Loans made by such Lender then
outstanding and (b) such Lender's Commitment Percentage of the L/C
Obligations then outstanding.
"Agreement": this Amended and Restated Credit Agreement, as
amended, supplemented or otherwise modified from time to time.
"Applicable Margin": for the Commitment Fee, for each Type of
Revolving Credit Loan and for each Type of Letter of Credit, the rate
per annum as set forth under the relevant column heading on Schedule
II.
"Asset Acquisition": (i) an investment by the Borrower or any of
its Subsidiaries in any other Person pursuant to which such Person
shall become a Subsidiary of the Borrower or any of its Subsidiaries
4
10
or shall be merged into or consolidated with the Borrower or any of
its Subsidiaries or (ii) an acquisition by the Borrower or any of its
Subsidiaries of the Property of any Person other than the Borrower or
any of its Subsidiaries that constitutes substantially all of an
operating unit or business of such Person.
"Asset Disposition": with respect to any Person, any sale,
transfer, conveyance, lease or other disposition (including by way of
merger, consolidation or sale-leaseback) by such Person or any of its
Subsidiaries to any Person (other than to such Person or a Subsidiary
of such Person and other than in the ordinary course of business) of
(i) any Property of such Person or any of its Subsidiaries or (ii) any
shares of Capital Stock of such Person's Subsidiaries. For purposes of
this definition, any disposition in connection with directors'
qualifying shares or investments by foreign nationals mandated by
applicable law shall not constitute an Asset Disposition. In addition,
the term "Asset Disposition" shall not include (i) any sale, transfer,
conveyance, lease or other disposition of the Capital Stock or assets
of Subsidiaries pursuant to the terms of any power sales agreements or
steam sales agreements to which such Subsidiaries are parties as of
the date of this Agreement or pursuant to the terms of any power sales
agreements or steam sales agreements to which such Subsidiaries become
a party after such date if the Board of Directors determines in good
faith (evidenced by a Board resolution) that such provisions are
necessary in order to effect such agreements and are reasonable, (ii)
any sale, transfer, conveyance, lease or other disposition of assets
governed by subsection 7.9, (iii) the sale, transfer, conveyance,
lease or other disposition of the Capital Stock or assets of the
following: (A) Cogentrix of Pennsylvania, Inc. and (B) ReUse
Technology, Inc. and (iv) any transaction or series of related
transactions consisting of the sale, transfer, conveyance, lease or
other disposition of Capital Stock or assets with a Fair Market Value
aggregating less than $5 million. The term "Asset Disposition" also
shall not include (i) the grant of a Lien by any Person in any assets
or shares of Capital Stock securing a borrowing by, or contractual
performance obligation of, such Person or any Subsidiary of such
Person or any Joint Venture in which such Person has an interest,
which Lien is not prohibited under subsection 7.8 or under Section
10(a) of the CDH Guarantee or the exercise of remedies thereunder or
(ii) a sale-leaseback transaction involving substantially all of the
assets of a Power Generation Facility where a Subsidiary of the
Borrower sells the Power Generation Facility to a Person in exchange
for the assumption by that Person of the Debt financing the Power
Generation Facility and the Subsidiary leases the Power Generation
Facility from such Person.
"Asset Sale": the sale or other disposition by the Borrower or
any of its Subsidiaries (other than to the Borrower or another
Subsidiary of the Borrower) of (i) all or substantially all of the
Capital Stock of any Subsidiary of the Borrower or (ii) all or
substantially all of the Property of the Borrower or any of its
Subsidiaries.
"Assignee": as defined in subsection 10.6(c).
5
11
"Assignment and Acceptance": an Assignment and Acceptance
substantially in the form of Exhibit G.
"Attributable Value": as to a Capitalized Lease Obligation under
which any Person is at the time liable and at any date as of which the
amount thereof is to be determined, the capitalized amount thereof
that would appear on the face of a balance sheet of such Person in
accordance with GAAP.
"Available Commitment ": as to any Lender, at any time, an amount
equal to the excess, if any, of (a) such Lender's Commitment over (b)
such Lender's Aggregate Outstanding Extensions of Credit.
"Average Life": at any date of determination with respect to any
Debt security or Preferred Stock the quotient obtained by dividing (i)
the sum of the product of (A) the number of years from such date of
determination to the dates of each successive scheduled principal or
involuntary liquidation value payment of such Debt security or
Preferred Stock, respectively, multiplied by (B) the amount of such
principal or involuntary liquidation value payment by (ii) the sum of
all such principal or involuntary liquidation value payments.
"Board of Directors": either the Board of Directors of the
Borrower or any committee of such Board duly authorized to act on
behalf of such Board.
"Borrower Indenture Securities": the collective reference to the
2004 Senior Notes and the 2008 Senior Notes.
"Borrower Indentures": the collective reference to the 2004
Senior Note Indenture and the 2008 Senior Note Indenture.
"Borrowing Date": any Business Day specified in a Borrowing
Request pursuant to subsection 2.2 as a date on which the Borrower
requests the Lenders to make Revolving Credit Loans hereunder.
"Borrowing Request": a request and certificate of the Borrower
substantially in the form of Exhibit E-1 (with such changes thereto as
agreed upon from time to time by the Agent and the Borrower).
"Business": as defined in subsection 4.15(b).
"Business Day": a day other than a Saturday, Sunday or other day
on which commercial banks in New York City are authorized or required
by law to close.
"Capital Stock": with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated,
6
12
whether voting or non-voting) of, or interests in (however
designated), the equity of such Person which is outstanding or issued
on or after the date of this Agreement, including, without limitation,
all Common Stock and Preferred Stock and partnership and joint venture
interests of such Person.
"Capitalized Lease": as applied to any Person, any lease of any
Property of which the discounted present value of the rental
obligations of such Person as lessee, in conformity with GAAP, is
required to be capitalized on the balance sheet of such Person;
"Capitalized Lease Obligation" means the rental obligations, as
aforesaid, under such lease.
"Collateral Account": as defined in subsection 3.9(b).
"CDH": Cogentrix Delaware Holdings, Inc., a Delaware corporation
and a Wholly-Owned Subsidiary of the Borrower.
"CDH Guarantee": the Amended and Restated Guarantee to be
executed and delivered by CDH, substantially in the form of Exhibit C,
as amended, supplemented or otherwise modified from time to time.
"CDH Permitted Investments": as defined in the CDH Guarantee.
"Closing Date": the date on which the conditions precedent set
forth in subsection 5.1 shall be satisfied.
"Code": the Internal Revenue Code of 1986, as amended from time
to time.
"Collateral": the collective reference to the "Collateral" and
the "Collateral Account" as defined in the Account Pledge Agreement.
"Commitment ": as to any Lender, the obligation of such Lender to
make Revolving Credit Loans to and/or issue or participate in Letters
of Credit issued hereunder in an aggregate principal and/or face
amount at any one time outstanding not to exceed the amount set forth
next to such Lender's name under the caption "Commitment" on Schedule
I or set forth in the Assignment and Acceptance executed by such
Lender by which such Lender became a Lender hereunder, in either such
case as such amount may be reduced from time to time pursuant to
subsection 2.4 and as such amount may be adjusted from time to time in
accordance with subsection 10.6 pursuant to any Assignment and
Acceptance executed by such Lender or otherwise in accordance with
this Agreement.
"Commitment Fee": as defined in subsection 2.3(a).
"Commitment Percentage": as to any Lender at any time, the
percentage set forth next to such Lender's name under the caption
"Commitment Percentage" on Schedule I or set forth in the Assignment
7
13
and Acceptance executed by such Lender by which such Lender became a
Lender hereunder, in either such case as such percentage may be
adjusted from time to time in accordance with subsection 10.6 pursuant
to any Assignment and Acceptance executed by such Lender or otherwise
in accordance with this Agreement.
"Commitment Period": the period from and including the Closing
Date to but not including the Final Maturity Date or such earlier date
on which the Commitments shall terminate as provided herein.
"Common Stock": with respect to any Person, Capital Stock of such
Person that does not rank prior, as to the payment of dividends or as
to the distribution of assets upon any voluntary or involuntary
liquidation, dissolution or winding up of such Person, to shares of
Capital Stock of any other class of such Person.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Borrower within
the meaning of Section 4001 of ERISA or is part of a group which
includes the Borrower and which is treated as a single employer under
Section 414 of the Code.
"Consolidated EBITDA": of any Person for any period, the Adjusted
Consolidated Net Income of such Person, plus (i) income taxes,
excluding income taxes (either positive or negative) attributable to
extraordinary and non-recurring gains or losses or Asset Sales, all
determined on a consolidated basis for such Person and its
consolidated Subsidiaries in accordance with GAAP, (ii) Consolidated
Fixed Charges, (iii) depreciation and amortization expense, all
determined on a consolidated basis for such Person and its
consolidated Subsidiaries in accordance with GAAP, (iv) all other
non-cash items reducing Adjusted Consolidated Net Income for such
period, all determined on a consolidated basis for such Person and its
consolidated Subsidiaries in accordance with GAAP and (v) the
aggregate amount actually received in cash by such Person during such
period relating to non-cash items increasing Adjusted Consolidated Net
Income for prior periods, and less (i) all non-cash items increasing
Adjusted Consolidated Net Income during such period and (ii) the
aggregate amount actually paid in cash by such Person during such
period relating to non-cash items reducing Adjusted Consolidated Net
Income for prior periods; provided that depreciation and amortization
expense of any Subsidiary of such Person and any other non-cash item
of any Subsidiary of such Person that reduces Adjusted Consolidated
Net Income shall be excluded (without duplication) in computing
Consolidated EBITDA, except to the extent that the positive cash flow
associated with such depreciation and amortization expense and other
non-cash items is actually distributed in cash to such Person during
such period.
"Consolidated Fixed Charges": of any Person, for any period, the
aggregate of (i) Consolidated Interest Expense, (ii) the interest
component of Capitalized Leases, determined on a consolidated basis
for such Person and its consolidated Subsidiaries in accordance with
8
14
GAAP excluding any interest component of Capitalized Leases in respect
of that portion of a Capitalized Lease Obligation of a Subsidiary that
is Non-Recourse to such Person and (iii) cash and non-cash dividends
due (whether or not declared) on the Preferred Stock of any Subsidiary
of such Person and any Redeemable Stock of such Person.
"Consolidated Interest Expense": of any Person, for any period,
the aggregate interest expense in respect of Debt (including
amortization or original issue discount and non-cash interest payments
or accruals) of such Person and its consolidated Subsidiaries,
determined on a consolidated basis in accordance with GAAP, including
all commissions, discounts, other fees and charges owed with respect
to letters of credit and bankers' acceptance financing and net costs
associated with Interest Rate Protection Agreements and any amounts
paid during such period in respect of such interest expense,
commissions, discounts, other fees and charges that have been
capitalized; provided that Consolidated Interest Expense of the
Borrower shall not include any interest expense (including all
commissions, discounts, other fees and charges owed with respect to
letters of credit and bankers' acceptance financing and net costs
associated with Interest Rate Protection Agreements) in respect of
that portion of Debt of a Subsidiary of the Borrower that is
Non-Recourse to the Borrower; and provided further that Consolidated
Interest Expense of the Borrower in respect of a Guarantee by the
Borrower of Debt of a Subsidiary shall be equal to the commissions,
discounts, other fees and charges that would be due with respect to a
hypothetical letter of credit issued under a bank credit agreement
that can be drawn by the beneficiary thereof in the amount of the Debt
so guaranteed if (i) the Borrower is not actually making directly or
indirectly interest payments on such Debt and (ii) GAAP does not
require the Borrower on an unconsolidated basis to record such Debt as
a liability of the Borrower.
"Consolidated Total Assets": with respect to any Person at any
time, the total assets of such Person and its consolidated
Subsidiaries at such time determined in conformity with GAAP.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or
any of its property is bound.
"Currency Protection Agreement": with respect to any Person any
foreign exchange contract, currency swap agreement or other similar
agreement or arrangement designed to protect such Person or any of its
Subsidiaries against fluctuations in currency values to or under which
such Person or any of its Subsidiaries is a party or a beneficiary on
the date of this Agreement or becomes a party or a beneficiary
thereafter.
"Debt": with respect to any Person at any date of determination
(without duplication), (i) all indebtedness of such Person for
borrowed money, (ii) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (iii) all
9
15
obligations of such Person in respect of letters of credit or bankers'
acceptance or other similar instruments (or reimbursement obligations
with respect thereto), (iv) all obligations of such Person to pay the
deferred purchase price of property or services, except Trade
Payables, (v) the Attributable Value of all obligations of such Person
as lessee under Capitalized Leases, (vi) all Debt of others secured by
a Lien on any asset of such Person, whether or not such Debt is
assumed by such Person; provided that, for purposes of determining the
amount of any Debt of the type described in this clause, if recourse
with respect to such Debt is limited to such asset, the amount of such
Debt shall be limited to the lesser of the Fair Market Value of such
asset or the amount of such Debt, (vii) all Debt of others Guaranteed
by such Person to the extent such Debt is Guaranteed by such Person,
(viii) all Redeemable Stock valued at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends
and (ix) to the extent not otherwise included in this definition, all
obligations of such Person under Currency Protection Agreement and
Interest Rate Protection Agreements.
"Default": any of the events specified in Section 8, whether or
not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Dollars" and "$": dollars in lawful currency of the United
States of America.
"Environmental Laws": any and all foreign, Federal, state, local
or municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees, requirements of any Governmental Authority or other
Requirements of Law (including common law) regulating, relating to or
imposing liability or standards of conduct concerning protection of
human health or the environment, as now or may at any time hereafter
be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on
such day (including, without limitation, basic, supplemental, marginal
and emergency reserves under any regulations of the Board of Governors
of the Federal Reserve System or other Governmental Authority having
jurisdiction with respect thereto) dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of such Board) maintained
by a member bank of such System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum
equal to the rate at which the Agent is offered Dollar deposits at or
about 10:00 A.M., New York City time, two Eurodollar Business Days
prior to the beginning of such Interest Period in the London interbank
eurodollar market for delivery on the first day of such Interest
10
16
Period for the number of days comprised therein and in an amount
comparable to the amount of its Eurodollar Loan to be outstanding
during such Interest Period.
"Eurodollar Business Day": any Business Day on which dealings in
foreign currency and exchange between banks may be carried on in
London, England.
"Eurodollar Loans": Revolving Credit Loans the rate of interest
applicable to which is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined
for such day in accordance with the following formula (rounded upward
to the nearest 1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Event of Default": any of the events specified in Section 8,
provided that any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
"Excess Cash Flow": of any Person for any period, Consolidated
EBITDA less Consolidated Fixed Charges less any income taxes actually
paid during such period.
"Existing Credit Agreement:": as defined in the recitals hereto.
"Existing Interest Rate Protection Agreement": the interest rate
protection agreement entered into by the Borrower with respect to the
2008 Senior Notes.
"Existing Letter of Credit:": the Letter of Credit No. 3362/8200
dated August 28, 1998 in the face amount of $54,000,000 issued for the
benefit of IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company by ANZ, as issuing bank
under the Existing Credit Agreement for the account of the Borrower
pursuant to the Existing Credit Agreement.
"Extension Date": as defined in subsection 2.1(c).
"Extension of Credit": any making of any Revolving Credit Loan by
a Lender and any issuance or extension by the Issuing Bank of any
Letter of Credit.
"Fair Market Value": with respect to any Capital Stock, asset or
other Property, the price obtainable for such Capital Stock, asset or
other Property in an arm's-length sale between an informed and willing
purchaser under no compulsion to purchase and an informed and willing
seller under no compulsion to sell.
"Fee Letter": as defined in subsection 2.3(b).
11
17
"Final Maturity Date": the third anniversary of the Closing Date
or such later date to which the Final Maturity Date shall have been
extended pursuant to subsection 2.1(c); provided, that, if such later
date is not a Eurodollar Business Day, the Final Maturity Date shall
be the next succeeding Eurodollar Business Day.
"Financial Letter of Credit ": as defined in clause (i)(1) of
subsection 3.1(b).
"Fixed Charge Ratio": the ratio, on a pro forma basis, of (i) the
aggregate amount of Consolidated EBITDA of any Person for the
Reference Period immediately prior to the date of the transaction
giving rise to the need to calculate the Fixed Charge Ratio (the
"Transaction Date") to (ii) the aggregate Consolidated Fixed Charges
of such Person during such Reference Period; provided that for
purposes of such computation in calculating Consolidated EBITDA and
Consolidated Fixed Charges, (1) the Incurrence of the Debt giving rise
to the need to calculate the Fixed Charge Ratio and the application of
the proceeds therefrom shall be assumed to have occurred on the first
day of the Reference Period, (2) Asset Sales and Asset Acquisitions
which occur during the Reference Period or subsequent to the Reference
Period and prior to the Transaction Date (but including any Asset
Acquisition to be made with the Debt Incurred pursuant to (1) above)
shall be assumed to have occurred on the first day of the Reference
Period, (3) the Incurrence of any Debt during the Reference Period or
subsequent to the Reference Period and prior to the Transaction Date
and the application of the proceeds therefrom shall be assumed to have
occurred on the first day of such Reference Period, (4) Consolidated
Interest Expense attributable to any Debt (whether existing or being
Incurred) computed on a pro forma basis and bearing a floating
interest rate shall be computed as if the rate in effect on the date
of computation had been the applicable rate for the entire period
unless such Person or any of its Subsidiaries is a party to an
Interest Rate Protection Agreement (which shall remain in effect for
the twelve month period after the Transaction Date) which has the
effect of fixing the interest rate on the date of computation, in
which case such rate (whether higher or lower) shall be used and (5)
there shall be excluded from Consolidated Fixed Charges any
Consolidated Fixed Charges related to any amount of Debt which was
outstanding during and subsequent to the Reference Period but is not
outstanding on the Transaction Date, except for Consolidated Fixed
Charges actually incurred with respect to Debt borrowed (as adjusted
pursuant to clause (4)) under a revolving credit or similar
arrangement to the extent the commitment thereunder remains in effect
on the Transaction Date. For the purpose of making this computation,
Asset Sales and Asset Acquisitions which have been made by any Person
which has become a Subsidiary of the Borrower or been merged with or
into the Borrower or any Subsidiary of the Borrower during the
Reference Period, or subsequent to the Reference Period and prior to
the Transaction Date shall be calculated on a pro forma basis
(including all of the calculations referred to in clauses (1) through
(5) above assuming such Asset Sales or Asset Acquisitions occurred on
the first day of the Reference Period).
"Fronting Fee": as defined in subsection 3.3(a).
12
18
"GAAP": generally accepted accounting principles in the United
States of America in effect from time to time, including, without
limitation, those set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other
entity as approved by a significant segment of the accounting
profession.
"Governmental Authority": any nation or government, any state or
other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guarantee" or "Guarantee Obligation": any obligation, contingent
or otherwise, of any Person directly or indirectly guaranteeing any
Debt or other obligation of any other Person and, without limiting the
generality of the foregoing, any obligation, direct or indirect,
contingent or otherwise, of such Person (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt or
other obligation of such other Person (whether arising by virtue of
partnership arrangements, or by agreement to keep-well, to purchase
assets, goods, securities or services, or to take-or-pay, or to
maintain financial statement conditions or otherwise) or (ii) entered
into for purposes of assuring in any other manner the obligee of such
Debt or other obligation of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part);
provided that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term
"Guarantee" used as a verb has a corresponding meaning.
"Incur": with respect to any Debt, to incur, create, issue,
assume, Guarantee or otherwise become liable for or with respect to,
or become responsible for, the payment of, contingently or otherwise,
such Debt; provided that neither the accrual of interest (whether such
interest is payable in cash or kind) nor the accretion of original
issue discount shall be considered an Incurrence of Debt.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Interest Payment Date": (a) as to any ABR Loan, the last day of
each March, June, September and December, (b) as to any Eurodollar
Loan having an Interest Period of three months or less, the last day
of such Interest Period, and (c) as to any Eurodollar Loan having an
Interest Period longer than three months or 90 days, respectively,
each day which is three months or 90 days, respectively, or a whole
multiple thereof, after the first day of such Interest Period and the
last day of such Interest Period.
"Interest Period": with respect to any Eurodollar Loan:
13
19
(i) initially, the period commencing on the Borrowing Date
or conversion date, as the case may be, with respect to such
Eurodollar Loan and ending one, two, three, six, nine or twelve
months thereafter, as selected by the Borrower in its Borrowing
Request or notice of conversion, as the case may be, given with
respect thereto; and
(ii) thereafter, each period commencing on the last day of
the next preceding Interest Period applicable to such Eurodollar
Loan and ending one, two, three, six, nine or twelve months
thereafter, as selected by the Borrower by irrevocable notice to
the Agent not less than three Eurodollar Business Days prior to
the last day of the then current Interest Period with respect
thereto;
provided that, all of the foregoing provisions relating to Interest Periods
are subject to the following:
(1) if any Interest Period pertaining to a Eurodollar Loan
would otherwise end on a day that is not a Eurodollar Business
Day, such Interest Period shall be extended to the next
succeeding Eurodollar Business Day unless the result of such
extension would be to carry such Interest Period into another
calendar month in which event such Interest Period shall end on
the immediately preceding Eurodollar Business Day;
(2) any Interest Period that would otherwise extend beyond
the Final Maturity Date shall end on the Final Maturity Date;
(3) any Interest Period pertaining to a Eurodollar Loan that
begins on the last Eurodollar Business Day of a calendar month
(or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall
end on the last Eurodollar Business Day of a calendar month; and
(4) the Borrower shall select Interest Periods so as not to
require a payment or prepayment of any Eurodollar Loan during an
Interest Period for such Revolving Credit Loan.
"Interest Rate Protection Agreement": with respect to any Person,
any interest rate protection agreement, interest rate future
agreement, interest rate option agreement, interest rate swap
agreement, interest rate cap agreement, interest rate collar
agreement, interest rate hedge agreement or other similar agreement or
arrangement designed to protect such Person or any of its Subsidiaries
against fluctuations in interest rates to or under which such Person
or any of its Subsidiaries is a party or a beneficiary on the date of
this Agreement or becomes a party or a beneficiary thereafter.
14
20
"Investment": in a Person, any investment in, loan or advance to,
Guarantee on behalf of, directly or indirectly, or other transfer of
assets to, such Person.
"Investment Grade": with respect to the Borrower Indenture
Securities, a rating of "Baa3" or better by ▇▇▇▇▇'▇ Investors Service,
Inc. and a rating of "BBB-" or better by Standard and Poor's Rating
Group.
"Issuance Request": a request and certificate of the Borrower
substantially in the form of Exhibit E-2 (with such changes thereto as
agreed upon from time to time by the Agent and the Borrower), together
with a properly completed application for a Letter of Credit in such
form as the Issuing Bank may specify from time to time.
"Issuing Bank ": ANZ, in its capacity as issuer of any Letter of
Credit, and any L/C Participant issuing any Letter of Credit pursuant
to subsection 3.10(a) or succeeding ANZ as Issuing Bank pursuant to
subsection 3.10(b), in its capacity as the issuer of each Letter of
Credit issued by it.
"Joint Venture": a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form;
provided that, as to any such arrangement in corporate form, such
corporation shall not, as to any Person to which such corporation is a
Subsidiary, be considered to be a Joint Venture to which such Person
is a party.
"L/C Fee Payment Date ": the last day of each March, June,
September and December.
"L/C Obligations ": at any time, an amount equal to the sum of
(a) the aggregate then undrawn and unexpired amount of the then
outstanding Letters of Credit and (b) the aggregate amount of drawings
under Letters of Credit which have not then been reimbursed pursuant
to subsection 3.5(a).
"L/C Participants ": the collective reference to all the Lenders.
"Lead Arrangers": the collective reference to ANZ, CIBC
▇▇▇▇▇▇▇▇▇▇▇ Corporation and The Bank of Nova Scotia, in their
capacities as the lead arrangers of the Commitments.
"Letter of Credit Availability": at any time, an amount equal to
the excess of (i) the aggregate Commitments of all the Lenders at such
time over (ii) the then Aggregate Outstanding Extensions of Credits of
all the Lenders.
"Letter of Credit Fee": as defined in subsection 3.3(b).
"Letters of Credit": as defined in subsection 3.1(a).
15
21
"Leverage Ratio": as of any date, the ratio of (i) the aggregate
amount of all Debt of the Borrower at such date to (ii) the sum of (a)
the Adjusted Parent Operating Cash Flow for the six-month period
ending on such date plus (b) the projected Adjusted Parent Operating
Cash Flow for the immediately succeeding six-month period. The
projected Adjusted Parent Operating Cash Flow referred to in subclause
(b) of the preceding sentence shall be determined by using the same
amount for Adjusted Parent Operating Cash Flow for the immediately
preceding six months and then adjusting such amount for the effect
thereon (if any) of any planned or anticipated changes in the Adjusted
Parent Operating Cash Flow during such succeeding six months (as
determined in good faith by the Borrower and by using assumptions
reasonably acceptable to the Majority Lenders); provided that in no
event shall the projected Adjusted Parent Operating Cash Flow include
cash flows to be received by the Borrower in respect of any Power
Generating Facility or other asset which was not owned by a Subsidiary
of the Borrower or by an unconsolidated Affiliate of the Borrower at
any time during such preceding six-month period.
"Lien": with respect to any Property, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of
such Property. For purposes of this Agreement, the Borrower shall be
deemed to own subject to a Lien any Property which it has acquired or
holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention
agreement relating to such Property.
"Loan Documents": this Agreement, the Notes, all Borrowing
Requests, all Issuance Requests, the Fee Letter, the CDH Guarantee,
and the Security Documents.
"Loan Parties": the Borrower and CDH.
"Majority Lenders": at any time, Lenders the Commitment
Percentages of which aggregate more than 50%.
"Material Adverse Effect": a material adverse effect on (a) the
business, operations, property, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole, (b)
the validity or enforceability of this or any of the other Loan
Documents or the rights or remedies of the Agent, the Issuing Bank or
the Lenders hereunder or thereunder or (c) any Loan Party's ability to
perform any Obligation.
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or
any hazardous or toxic substances, materials or wastes, defined or
regulated as such in or under any Environmental Law, including,
without limitation, asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.
16
22
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": from an Asset Disposition or Recovery Event,
cash payments received (including, without limitation, any cash
payment received by way of (a) a payment of principal pursuant to a
note or installment receivable or otherwise, but only as and when
received (including any cash received upon sale or disposition of such
note or receivable) or (b) any dividend or other distribution on any
shares of any Person's Capital Stock representing directly or
indirectly all or part of the consideration in respect of any Asset
Disposition or Recovery Event, but only as and when received, but
excluding any other consideration received in the form of assumption
by the acquiring Person of Debt or other obligations relating to the
Property disposed of in such Asset Disposition or Recovery Event or
received in any other noncash form) therefrom, in each case, net of
all legal, title and recording tax expenses, commissions and other
fees and expenses incurred or payable and all federal, state,
provincial, foreign and local taxes required to be accrued as a
liability under GAAP (i) as a consequence of such Asset Disposition or
Recovery Event, (ii) as a result of the repayment of any Debt in any
jurisdiction other than the jurisdiction where the Property disposed
of was located or (iii) as a result of any repatriation to the United
States of America of any proceeds of such Asset Disposition or
Recovery Event, and in each case net of a reasonable reserve for the
after tax cost of any indemnification payments (fixed and contingent)
attributable to seller's indemnities to the purchaser undertaken by
the Borrower or any of its Subsidiaries in connection with such Asset
Disposition or Recovery Event (but excluding any payments, which by
the terms of the indemnities will not, under any circumstances, be
made prior to the then Final Maturity Date), and net of all payments
made on any Debt which is secured by such Property, in accordance with
the terms of any Lien upon or with respect to such Property or which
must by its terms or by applicable law be repaid out of the proceeds
from such Asset Disposition, and net of all distributions and other
payments made to holders of minority interests in Subsidiaries or
Joint Ventures as a result of such Asset Disposition.
"Net Income": of any Person for any period, the net income (loss)
of such Person for such period, determined in accordance with GAAP,
except that for any purpose hereunder (other than for computing Net
Income of the Borrower and its consolidated Subsidiaries for purposes
of subsection 7.1(c)(iii)) extraordinary and non-recurring gains and
losses as determined in accordance with GAAP shall be excluded.
"Net Worth": of any Person, as of any date the aggregate of
capital, surplus and retained earnings (including any cumulative
translation adjustment) of such Person and its consolidated
Subsidiaries as would be shown on a consolidated balance sheet of such
Person and its consolidated Subsidiaries prepared as of such date in
accordance with GAAP.
"Non-Excluded Taxes": as defined in subsection 2.15.
17
23
"Non-Recourse": to a Person as applied to any Debt (or portion
thereof), that such Person is not, directly or indirectly, liable to
make any payments with respect to such Debt (or portion thereof), that
no Guarantee of such Debt (or portion thereof) has been made by such
Person other than a Guarantee limited in recourse to the Capital Stock
of the Person incurring such Debt (or any shareholder, partner, member
or participant of such Person) and that such Debt (or portion thereof)
is not secured by a Lien on any asset of such Person other than the
Capital Stock of the Person incurring such Debt or any shareholder,
partner, member or participant of such Person or of the Person whose
obligations were Guaranteed, provided that for purposes of this
definition the status of a Subsidiary as a general partner of a
partnership or Joint Venture shall not, without more, cause such
Person to be, directly or indirectly, liable to make payments with
respect to such Debt or constitute a Guarantee of such Debt for
purposes of determining whether Debt is Non-Recourse, and provided
further that none of the following shall cause any Debt to fail to be
Non-Recourse: the incurrence of Debt, Guarantees or Liens jointly by
(i) Cogentrix Eastern Carolina Corporation and Cogentrix of North
Carolina, Inc. (or successor to the merger or other combination of
such entities) with respect to the Power Generation Facilities located
at Elizabethtown, Kenansville, Lumberton, Southport and Roxboro, North
Carolina; (ii) Cogentrix Virginia Leasing Corporation and ▇▇▇▇▇ River
Cogeneration Company (or successor to the merger or other combination
of such entities) with respect to the Power Generation Facilities
located at Portsmouth and Hopewell, Virginia; and (iii) Subsidiaries
of the Borrower or Joint Ventures in which the Borrower or one of its
Subsidiaries is a partner, shareholder, member or other participant,
which become such after the date of this Agreement, incurred
thereafter with respect to the development or acquisition by such
Subsidiaries or Joint Ventures of multiple Power Generation
Facilities, so long as no such Subsidiary or Joint Venture has any
direct or indirect interest in any Power Generation Facility other
than the Power Generation Facilities to be developed or acquired or in
any other business.
"Notes": as defined in Section 2.5(e).
"Obligations": all of the Debt, obligations and liabilities of
the Loan Parties to the Agent, the Lead Arrangers, the Issuing Bank,
the Lenders, or to any of them now or in the future existing under or
in connection with this Agreement, the Notes, the CDH Guarantee or any
other Loan Document (as any of the foregoing may from time to time be
amended, modified, substituted, extended, or renewed), direct or
indirect, absolute or contingent, due or to become due, now or
hereafter existing.
"Other Borrower Indebtedness": any Debt of the Borrower of the
types described in clause (i) and (ii) of the definition of Debt which
has a term of not less than 5 years (other than the Obligations but
including the Borrower Indenture Securities) and which the Borrower is
not prohibited from incurring hereunder or under the Borrower
Indentures.
18
24
"Parent Cash Flow Coverage Ratio": for any period, the ratio of
(i) Adjusted Parent Operating Cash Flow for such period to (ii) Parent
Corporate Charges for such period.
"Parent Corporate Charges": for any period, the sum of the
following amounts (determined without duplication), in each case to
the extent paid by the Borrower during such period and regardless of
whether any such amount was accrued during such period:
(a) interest expenses of the Borrower for such period,
including without limitation all commissions, discounts, other
fees and charges owed with respect to letters of credit and
bankers' acceptance financing and net costs associated with
Interest Rate Protection Agreements; and
(b) rental payments and other expenses of the Borrower for
such period under any Capitalized Lease.
"Parent Operating Cash Flow": for any period, the sum of the
following amounts (determined without duplication), but only to the
extent received in cash by the Borrower during such period and
regardless of whether any such amount was accrued during such period:
(a) dividends and distributions paid to the Borrower by its
Subsidiaries during such period;
(b) development, consulting, management or other fees paid
to the Borrower during such period;
(c) tax-sharing payments made to the Borrower during such
period;
(d) interest, dividends and other distributions paid during
such period with respect to cash and cash investments of the
Borrower (other than with respect to amounts on deposit in the
Collateral Account except to the extent of any interest earnings
on cash deposited in the Collateral Account actually paid to the
Borrower pursuant to Section 3.9(c)); and
(e) other cash payments made to the Borrower by its
Subsidiaries other than (i) returns of invested capital upon
liquidation or sale, (ii) payments of the principal of Debt of
any such Subsidiary to the Borrower and (iii) payments in an
amount equal to the aggregate amount released from debt service
reserve accounts upon the issuance of Letters of Credit for the
benefit of the beneficiaries of such accounts.
"Participant": as defined in subsection 10.6(b).
19
25
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Performance Letter of Credit ": as defined in clause (i)(2) of
subsection 3.1(b).
"Permitted Holders": (a) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., ▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇ (collectively, the
"Current Holders"), (b) members of the immediate families of the
Current Holders, (c) trusts for the benefit of Current Holders and
members of the immediate families of the Current Holders, and (d) a
non-profit corporation or foundation controlled by any of the Persons
described in (a), (b) or (c) of this definition. Members of a Person's
"immediate family" shall mean such Person's parents, brothers,
sisters, spouse and lineal descendants.
"Permitted Investment": any Investment of the type specified in
clause (iv) of the definition of Restricted Payment which is made
directly or indirectly by the Borrower and its Subsidiaries; provided
that the Person in which the Investment is made is (a) a Subsidiary
which, directly or indirectly, is or will be engaged in the
development, construction, marketing, management, acquisition,
ownership or operation of a Power Generation Facility or (b) a Joint
Venture; provided further, that, in the case of an Investment in a
Joint Venture, (i) at the time such Investment is made, the Borrower
could Incur at least $1 of Debt under subsection 7.2; (ii) at the time
such Investment is made, no Event of Default or event that, after the
giving of notice or lapse of time or both would become an Event of
Default, shall have occurred and be continuing; and (iii) such
Investment is in a Joint Venture which, directly or indirectly, is or
will be engaged in the development, construction, marketing,
management, acquisition, ownership or operation of a Power Generation
Facility.
"Permitted Payments": with respect to the Borrower or any of its
Subsidiaries (i) any dividend on shares of Capital Stock payable (or
to the extent paid) solely in shares of Capital Stock (other than
Redeemable Stock) or in options, warrants or other rights to purchase
Capital Stock (other than Redeemable Stock); (ii) any dividend or
other distribution payable to the Borrower by any of its Subsidiaries
or by a Subsidiary to a Wholly-Owned Subsidiary; (iii) the repurchase
or other acquisition or retirement for value of any shares of the
Borrower's Capital Stock, or any option, warrant or other right to
purchase shares of the Borrower's Capital Stock with additional shares
of, or out of the proceeds of a substantially contemporaneous issuance
of, Capital Stock other than Redeemable Stock (unless the redemption
provisions of such Redeemable Stock prohibit the redemption thereof
prior to the date on which the Capital Stock to be acquired or retired
was by its terms required to be redeemed); (iv) any defeasance,
redemption, repurchase or other acquisition for value of any Debt
which by its terms ranks subordinate in right of payment to the
Obligations with the proceeds from the issuance of (x) Debt which is
also subordinate to the Obligations at least to the extent and in the
manner as the Debt to be defeased, redeemed, repurchased or otherwise
acquired is subordinate in right of payment to the Obligations;
provided that such subordinated Debt provides for no payments of
20
26
principal by way of sinking fund, mandatory redemption or otherwise
(including defeasance) by the Borrower (including, without limitation,
at the option of the holder thereof other than an option given to a
holder pursuant to an asset disposition or change of control covenant
which is no more favorable to the holders of such Debt than the
provisions contained in subsections 2.6(b), 7.6, 7.9, 7.10 and 8(j)
are to the Lenders and such Debt provides that the Borrower will not
repurchase such Debt pursuant to such provisions prior to the date
that all Obligations have been paid and performed in full) prior to,
or in an amount greater than, any Stated Maturity of the Debt being
replaced and the proceeds of such subordinated Debt are utilized for
such purpose within 45 days of issuance or (y) Capital Stock (other
than Redeemable Stock); (v) in respect of any actual payment on
account of an Investment (other than a Permitted Investment) which is
not fixed in amount at the time when made, the amount determined by
the Board of Directors to be a Restricted Payment on the date such
Investment was originally deemed to have been made (the "Original
Restricted Payment Charge") plus an amount equal to the interest on a
hypothetical investment in a principal amount equal to the Original
Restricted Payment Charge assuming interest at a rate of 7% per annum
compounded annually for a period beginning on the date the Investment
was originally deemed to have been made and ending with respect to any
portion of the Original Restricted Payment Charge actually paid on the
date of actual payment less any actual payments previously made on
account of such Investment; provided that the Permitted Payment under
this clause (v) shall in no event exceed the payment actually made;
(vi) any amount required to be paid with respect to an obligation
outstanding on the date of this Agreement; or (vii) a Permitted
Investment.
"Person": an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Power Generation Facility": an electric power or thermal energy
generation or cogeneration facility or related facilities (including
residual waste management and, to the extent such facilities are in
existence on the date of this Agreement or are required by contract or
applicable law, rule or regulation, facilities that use thermal energy
from a cogeneration facility), and its or their related electric power
transmission, fuel supply and fuel transportation facilities, together
with its or their related power supply, thermal energy and fuel
contracts and other facilities, services or goods that are ancillary,
incidental, necessary or reasonably related to the marketing,
development, construction, management or operation of the foregoing,
as well as other contractual arrangements with customers, suppliers
and contractors.
21
27
"Preferred Stock": with respect to any Person, any and all
shares, interests, participations or other equivalents (however
designated, whether voting or non-voting) of preferred or preference
stock of such Person which is outstanding or issued on or after the
date of this Agreement.
"Pro Forma Balance Sheet": as defined in subsection 4.1(e).
"Project Properties": as defined in subsection 4.15.
"Property": as to any Person, all types of real, personal,
tangible, intangible or mixed property owned by such Person whether or
not included in the most recent consolidated balance sheet of such
Person under GAAP.
"Recovery Event": any settlement of or payment in respect of any
property or casualty insurance claim or any condemnation proceeding
relating to any Property of the Borrower or any of its Subsidiaries.
"Redeemable Stock": any class or series of Capital Stock of any
Person that by its terms or otherwise is (i) required to be redeemed
prior to the later of the Final Maturity Date, the Stated Maturity of
the 2004 Senior Notes or the Stated Maturity of the 2008 Senior Notes,
(ii) redeemable at the option of the holder of such class or series of
Capital Stock at any time prior to the later of the Final Maturity
Date or the Stated Maturity of the 2004 Senior Notes or the Stated
Maturity of the 2008 Senior Notes or (iii) convertible into or
exchangeable for Capital Stock referred to in clause (i) or (ii) above
or Debt having a scheduled maturity prior to the later of the Final
Maturity Date, the Stated Maturity of the 2004 Senior Notes or the
Stated Maturity of the 2008 Senior Notes; provided that any Capital
Stock that would not constitute Redeemable Stock but for provisions
thereof giving holders thereof the right to require the Borrower to
repurchase or redeem such Capital Stock upon the occurrence of an
"asset sale" or a "change of control" occurring prior to the later of
the Final Maturity Date or the Stated Maturity of the 2004 Senior
Notes or the Stated Maturity of the 2008 Senior Notes shall not
constitute Redeemable Stock if the asset disposition or change of
control provision applicable to such Capital Stock is no more
favorable to the holders of such Capital Stock than the provisions
contained in subsections 2.6(b), 7.6, 7.9, 7.10 and 8(j) are to the
Lenders and such Capital Stock specifically provides that the Borrower
will not repurchase or redeem any such Capital Stock pursuant to such
provisions prior to the date that all Obligations have been paid and
performed in full.
"Reference Period": the four complete fiscal quarters for which
financial information is available preceding the date of a transaction
giving rise to the need to make a financial calculation; provided,
that for purposes of this definition financial information shall not
be considered unavailable for any fiscal quarter on any day that is 30
or more days after the last day of such fiscal quarter.
22
28
"Refinance": to issue Debt in order to substantially concurrently
repay, redeem, defease, refund, refinance, discharge or otherwise
retire for value, in whole or in part, other Debt or securities.
"Register": as defined in subsection 10.6(d).
"Regulation U": Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.
"Reimbursement Obligation ": the obligation of the Borrower to
reimburse the Issuing Bank pursuant to subsection for amounts drawn
under Letters of Credit.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty day
notice period is waived under subsections .13, .14, .16, .18, .19 or
.20 of PBGC Reg. ss. 2615.
"Required Lenders": at any time, Lenders the Commitment
Percentages of which aggregate at least 66-2/3%.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its property or to which such Person or any of its property is
subject.
"Responsible Officer": the chief executive officer or the
president of the Borrower or, with respect to financial matters, the
chief financial officer, the vice president-finance or the treasurer
of the Borrower.
"Restricted Payment": with respect to any Person, (i) any
dividend or other distribution on any shares of such Person's Capital
Stock; (ii) any payment on account of the purchase, redemption,
retirement or acquisition for value of such Person's Capital Stock;
(iii) any defeasance, redemption, repurchase or other acquisition or
retirement for value prior to the Stated Maturity of any Debt ranked
subordinate in right of payment to the Obligations; and (iv) any
Investment made in an Affiliate (other than the Borrower or CDH).
Notwithstanding the foregoing, "Restricted Payment" shall not include
any Permitted Payment.
"Revolving Credit Loans": as defined in subsection 2.1.
23
29
"Security Documents": the Account Pledge Agreement and the
Securities Account Control Agreement.
"Secured Parties": the collective reference to the Agent, the
Issuing Bank, the Lenders and the L/C Participants.
"Securities Account Control Agreement": as defined in subsection
3.9(b).
"Significant Subsidiary": of a Person, as of any date, any
Subsidiary, or two or more Subsidiaries taken together in the event of
a cross-collateralization of such multiple Subsidiaries' Debt, which
has two or more of the following attributes: (i) it contributes 20% or
more of such Person's Excess Cash Flow for its most recently completed
fiscal quarter or (ii) it contributed 15% or more of Net Income before
tax of such Person and its consolidated Subsidiaries for such Person's
most recently completed fiscal quarter or (iii) it constituted 20% or
more of Consolidated Total Assets of such Person at the end of such
Person's most recently completed fiscal quarter.
"Single Employer Plan": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"Stated Maturity": with respect to any debt security or any
installment of interest thereon, the date specified in such debt
security as the fixed date on which any principal of such debt
security or any such installment of interest is due and payable.
"Subsidiary": with respect to any Person, any corporation or
other entity of which a majority of the Capital Stock or other
ownership interests having ordinary voting power (other than stock or
such other ownership interests having such power only by reason of the
happening of a contingency) to elect a majority of the board of
directors or other persons performing similar functions are at the
time directly or indirectly owned by such Person. Unless otherwise
qualified, all references to a "Subsidiary" or to "Subsidiaries" in
this Agreement shall refer to a Subsidiary or Subsidiaries of the
Borrower.
"Tangible Net Worth ": with respect to any Person, as of the date
of determination, the Net Worth of such Person at such date, after
deducting therefrom all intangible assets, including without
limitation the following:
(a) any surplus resulting from the write-up of assets subsequent
to June 30, 1998;
(b) goodwill, including any amounts (however designated on the
balance sheet) representing Acquisition Premiums;
(c) patents, trademarks, copyrights, franchises, licenses,
service marks and brand names;
24
30
(d) leasehold improvements not recoverable at the expiration of a
lease; and
(e) deferred charges (including, but not limited to, unamortized
debt discount and expense, organization expenses and experimental
expenses and project and other development expenses, but excluding
prepaid expenses).
"Trade Payables": with respect to any Person, any accounts
payable or any other indebtedness or monetary obligation to trade
creditors created, assumed or Guaranteed by such Person or any of its
Subsidiaries arising in the ordinary course of business in connection
with the acquisition of goods or services.
"Tranche": the collective reference to Eurodollar Loans the then
current Interest Periods with respect to all of which begin on the
same date and end on the same later date (whether or not such
Revolving Credit Loans shall originally have been made on the same
day).
"Transferee": as defined in subsection 10.6(f).
"2004 Senior Note Indenture": the Indenture, dated as of March
15, 1994, between the Borrower and the First Union National Bank of
North Carolina, a National Banking Association, as trustee, as
amended, supplemented or otherwise modified from time to time.
"2004 Senior Notes": the 8.10% Senior Notes Due 2004 issued by
the Borrower pursuant to the 2004 Senior Note Indenture.
"2008 Senior Note Indenture": the Indenture, dated as of October
20, 1998, between the Borrower and First Union National Bank of North
Carolina, as trustee, as supplemented by the first Supplemental
Indenture thereto dated as of October 20, 1998, as amended,
supplemented or otherwise modified from time to time.
"2008 Senior Notes": the 8.75% Senior Notes Due 2008 issued by
the Borrower pursuant to the 2008 Senior Note Indenture.
"Type": (a) as to any Revolving Credit Loan, its nature as an ABR
Loan or a Eurodollar Loan and (b) as to any Letter of Credit, its
nature as a Financial Letter of Credit or a Performance Letter of
Credit.
"Uniform Customs ": the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be amended from time to time.
25
31
"Voting Stock": with respect to any Person, Capital Stock of any
class or kind ordinarily having the power to vote for the election of
directors (or persons fulfilling similar responsibilities) of such
Person.
"Wholly-Owned Subsidiary": with respect to any Person, any
Subsidiary of such Person if all of the Capital Stock or other
ownership interests in such Subsidiary having ordinary voting power
(other than stock or such other ownership interests having such power
only by reason of the happening of a contingency) to elect the entire
board of directors or entire group of other persons performing similar
functions (other than any director's qualifying shares or Investments
by foreign nationals mandated by applicable law) is owned directly or
indirectly, by one or more Wholly-Owned Subsidiaries of such Person's
Wholly-Owned Subsidiaries, by such Person.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in any Notes or any certificate or other document made or delivered
pursuant hereto.
(b) As used herein and in any Notes, and any certificate or other
document made or delivered pursuant hereto, accounting terms relating to the
Borrower and its Subsidiaries not defined in subsection 1.1 and accounting terms
partly defined in subsection 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP.
(c) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Revolving Credit Commitments. (a) Subject to the terms and
conditions hereof, each Lender severally agrees to make revolving credit loans
("Revolving Credit Loans") to the Borrower from time to time during the
Commitment Period in an aggregate principal amount at any one time outstanding
which, when added to such Lender's Commitment Percentage of the then outstanding
L/C Obligations, does not exceed the amount of such Lender's Commitment at such
time. During the Commitment Period the Borrower may use the Commitments by
borrowing, prepaying and reborrowing the Revolving Credit Loans in whole or in
part, all in accordance with the terms and conditions hereof. At no time may the
aggregate outstanding principal amount of all Lenders' Revolving Credit Loans,
when added to then outstanding L/C Obligations, exceed the aggregate of all
Lenders' Commitments at such time.
26
32
(b) The Revolving Credit Loans may from time to time be (i)
Eurodollar Loans, (ii) ABR Loans or (iii) a combination thereof, as determined
by the Borrower and notified to the Agent in accordance with subsections 2.2 and
2.7, provided that no Revolving Credit Loan shall be made as a Eurodollar Loan
after the day that is one month prior to the Final Maturity Date.
(c) The Final Maturity Date may be extended, in the manner set
forth in this subsection 2.1(c), on the first anniversary of the Closing Date
and each such anniversary thereafter (each, an "Extension Date"), in each case
for a period of one year after the Final Maturity Date theretofore in effect,
provided, that the Borrower shall be entitled to request no more than two such
one-year extensions. If the Borrower wishes to request an extension of the Final
Maturity Date on any Extension Date, it shall give written notice to that effect
to the Agent not less than 45 nor more than 90 days prior to such Extension
Date, whereupon the Agent shall notify each of the Lenders of such notice. Each
Lender will use reasonable efforts to respond to such request, whether
affirmatively or negatively, no later than 15 days prior to such Extension Date.
If all Lenders respond affirmatively (any Lender which does not respond being
deemed to have responded negatively), then, subject to receipt by the Agent
prior to such Extension Date of counterparts of an Extension Agreement in
substantially the form of Exhibit D duly completed and signed by all of the
parties hereto, the Final Maturity Date shall be extended, effective on such
Extension Date, for a period of one year to the date stated in such Extension
Agreement.
2.2 Procedure for Revolving Credit Borrowing. The Borrower may
borrow under the Commitments during the Commitment Period on any Business Day in
the case of ABR Loans and on any Eurodollar Business Day in the case of
Eurodollar Loans, provided that the Borrower shall have delivered to the Agent a
properly completed Borrowing Request, duly executed by a Responsible Officer of
the Borrower, which notice shall be irrevocable and must be received by the
Agent prior to 10:00 A.M., New York City time, (a) three Eurodollar Business
Days prior to the requested Borrowing Date, if all or any part of the requested
Revolving Credit Loans are to be initially Eurodollar Loans or (b) one Business
Day prior to the requested Borrowing Date, otherwise. In each such Borrowing
Request, the Borrower shall, in addition to any other information required to be
therein, specify (i) the amount to be borrowed, (ii) the requested Borrowing
Date, (iii) whether the borrowing is to be of Eurodollar Loans, ABR Loans or a
combination thereof and (iv) if the borrowing is to be entirely or partly of
Eurodollar Loans, the respective amounts of each such Type of Revolving Credit
Loan and the respective lengths of the initial Interest Periods therefor. Each
borrowing under the Commitments of ABR Loans and each borrowing under the
Commitments of Eurodollar Loans shall be in an amount equal to $1,000,000 or a
whole multiple of $500,000 in excess thereof. Upon receipt of any such notice
from the Borrower, the Agent shall promptly notify each Lender thereof. Each
Lender will make the amount of its pro rata share of each borrowing available to
the Agent, by wire transfer using Fedwire or such other method as reasonably
specified by the Agent, for the account of the Borrower at the office of the
Agent specified in subsection 10.2 prior to 11:00 A.M., New York City time, on
the Borrowing Date requested by the Borrower in funds immediately available to
the Agent. Such borrowing will then be made available to the Borrower by the
Agent by wire transfer to the account specified in the Borrowing Request, in the
27
33
amount of the aggregate of the amounts made available to the Agent by the
Lenders and in like funds as received by the Agent.
2.3 Fees. (a) Commitment Fee. The Borrower agrees to pay to the
Agent for the account of each Lender a commitment fee (a "Commitment Fee") for
the Commitment Period computed at a rate per annum equal to the Applicable
Margin in effect from time to time for the Commitment Fee, such fee to be paid
on the average daily amount of the Available Commitment of such Lender during
the period for which payment is made. The Commitment Fee shall be payable
quarterly in arrears on the last day of each March, June, September and December
and on the Final Maturity Date or such earlier date as the Commitments shall
terminate as provided herein, commencing on the first of such dates to occur
after the date hereof.
(b) Up-Front Fees. The Borrower agrees to pay to ANZ on or prior
to the Closing Date for its own account and for the account of the other Lenders
the non-refundable up-front fees in the amount set forth in the letter agreement
dated October 29, 1998, between the Borrower and ANZ (the "Fee Letter").
(c) Administration Fee. The Borrower agrees to pay to the Agent,
for its own account, a non-refundable fee (the "Administration Fee") for its
administration of this Agreement in the amount and at the times set forth in the
Fee Letter.
2.4 Termination or Reduction of Commitments.
(a) Optional. The Borrower shall have the right, upon not less
than thirty days' notice to the Agent, to terminate the Commitments or, from
time to time, to reduce the amount of the Commitments. Any such reduction shall
be in an amount equal to $1,000,000 or a whole multiple of $500,000 in excess
thereof and shall reduce permanently the Commitments then in effect.
(b) Mandatory. In the event that (i) the Borrower or any of its
Subsidiaries shall at any time before the day that is 366 days before the Final
Maturity Date receive any payment representing all or any part of the Net Cash
Proceeds of an Asset Disposition made by the Borrower or any of its Subsidiaries
or any Recovery Event and (ii) such payment shall not have been invested in its
entirety by the Borrower or its Subsidiaries in the business or businesses of
the Borrower or any of its Subsidiaries within 364 days of the receipt of such
payment, the amount of the Commitments shall be mandatorily reduced on the day
that is 365 days after the receipt of such payment in an amount equal to the
product of (x) the amount of the payment of Net Cash Proceeds not so invested
times (y) the fraction obtained by dividing (A) the amount of the Commitments
then in effect by (B) the sum of the amount of the Commitments then in effect
plus the aggregate principal amount of the Other Borrower Indebtedness then
outstanding.
2.5 Repayment of Revolving Credit Loans; Evidence of Debt. (a)
The Borrower hereby unconditionally promises to pay to the Agent for the account
of each Lender the then unpaid principal amount of each Revolving Credit Loan of
such Lender on the Final Maturity Date (or such earlier date on which the
28
34
Revolving Credit Loans become due and payable pursuant to Section 8). The
Borrower hereby further agrees to pay interest on the unpaid principal amount of
the Revolving Credit Loans from time to time outstanding from the date hereof
until payment in full thereof at the rates per annum, and on the dates, set
forth in subsection 2.9.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrower to such
Lender resulting from each Revolving Credit Loan of such Lender from time to
time, including the amounts of principal and interest payable and paid to such
Lender from time to time under this Agreement.
(c) The Agent shall maintain the Register pursuant to subsection
10.6(d), and a subaccount therein for each Lender, in which shall be recorded
(i) the amount of each Revolving Credit Loan made hereunder, the Type thereof
and each Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) both the amount of any sum received by the Agent
hereunder from the Borrower and each Lender's share thereof.
(d) The entries made in the Register and the accounts of each
Lender maintained pursuant to subsection 2.5(b) shall, to the extent permitted
by applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Agent to maintain the Register or any such account,
or any error therein, shall not in any manner affect the obligation of the
Borrower to repay (with applicable interest) the Revolving Credit Loans made to
such Borrower by such Lender in accordance with the terms of this Agreement.
(e) The Borrower agrees that it will execute and deliver to each
Lender upon the Closing Date, a promissory note of the Borrower evidencing the
Revolving Credit Loans of such Lender, substantially in the form of Exhibit A
with appropriate insertions as to date and principal amount (a " Note").
2.6 Prepayments.
(a) Optional. The Borrower may on the last day of any Interest
Period with respect thereto, in the case of Eurodollar Loans, or at any time and
from time to time, in the case of ABR Loans, prepay the Revolving Credit Loans,
in whole or in part, without premium or penalty, upon irrevocable notice to the
Agent, specifying the date and amount of prepayment and whether the prepayment
is of Eurodollar Loans, ABR Loans or a combination thereof, and, if of a
combination thereof, the amount allocable to each, which notice must be received
by the Agent at least (i) three Eurodollar Business Days prior to the date of
prepayment if any of the Revolving Credit Loans to be prepaid are Eurodollar
Loans and (ii) one Business Day prior to the date of prepayment, otherwise. Upon
receipt of any such notice the Agent shall promptly notify each Lender thereof.
If any such notice is given, the amount specified in such notice shall be due
and payable on the date specified therein, together with any amounts payable
29
35
pursuant to subsection 2.16 and accrued interest to such date on the amount
prepaid. Partial prepayments shall be in an aggregate principal amount of
$1,000,000 or a whole multiple of $500,000 in excess thereof.
(b) Mandatory.
(i) In the event that the Commitments shall have been
reduced pursuant to subsection 2.4 and the aggregate principal
amount of the Revolving Credit Loans then outstanding, when added
to the then outstanding L/C Obligations, exceed the Commitments
in effect after such reduction less the aggregate amount then on
deposit in the Collateral Account (excluding any amounts then on
deposit representing interest or other earnings thereon), the
Borrower shall apply an amount equal to the amount of such excess
to prepay the Revolving Credit Loans or to collateralize the
Letters of Credit or both.
(ii) Amounts to be applied pursuant to clause (i) of this
subsection 2.6(b) shall be applied first to prepay the principal
amount of the Revolving Credit Loans then outstanding until all
such Revolving Credit Loans shall have been prepaid in full, and
if any excess then remains such excess shall be deposited in the
Collateral Account to be held, applied or released for
application as provided in subsection 3.9. The particular
Revolving Credit Loans to be prepaid shall be designated by the
Borrower (or, failing such designation, as the Agent may
determine). Each prepayment shall be applied to prepay ratably
the Revolving Credit Loans of the Lenders. Each payment of
principal shall be made together with interest accrued on the
amount prepaid to the date of payment.
2.7 Conversion and Continuation Options. (a) The Borrower may
elect from time to time to convert Eurodollar Loans to ABR Loans by giving the
Agent at least two Eurodollar Business Days' prior irrevocable notice of such
election, provided that any such conversion of Eurodollar Loans may only be made
on the last day of an Interest Period with respect thereto. The Borrower may
elect from time to time to convert ABR Loans to Eurodollar Loans by giving the
Agent at least three Eurodollar Business Days' prior irrevocable notice of such
election. Any such notice of conversion to Eurodollar Loans shall specify the
length of the initial Interest Period or Interest Periods therefor. Upon receipt
of any such notice the Agent shall promptly notify each Lender thereof. All or
any part of outstanding Eurodollar Loans or ABR Loans may be converted as
provided herein, provided that (i) no Revolving Credit Loan may be converted
into a Eurodollar Loan when any Event of Default has occurred and is continuing
and (ii) no Revolving Credit Loan may be converted into a Eurodollar Loan after
the date that is one month prior to the Final Maturity Date.
(b) Any Eurodollar Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving notice to the Agent, in accordance with the applicable
provisions of the term "Interest Period" set forth in subsection 1.1, of the
length of the next Interest Period to be applicable to such Revolving Credit
30
36
Loans, provided that no Eurodollar Loan may be continued as such (i) when any
Event of Default has occurred and is continuing or (ii) after the date that is
one month prior to the Final Maturity Date and provided, further, that if the
Borrower shall fail to give such notice or if such continuation is not permitted
such Revolving Credit Loans shall be automatically converted to ABR Loans on the
last day of such then expiring Interest Period.
2.8 Minimum Amounts and Maximum Number of Tranches. All
borrowings, conversions and continuations of Revolving Credit Loans hereunder
and all selections of Interest Periods hereunder shall be in such amounts and be
made pursuant to such elections so that, after giving effect thereto, the
aggregate principal amount of the Revolving Credit Loans comprising each Tranche
shall be equal to $1,000,000 or a whole multiple of $500,000 in excess thereof.
2.9 Interest Rates and Payment Dates. (a) Each Eurodollar Loan
shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus the Applicable Margin for such Type of Revolving Credit Loan.
(b) Each ABR Loan shall bear interest at a rate per annum equal
to the ABR plus the Applicable Margin for such Type of Revolving Credit Loan.
(c) If all or a portion of (i) any principal of any Revolving
Credit Loan, (ii) any interest payable thereon, (iii) the Commitment Fee, the
Administration Fee, any Fronting Fee or any Letter of Credit Fee or (iv) any
other amount payable hereunder or under any other Loan Document shall not be
paid when due (whether at the stated maturity, by acceleration or otherwise),
the principal of the Revolving Credit Loans and any such overdue interest,
Commitment Fee, Administration Fee, Fronting Fee, Letter of Credit Fee or other
amount shall bear interest at a rate per annum which is (x) in the case of
principal, the rate that would otherwise be applicable thereto pursuant to the
foregoing provisions of this subsection plus 2% or (y) in the case of any such
overdue interest, Commitment Fee, Administration Fee, Fronting Fee, Letter of
Credit Fee or other amount, the rate described in paragraph (b) of this
subsection plus 2%, in each case from the date of such non-payment until such
overdue principal, interest, Commitment Fee, Administration Fee, Fronting Fee,
Letter of Credit Fee or other amount is paid in full (as well after as before
judgment).
(d) Interest shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to paragraph (c) of this
subsection shall be payable from time to time on demand.
2.10 Computation of Interest and Fees. (a) The Commitment Fee
and, whenever it is calculated on the basis of the Prime Rate, interest shall be
calculated on the basis of a 365- (or 366-, as the case may be) day year for the
actual days elapsed; and, otherwise, interest shall be calculated on the basis
of a 360-day year for the actual days elapsed. The Agent shall as soon as
practicable notify the Borrower and the Lenders of each determination of a
Eurodollar Rate. Any change in the interest rate on a Revolving Credit Loan
resulting from a change in the ABR or the Eurocurrency Reserve Requirements
31
37
shall become effective as of the opening of business on the day on which such
change becomes effective. The Agent shall as soon as practicable notify the
Borrower and the Lenders of the effective date and the amount of each such
change in interest rate.
(b) Each determination of an interest rate by the Agent pursuant
to any provision of this Agreement shall be conclusive and binding on the
Borrower and the Lenders in the absence of manifest error. The Agent shall, at
the request of the Borrower, deliver to the Borrower a statement showing the
quotations used by the Agent in determining any interest rate pursuant to
subsection 2.9(a) or (c).
2.11 Inability to Determine Interest Rate. If prior to the first
day of any Interest Period:
(a) the Agent shall have determined (which determination shall be
conclusive and binding upon the Borrower) that, by reason of
circumstances affecting the relevant market, adequate and reasonable
means do not exist for ascertaining the Eurodollar Rate for such
Interest Period, or
(b) the Agent shall have received notice from the Majority
Lenders that the Eurodollar Rate determined or to be determined for
such Interest Period will not adequately and fairly reflect the cost
to such Lenders (as conclusively certified by such Lenders) of making
or maintaining their affected Revolving Credit Loans during such
Interest Period,
the Agent shall give telecopy or telephonic notice thereof to the Borrower and
the Lenders as soon as practicable thereafter. If such notice is given (x) any
Eurodollar Loans requested to be made on the first day of such Interest Period
shall be made as ABR Loans, (y) any Revolving Credit Loans that were to have
been converted on the first day of such Interest Period to Eurodollar Loans
shall be continued as ABR Loans and (z) any outstanding Eurodollar Loans that
were to have been continued as such on such first day shall be converted on such
day to ABR Loans. Until such notice has been withdrawn by the Agent, no further
Eurodollar Loans shall be made or continued as such, nor shall the Borrower have
the right to convert ABR Loans to Eurodollar Loans.
2.12 Pro Rata Treatment and Payments. (a) Each borrowing by the
Borrower from the Lenders hereunder, each payment by the Borrower of the
Commitment Fee or any Letter of Credit Fee and any reduction of the Commitments
of the Lenders shall be made pro rata according to the respective Commitment
Percentages of the Lenders. Each payment (including each prepayment) by the
Borrower on account of principal of and interest on the Revolving Credit Loans
shall be made pro rata according to the respective outstanding principal amounts
of the Revolving Credit Loans then held by the Lenders. All payments (including
prepayments) to be made by the Borrower hereunder, whether on account of
principal, interest, fees or otherwise, shall be made without set off or
counterclaim and shall be made prior to 11:00 a.m., New York City time, on the
32
38
due date thereof to the Agent, for the account of the Lenders, at the Agent's
office specified in subsection 10.2, in Dollars and in immediately available
funds. The Agent shall distribute such payments to the Lenders promptly upon
receipt in like funds as received. If any payment hereunder (other than a
payment on any Eurodollar Loan) becomes due and payable on a day other than a
Business Day, such payment shall be extended to the next succeeding Business
Day, and, with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension. If any payment on a
Eurodollar Loan becomes due and payable on a day other than a Eurodollar
Business Day, the maturity thereof shall be extended to the next succeeding
Eurodollar Business Day (unless the result of such extension would be to extend
such payment into another calendar month, in which event such payment shall be
made on the immediately preceding Eurodollar Business Day) and, with respect to
payments of principal, interest thereon shall be payable at the then applicable
rate during any such extension.
(b) Unless the Agent shall have been notified in writing by any
Lender prior to a borrowing that such Lender will not make the amount that would
constitute its Commitment Percentage of such borrowing available to the Agent,
the Agent may assume that such Lender is making such amount available to the
Agent, and the Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If such amount is not made available to the
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Agent, on demand, such amount with interest thereon at a rate equal to
the daily average Federal Funds Effective Rate for the period until such Lender
makes such amount immediately available to the Agent. A certificate of the Agent
submitted to any Lender with respect to any amounts owing under this subsection
shall be conclusive in the absence of manifest error. If such Lender's
Commitment Percentage of such borrowing is not made available to the Agent by
such Lender within three Business Days of such Borrowing Date, the Agent shall
also be entitled to recover such amount with interest thereon at the rate per
annum applicable to ABR Loans hereunder, on demand, from the Borrower.
2.13 Illegality. Notwithstanding any other provision herein, if
the adoption of or any change in any Requirement of Law or in the interpretation
or application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert ABR Loans to Eurodollar Loans shall forthwith be cancelled and (b) such
Lender's Revolving Credit Loans then outstanding as Eurodollar Loans, if any,
shall be converted automatically to ABR Loans on the respective last days of the
then current Interest Periods with respect to such Revolving Credit Loans or
within such earlier period as required by law. If any such conversion of a
Eurodollar Loan occurs on a day which is not the last day of the then current
Interest Period with respect thereto, the Borrower shall pay to such Lender such
amounts, if any, as may be required pursuant to subsection 2.16.
2.14 Requirements of Law. (a) If the adoption of or any change in
any Requirement of Law or in the interpretation or application thereof or
33
39
compliance by any Lender or the Issuing Bank with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the date hereof:
(i) shall subject any Lender or the Issuing Bank to any tax of
any kind whatsoever with respect to this Agreement or any other Loan
Document or any Eurodollar Loan made by it, or change the basis of
taxation of payments to such Lender or the Issuing Bank in respect
thereof (except for Non-Excluded Taxes covered by subsection 2.15 and
changes in the rate of tax on the overall net income of such Lender or
the Issuing Bank);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held
by, deposits or other liabilities in or for the account of, advances,
loans or other extensions of credit by, or any other acquisition of
funds by, any office of such Lender or the Issuing Bank which is not
otherwise included in the determination of the Eurodollar Rate
hereunder; or
(iii) shall impose on such Lender or the Issuing Bank any other
condition;
and the result of any of the foregoing is to increase the cost to such Lender or
the Issuing Bank, by an amount which such Lender or the Issuing Bank, as the
case may be, deems to be material, of making, converting into, continuing or
maintaining Eurodollar Loans or issuing or participating in Letters of Credit or
to reduce any amount receivable hereunder in respect thereof, then, in any such
case, the Borrower shall promptly pay such Lender or the Issuing Bank such
additional amount or amounts as will compensate such Lender or the Issuing Bank,
as the case may be, for such increased cost or reduced amount receivable.
(b) If any Lender or the Issuing Bank shall have determined that
the adoption of or any change in any Requirement of Law regarding capital
adequacy or in the interpretation or application thereof or compliance by such
Lender or the Issuing Bank or any corporation controlling such Lender or the
Issuing Bank with any request or directive regarding capital adequacy (whether
or not having the force of law) from any Governmental Authority made subsequent
to the date hereof shall have the effect of reducing the rate of return on such
Lender's or the Issuing Bank's or such corporation's capital as a consequence of
its obligations hereunder or under any Letter of Credit to a level below that
which such Lender or the Issuing Bank or such corporation could have achieved
but for such adoption, change or compliance (taking into consideration such
Lender's or the Issuing Bank's or such corporation's policies with respect to
capital adequacy) by an amount deemed by such Lender or the Issuing Bank to be
material, then from time to time, the Borrower shall promptly pay to such Lender
or the Issuing Bank such additional amount or amounts as will compensate such
Lender or the Issuing Bank, as the case may be, for such reduction.
(c) If any Lender or the Issuing Bank becomes entitled to claim
any additional amounts pursuant to this subsection, it shall promptly notify the
Borrower (with a copy to the Agent) of the event by reason of which it has
become so entitled. A certificate as to any additional amounts payable pursuant
34
40
to this subsection submitted by such Lender or the Issuing Bank to the Borrower
(with a copy to the Agent) shall be conclusive in the absence of manifest error.
The agreements in this subsection shall survive the termination of this
Agreement and the payment of the Notes, the Revolving Credit Loans and all other
Obligations.
2.15 Taxes. (a) All payments made by the Borrower under this
Agreement and any Notes shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes and franchise taxes (imposed
in lieu of net income taxes) imposed on the Agent or the Issuing Bank or any
Lender as a result of a present or former connection between the Agent or the
Issuing Bank or such Lender and the jurisdiction of the Governmental Authority
imposing such tax or any political subdivision or taxing authority thereof or
therein (other than any such connection arising solely from the Agent or the
Issuing Bank or such Lender having executed, delivered or performed its
obligations or received a payment under, or enforced, this Agreement or any
Note). If any such non-excluded taxes, levies, imposts, duties, charges, fees,
deductions or withholdings ("Non-Excluded Taxes") are required to be withheld
from any amounts payable to the Agent or the Issuing Bank or any Lender
hereunder or under any Note, the amounts so payable to the Agent or the Issuing
Bank or such Lender shall be increased to the extent necessary to yield to the
Agent or the Issuing Bank or such Lender (after payment of all Non-Excluded
Taxes) interest or any such other amounts payable hereunder at the rates or in
the amounts specified in this Agreement, provided, however, that the Borrower
shall not be required to increase any such amounts payable to any Lender that is
not organized under the laws of the United States of America or a state thereof
if such Lender fails to comply with the requirements of paragraph (b) of this
subsection. Whenever any Non-Excluded Taxes are payable by the Borrower, as
promptly as possible thereafter the Borrower shall send to the Agent for its own
account or for the account of the Issuing Bank or such Lender, as the case may
be, a certified copy of an original official receipt received by the Borrower
showing payment thereof. If the Borrower fails to pay any Non-Excluded Taxes
when due to the appropriate taxing authority or fails to remit to the Agent the
required receipts or other required documentary evidence, the Borrower shall
indemnify the Agent, the Issuing Bank and the Lenders for any incremental taxes,
interest or penalties that may become payable by the Agent or the Issuing Bank
or any Lender as a result of any such failure. The agreements in this subsection
2.15(a) shall survive the termination of this Agreement and the payment of the
Notes, the Revolving Credit Loans and all other Obligations.
(b) Each Lender that is not incorporated under the laws of the
United States of America or a state thereof shall:
(i) deliver to the Borrower and the Agent (A) two duly completed
copies of United States Internal Revenue Service Form 1001 or 4224, or
successor applicable form, as the case may be, and (B) an Internal
Revenue Service Form W-8 or W-9, or successor applicable form, as the
case may be;
35
41
(ii) deliver to the Borrower and the Agent two further copies of
any such form or certification on or before the date that any such
form or certification expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrower; and
(iii) obtain such extensions of time for filing and complete such
forms or certifications as may reasonably be requested by the Borrower
or the Agent;
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Borrower and the Agent.
Such Lender shall certify (i) in the case of a Form 1001 or 4224, that it is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes and (ii) in the case of a
Form W-8 or W-9, that it is entitled to an exemption from United States backup
withholding tax. Each Person that shall become a Lender or a Participant
pursuant to subsection 10.6 shall, upon the effectiveness of the related
transfer, be required to provide all of the forms and statements required
pursuant to this subsection, provided that in the case of a Participant such
Participant shall furnish all such required forms and statements to the Lender
from which the related participation shall have been purchased.
2.16 Indemnity. The Borrower agrees to indemnify each Lender and
to hold each Lender harmless from any loss or expense which such Lender may
sustain or incur as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment after the Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making of a prepayment of Eurodollar
Loans on a day which is not the last day of an Interest Period with respect
thereto. Such indemnification may include an amount equal to the excess, if any,
of (i) the amount of interest which would have accrued on the amount so prepaid,
or not so borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Revolving
Credit Loans provided for herein (excluding, however, the Applicable Margin
included therein, if any) over (ii) the amount of interest (as reasonably
determined by such Lender) which would have accrued to such Bank on such amount
by placing such amount on deposit for a comparable period with leading banks in
the interbank eurodollar market. This covenant shall survive the termination of
this Agreement and the payment of the Notes, the Revolving Credit Loans and all
other Obligations.
2.17 Change of Lending Office. Each Lender agrees that if it
makes any demand for payment under subsection 2.14 or 2.15(a), or if any
adoption or change of the type described in subsection 2.13 shall occur with
36
42
respect to it, it will use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions and so long as such efforts would
not be disadvantageous to it, as determined in its sole discretion) to designate
a different lending office if the making of such a designation would reduce or
obviate the need for the Borrower to make payments under subsection 2.14 or
2.15(a), or would eliminate or reduce the effect of any adoption or change
described in subsection 2.13.
2.18 Use of Proceeds. The Borrower shall use the proceeds of the
Revolving Credit Loans solely for working capital and general corporate purposes
in the ordinary course of business.
2.19 Revolving Credit Commitment Increases. (a) In the event that
the Borrower wishes to increase the aggregate Commitments, it shall notify the
Agent of the amount of such proposed increase (such amount, a "Commitment
Increase Amount"). Any additional bank, financial institution or other entity
which, with the consent of the Borrower and the Agent (which consent, in the
case of the Agent, shall not be unreasonably withheld), elects to become a party
to this Agreement and obtain a Commitment in an amount equal to all or any
portion of a Commitment Increase Amount shall execute a New Lender Supplement
(each, a "New Lender Supplement") with the Borrower and the Agent, substantially
in the form of Exhibit B, whereupon such bank, financial institution or other
entity (herein called a "New Lender") shall become a Lender for all purposes and
to the same extent as if originally a party hereto and shall be bound by and
entitled to the benefits of this Agreement, and Schedule 1 shall be deemed to be
deleted in its entirety and replaced with the Schedule 1 attached to such New
Lender Supplement, which Schedule 1 promptly shall be delivered to each Lender
at its address for notification as provided in Section 10.2.
(b) If on the date upon which a bank, financial institution or
other entity becomes a New Lender pursuant to Section 2.19(a) there is an unpaid
principal amount of Revolving Credit Loans, the Borrower shall borrow Revolving
Credit Loans from such New Lender in an amount determined by reference to the
amount of each Type of Revolving Credit Loan (and, in the case of Eurodollar
Loans, of each Eurodollar Tranche) which would then have been outstanding from
such New Lender if (i) each such Type or Eurodollar Tranche had been borrowed on
the date such bank, financial institution or other entity became a Lender after
giving effect to such transaction and (ii) the aggregate amount of each such
Type or Eurodollar Tranche requested to be so borrowed had been increased to the
extent necessary to give effect, with respect to such New Lender, to the
borrowing allocation provisions of Section 2.2. Any Eurodollar Loan borrowed
pursuant to the preceding sentence shall bear interest at a rate equal to the
respective interest rates then applicable to the Revolving Credit Loans of the
other Lenders in the same Eurodollar Tranche or such other rate as shall be
acceptable to the New Lender.
(c) Notwithstanding anything to the contrary in this Section
2.19, (i) in no event shall any transaction effected pursuant to this Section
37
43
2.19 cause the aggregate Commitments to exceed $125,000,000 and (ii) no Lender
shall have any obligation to increase its Commitment unless it agrees to do so
in its sole discretion.
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Subject to the terms and conditions
hereof, the Issuing Bank agrees to issue standby letters of credit ("Letters of
Credit") for the account of the Borrower or, at the Borrower's request, any
Subsidiary of the Borrower on any Business Day during the Commitment Period in
such form as may be approved from time to time by the Issuing Bank; provided,
that the Issuing Bank shall have no obligation to issue any Letter of Credit if,
after giving effect to such issuance, the Available Commitment for any Lender,
or the Letter of Credit Availability, would be less than zero.
(b) Each Letter of Credit shall:
(i) be denominated in Dollars and shall be either (1) a standby
letter of credit issued to support financial obligations (incurred in
the ordinary course of business) of the Borrower or any Subsidiary of
the Borrower, contingent or otherwise, to pay money (a "Financial
Letter of Credit") or (2) a standby letter of credit issued to support
non-financial obligations of the Borrower or any Subsidiary of the
Borrower, contingent or otherwise, to provide goods or services in the
ordinary course of business (a "Performance Letter of Credit");
(ii) have a face amount of (1) not less than $300,000 and (2) not
more than the amount that would, after giving effect to the issuance
thereof, cause the Available Commitment of any Lender or the Letter of
Credit Availability to be less than zero; and
(iii) expire (1) no earlier than 30 days after its date of issue
and (2) no later than five Business Days prior to the then Final
Maturity Date.
(c) Each Letter of Credit shall be subject to the Uniform Customs
and, to the extent not inconsistent therewith, the laws of the State of New
York.
(d) The Issuing Bank shall not at any time be obligated to issue
any Letter of Credit hereunder if such issuance would conflict with, or cause
the Issuing Bank or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.
(e) Each party hereto agrees that, on and at all times after the
Closing Date, the Existing Letter of Credit shall be deemed to be a Letter of
Credit issued by the Issuing Bank pursuant hereto for all purposes hereunder and
under the other Loan Documents.
38
44
3.2 Procedure for Issuance of Letters of Credit. (a) The Borrower
may from time to time request that the Issuing Bank issue a Letter of Credit by
delivering to the Agent and the Issuing Bank a duly executed and completed
Issuance Request therefor, completed to the satisfaction of the Agent and the
Issuing Bank, and such other certificates, documents and other papers and
information relating to such Letter of Credit as the Issuing Bank may reasonably
request consistent with its current practices and procedures with respect to
letters of credit of the same type. In addition to such other information as is
required to be therein, the Borrower shall specify in any Issuance Request:
(i) the proposed party for whose account the requested Letter of
Credit would be issued (which shall be either the Borrower or a
Subsidiary of the Borrower);
(ii) the proposed beneficiary of the requested Letter of Credit;
(iii) the proposed date of issuance of the requested Letter of
Credit;
(iv) the proposed expiry date of the requested Letter of Credit;
(v) the proposed terms of the requested Letter of Credit,
including the proposed face amount thereof and whether it would
constitute a Financial Letter of Credit or a Performance Letter of
Credit; and
(vi) the transaction that is to be supported or financed with the
requested Letter of Credit, including identification of the Power
Generation Facility, if any, to which such Letter of Credit would
relate.
(b) Upon receipt of any Issuance Request, the Issuing Bank will
process such Issuance Request and the certificates, documents and other papers
and information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby (but in no event shall the Issuing Bank be required to issue any Letter
of Credit earlier than three Business Days after its receipt of the Issuance
Request therefor and all such other certificates, documents and other papers and
information relating thereto) by issuing the original of such Letter of Credit
to the beneficiary thereof or as otherwise may be agreed by the Issuing Bank and
the Borrower. The Issuing Bank shall furnish a copy of such Letter of Credit to
the Borrower promptly following the issuance thereof.
3.3 Fees, Commissions and Other Charges. (a) The Borrower shall
pay to the Agent, for the account of the Issuing Bank, a fronting fee ("Fronting
Fee") with respect to each Letter of Credit in the amount and at the times set
forth in the Fee Letter.
(b) The Borrower shall pay to the Agent, for the account of the
Issuing Bank and the L/C Participants, a letter of credit fee ("Letter of Credit
Fee") with respect to each Letter of Credit, computed for the period from and
including the date of the issuance of such Letter of Credit and to but excluding
the date such Letter of Credit expires, at a rate per annum, calculated on the
39
45
basis of a 365- (or 366-, as the case may be) day year, equal to the Applicable
Margin in effect from time-to-time for the Type of such Letter of Credit and
calculated on the aggregate amount available for drawing under such Letter of
Credit for each day during the period for which such fee is then being
calculated. Each Letter of Credit Fee shall be payable to the L/C Participants
to be shared ratably among them in accordance with their respective Commitment
Percentages. Each Letter of Credit Fee shall be payable in arrears on each L/C
Fee Payment Date to occur after the date of issuance of each Letter of Credit
and shall be nonrefundable.
(c) In addition to the foregoing fees and commissions, the
Borrower shall pay or reimburse the Issuing Bank for such normal and customary
costs and expenses as are incurred or charged by the Issuing Bank in issuing,
effecting payment under, amending or otherwise administering any Letter of
Credit.
(d) The Agent shall, promptly following its receipt thereof,
distribute to the Issuing Bank and the L/C Participants all fees and commissions
received by the Agent for their respective accounts pursuant to this subsection.
3.4 L/C Participations. (a) The Issuing Bank irrevocably agrees
to grant and hereby grants to each L/C Participant, and, to induce the Issuing
Bank to issue Letters of Credit hereunder, each L/C Participant irrevocably
agrees to accept and purchase and hereby accepts and purchases from the Issuing
Bank, on the terms and conditions hereinafter stated, for such L/C Participant's
own account and risk an undivided interest equal to such L/C Participant's
Commitment Percentage in the Issuing Bank's obligations and rights under each
Letter of Credit issued hereunder and the amount of each draft paid by the
Issuing Bank thereunder. Each L/C Participant unconditionally and irrevocably
agrees with the Issuing Bank that, if a draft is paid under any Letter of Credit
for which the Issuing Bank is not reimbursed in full by the Borrower in
accordance with the terms of this Agreement, such L/C Participant shall pay to
the Issuing Bank upon first demand at the Issuing Bank's address for notices
specified herein an amount equal to such L/C Participant's Commitment Percentage
of the amount of such draft, or any part thereof, which is not so reimbursed.
(b) If any amount required to be paid by any L/C Participant to
the Issuing Bank pursuant to subsection in respect of any unreimbursed portion
of any payment made by the Issuing Bank under any Letter of Credit is paid to
the Issuing Bank within three Business Days after the date such payment is due,
such L/C Participant shall pay to the Issuing Bank on demand an amount equal to
the product of such amount, times the daily average Federal funds rate, as
quoted by the Issuing Bank, during the period from and including the date such
payment is required to the date on which such payment is immediately available
to the Issuing Bank, times a fraction the numerator of which is the number of
days that elapse during such period and the denominator of which is 360. If any
such amount required to be paid by any L/C Participant pursuant to subsection is
not in fact made available to the Issuing Bank by such L/C Participant within
three Business Days after the date such payment is due, the Issuing Bank shall
be entitled to recover from such L/C Participant, on demand, such amount with
interest thereon calculated from such due date at the rate per annum applicable
40
46
to ABR Loans hereunder. A certificate of the Issuing Bank submitted to any L/C
Participant with respect to any amounts owing under this subsection shall be
conclusive in the absence of manifest error.
(c) Whenever, at any time after the Issuing Bank has made payment
under any Letter of Credit and has received from any L/C Participant its pro
rata share of such payment in accordance with subsection , the Issuing Bank
receives any payment related to such Letter of Credit (whether directly from the
Borrower or otherwise, including proceeds of collateral applied thereto by the
Issuing Bank), or any payment of interest on account thereof, the Issuing Bank
will distribute to such L/C Participant its pro rata share thereof; provided,
however, that in the event that any such payment received by the Issuing Bank
shall be required to be returned by the Issuing Bank, such L/C Participant shall
return to the Issuing Bank the portion thereof previously distributed by the
Issuing Bank to it.
3.5 Reimbursement Obligation of the Borrower. (a) The Borrower
agrees to reimburse the Issuing Bank on each date on which the Issuing Bank
notifies the Borrower of the date and amount of a draft presented under any
Letter of Credit and paid by the Issuing Bank for the amount of such draft so
paid. Each such payment shall be made to the Issuing Bank at its address for
notices specified herein in lawful money of the United States of America and in
immediately available funds.
(b) Interest shall be payable on any and all amounts remaining
unpaid by the Borrower under this subsection from the date such amounts become
payable (whether at stated maturity, by acceleration or otherwise) until payment
in full at the rate which would be payable on any outstanding ABR Loans which
were then overdue.
(c) Each drawing under any Letter of Credit during the Commitment
Period shall be deemed a request by the Borrower to the Agent for a borrowing
pursuant to subsection 2.2 (Procedure for Revolving Credit Borrowing) of ABR
Loans in the amount of such drawing. The Borrowing Date with respect to such
borrowing shall be the date of such drawing.
3.6 Obligations Absolute. (a) The Borrower's obligations under
this Section 3 shall be absolute and unconditional under any and all
circumstances and irrespective of any set-off, counterclaim or defense to
payment which the Borrower may have or have had against the Issuing Bank or any
beneficiary of a Letter of Credit.
(b) The Borrower also agrees with the Issuing Bank that the
Issuing Bank shall not be responsible for, and the Borrower's Reimbursement
Obligations under subsection 3.5(a) shall not be affected by, among other
things, (i) the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or (ii) any dispute between or among the Borrower and any
beneficiary of any Letter of Credit or any other party to which such Letter of
Credit may be transferred or (iii) any claims whatsoever of the Borrower against
any beneficiary of such Letter of Credit or any such transferee.
41
47
(c) The Issuing Bank shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit, except for
errors or omissions caused by the Issuing Bank's gross negligence or willful
misconduct.
(d) The Borrower agrees that any action taken or omitted by the
Issuing Bank under or in connection with any Letter of Credit or the related
drafts or documents, if done in the absence of gross negligence of willful
misconduct and in accordance with the standards of care specified in the Uniform
Commercial Code of the State of New York, shall be binding on the Borrower and
shall not result in any liability of the Issuing Bank to the Borrower.
3.7 Letter of Credit Payments. If any draft shall be presented
for payment under any Letter of Credit, the Issuing Bank shall promptly notify
the Borrower of the date and amount thereof. The responsibility of the Issuing
Bank to the Borrower in connection with any draft presented for payment under
any Letter of Credit shall, in addition to any payment obligation expressly
provided for in such Letter of Credit, be limited to determining that the
documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are in conformity with such Letter of Credit.
3.8 Issuance Request. To the extent that any provision of any
Issuance Request related to any Letter of Credit is inconsistent with the
provisions of this Section 3, the provisions of this Section shall apply.
3.9 Collateralization. (a) All amounts required to be deposited
as Collateral with the Agent pursuant to subsection 2.6(b) or Section 8 shall be
deposited in a collateral account established by CDH with the Agent (the
"Collateral Account"), to be held, applied or released for application as
provided in this subsection 3.9. Promptly after being requested by the Agent,
the Borrower shall cause CDH to execute and deliver to the Agent, (i) an Account
Pledge Agreement substantially in the form of Exhibit H (the "Account Pledge
Agreement") pursuant to which, as provided therein, CDH shall grant to the
Agent, for the benefit of the Secured Parties, a security interest in, among
other things, all cash, securities and other financial instruments in the
Collateral Account to secure the Obligations, (ii) a securities account control
agreement substantially in the form of Exhibit I (the "Securities Account
Control Agreement") and (iii) such further documents and instruments as the
Agent may reasonably request to evidence the creation and perfection of such
security interest in the Collateral Account.
(b) In the event of a payment by the Issuing Bank of a draft
presented under any Letter of Credit, the amount of such drawing (but not more
than the amount in the Collateral Account at the time) shall be withdrawn by the
Agent from the Collateral Account and shall be paid to the Issuing Bank to be
applied against such drawing. If on any L/C Fee Payment Date the amount in the
Collateral Account exceeds the then outstanding L/C Obligations, the excess
amount shall, so long as no Default shall have occurred and be continuing, be
withdrawn by the Agent and paid to the Borrower on such L/C Fee Payment Date. If
an Event of Default shall have occurred and be continuing, such excess amount
42
48
shall, if and when requested by the Required Lenders, be withdrawn by the Agent
and applied first to repay the Reimbursement Obligations, second to repay the
Revolving Credit Loans and other due and unpaid amounts required to be paid by
the Borrower hereunder and third any remaining excess shall be paid to the
Borrower.
(c) Interest and other payments and distributions made on or with
respect to the Collateral held in the Collateral Account shall be for the
account of CDH and shall constitute Collateral to be held by the Agent or
returned to the Borrower in accordance with subsection 3.9(b). Funds held in the
Collateral Account shall be invested in time deposits with the Agent which pay a
market rate of interest for a like deposit with a comparable financial
institution. Beyond the exercise of reasonable care in the custody thereof, the
Agent shall have no duty as to any Collateral in its possession or control or in
the possession or control of any agent or bailee or any income thereon or as to
the preservation of rights against prior parties or any other rights the
preservation of rights against prior parties or any other rights pertaining
thereto. The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the Collateral in its possession if the Collateral
is accorded treatment substantially equal to that which it accords its own
property, and shall not be liable or responsible for any loss or damage to any
of the Collateral, or for any diminution in the value thereof, by reason of the
act or omission of any agent or bailee selected by the Agent in good faith. All
expenses and liabilities incurred by the Agent in connection with taking,
holding and disposing of any Collateral (including customary custody and similar
fees with respect to any Collateral held directly by the Agent) shall be paid by
the Borrower or CDH from time to time upon demand. Upon a Default, the Agent
shall be entitled to apply (and, at the request of the Required Lenders but
subject to applicable law, shall apply) Collateral or the proceeds thereof to
payment of any such expenses, liabilities and fees.
3.10 Substitution/Replacement of Issuing Bank. (a) In the event
that the Issuing Bank shall refuse pursuant to subsection 3.1(d) to issue any
Letter of Credit requested by the Borrower, the Borrower may request any L/C
Participant to issue such Letter of Credit hereunder in substitution for the
Issuing Bank by delivering to such L/C Participant and to the Agent a duly
executed and completed Issuance Request in accordance with subsection 3.2, and
such L/C Participant may agree to issue such Letter of Credit (but no L/C
Participant shall be under any obligation to do so); provided, that the issuance
by such L/C Participant of such Letter of Credit would not conflict with any
Requirement of Law applicable to any other L/C Participant or cause any other
L/C Participant to exceed any limits imposed by any applicable Requirement of
Law. Any L/C Participant issuing a Letter of Credit pursuant to this subsection
3.10(a) shall be deemed hereunder and under the other Loan Documents to be, and
to have all rights, powers, duties and obligations of, the Issuing Bank for the
purposes of such Letter of Credit without any further act or deed on the part of
any of the L/C Participants or any other party to this Agreement.
(b) If at any time the senior unsecured long-term debt securities
of ANZ shall be rated less than "A1" by ▇▇▇▇▇'▇ Investors Service, Inc. or less
than "A+" by Standard & Poor's Rating Group, the Borrower may request any L/C
43
49
Participant, and such L/C Participant may agree, to succeed ANZ as Issuing Bank
hereunder (but no L/C Participant shall be under any obligation to do so). In
such event, upon 10 days' prior written notice to the Agent, ANZ and each L/C
Participant but without any further act or deed on the part of any of the L/C
Participants or any other party to this Agreement, such L/C Participant shall
succeed ANZ as Issuing Bank hereunder and be deemed hereunder and under the
other Loan Documents to be, and to have all rights, powers, duties and
obligations of, the Issuing Bank for the purposes of each Letter of Credit
issued thereafter by such L/C Participant; provided, that ANZ shall remain, and
have all rights, powers, duties and obligations of, the Issuing Bank with
respect to (i) any actions taken or omitted to be taken by it while it was
Issuing Bank and (ii) each Letter of Credit issued by ANZ as Issuing Bank that
shall not have been surrendered and returned to ANZ by the beneficiary thereof
in a manner acceptable to ANZ in its sole discretion.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Agent, the Issuing Bank and the Lenders to enter
into this Agreement and to make the Revolving Credit Loans and issue or
participate in the Letters of Credit, the Borrower hereby represents and
warrants to the Agent, the Issuing Bank and each Lender that:
4.1 Financial Information. (a)(i) The audited consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at June 30,
1997 and December 31, 1997 and the related audited consolidated statements of
income, of retained earnings and of cash flows for the fiscal periods ended on
such dates, reported on by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP, copies of which have heretofore
been furnished to each Lender, are complete and correct and present fairly the
consolidated financial condition of the Borrower and its consolidated
Subsidiaries as at such dates, and the consolidated results of their operations
and their consolidated cash flows for the fiscal periods then ended.
(ii) The unaudited unconsolidated balance sheets of the Borrower
and of CDH as at June 30, 1997 and December 31, 1997 and the related unaudited
unconsolidated statements of income for the fiscal periods ended on such dates,
certified by a Responsible Officer, copies of which have heretofore been
furnished to each Lender, are complete and correct and present fairly the
unconsolidated financial condition of the Borrower and CDH as at such dates, and
the unconsolidated results of their operations for the fiscal periods then
ended.
(iii) The unaudited consolidating balance sheet of the Borrower
and its consolidated Subsidiaries as at June 30, 1997 and December 31, 1997 and
the related unaudited consolidating statements of income for the fiscal periods
ended on such dates, certified by a Responsible Officer, copies of which have
heretofore been furnished to each Lender, are complete and correct and present
fairly the consolidating financial condition of the Borrower and its
consolidated Subsidiaries as at such dates, and the consolidating results of
their operations for the fiscal periods then ended.
44
50
(iv) The unaudited statements of cash flow to the Borrower from
each of its consolidated Subsidiaries for the fiscal periods ended on June 30,
1997 and December 31, 1997, certified by a Responsible Officer, copies of which
have heretofore been furnished to each Lender, are complete and correct and
present fairly the cash flow to the Borrower from each of its consolidated
Subsidiaries for the fiscal periods then ended.
(b)(i) The unaudited consolidated balance sheet of the Borrower
and its consolidated Subsidiaries as at June 30, 1998 and the related unaudited
consolidated statements of income, of retained earnings and of cash flows for
the six-month period ended on such date, certified by a Responsible Officer,
copies of which have heretofore been furnished to each Lender, are complete and
correct and present fairly the consolidated financial condition of the Borrower
and its consolidated Subsidiaries as at such date, and the consolidated results
of their operations and their consolidated cash flows for the six-month period
then ended (subject to normal year-end audit adjustments).
(ii) The unaudited unconsolidated balance sheets of the Borrower
and CDH as at June 30, 1998 and the related unaudited unconsolidated statements
of income for the six-month period then ended, certified by a Responsible
Officer, copies of which have heretofore been furnished to each Lender, are
complete and correct and present fairly the unconsolidated financial condition
of the Borrower and CDH as at such dates, and the unconsolidated results of
their operations and their unconsolidated cash flows for the six-month period
then ended.
(iii) The unaudited consolidating balance sheet of the Borrower
and its consolidated Subsidiaries as at June 30, 1998 and the related unaudited
consolidating statement of income for the six-month period then ended, certified
by a Responsible Officer, copies of which have heretofore been furnished to each
Lender, are complete and correct and present fairly the consolidating financial
condition of the Borrower and its consolidated Subsidiaries as at such date, and
the consolidating results of their operations for the six-month period then
ended.
(iv) The unaudited statements of cash flow to the Borrower from
each of its consolidated Subsidiaries for the six-month period ended on June 30,
1998, certified by a Responsible Officer, copies of which have heretofore been
furnished to each Lender, are complete and correct and present fairly the cash
flow to the Borrower from each of its consolidated Subsidiaries for the
six-month period then ended.
(c) All of the financial statements referred to in clause (a) and
(b) above, including the related schedules and notes thereto, have been prepared
in accordance with GAAP applied consistently throughout the periods involved
(except as approved by such accountants or Responsible Officer, as the case may
be, and as disclosed therein).
(d) Neither the Borrower nor any of its consolidated Subsidiaries
had, at the date of the most recent balance sheet referred to above, any
material Guarantee Obligation, contingent liability or liability for taxes, or
any long-term lease or unusual forward or long-term commitment, including,
without limitation, any interest rate or foreign currency swap or exchange
45
51
transaction (other than the Existing Interest Rate Protection Agreement), which
is not reflected in the foregoing statements or in the notes thereto. Except as
disclosed on Schedule III, during the period from June 30, 1998 to and including
the date of this Agreement there has been no sale, transfer or other disposition
by the Borrower or any of its consolidated Subsidiaries of any material part of
its business or property and no purchase or other acquisition of any business or
property (including any capital stock of any other Person) material in relation
to the consolidated financial condition of the Borrower and its consolidated
Subsidiaries at June 30, 1998 (other than the Acquisition).
(e) The unaudited pro forma consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at June 30, 1998 (including the
notes thereto) (the "Pro Forma Balance Sheet"), copies of which have heretofore
been furnished to each Lender, has been prepared giving effect (as if such
events had occurred on such date) to (i) the consummation of the Acquisition and
the issuance of 2008 Senior Notes in an aggregate principal amount of
$220,000,000, (ii) the Revolving Credit Loans and any other Extensions of Credit
to be made on the Closing Date and the use of proceeds thereof and (iii) the
payment of fees and expenses in connection with the foregoing. The Pro Forma
Balance Sheet has been prepared based on the best information available to the
Borrower as of the date of delivery thereof, and presents fairly on a pro forma
basis the estimated financial position of the Borrower and its consolidated
Subsidiaries as at June 30, 1998, assuming that the events specified in the
preceding sentence had actually occurred at such date.
4.2 No Change. (a) Except as disclosed on Schedule III, since
December 31, 1997 there has been no development or event which has had or could
reasonably be expected to have a Material Adverse Effect, and (b) during the
period from June 30, 1998 to and including the date of this Agreement no
dividends or other distributions have been declared, paid or made upon the
Capital Stock of the Borrower nor has any of the Capital Stock of the Borrower
been redeemed, retired, purchased or otherwise acquired for value by the
Borrower or any of its Subsidiaries.
4.3 Corporate Existence; Compliance with Law. Each of the
Borrower and its Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization (except, in
the case of the Borrower's Subsidiaries, to the extent that the failure to be so
organized, validly existing or in good standing could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect), (b) has the corporate
or partnership power and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged (except, in the case of the Borrower's
Subsidiaries, to the extent that the failure to have such power and authority or
legal right could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect), (c) is duly qualified as a foreign corporation and in
good standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
(except, in the case of the Borrower's Subsidiaries, to the extent that the
failure to be so duly qualified or in good standing could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect) and, (d) is in
46
52
compliance with all Requirements of Law except to the extent that the failure to
comply therewith could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
4.4 Corporate Power; Authorization; Enforceable Obligations. The
Borrower has the corporate power and authority, and the legal right, to make,
deliver and perform the Loan Documents to which it is a party and to borrow
hereunder and has taken all necessary corporate action to authorize the
borrowings on the terms and conditions of this Agreement and the Notes and to
authorize the execution, delivery and performance of the Loan Documents to which
it is a party. No consent or authorization of, filing with, notice to or other
act by or in respect of, any Governmental Authority or any other Person (other
than those that have been given or made) is required in connection with the
borrowings hereunder or with the execution, delivery, performance, validity or
enforceability of the Loan Documents to which the Borrower is a party. This
Agreement has been, and each other Loan Document to which it is a party will be,
duly executed and delivered on behalf of the Borrower. This Agreement
constitutes, and each other Loan Document to which it is a party when executed
and delivered will constitute, a legal, valid and binding obligation of the
Borrower enforceable against the Borrower in accordance with its terms, subject
to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
4.5 No Legal Bar. The execution, delivery and performance of the
Loan Documents to which the Borrower is a party, the borrowings hereunder and
the use of the proceeds thereof will not violate any Requirement of Law or
Contractual Obligation of the Borrower or of any of its Subsidiaries and will
not result in, or require, the creation or imposition of any Lien (other than
any Lien created by the Loan Documents) on any of its or their respective
properties or revenues pursuant to any such Requirement of Law or Contractual
Obligation.
4.6 No Material Litigation. Except as disclosed on Schedule IV,
no litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Borrower,
threatened by or against the Borrower or any of its Subsidiaries or against any
of its or their respective properties or revenues (a) with respect to any of the
Loan Documents or any of the transactions contemplated hereby or thereby or (b)
which could reasonably be expected to have a Material Adverse Effect.
4.7 No Default. The Borrower is not in default under or in
respect of any of its obligations under the Borrower Indenture, and no "Event of
Default" (as defined in the Borrower Indenture) has occurred and is continuing
under the Borrower Indenture. Neither the Borrower nor any of its Subsidiaries
is in default under or with respect to any of its Contractual Obligations in any
respect which could reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
47
53
4.8 Ownership of Property; Liens. Each of the Borrower and its
Subsidiaries has good record and marketable title in fee simple to, or a valid
leasehold interest in, all its real property, and good title to, or a valid
leasehold interest in, all its other property, and none of the Borrower's
property is subject to any Lien except as permitted by subsection 7.8.
4.9 Taxes. Each of the Borrower and its Subsidiaries has filed or
caused to be filed all tax returns which, to the knowledge of the Borrower, are
required to be filed and has paid all taxes shown to be due and payable on said
returns or on any assessments made against it or any of its property and all
other taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority (other than any the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of the Borrower or its Subsidiaries, as the case may be); no tax Lien has
been filed, and, to the knowledge of the Borrower, no claim is being asserted,
with respect to any such tax, fee or other charge.
4.10 Federal Regulations. No part of the proceeds of any
Revolving Credit Loans will be used for "purchasing" or "carrying" any "margin
stock" within the respective meanings of each of the quoted terms under
Regulation G or Regulation U of the Board of Governors of the Federal Reserve
System as now and from time to time hereafter in effect. If requested by any
Lender or the Agent, the Borrower will furnish to the Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
G-1 or FR Form U-1 referred to in said Regulation G or Regulation U, as the case
may be.
4.11 ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code. No termination of a Single Employer Plan has occurred,
and no Lien in favor of the PBGC or a Plan has arisen, during such five-year
period. The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits. Neither the Borrower nor any Commonly Controlled Entity
has had a complete or partial withdrawal from any Multiemployer Plan, and
neither the Borrower nor any Commonly Controlled Entity would become subject to
any liability under ERISA if the Borrower or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made. No such Multiemployer Plan is in Reorganization or Insolvent. The
present value (determined using actuarial and other assumptions which are
reasonable in respect of the benefits provided and the employees participating)
of the liability of the Borrower and each Commonly Controlled Entity for post
retirement benefits to be provided to their current and former employees under
Plans which are welfare benefit plans (as defined in Section 3(1) of ERISA) does
not, in the aggregate, exceed the assets under all such Plans allocable to such
benefits.
48
54
4.12 Investment Company Act; Public Utility Holding Company Act;
Other Regulations. The Borrower is not (a) an "investment company," or a company
"controlled" by an "investment company," within the meaning of the Investment
Company Act of 1940, as amended, or (b) a "holding company," a "subsidiary
company" of a "holding company" or an "affiliate" of a "holding company" within
the meaning of the Public Utility Holding Company Act of 1935, as amended. The
Borrower is not subject to regulation under any Federal or State statute or
regulation (other than Regulation X of the Board of Governors of the Federal
Reserve System) which limits its ability to incur Debt.
4.13 Subsidiaries. All the Subsidiaries of the Borrower at the
date of this Agreement are listed on Schedule V.
4.14 Purpose of the Revolving Credit Loans. The proceeds of the
Revolving Credit Loans shall be used by the Borrower for working capital and
general corporate purposes in the ordinary course of business.
4.15 Environmental Matters. Except as set forth on Schedule VI:
(a) To the best knowledge of the Borrower, the facilities and
properties owned, leased or operated by the Borrower or any of its
Subsidiaries (the "Project Properties") do not contain, and have not
previously contained, any Materials of Environmental Concern in
amounts or concentrations which (i) constitute or constituted a
violation of, or (ii) could reasonably be expected to give rise to
liability under, any Environmental Law, except in either case insofar
as such violation or liability, or any aggregation thereof, is not
reasonably likely to have a Material Adverse Effect.
(b) To the best knowledge of the Borrower, the Project Properties
and all operations at the Project Properties are in compliance, and
have been in compliance while owned, leased or operated by the
Borrower or any of its Subsidiaries, in all material respects with all
applicable Environmental Laws, and there is no contamination at, under
or about the Project Properties or violation of any Environmental Law
with respect to the Project Properties or the business operated by the
Borrower or any of its Subsidiaries (the "Business") which could
materially interfere with the continued operation of the Project
Properties or materially impair the fair saleable value thereof.
(c) Neither the Borrower nor any of its Subsidiaries has received
any notice of violation, alleged violation, non-compliance, liability
or potential liability regarding environmental matters or compliance
with Environmental Laws with regard to any of the Project Properties
or the Business, nor does the Borrower have knowledge or reason to
believe that any such notice will be received or is being threatened,
except insofar as such notice or threatened notice, or any aggregation
thereof, does not involve a matter or matters that is or are
reasonably likely to have a Material Adverse Effect.
49
55
(d) To the best knowledge of the Borrower, Materials of
Environmental Concern have not been transported or disposed of from
the Project Properties in violation of, or in a manner or to a
location which could reasonably be expected to give rise to liability
under, any Environmental Law, nor have any Materials of Environmental
Concern been generated, treated, stored or disposed of at, on or under
any of the Project Properties (i) in violation of any applicable
Environmental Law which violation, or any aggregation thereof, could
reasonably be expected to give rise to material liability to the
Borrower or any of its Subsidiaries under any applicable Environmental
Law or (ii) in a manner that could reasonably be expected to give rise
to material liability to the Borrower or any of its Subsidiaries under
any applicable Environmental Law.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Borrower, threatened,
under any Environmental Law to which the Borrower or any Subsidiary is
or will be named as a party with respect to the Project Properties or
the Business, nor are there any consent decrees or other decrees,
consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any
Environmental Law with respect to the Project Properties or the
Business that could reasonably be expected to give rise to material
liability to the Borrower or any of its Subsidiaries under any
applicable Environmental Law.
(f) To the best knowledge of the Borrower, there has been no
release or threat of release of Materials of Environmental Concern at
or from the Project Properties, or arising from or related to the
operations of the Borrower or any Subsidiary in connection with the
Project Properties or otherwise in connection with the Business, (i)
in violation of any applicable Environmental Law which violation, or
any aggregation thereof, could reasonably be expected to give rise to
material liability to the Borrower or any of its Subsidiaries under
any applicable Environmental Law or (ii) in amounts or in a manner
that could reasonably give rise to material liability to the Borrower
or any of its Subsidiaries under any applicable Environmental Law.
4.16 Accuracy of Information; Full Disclosure. No representation,
warranty or other statement made by any Loan Party in this Agreement, the CDH
Guarantee or any other Loan Document or in any certificate, written statement or
other document furnished to the Agent or any Lender by or on behalf of any Loan
Party pursuant to or in connection with this Agreement, the CDH Guarantee or any
other Loan Document or the transactions contemplated hereby or thereby, contains
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements contained herein or therein, in light
of the circumstances under which they were made, not misleading. There is no
fact known to the Borrower as of the date of this Agreement which the Borrower
has not disclosed to the Agent and the Lenders in writing prior to the date of
this Agreement which has had, or could reasonably be expected to have, a
Material Adverse Effect.
50
56
4.17 Security Documents. The provisions of the Security
Documents, when executed and delivered, will be sufficient to create in favor of
the Agent for the benefit of the Secured Parties a legal, valid and enforceable
security interest in the Collateral and all proceeds thereof to the extent a
security interest can be created therein under the Uniform Commercial Code of
the State of New York.
4.18 Year 2000 Matters. Any reprogramming required to permit the
proper functioning (but only to the extent that such proper functioning would
otherwise be impaired by the occurrence of the year 2000) in and following the
year 2000 of computer systems and other equipment containing embedded
microchips, in either case owned or operated by the Borrower or any of its
Subsidiaries or used or relied upon in the conduct of their business (including
any such systems and other equipment supplied by others to the Borrower or any
of its Subsidiaries), and the testing of all such systems and other equipment as
so reprogrammed, will be completed by September 30, 1999. The costs to the
Borrower and its Subsidiaries that have not been incurred as of the date hereof
for such reprogramming and testing and for the other reasonably foreseeable
consequences to them of any improper functioning of their computer systems and
other equipment containing embedded microchips due to the occurrence of the year
2000 could not reasonably be expected to result in a Default or Event of Default
or to have a Material Adverse Effect. Except for any reprogramming referred to
above, the computer systems of the Borrower and its Subsidiaries are and, with
ordinary course upgrading and maintenance, will continue for the term of this
Agreement to be, sufficient for the conduct of their business as currently
conducted.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Effectiveness of Agreement. This Agreement
shall become effective on the date on which each of the following conditions
shall have been fulfilled, as such date is specified in a notice given by the
Agent to the other parties hereto:
(a) Loan Documents. The Agent shall have received (i) this
Agreement, executed and delivered by a duly authorized officer of the
Borrower, with a counterpart for each Lender, (ii) for the account of
each Lender, a Note, dated the Closing Date, conforming to the
requirements hereof and executed and delivered by a duly authorized
officer of the Borrower, and (iii) the CDH Guarantee, executed and
delivered by a duly authorized officer of CDH, with a counterpart each
Lender.
(b) Related Agreements. The Agent shall have received, with a
copy for each Lender, a true and correct copy, certified as to
authenticity by the Borrower, of each of the Borrower Indentures.
(c) Corporate Proceedings of the Borrower. The Agent shall have
received, with a counterpart for each Lender, a copy of the
resolutions, in form and substance satisfactory to the Agent, of the
Board of Directors of the Borrower authorizing (i) the execution,
51
57
delivery and performance of this Agreement, the Notes and the other
Loan Documents to which it is a party and (ii) the borrowings
contemplated hereunder, certified by the Secretary or an Assistant
Secretary of the Borrower as of the Closing Date, which certificate
shall be in form and substance satisfactory to the Agent and shall
state that the resolutions thereby certified have not been amended,
modified, revoked or rescinded.
(d) Borrower Incumbency Certificate. The Agent shall have
received, with a counterpart for each Lender, a Certificate of the
Borrower, dated the Closing Date, as to the incumbency and signature
of the officers of the Borrower executing any Loan Document
satisfactory in form and substance to the Agent, executed by the
Secretary or any Assistant Secretary of the Borrower and countersigned
by one such officer of the Borrower.
(e) Corporate Proceedings of CDH. The Agent shall have received,
with a counterpart for each Lender, a copy of the resolutions, in form
and substance satisfactory to the Agent, of the Board of Directors of
CDH authorizing the execution, delivery and performance of the CDH
Guarantee, certified by the Secretary or an Assistant Secretary of CDH
as of the Closing Date, which certificate shall be in form and
substance satisfactory to the Agent and shall state that the
resolutions thereby certified have not been amended, modified, revoked
or rescinded.
(f) Incumbency Certificate of CDH. The Agent shall have received,
with a counterpart for each Lender, a certificate of CDH, dated the
Closing Date, as to the incumbency and signature of the officer of CDH
executing the CDH Guarantee, satisfactory in form and substance to the
Agent, executed by the Secretary or any Assistant Secretary of CDH and
countersigned by such officer of CDH.
(g) Corporate Documents. The Agent shall have received, with a
counterpart for each Lender, true and complete copies of the
certificate or articles of incorporation and by-laws of each Loan
Party, certified as of the Closing Date as complete and correct copies
thereof by the Secretary or an Assistant Secretary of such Loan Party.
(h) Fees and Expenses. ANZ shall have received all fees referred
to in subsection 2.3(b) to be received by them on the Closing Date and
(ii) the Lead Arrangers and the Lenders shall have received payment
for all of their costs and expenses then payable to them. The Agent
shall have received payment for all of its costs and expenses then
payable to it as the Agent pursuant to subsection 10.5 and all fees
then payable to it under the Fee Letter.
(i) Legal Opinion. The Agent shall have received, with a
counterpart for each Lender the executed legal opinion of
Fennebresque, Clark, ▇▇▇▇▇▇▇▇ & Hay, counsel to the Borrower and CDH,
substantially in the form of Exhibit F. Such legal opinion shall cover
52
58
such other matters incident to the transactions contemplated by this
Agreement as the Agent may reasonably require.
(j) Lien Searches. The Agent shall have received the results of a
recent search by a Person satisfactory to the Agent of the Uniform
Commercial Code, judgement and tax lien filings which may have been
filed with respect to personal property of the Borrower and CDH, and
the results of such search shall be reasonably satisfactory to the
Agent.
(k) Acquisition. The Acquisition shall have been consummated on
terms and conditions reasonably satisfactory to the Lenders.
(l) Existing Credit Agreement. All accrued and unpaid fees under
the Existing Credit Agreement shall have been paid in full.
(m) Financial Statements. The Lenders shall have received all of
the financial statements described in subsection 4.1.
(n) 2008 Senior Notes. The Borrower shall have issued 2008 Senior
Notes in an aggregate principal amount of $220,000,000, and all
commitments for bridge financing in lieu of the 2008 Senior Notes
shall have been terminated or otherwise expired.
(o) Additional Matters. All corporate and other proceedings, and
all documents, instruments and other legal matters in connection with
the transactions contemplated by this Agreement and the other Loan
Documents shall be satisfactory in form and substance to the Agent,
and the Agent shall have received such other documents and legal
opinions in respect of any aspect or consequence of the transactions
contemplated hereby or thereby as it shall reasonably request.
5.2 Conditions to Each Revolving Credit Loan and Each Letter of
Credit. The agreement of each Lender to make any Revolving Credit Loan, and of
the Issuing Bank to issue any Letter of Credit, requested to be made or issued
by it on any date (including, without limitation, its initial Revolving Credit
Loan or Letter of Credit) is subject to the satisfaction of the following
conditions precedent:
(a) Borrowing or Issuance Request. Except in the case of a
request for a borrowing deemed to be made pursuant to subsection
3.5(c), the Agent and, in the case of a request for a Letter of
Credit, the Issuing Bank shall have received a Borrowing Request or
Issuance Request, as the case may be, for such Revolving Credit Loan
or Letter of Credit, duly executed by a Responsible Officer of the
Borrower and completed, with the appropriate insertions and
attachments, to the satisfaction of the Agent and, in the case of an
Issuance Request, the Issuing Bank.
(b) Representations and Warranties. Each of the representations
and warranties made by the Borrower or CDH in or pursuant to the Loan
53
59
Documents shall be true and correct in all material respects on and as
of such date as if made on and as of such date (or, if such
representation or warranty is expressly stated to have been made as of
a specific date, such specific date).
(c) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to all
Extensions of Credit requested to be made on such date.
(d) Financial Covenants. The Agent shall have received a
certificate of a Responsible Officer of the Borrower (i) setting forth
in reasonable detail the calculations and financial information
necessary to determine the Parent Cash Flow Coverage Ratio, for the
four most recent consecutive fiscal quarters of the Borrower and the
Leverage Ratio and the Adjusted Tangible Net Worth of the Borrower as
at the last day of the most recently ended fiscal quarter and (ii)
certifying that the Borrower is then in compliance with subsection
7.1.
Each borrowing of a Revolving Credit Loan by and Letter of Credit issued at the
request of the Borrower hereunder shall constitute a representation and warranty
by the Borrower as of the date thereof that the conditions contained in this
subsection have been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, until the Commitments are
terminated, all Obligations have been paid and performed in full, no L/C
Obligations are outstanding and all Letters of Credit have expired and are no
longer outstanding, the Borrower shall:
6.1 Financial Statements . Furnish to each Lender:
(a) as soon as available, but in any event within 90 days after
the end of each fiscal year of the Borrower, (i) a copy of the audited
consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income and retained earnings and of cash
flows for such fiscal year, setting forth in each case in comparative
form the figures for the fiscal year immediately preceding such fiscal
year, reported on without a "going concern" or like qualification or
exception, or qualification arising out of the scope of the audit, by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP or other independent certified public accountants
of nationally recognized standing, (ii) a copy of the unaudited
unconsolidated balance sheet of the Borrower as at the end of such
fiscal year and the related unconsolidated statements of income for
such fiscal year, setting forth in each case in comparative form the
figures for the fiscal year immediately preceding such fiscal year,
certified by a Responsible Officer as being fairly stated in all
material respects, (iii) a copy of the unaudited consolidating balance
sheet of the Borrower and its consolidated Subsidiaries as at the end
of such fiscal year and the related consolidating statement of income
for such fiscal year, setting forth in each case in comparative form
54
60
the figures for the fiscal year immediately preceding such fiscal
year, certified by a Responsible Officer as being fairly stated in all
material respects, (iv) a statement of cash flows for such fiscal year
to the Borrower from each of its Subsidiaries, setting forth in each
case in comparative form the figures for the fiscal year immediately
preceding such fiscal year, certified by a Responsible Officer as
being fairly stated in all material respects and (v) a copy of the
unaudited unconsolidated balance sheet of CDH as at the end of such
fiscal year and the related unconsolidated statements of income for
such fiscal year, setting forth in comparative figures for the fiscal
year immediately preceding such fiscal year, certified by a
Responsible Officer as being fairly stated in all material respects;
and
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each
fiscal year of the Borrower, (i) the unaudited consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at the end
of such quarter and the related unaudited consolidated statements of
income and retained earnings and of cash flows of the Borrower and its
consolidated Subsidiaries for such quarter and the portion of the
fiscal year through the end of such quarter, (ii) the unaudited
unconsolidated balance sheet of the Borrower as at the end of such
quarter and the related unconsolidated statements of income for such
quarter and the portion of the fiscal year through the end of such
quarter, (iii) the unaudited consolidating balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of such
quarter and the related consolidating statement of income for such
quarter and the portion of the fiscal year through the end of such
quarter, (iv) a statement of cash flows to the Borrower from each of
its Subsidiaries for such quarter and the portion of the fiscal year
through the end of such quarter and (v) the unaudited balance sheet of
CDH as at the end of such quarter and the related statements of income
of CDH for such quarter and the portion of the fiscal year through the
end of such quarter, setting forth in the case of each of subclause
(i), (ii), (iii), (iv) and (v) in comparative form the figures for the
corresponding quarter in the fiscal year immediately preceding such
fiscal year, certified by a Responsible Officer as being fairly stated
in all material respects (subject to normal year-end audit
adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
6.2 Certificates; Other Information . Furnish to each Lender:
(a) concurrently with the delivery of the financial statements
referred to in clause (i) of subsection 6.1(a), a certificate of the
independent certified public accountants reporting on such financial
statements stating that in making the examination necessary therefor
no knowledge was obtained of any Default or Event of Default, except
as specified in such certificate;
55
61
(b) concurrently with the delivery of the financial statements
referred to in subsections 6.1(a) and 6.1(b), a certificate of a
Responsible Officer (i) stating that, to the best of such Officer's
knowledge, during such period the Borrower has observed or performed
all of its covenants and other agreements, and satisfied every
condition, contained in this Agreement and the other Loan Documents to
be observed, performed or satisfied by it, and that such Officer has
obtained no knowledge of any Default or Event of Default except as
specified in such certificate, (ii) setting forth in reasonable detail
the calculations and financial information required to establish
whether the Borrower is in compliance with subsection 7.1 and (iii)
certifying the amount, as of the end of such period, of the sum of
clauses (i) through (v) of subsection 7.4(c) and setting forth in
reasonable detail the calculations and financial information required
to determine such sum;
(c) not later than thirty days prior to the end of each fiscal
year of the Borrower, a copy of the projections by the Borrower of the
consolidated operating budget and cash flow budget of the Borrower and
its consolidated Subsidiaries for the succeeding fiscal year, such
projections to be accompanied by a certificate of a Responsible
Officer to the effect that such projections have been prepared on the
basis of sound financial planning practice and that such Officer has
no reason to believe they are based on unreasonable assumptions or
misleading in any material respect;
(d) within five days after the same are filed, copies of all
financial statements and reports which the Borrower may make to, or
file with, the Securities and Exchange Commission or any successor or
analogous Governmental Authority;
(e) concurrently with the delivery thereof, copies of all
certificates, notices and other written communications which the
Borrower delivers pursuant to the Borrower Indenture to any party
thereto;
(f) not less than 10 days prior to the anticipated date of any
Asset Disposition by the Borrower or any of its Subsidiaries, or
promptly after the occurrence of any Recovery Event which will result
in Net Cash Proceeds, a certificate of a Responsible Officer of the
Borrower setting forth (i) in the case of any Asset Disposition, a
description of the transaction resulting in such Asset Disposition
(including, without limitation, an identification of the securities,
assets or other Property to be sold or otherwise disposed of) and a
description and valuation of the consideration to be received by the
Borrower or such Subsidiary for such Asset Disposition, (ii) in the
case of any Recovery Event, a description of such Recovery Event
(including, without limitation, an identification of the Property
which is the subject of such Recovery Event) and (iii) in the case of
any Asset Disposition or any Recovery Event, the date or dates upon
which any Net Cash Proceeds therefrom are anticipated to be received
by the Borrower or such Subsidiary and the amount of the Net Cash
Proceeds anticipated to be received on such date or each of such
dates; and
56
62
(g) promptly, such additional financial and other information as
any Lender may from time to time reasonably request.
6.3 Payment of Obligations. Pay, discharge or otherwise satisfy
at or before maturity or before they become delinquent, as the case may be, (a)
all of the Obligations and (b) all of its other obligations of whatever nature,
except in the case of this clause (b) where the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP with respect thereto have been provided on the books of
the Borrower; provided, that no Default or Event of Default shall exist under
this subsection 6.3(b) at any time unless the aggregate amount of such unpaid,
undischarged or unsatisfied obligations outstanding at such time shall be equal
to at least $5 million.
6.4 Conduct of Business and Maintenance of Existence. Preserve,
renew and keep in full force and effect its corporate existence and take all
action necessary to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business; comply with all Contractual
Obligations and Requirements of Law except to the extent that failure to comply
therewith could not, in the aggregate, have a Material Adverse Effect.
6.5 Maintenance of Property; Insurance . Keep or cause its
Subsidiaries to keep all property useful and necessary in its and its
Subsidiaries' businesses in good working order and condition and maintain and
operate such property in accordance with prudent engineering and business
practices no less rigorous than, in the case of Power Generation Facilities,
those customary in the independent power industry and, in the case of any other
property, those customary in the industry in which such property is used,
except, in either such case, to the extent that the failure to comply herewith
with respect to its Subsidiaries' businesses could not, in the aggregate, be
reasonably expected to have a Material Adverse Effect; maintain or cause its
Subsidiaries to maintain with financially sound and reputable insurance
companies insurance on all its and its Subsidiaries' properties in at least such
amounts and against at least such risks (but including in any event public
liability, product liability and business interruption) as are usually insured
against in the same general area by companies engaged in the same or a similar
business; and furnish to each Lender, upon written request, full information as
to the insurance carried.
6.6 Inspection of Property; Books and Records; Discussions. Keep
proper books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and permit
representatives of any Lender to visit and inspect any of its properties and
examine and make abstracts from any of its books and records at any reasonable
time and as often as may reasonably be desired and to discuss the business,
operations, properties and financial and other condition of the Borrower and its
Subsidiaries with officers and employees of the Borrower and its Subsidiaries
and with its independent certified public accountants.
6.7 Notices. Promptly give notice to the Agent and each Lender
of:
(a) the occurrence of any Default or Event of Default;
57
63
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries (including,
without limitation, either Borrower Indenture) or (ii) litigation,
investigation or proceeding which may exist at any time between the
Borrower or any of its Subsidiaries and any Governmental Authority,
which in either case, if not cured or if adversely determined, as the
case may be, could reasonably be expected to have a Material Adverse
Effect;
(c) any litigation or proceeding affecting the Borrower or any of
its Subsidiaries in which the amount involved is $3 million or more or
in which injunctive or similar relief is sought or that could
reasonably be expected to have a Material Adverse Effect; and
(d) the following events, as soon as possible and in any event
within 30 days after the Borrower knows or has reason to know thereof:
(i) the occurrence or expected occurrence of any Reportable Event with
respect to any Plan, a failure to make any required contribution to a
Plan, the creation of any Lien in favor of the PBGC or a Plan or any
withdrawal from, or the termination, Reorganization or Insolvency of,
any Multiemployer Plan or (ii) the institution of proceedings or the
taking of any other action by the PBGC or the Borrower or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the
withdrawal from, or the terminating, Reorganization or Insolvency of,
any Plan.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower proposes to take with respect thereto.
6.8 Environmental Laws. (a) Comply with, and ensure compliance by
all tenants and subtenants, if any, with, all applicable Environmental Laws and
obtain and comply in all material respects with and maintain, and ensure that
all tenants and subtenants obtain and comply in all material respects with and
maintain, any and all licenses, approvals, notifications, registrations or
permits required by applicable Environmental Laws except to the extent that
failure to do so could not be reasonably expected to have a Material Adverse
Effect.
(b) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws except to the extent that the same are being contested in good faith by
appropriate proceedings and the pendency of such proceedings could not be
reasonably expected to have a Material Adverse Effect.
6.9 Indemnification. The Borrower shall pay, and protect,
indemnify and save harmless the Agent, the Lead Arrangers, the Issuing Bank and
the Lenders and, in their capacity as such, their officers, directors,
shareholders, controlling persons, employees, agents and servants (individually
an "Indemnified Party," collectively the "Indemnified Parties") from and
58
64
against, all liabilities, losses, claims, damages, penalties, causes of action,
suits, costs, expenses and disbursements of any kind whatsoever (including,
without limitation, reasonable attorneys' fees and expenses, but excluding
special, exemplary, punitive or consequential damages suffered by such
Indemnified Party) incurred by or asserted against any Indemnified Party arising
out of, in any way in connection with, or as a result of (a) the execution,
delivery, enforcement, performance or administration of this Agreement, the CDH
Guarantee, any other Loan Document or any document contemplated hereby or
thereby or any of the transactions contemplated by any Loan Document, (b) the
use of the proceeds of the Revolving Credit Loans, (c) the issuance or use of
the proceeds of, or any drawing under, any Letter of Credit or (d) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnified Party is a party thereto (including, without
limitation, any of the foregoing relating to the violation of, noncompliance
with or liability under, any Environmental Law applicable to the operations of
the Borrower, any of its Subsidiaries or any of the Project Properties);
provided that the Borrower will not be liable to any Indemnified Party for such
liabilities, losses, claims, damages, penalties, causes of action, suits, costs
and expenses (including, without limitation, attorneys' fees) or judgments
arising from such Indemnified Party's gross negligence or wilful misconduct.
With respect to any action, suit or proceeding against it, or any of its
officers, directors, shareholders, controlling persons, employees, agents and
servants, in respect of which indemnity may be sought hereunder, the Agent, the
Issuing Bank, each Lead Arranger and each Lender agrees that it will give
written notice of the commencement of such action, suit or proceeding to the
Borrower within a reasonable time after it is made a party to such action, suit
or proceeding; but the omission to so notify the Borrower will not relieve the
Borrower from any liability which it might have to any Indemnified Party, except
to the extent that the failure to give notice of the commencement of such
action, suit or proceeding shall preclude the Borrower from effectively
defending such action, suit or proceeding. Upon receipt of any such notice by
the Borrower, the Borrower shall be entitled to assume the defense of such
action, suit or proceeding, including the employment of counsel and the payment
of all expenses in connection with such defense, and shall have the right to
negotiate and consent to settlement. Any Indemnified Party shall have the right
to employ separate counsel in any such action, suit or proceeding against it and
to participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party unless (i) the employment of
such counsel shall have been specifically authorized in writing by the Borrower
or (ii) the Borrower shall have elected not to assume the defense of such
action, suit or proceeding or (iii) such Indemnified Party has been advised by
its own counsel that there are legal defenses available to such Indemnified
Party which are different from, additional to or in conflict with the defenses
available to the Borrower. The Borrower shall not be liable for any settlement
of any such action, suit or proceeding effected without its consent, which
consent shall not be unreasonably withheld; but if any such action, suit or
proceeding is settled with the consent of the Borrower or if there is a final
judgment for the plaintiff in any such action, suit or proceeding (of which the
Borrower shall have been notified), the Borrower shall indemnify and hold
harmless each Indemnified Party from and against any losses, claims, damages,
liabilities or expenses incurred or suffered by reason of such settlement or
judgment. This covenant shall survive the termination of this Agreement and the
payment of the Notes, the Revolving Credit Loans and all other Obligations.
59
65
SECTION 7. NEGATIVE COVENANTS
The Borrower hereby agrees that, until the Commitments are
terminated, all Obligations have been paid and performed in full, no L/C
Obligations are outstanding and all Letters of Credit have expired or are no
longer outstanding, the Borrower shall not do any of the following:
7.1 Financial Condition. (a) Parent Cash Flow Coverage Ratio. The
Borrower shall not permit the Parent Cash Flow Coverage Ratio to be less than
2.0 to 1 for any period of four consecutive fiscal quarters of the Borrower.
(b) Leverage Ratio . The Borrower shall not permit the Leverage
Ratio as at the last day of any fiscal quarter of the Borrower ending within any
calendar year set forth below to exceed the ratio set forth below opposite such
calendar year:
Calendar year Ratio
------------- -----
1998 8.5 to 1
1999 7.5 to 1
2000 6.1 to 1
2001 5.5 to 1
(c) Adjusted Tangible Net Worth. The Borrower shall not permit
its Adjusted Tangible Net Worth at any time to be less than the sum of (i)
$42,448,000 less (ii) the aggregate amount of all deferred financing costs
reasonably incurred by the Borrower in connection with this Credit Agreement and
the issuance of the 2008 Senior Notes as reflected in the most recent financial
statements of the Borrower prepared in accordance with GAAP, plus (iii) 65% of
cumulative Net Income of the Borrower and its consolidated Subsidiaries for each
fiscal quarter (beginning with the fiscal quarter ending September 30, 1998) for
which Net Income is positive plus (iv) 100% of the Net Cash Proceeds of any
offering by the Borrower of Capital Stock consummated after the Closing Date
plus (v) 100% of any capital contribution made to the Borrower or any of its
Subsidiaries after the Closing Date by any holder of the Borrower's Capital
Stock.
7.2 Limitation on Debt. (a) The Borrower shall not Incur any
Debt, including Acquisition Debt, unless after giving effect to the Incurrence
of such Debt and the receipt and application of the proceeds therefrom, the
Fixed Charge Ratio of the Borrower would be equal to or greater than 2.0 to 1.
(b) Notwithstanding the foregoing, the Borrower may Incur each
and all of the following:
60
66
(i) Debt issued in exchange for, or the proceeds of which are
used to Refinance, Debt of the Borrower in an amount (or, if such new
Debt provides for an amount less than the principal amount thereof to
be due and payable upon a declaration of acceleration thereof, with an
original issue price) not to exceed the amount so exchanged or
Refinanced (plus accrued interest and fees and expenses related to
such exchange or Refinancing), the amount so exchanged or Refinanced
being equal to the lesser of (x) the principal amount or involuntary
liquidation preference of the Debt so exchanged or Refinanced and (y)
if the Debt being exchanged or Refinanced was issued with an original
issue discount, the accreted value thereof (as determined in
accordance with GAAP) at the time of such Refinancing; provided that
such Debt of the Borrower will rank pari passu with or expressly
subordinated in right of payment to the Obligations and the Average
Life of the new Debt shall be equal to or greater than the Average
Life of the Debt to be exchanged or Refinanced;
(ii) Debt of the Borrower to any of its Subsidiaries and to any
Joint Ventures in which the Borrower is a direct or indirect partner,
shareholder, member or other participant if such Debt of the Borrower
is expressly subordinated in right of payment to the Obligations;
provided that any transfer of such Debt by a Subsidiary or a Joint
Venture (other than to another Subsidiary or Joint Venture) will be
deemed to be an Incurrence of Debt unless (x) such Debt has an Average
Life which is greater than that of the Borrower Indenture Securities
and which extends to a date later than the then Final Maturity Date or
(y) the aggregate amount of such Debt which has an Average Life which
is equal to or less than that of the Borrower Indenture Securities or
which extends to, or to a date earlier than, the then Final Maturity
Date does not exceed $3 million;
(iii) Debt in an aggregate principal amount not to exceed $10
million at any one time outstanding;
(iv) Debt in respect of Currency Protection Agreements or
Interest Rate Protection Agreements; and
(v) Debt outstanding as of the date of this Agreement.
For purposes of determining any particular amount of Debt under
this subsection 7.2, Guarantees of, or obligations with respect to letters of
credit supporting, Debt otherwise included in the determination of such
particular amount shall not be included. For purposes of determining compliance
with the provisions of this subsection 7.2, in the event that an item of Debt
meets the criteria of more than one of the types of Debt described in the above
clauses, the Borrower, in its sole discretion, shall classify such item of Debt
and only be required to include the amount and type of such Debt in one of such
clauses.
(c) Notwithstanding any other provision hereof, including without
limitation any other provision of this subsection 7.2, the Borrower shall not
Incur any Debt at any time unless (i) no payment or prepayment in respect of
principal of such Debt (including, without limitation, any payments in respect
61
67
of any sinking fund) shall be due or can become due (other than as a result of
the acceleration thereof) on or prior to the then Final Maturity Date and (ii)
the aggregate outstanding principal amount of Debt Incurred by the Borrower at
such time (after giving effect to the Incurrence of such Debt) shall not exceed
$480,000,000, to the extent such Debt is Incurred in calendar year 1999, or
$490,000,000 to the extent such Debt is Incurred in calendar year 2000 or 2001.
7.3 Limitation on Subsidiary Debt. The Borrower shall not permit
any Subsidiary to Incur, assume or otherwise cause or suffer to exist, directly
or indirectly, any Debt.
(b) Notwithstanding the foregoing, each and all of the following
Debt may be Incurred by a Subsidiary:
(i) Debt outstanding as of the date of this Agreement;
(ii) Debt owed by a Subsidiary to the Borrower;
(iii) Debt Incurred to finance the development, acquisition,
construction or operation of a Power Generation Facility in which such
Subsidiary has a direct or indirect interest; provided that such Debt
shall be permitted under this clause (iii) only to the extent of the
amount thereof which is Non-Recourse to the Borrower and is
Non-Recourse to any other Subsidiary with a direct or indirect
interest in any other Power Generation Facility;
(iv) Debt issued in exchange for, or the proceeds of which are
used to Refinance, outstanding Debt of such Subsidiary otherwise
permitted under this Agreement in an amount (or, if such new Debt
provides for an amount less than the principal amount thereof to be
due and payable upon a declaration of acceleration thereof, with an
original issue price) not to exceed the amount so exchanged or
Refinanced (plus accrued interest and fees and expenses related to
such exchange or Refinancing), the amount so exchanged or Refinanced
being equal to the lesser of (x) the principal amount or involuntary
liquidation preference of the Debt so exchanged or Refinanced and (y)
if the Debt being exchanged or Refinanced was issued with an original
issue discount, the accreted value thereof (as determined in
accordance with GAAP) at the time of such Refinancing; provided that
(A) the new Debt shall be Non-Recourse to the Borrower to no lesser
extent than the Debt to be exchanged or Refinanced, (B) the new Debt
shall be Non-Recourse to any other Subsidiary with a direct or
indirect interest in any other Power Generation Facility to no lesser
extent than the Debt to be exchanged or Refinanced, and (C) the
Average Life of the new Debt shall be equal to or greater than the
Average Life of the Debt to be exchanged or Refinanced;
(v) Debt issued in exchange for, or the proceeds of which are
used to Refinance, outstanding Debt of such Subsidiary otherwise
permitted under this Agreement in an amount (or, if such new Debt
provides for an amount less than the principal amount thereof to be
62
68
due and payable upon a declaration of acceleration thereof, with an
original issue price) in excess of the amount so exchanged or
Refinanced (plus accrued interest and fees and expenses related to
such exchange or Refinancing); provided that (A) the new Debt shall be
Non-Recourse to the Borrower to no lesser extent than the Debt to be
exchanged or Refinanced, (B) the new Debt shall be Non-Recourse to any
other Subsidiary with a direct or indirect interest in any other Power
Generation Facility to no lesser extent than the Debt to be exchanged
or Refinanced, and (C) the Average Life of the new Debt shall be equal
to or greater than the Average Life of the Debt to be exchanged or
Refinanced; provided further that, after giving effect to the
Incurrence of such new Debt and the retirement of the Debt to be
exchanged or Refinanced, the Fixed Charge Ratio of the Borrower would
be equal to or greater than 2.0 to 1;
(vi) Debt issued in exchange for, or the proceeds of which are
used to Refinance, outstanding Debt which is not Non-Recourse to the
Borrower or to any other Subsidiary in an amount (or if such new Debt
provides for an amount less than the principal amount thereof to be
due and payable upon a declaration or acceleration thereof, with an
original issue price) not to exceed the amount so exchanged or
Refinanced (plus accrued interest and fees and expenses related to
such exchange or Refinancing), the amount so exchanged or Refinanced
being equal to the lesser of (x) the principal amount of the Debt so
exchanged or Refinanced and (y) if the Debt being so exchanged or
Refinanced was issued with an original issue discount, the accreted
value thereof (as determined in accordance with GAAP) at the time of
such Refinancing; provided that the Average Life of the new Debt shall
be equal to or greater than the Average Life of the Debt to be
exchanged or Refinanced;
(vii) Debt Incurred to support the performance obligations of a
Subsidiary engaged in providing construction management or operating
services to a Power Generation Facility; provided that such Debt shall
be permitted under this clause (vii) only to the extent of the amount
thereof which is Non-Recourse to the Borrower and is Non-Recourse to
any other Subsidiary with a direct or indirect interest in any other
Power Generation Facility;
(viii) Debt of a Subsidiary Incurred solely to finance the
development, acquisition, construction or operation of a Power
Generation Facility in which such Subsidiary, the Borrower or another
Subsidiary has a direct or indirect interest; provided, that after
giving effect to the Incurrence of such new Debt and the retirement of
any Debt to be exchanged or Refinanced, the Fixed Charge Ratio of the
Borrower would be equal to or greater than 2.0 to 1;
(ix) Debt Incurred by a Person prior to the time: (A) such Person
became a Subsidiary of the Borrower; (B) such Person merges with or
into a Subsidiary of the Borrower; or (C) another Subsidiary of the
Borrower merges with or into such Person (in a transaction in which
such Person becomes a Subsidiary of the Borrower); provided that,
63
69
giving effect to such transaction, such Debt could have been Incurred
at the time of such merger or acquisition by the Borrower pursuant to
subsection 7.2 or by the Subsidiary pursuant to either of clauses
(iii) or (iv) of this paragraph (b) of this subsection 7.3; and
(x) Debt Incurred by a Subsidiary of which at least 80% of each
class of Common Stock is owned, directly or indirectly, by the
Borrower, to another Subsidiary of which at least 80% of each class of
Common Stock is owned, directly or indirectly, by the Borrower.
For purposes of determining any particular amount of Debt under
this subsection 7.3, Guarantees of, or obligations with respect to letters of
credit supporting, Debt otherwise included in the determination of such
particular amount shall not be included. For purposes of determining compliance
with the provisions of this subsection 7.3, in the event that an item of Debt
meets the criteria of more than one of the types of Debt described in the above
clauses, the Borrower, in its sole discretion, shall classify such item of Debt
and only be required to include the amount and type of such Debt in one of such
clauses.
7.4 Limitation on Restricted Payments. The Borrower will not, and
will not permit any Subsidiary to, directly or indirectly, make any Restricted
Payment if at the time of such Restricted Payment and after giving effect
thereto:
(a) an Event of Default or an event that, after the giving of
notice or lapse of time or both would become an Event of Default,
shall have occurred and be continuing;
(b) the Borrower could not Incur at least $1 of Debt under
subsection 7.2(a);
(c) the aggregate amount of all Restricted Payments made by the
Borrower and its Subsidiaries after March 15, 1994 (the amount so
made, if other than in cash, to be determined in good faith by the
Board of Directors, as evidenced by a Board resolution) shall exceed
the sum (without duplication) of: (i) $5 million plus 50% of the Net
Income of the Borrower and its consolidated Subsidiaries for the
period (taken as one accounting period) beginning on March 15, 1994
and ending on the last day of the fiscal quarter immediately prior to
the date of such calculation; provided that if Net Income for such
period is less than zero, then minus 100% of the amount of such net
loss; plus (ii) if the Borrower Indenture Securities are Investment
Grade at the time of and after giving effect to the Restricted Payment
(or in the case of a dividend, its declaration) in connection with
which the calculation is made, an additional 25% of Net Income of the
Borrower and its consolidated Subsidiaries for any period of one or
more completed fiscal quarters ending with the last fiscal quarter
completed prior to the date of such Restricted Payment during which
the Borrower Indenture Securities were Investment Grade for the entire
period; plus (iii) the aggregate net proceeds (including the Fair
Market Value of proceeds other than cash) received by the Borrower
from and after March 15, 1994 from the issuance and sale (other than
to a Subsidiary) of its Capital Stock (excluding Redeemable Stock, but
including Capital Stock other than Redeemable Stock issued upon
64
70
conversion of, or in exchange for, Redeemable Stock or securities
other than its Capital Stock), and warrants, options and rights to
purchase its Capital Stock (other than Redeemable Stock), but
excluding the net proceeds from the issuance, sale, exchange,
conversion or other disposition of its Capital Stock convertible
(whether at the option of the Borrower or the holder thereof or upon
the happening of any event) into (x) any security other than its
Capital Stock or (y) its Redeemable Stock; plus (iv) the net reduction
in Investments of the type specified in clause (iv) of the definition
of "Restricted Payment" resulting from payments of interest on Debt,
dividends, repayments of loans or advances, or other transfers of
assets to the Borrower or other Person that made the original
Investment from the Person in which such Investment was made; provided
that such payment shall not exceed the amount of the original
Investment; plus (v) any amount previously included as a Restricted
Payment on account of an obligation by the Borrower or any Subsidiary
to make a Restricted Payment which has not actually been made by the
Borrower or any Subsidiary; provided that this clause (c) shall not
prevent the payment of any dividend within 60 days after the date of
its declaration if such dividend could have been made on the date of
its declaration without violation of the provisions of this subsection
7.4.
7.5 Limitations on Dividends and Other Payment Restrictions
Affecting Subsidiaries. The Borrower will not, and will not permit any
Subsidiary to, create or otherwise cause or suffer to exist or become effective
any consensual encumbrance or restriction of any kind on the ability of any
Subsidiary to (a) pay dividends or make any other distributions permitted by
applicable law on any Capital Stock of such Subsidiary owned by the Borrower or
any other Subsidiary, (b) make payments in respect of any Debt owed to the
Borrower or any other Subsidiary of the Borrower, (c) make loans or advances to
the Borrower or any other Subsidiary of the Borrower or (d) transfer any of its
Property to the Borrower or any other Subsidiary, other than those encumbrances
and restrictions created or existing (i) on the date of this Agreement, (ii)
pursuant to this Agreement, the CDH Guarantee or either Borrower Indenture,
(iii) in connection with the Incurrence of any Debt permitted under clauses
(iii) and (vii) of subsection 7.3(b) hereof; provided that such encumbrances or
restrictions are required in order to effect such financing and are not
materially more restrictive, taken as a whole, on the ability of the applicable
Subsidiary to make the payments, distributions, loans, advances or transfers
referred to in clauses (a) through (d) above than encumbrances and restrictions,
taken as a whole, customarily accepted (or, in the absence of any industry
custom, reasonably acceptable) in substantially Non-Recourse financing, (iv) in
connection with the execution and delivery of an electric power or thermal
energy purchase contract to which such Subsidiary is the supplying party or
other contracts with customers, suppliers and contractors to which such
Subsidiary is a party and where such Subsidiary is engaged, directly or
indirectly, in the development, construction, acquisition or operation of a
Power Generation Facility; provided that such encumbrances or restrictions are
required in order to effect such contracts and are not materially more
restrictive, taken as a whole, on the ability of the applicable Subsidiary to
make the payments, distributions, loans, advances or transfers referred to in
clauses (a) through (d) above than encumbrances and restrictions, taken as a
whole, customarily accepted (or, in the absence of any industry custom,
reasonably acceptable) in comparable transactions, (v) in connection with any
65
71
Debt of a Person outstanding when such Person becomes a Subsidiary permitted
under clause (ix) of subsection 7.3(b); provided that such encumbrance or
restriction was not Incurred in contemplation of such Subsidiary becoming a
Subsidiary, (vi) in connection with the Incurrence of any Debt permitted under
clause (iv), (v), (vi), (viii) or (to the extent not covered by (iii) above)
(iii) of subsection 7.3(b) hereof; provided that such encumbrances or
restrictions taken as a whole are not materially more restrictive on the ability
of the applicable Subsidiary to make the payments, distributions, loans,
advances or transfers referred to in clauses (a) through (d) above than those,
taken as a whole, customarily accepted (or, in the absence of any industry
custom, reasonably acceptable) in comparable financing transactions of the same
nature as the Debt being Incurred, (vii) customary non-assignment provisions in
leases or other contracts entered into in the ordinary course of business of the
Borrower or any Subsidiary and (viii) any restrictions imposed pursuant to an
agreement entered into for the sale or disposition of all or substantially all
of the Capital Stock or assets of any Subsidiary or Joint Venture that apply
pending the closing of such sale or disposition.
7.6 Restrictions on Dispositions. Subject to the provisions of
subsections 7.9 and 7.10, the Borrower will not make and will not permit any of
its Subsidiaries to make, any Asset Disposition unless the Borrower (or the
Subsidiary, as the case may be) receives, at the time of such Asset Disposition,
consideration with a Fair Market Value at least equal to the Fair Market Value
of the securities, assets or other Property sold or otherwise disposed of. In
determining the Fair Market Value of the consideration received for any Asset
Disposition, in addition to any other adjustment necessary to determine such
consideration's Fair Market Value, any payment or other amount that is to be
received after the date of such Asset Disposition (whether paid pursuant to a
note or installment receivable or otherwise or in the form of a dividend or
distribution on any shares of any Person's Capital Stock) shall be valued at the
net present value of such payment or other amount calculated by discounting such
payment or other amount to the date of such Asset Disposition using an assumed
discount rate proposed by the Borrower and reasonably acceptable to the Agent.
7.7 Limitations on Transactions with Affiliates. The Borrower
will not, and will not permit any of its Subsidiaries to, directly or
indirectly, enter into any transaction after the date of this Agreement
(including, without limitation, the sale, purchase or lease of any assets or
properties or the rendering of any services) involving aggregate consideration
with respect to such transaction in excess of $1 million with any Affiliate or
holder of 5% or more of any class of Capital Stock of the Borrower except for
transactions (including, subject to subsection 7.4, any loans or advances by or
to, or guarantee on behalf of, any Affiliate or holder) made in good faith the
terms of which are fair and reasonable to the Borrower or such Subsidiary, as
the case may be, and are at least as favorable as the terms which could be
obtained by the Borrower or such Subsidiary, as the case may be, in a comparable
transaction made on an arm's-length basis with Persons who are not such a holder
or Affiliate; provided that the fairness, reasonableness and arm's-length nature
of the terms of any transaction which is part of a series of related
transactions may be determined on the basis of the terms of the series of
related transactions taken as a whole. This covenant shall not apply to (a) the
payment of reasonable and customary regular fees to directors of the Borrower or
a Subsidiary of the
66
72
Borrower (including directors who are employees), (b) any transaction between
the Borrower and any of its Subsidiaries the terms of which are not unfair or
unreasonable to the Borrower, (c) any Permitted Payment, and any Restricted
Payment not otherwise prohibited by subsection 7.4 or (d) equipment and real
property lease transactions with and loans to Equipment Leasing Partners, a
North Carolina general partnership, outstanding on the date of this Agreement,
indebtedness of the shareholders of the Borrower outstanding on the date of this
Agreement and the agreements between the Borrower and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.,
▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, in each case as in effect on the date of
this Agreement.
7.8 Limitations on Liens. The Borrower may not Incur any Debt
which is secured, directly or indirectly, with, nor will the Borrower grant or
cause or suffer to exist, a Lien on the Property of the Borrower now owned or
hereafter acquired unless contemporaneous therewith or prior thereto the
Obligations are equally and ratably secured thereof except for (a) any such Debt
secured by Liens existing on the assets of any entity at the time such assets
are acquired by the Borrower, whether by merger, consolidation, purchase of
assets or otherwise; provided that such Liens (x) are not created, incurred or
assumed in contemplation of such assets being acquired by the Borrower and (y)
do not extend to any other Property of the Borrower; (b) Liens granted to secure
any other Debt required by its terms to be equally and ratably secured as a
result of the Incurrence of such Debt; (c) Liens on the Borrower's interests in
Subsidiaries and Joint Ventures in which the Borrower is a partner, shareholder,
member or other participant, which Liens are granted in good faith in connection
with the acquisition of such assets or as part of the financing of a Power
Generation Facility; provided that such Liens are required in order to effect
such financing and are not materially more restrictive, taken as a whole, than
Liens, taken as a whole, customarily accepted (or in the absence of any industry
custom, reasonably acceptable) in substantially Non-Recourse project financing;
(d) Liens on the stock or partnership interest of Subsidiaries and interests in
Joint Ventures in which the Borrower becomes a partner, shareholder, member or
other participant which Liens are granted in good faith as part of a project
financing or the development of a project; provided that such Liens are required
in order to effect such transaction and are not materially more restrictive,
taken as a whole, than Liens, taken as a whole, customarily accepted (or in the
absence of any industry custom, reasonably acceptable) in substantially
Non-Recourse project financing; (e) Liens in existence on the date of this
Agreement or established pursuant to this Agreement; (f) purchase money Liens
incurred to secure Debt incurred by the Borrower as permitted by subsection 7.2,
which Debt finances the purchase price of Property acquired in the ordinary
course of business, and which Liens will not cover any Property other than that
being purchased, improved or constructed; (g) [intentionally omitted]; (h) Liens
incurred in connection with Capitalized Lease Obligations incurred by the
Borrower as permitted by subsection 7.2; (i) Liens in respect of extensions,
renewals, refunding or Refinancing of any Debt secured by the Liens referred to
in clauses (a), (b), (c), (d), (e), (f) or (h) above, provided that the Liens in
connection with such renewal, extension, refunding or Refinancing shall be
limited to all or part of the specific Property which was subject to the
original Lien; (j) any Lien arising by reason of (A) any judgment, decree or
order or any court, so long as such Lien is being contested in good faith and is
adequately bonded, and any appropriate legal proceedings which may have been
duly initiated for the review of such judgment, decree or order shall not have
been finally terminated or the period within which such proceedings may be
67
73
initiated shall not have expired, (B) taxes not yet delinquent or which are
being contested in good faith, (C) security for payment of worker's compensation
or other insurance, (D) security for the performance of tenders, contracts
(other than contracts for the payment of money) or leases, (E) deposits to
secure public or statutory obligations, or to secure permitted contracts for the
purchase or sale of any currency entered into in the ordinary course of
business, (F) operation of law in favor of carriers, warehousemen, landlords,
mechanics, materialmen, laborers, employees or suppliers, incurred in the
ordinary course of business for sums which are not yet delinquent or which are
being contested in good faith by negotiations or by appropriate proceedings
which suspend the collection thereof, (G) easements, rights-of-way, zoning and
similar covenants and restrictions and other similar encumbrances or title
defects which, in the aggregate, are not material, and which do not in any case
materially detract from the value of the Property subject thereto or materially
interfere with the ordinary conduct of the business of the Borrower or (H)
leases and subleases of property which do not interfere with the ordinary
conduct of the business of the Borrower, and which are made on customary and
usual terms applicable to similar properties; or (I) Liens in addition to the
foregoing, provided that the amount of the obligations secured by such Liens
does not exceed in the aggregate $1 million.
7.9 Limitations on Mergers, Consolidations, Sales or Transfers of
Assets by or Involving Borrower. The Borrower shall not consolidate with, merge
with or into, or transfer all or substantially all of its assets (as an entirety
or substantially an entirety in one transaction or a series of related
transactions), to any Person unless:
(a) the Borrower shall be the continuing Person, or the Person
(if other than the Borrower) formed by such consolidation or into
which the Borrower is merged or to which properties and assets of the
Borrower are transferred shall be a corporation organized and existing
under the laws of the United States or any state thereof or the
District of Columbia and shall expressly assume in a writing
acceptable to the Lenders all of the Obligations of the Borrower;
(b) immediately after giving effect to such transaction no Event
of Default or event or condition which through the giving of notice or
lapse of time or both would become an Event of Default shall have
occurred and be continuing;
(c) the Net Worth of the Borrower or the surviving entity, as the
case may be, on a pro forma basis after giving effect to such
transaction is not less than the Net Worth of the Borrower immediately
prior to such transaction; and
(d) immediately after giving effect to such transaction on a pro
forma basis, the Borrower or the surviving entity would be able to
incur at least $1 of Debt under subsection 7.2(a).
7.10 Limitations on Certain Mergers, Consolidations and
Investments by Subsidiaries. Without the prior written consent of the Required
Lenders (which shall not be unreasonably withheld), the Borrower shall not
68
74
permit any Subsidiary with any direct or indirect interest in (a) a Power
Generation Facility to make any Investment in, or to consolidate or merge with,
any other Person with a direct or indirect interest in any other Power
Generation Facility or any unrelated business or (b) any unrelated business to
make any Investment in, or to consolidate or merge with, any other Person with a
direct or indirect interest in any Power Generation Facility; provided, that to
the extent otherwise permitted under this Agreement and the other Loan Documents
(i) Cogentrix Virginia Leasing Corporation and ▇▇▇▇▇ River Cogeneration Company
may each make Investments in and consolidate or merge with each other and (ii)
CDH, Cogentrix International Holdings, Inc., Cogentrix International Ltd., and
Cogentrix International Holdings, B.V. may each make any Investment in any
Person.
7.11 CDH Permitted Investments. Notwithstanding any other
provision of this Agreement, the Borrower shall not make any advance, loan,
extension of credit or capital contribution to, or purchase any stock, bonds,
notes, debentures or other securities of or any assets constituting a business
unit of, or make any other Investment in, any Person, other than (i) Investments
in any Subsidiary of the Borrower (or any Person that will become a Subsidiary
of the Borrower as a result of such Investment) otherwise permitted hereunder
(including, without limitation, subsection 7.4) and under the other Loan
Documents and (ii) CDH Permitted Investments; provided, that so long as the
total of the aggregate amount of CDH Permitted Investments owned by the Borrower
plus the aggregate amount of CDH Permitted Investments owned by CDH (exclusive
of, in the case of both the Borrower and CDH, any CDH Permitted Investments
subject to or otherwise covered by any Lien other than the Lien created under
this Agreement in the Collateral Account) shall have a value of $50 million or
more, the Borrower may make any Investment that the Borrower is otherwise
permitted to make hereunder (including, without limitation, subsection 7.4) and
under the other Loan Documents.
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay when due any principal of any
Revolving Credit Loan or any Reimbursement Obligation in accordance
with the terms hereof; or the Borrower shall fail to make in full any
deposit required to be made hereunder into the Collateral Account on
the day such deposit is due in accordance with the terms hereof; or
the Borrower shall fail to pay any interest on any Revolving Credit
Loan, or any fee or other amount payable hereunder or under any other
Loan Document (including, without limitation, any Commitment Fee,
Administration Fee, Fronting Fee or Letter of Credit Fee), when due in
accordance with the terms hereof, and such interest or fee or other
amount shall remain unpaid for a period of five or more Business Days
after notice to the Borrower by the party to whom such payment was due
(or by the Agent on behalf of such party); or
69
75
(b) Any representation or warranty made or deemed made by any
Loan Party herein, the CDH Guarantee or in any other Loan Document or
which is contained in any certificate, document or financial or other
statement furnished at any time under or in connection with this
Agreement, the CDH Guarantee or any other Loan Document shall prove to
have been false or misleading as of the time made or furnished in any
material respect and either such false or misleading representation or
warranty (i) has resulted in a Material Adverse Effect or (ii) could
reasonably be expected to result in a Material Adverse Effect; or
(c) The Borrower shall default in the observance or performance
of any covenant contained in subsection 7.1, 7.9 or 7.10; or the
Borrower shall default in the observance or performance of any other
covenant contained in Section 7 or CDH shall default in the observance
or performance of any covenant in Section 10 of the CDH Guarantee, and
in either case such default shall continue unremedied for a period of
10 days after the earlier to occur of (i) the date the Agent shall
have provided notice to the Borrower of such default and (ii) the date
a Responsible Officer of the Borrower shall have learned or reasonably
should have learned of such default; or
(d) The Borrower shall default in the observance or performance
of any other covenant contained in this Agreement (other than as
provided in paragraphs (a) through (c) of this Section), and such
default shall continue unremedied for a period of 30 Business Days
after notice to the Borrower by the Agent of such default; or
(e) The Borrower or CDH shall (i) default in any payment of
principal of or interest on any Debt (other than the Revolving Credit
Loans) or in the payment of any Guarantee Obligation, beyond the
period of grace (not to exceed 30 days), if any, provided in the
instrument or agreement under which such Debt or Guarantee Obligation
was created and such default permits the holder or holders of such
Debt or beneficiary or beneficiaries of such Guarantee Obligation (or
a trustee or agent on behalf of such holder or holders or beneficiary
or beneficiaries) to cause, with the giving of notice if required,
such Debt to become due prior to its stated maturity or such Guarantee
Obligation to become payable; or (ii) default in the observance or
performance of any other agreement or condition relating to any such
Debt or Guarantee Obligation or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which default or other
event or condition is to cause such Debt to become due prior to its
stated maturity or such Guarantee Obligation to become payable;
provided, however, that no Default or Event of Default shall exist
under this paragraph unless the aggregate amount of Debt and/or
Guarantee Obligations in respect of which any default or other event
or condition referred to in this paragraph shall have occurred shall
be equal to at least $5 million; or
(f) (i) The Borrower or CDH shall commence any case, proceeding
or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for
70
76
relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other
relief with respect to it or its debts, or (B) seeking appointment of
a receiver, trustee, custodian, conservator or other similar official
for it or for all or any substantial part of its assets, or the
Borrower or CDH shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against the Borrower or
CDH any case, proceeding or other action of a nature referred to in
clause (i) above which (A) results in the entry of an order for relief
or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall
be commenced against the Borrower or CDH any case, proceeding or other
action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of
its assets which results in the entry of an order for any such relief
which shall not have been vacated, discharged, or stayed or bonded
pending appeal within 60 days from the entry thereof; or (iv) the
Borrower or CDH shall take any action in furtherance of, or indicating
its consent to, approval of, or acquiescence in, any of the acts set
forth in clause (i), (ii), or (iii) above; or (v) the Borrower or CDH
shall generally not, or shall be unable to, or shall admit in writing
its inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited transaction"
(as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan or any Lien in favor of the PBGC or a Plan
shall arise on the assets of the Borrower or any Commonly Controlled
Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Required
Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate
for purposes of Title IV of ERISA, (v) the Borrower or any Commonly
Controlled Entity shall, or in the reasonable opinion of the Required
Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other event or condition shall occur or
exist with respect to a Plan; and in each case in clauses (i) through
(vi) above, such event or condition, together with all other such
events or conditions, if any, could reasonably be expected to have a
Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against the
Borrower or any Significant Subsidiary involving in the aggregate a
liability (not paid or fully covered by insurance) of $3 million or
more, and all such judgments or decrees shall not have been vacated,
satisfied, discharged, stayed or bonded pending appeal within 60 days
from the entry thereof; provided, that no Default or Event of Default
shall exist under this paragraph (h) as a result of any such judgment
71
77
or decree if such judgment or decree is not against the Borrower and
the Borrower is not liable, by contract or otherwise, to make any
payment in respect of such judgment or decree; or
(i) (i) The CDH Guarantee shall cease, for any reason, to be in
full force and effect or CDH shall so assert or (ii) CDH shall fail,
at any time, to be a direct Wholly-Owned Subsidiary of the Borrower;
or
(j) (i) Any Person not a Permitted Holder, or any "group" (within
the meaning of Section 13(d) or 14(d) of the Securities Exchange Act
of 1934, as amended) not composed entirely of Permitted Holders, (A)
shall have acquired beneficial ownership of more than 50% of any
outstanding class of Capital Stock having ordinary voting power in the
election of directors of the Borrower or (B) shall obtain the power
(whether or not exercised) to elect a majority of the Borrower's
directors or (ii) during any period of twelve consecutive calendar
months, individuals who were either (x) directors of the Borrower on
the first day of such period (or who were appointed or nominated for
election as directors of the Borrower by at least a majority of the
individuals who were directors of the Borrower on the first day of
such period) or (y) appointed directors to replace directors removed
solely as a result of death or mental or physical disability, shall
cease to constitute a majority of the Board of Directors;
(k) an event of default, as defined in any indenture or
instrument evidencing or under which any Significant Subsidiary has at
the date of this Agreement or shall hereafter have outstanding any
Debt, shall happen and be continuing and either (i) such default
results from the failure to pay principal of such Debt in excess of
$10 million at final maturity of such Debt or (ii) as a result of such
default, the maturity of such Debt shall have been accelerated so that
the same shall be or become due and payable prior to the date on which
the same would otherwise have become due and payable, and such
acceleration shall not be rescinded or annulled within 30 days and the
principal amount of such Debt of any Significant Subsidiary in
default, or the maturity of which has been accelerated aggregates $10
million or more; provided that such default shall not be an Event of
Default if such Debt is Non-Recourse to the Borrower in respect of the
amounts not paid or due upon acceleration and the Borrower could, at
the time of default, Incur at least $1 of Debt under subsection
7.2(a); or
(l) any of the Security Documents shall cease, for any reason
after the execution and delivery thereof, to be in full force and
effect (other than as a result of the expiration or termination of
such Security Document in accordance with its terms), or any Loan
Party shall so assert, or any Lien created by any of the Security
Documents shall cease to be enforceable and of the same effect and
priority purported to be created thereby (other than as a result of
the expiration or termination of such Security Document in accordance
with its terms);
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) of this Section with respect to the
Borrower, automatically the Commitments shall immediately terminate and the
72
78
Revolving Credit Loans hereunder (with accrued interest thereon), the Notes and
all other amounts owing under this Agreement (including, without limitation, all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) shall immediately become due and payable, and (B) if such event is
any other Event of Default, either or both of the following actions may be
taken: (i) with the consent of the Required Lenders, the Agent may, or upon the
request of the Required Lenders, the Agent shall, by notice to the Borrower
declare the Commitments to be terminated forthwith, whereupon the Commitments
shall immediately terminate; and (ii) with the consent of the Required Lenders,
the Agent may, or upon the request of the Required Lenders, the Agent shall, by
notice to the Borrower, declare the Revolving Credit Loans hereunder (with
accrued interest thereon), the Notes and all other amounts owing under this
Agreement (including, without limitation, all amounts of L/C Obligations,
whether or not the beneficiaries of the then outstanding Letters of Credit shall
have presented the documents required thereunder) to be due and payable
forthwith, whereupon the same shall immediately become due and payable.
With respect to all Letters of Credit with respect to which
presentment for honor shall not have occurred at the time of an acceleration
pursuant to the preceding paragraph, the Borrower shall at such time deposit in
the Collateral Account an amount equal to the aggregate then undrawn and
unexpired amount of such Letters of Credit, to be held, applied or released for
application as Collateral as provided in subsection 3.9.
Except as expressly provided above in this Section, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.
SECTION 9. THE AGENT
9.1 Appointment. Each Lender and the Issuing Bank hereby
irrevocably designates and appoints the Agent as the agent of such Lender and
the Issuing Bank under this Agreement and the other Loan Documents, and each
such Lender and the Issuing Bank irrevocably authorizes the Agent, in such
capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender or the Issuing Bank, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Agent.
9.2 Delegation of Duties. The Agent may execute any of its duties
under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
73
79
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
9.3 Exculpatory Provisions. Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be
(i) liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement or any other Loan Document
(except for its or such Person's own gross negligence or willful misconduct) or
(ii) responsible in any manner to any of the Lenders or the Issuing Bank for any
recitals, statements, representations or warranties made by the Borrower or any
officer thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of the Borrower to perform its obligations hereunder or
thereunder. The Agent shall not be under any obligation to any Lender or the
Issuing Bank to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the properties, books or records of the
Borrower.
9.4 Reliance by Agent. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any Note, writing, resolution, notice,
consent, certificate, affidavit, letter, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrower), independent accountants and other experts
selected by the Agent. The Agent may deem and treat the payee of any Note as the
owner thereof for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the Agent. The Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice
or concurrence of the Required Lenders as it deems appropriate or it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Agent shall in all cases be fully protected in acting,
or in refraining from acting, under this Agreement and the other Loan Documents
in accordance with a request of the Required Lenders, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders, the Issuing Bank and all future holders of the Revolving Credit Loans.
9.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has received notice from a Lender, the Issuing Bank
or the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default." In the event that
the Agent receives such a notice, the Agent shall give notice thereof to the
Lenders and the Issuing Bank. The Agent shall take such action with respect to
such Default or Event of Default as shall be reasonably directed by the Required
74
80
Lenders; provided that unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders and the
Issuing Bank.
9.6 Non-Reliance on Agent and Other Lenders. Each Lender and the
Issuing Bank expressly acknowledges that neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates has made
any representations or warranties to it and that no act by the Agent hereinafter
taken, including any review of the affairs of the Borrower, shall be deemed to
constitute any representation or warranty by the Agent to any Lender or the
Issuing Bank. Each Lender and the Issuing Bank represents to the Agent that it
has, independently and without reliance upon the Agent or any other Lender or
the Issuing Bank, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Borrower and made its own decision to make its Revolving Credit Loans hereunder
and enter into this Agreement. Each Lender and the Issuing Bank also represents
that it will, independently and without reliance upon the Agent or any other
Lender or the Issuing Bank, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Borrower. Except for notices, reports and
other documents expressly required to be furnished to the Lenders and the
Issuing Bank by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Lender or the Issuing Bank with any credit or
other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of the Borrower which
may come into the possession of the Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.
9.7 Indemnification. The Lenders agree to indemnify the Agent in
its capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
respective Commitment Percentages in effect on the date on which indemnification
is sought, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including, without limitation, at
any time following the payment of the Revolving Credit Loans) be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of, the Commitments, this Agreement, any of the other Loan Documents or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Agent under
or in connection with any of the foregoing; provided that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from the Agent's gross negligence or willful misconduct. The
agreements in this subsection shall survive the termination of this Agreement
and payment of the Notes, the Revolving Credit Loans and all other Obligations.
75
81
9.8 Agent in Its Individual Capacity. The Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Borrower as though the Agent were not the Agent
hereunder and under the other Loan Documents. With respect to the Revolving
Credit Loans made by it and any Note issued to it and with respect to any Letter
of Credit issued or participated in by it, the Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Lender and
may exercise the same as though it were not the Agent, and the terms "Lender"
and "Lenders" shall include the Agent in its individual capacity.
9.9 Successor Agent. The Agent may resign as Agent upon 10 days'
notice to the Lenders and the Issuing Bank. If the Agent shall resign as Agent
under this Agreement and the other Loan Documents, then the Required Lenders
shall appoint from among the Lenders a successor agent for the Lenders and the
Issuing Bank, which successor agent (provided that it shall have been approved
by the Borrower), shall succeed to the rights, powers and duties of the Agent
hereunder. Effective upon such appointment and approval, the term "Agent" shall
mean such successor agent, and the former Agent's rights, powers and duties as
Agent shall be terminated, without any other or further act or deed on the part
of such former Agent or any of the parties to this Agreement or any holders of
the Revolving Credit Loans. After any retiring Agent's resignation as Agent, the
provisions of this Section 9 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement and the
other Loan Documents.
9.10 Lead Arrangers. None of the Lead Arrangers shall have any
duties or responsibilities hereunder or under any other Loan Document in its
capacity as such.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement nor any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this subsection. The
Required Lenders may, or, with the written consent of the Required Lenders, the
Agent may, from time to time, (a) enter into with the Borrower written
amendments, supplements or modifications hereto and to the other Loan Documents
for the purpose of adding any provisions to this Agreement or the other Loan
Documents or changing in any manner the rights of the Lenders or of the Borrower
hereunder or thereunder or (b) waive, on such terms and conditions as the
Required Lenders or the Agent, as the case may be, may specify in such
instrument, any of the requirements of this Agreement or the other Loan
Documents or any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, supplement or modification
shall (i) reduce the amount or extend the scheduled date of maturity of any
Revolving Credit Loan or reduce the stated rate of any interest or fee payable
hereunder or extend the scheduled date of any payment thereof or increase the
amount or extend the expiration date of any Commitment of any Lender, in each
case without the consent of each Lender affected thereby, or (ii) amend, modify
or waive any provision of this subsection or reduce the percentage specified in
76
82
the definition of Required Lenders or Majority Lenders, or consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement and the other Loan Documents, in each case without the
written consent of all the Lenders, or (iii) amend, modify or waive any
provision of Section 9 without the written consent of the Agent. Any such waiver
and any such amendment, supplement or modification shall apply equally to each
of the Lenders and shall be binding upon the Borrower, the Lenders, the Lead
Arrangers, the Issuing Bank, the Agent and all future holders of the Revolving
Credit Loans. In the case of any waiver, the Borrower, the Lenders, the Lead
Arrangers, and the Agent shall be restored to their former positions and rights
hereunder and under the other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; no such waiver
shall extend to any subsequent or other Default or Event of Default or impair
any right consequent thereon. Notwithstanding any provision of this Agreement
(including, without limitation, any provision of this subsection 10.1), the
provisions of this subsection 10.1 shall not apply to any amendment, supplement,
modification, or waiver with respect to the Fee Letter, and the Fee Letter and
any term thereof may be amended, supplemented or modified, and any requirement
or other provision thereof may be waived, as permitted under the Fee Letter
without meeting any requirement (including, without limitation, any requirement
to obtain the agreement or consent of any Person) other than as may be imposed
by the Fee Letter.
10.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and delivered by hand or courier or sent by certified
mail or facsimile transmission and, unless otherwise expressly provided herein,
shall be deemed to have been duly given or made (a) in the case of delivery by
hand or courier, when delivered, (b) in the case of delivery by certified mail,
three Business Days after being deposited in the mails, postage prepaid, or (c)
in the case of delivery by facsimile transmission, when sent and receipt has
been confirmed, addressed as follows in the case of the Borrower, the Issuing
Bank and the Agent, and as set forth in Schedule I in the case of the other
parties hereto, or to such other address as may be hereafter notified by the
respective parties hereto:
The Borrower: Cogentrix Energy, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
with copy to General Counsel
Fax: ▇▇▇-▇▇▇-▇▇▇▇
The Agent and the
Issuing Bank: Australia and New Zealand Banking Group Limited
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ Pack/▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
77
83
provided that any notice, request or demand to or upon the Agent, the Issuing
Bank or the Lenders pursuant to subsection 2.2, 2.4, 2.6, 2.7, 2.12, 2.19 or 3.2
shall not be effective until received.
10.3 No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the Agent or any Lender, any right,
remedy, power or privilege hereunder or under the other Loan Documents shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
10.4 Survival of Representations and Warranties; Survival of
Certain Agreements and Covenants. All representations and warranties made
hereunder, in the other Loan Documents and in any document, certificate or
statement delivered pursuant hereto or in connection herewith shall survive the
execution and delivery of this Agreement and the making of the Revolving Credit
Loans hereunder. To the extent provided in such subsections, the agreements and
covenants in subsections 2.14, 2.15(a), 2.16, 6.9, 9.7 and 10.5 shall survive
the termination of this Agreement and the payment of the Notes, the Revolving
Credit Loans and all other Obligations.
10.5 Payment of Expenses and Taxes. The Borrower agrees (a) to
pay or reimburse the Agent and the Lead Arrangers for all their reasonable
out-of-pocket costs and expenses incurred in connection with the syndication of
the Commitments and the Revolving Credit Loans, including, without limitation,
all such expenses relating to the preparation and distribution of information
memoranda relating thereto, the hosting of meetings of prospective Lenders and
the promotion and advertising of the syndication, (b) to pay or reimburse the
Agent for all its out-of-pocket costs and expenses incurred in connection with
the development, preparation and execution of, and, in the case of the Agent,
any amendment, supplement or modification to, or waiver or consent under or in
respect of, this Agreement and the other Loan Documents and any other documents
prepared in connection herewith or therewith, and the consummation and
administration of the transactions contemplated hereby and thereby, including,
without limitation, the reasonable fees and disbursements of counsel to the
Agent, (c) to pay or reimburse each Lender, the Issuing Bank and the Agent for
all its costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the other Loan Documents and
any such other documents, including, without limitation, the fees and
disbursements of counsel (including without limitation the allocated fees and
expenses of in-house counsel, if applicable) to each Lender and of counsel to
the Agent and (d) to pay, indemnify, and hold each Lender, the Issuing Bank and
the Agent harmless from, any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other taxes, if any, which may be payable or determined to be payable
in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents. The
78
84
agreements in this subsection 10.5 shall survive the termination of this
Agreement and the payment of the Notes, the Revolving Credit Loans and all other
Obligations.
10.6 Successors and Assigns; Participations and Assignments. This
Agreement shall be binding upon and inure to the benefit of the Borrower, the
Lenders, the Issuing Bank, the Agent and their respective successors and
assigns, except that the Borrower may not assign or transfer any of its rights
or obligations under this Agreement without the prior written consent of each
Lender and the Issuing Bank (except as otherwise may be permitted by subsection
7.9).
(b) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time sell to one
or more banks or other entities ("Participants") participating interests in any
Revolving Credit Loan owing to such Lender, any Commitment of such Lender or any
other interest of such Lender hereunder and under the other Loan Documents. In
the event of any such sale by a Lender of a participating interest to a
Participant, such Lender's obligations under this Agreement to the other parties
to this Agreement shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain the holder of
any such Revolving Credit Loan for all purposes under this Agreement and the
other Loan Documents, and the Borrower and the Agent shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. No Lender shall
be entitled to create in favor of any Participant, in the participation
agreement pursuant to which such Participant's participating interest shall be
created or otherwise, any right to vote on, consent to or approve any matter
relating to this Agreement or any other Loan Document except for those specified
in clauses (i) and (ii) of the proviso to subsection 10.1. The Borrower agrees
that if amounts outstanding under this Agreement are due or unpaid, or shall
have been declared or shall have become due and payable upon the occurrence of
an Event of Default, each Participant shall, to the maximum extent permitted by
applicable law, be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement, provided that, in purchasing such participating
interest, such Participant shall be deemed to have agreed to share with the
Lenders the proceeds thereof as provided in subsection 10.7(a) as fully as if it
were a Lender hereunder. The Borrower also agrees that each Participant shall be
entitled to the benefits of subsections 2.14, 2.15 and 2.16 with respect to its
participation in the Commitments and the Revolving Credit Loans outstanding from
time to time as if it was a Lender; provided that, in the case of subsection
2.15, such Participant shall have complied with the requirements of said
subsection and provided, further, that no Participant shall be entitled to
receive any greater amount pursuant to any such subsection than the transferor
Lender would have been entitled to receive in respect of the amount of the
participation transferred by such transferor Lender to such Participant had no
such transfer occurred.
(c) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time and from
time to time assign to any Lender or any affiliate thereof or, with the consent
79
85
of the Borrower and the Agent (which in each case shall not be unreasonably
withheld), to an additional bank or financial institution (an "Assignee") all or
any part of its rights and obligations under this Agreement and the other Loan
Documents pursuant to an Assignment and Acceptance, substantially in the form of
Exhibit G, executed by such Assignee, such assigning Lender (and, in the case of
an Assignee that is not then a Lender or an affiliate thereof, by the Borrower
and the Agent) and delivered to the Agent for its acceptance and recording in
the Register, provided that, in the case of any such assignment to an additional
bank or financial institution, the sum of the aggregate principal amount of the
Revolving Credit Loans, the aggregate amount of the L/C Obligations and the
aggregate amount of the unused Available Commitment being assigned is not less
than $10 million (or such lesser amount as may be agreed to by the Borrower and
the Agent). Upon such execution, delivery, acceptance and recording, from and
after the effective date determined pursuant to such Assignment and Acceptance,
(x) the Assignee thereunder shall be a party hereto and, to the extent provided
in such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder with a Commitment and Commitment Percentage as set forth therein, and
(y) the assigning Lender thereunder shall, to the extent provided in such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such assigning Lender shall cease to be a party hereto).
(d) The Agent, on behalf of the Borrower, shall maintain at the
address of the Agent referred to in subsection 10.2 a copy of each Assignment
and Acceptance delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Lenders and the Commitment of, and
principal amounts of the Revolving Credit Loans owing to, each Lender from time
to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Agent and the Lenders may (and, in the
case of any Revolving Credit Loan or other obligation hereunder not evidenced by
a Note, shall) treat each Person whose name is recorded in the Register as the
owner of a Revolving Credit Loan or other obligation hereunder as the owner
thereof for all purposes of this Agreement and the other Loan Documents,
notwithstanding any notice to the contrary. Any assignment of any Revolving
Credit Loan or other obligation hereunder not evidenced by a Note shall be
effective only upon appropriate entries with respect thereto being made in the
Register.
(e) Upon its receipt of an Assignment and Acceptance executed by
an assigning Lender and an Assignee (and, in the case of an Assignee that is not
then a Lender or an affiliate thereof, by the Borrower and the Agent) together
with payment to the Agent of a registration and processing fee of $2,500, the
Agent shall (i) promptly accept such Assignment and Acceptance and (ii) on the
effective date determined pursuant thereto record the information contained
therein in the Register and give notice of such acceptance and recordation to
the Lenders and the Borrower.
(f) The Borrower authorizes each Lender to disclose to any
Participant or Assignee (each, a "Transferee") and any prospective Transferee,
subject to the provisions of subsection 10.15, any and all financial information
in such Lender's possession concerning the Borrower and its Affiliates which has
80
86
been delivered to such Lender by or on behalf of the Borrower pursuant to this
Agreement or which has been delivered to such Lender by or on behalf of the
Borrower in connection with such Lender's credit evaluation of the Borrower and
its Affiliates prior to becoming a party to this Agreement.
(g) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this subsection concerning assignments of
Revolving Credit Loans and Notes relate only to absolute assignments and that
such provisions do not prohibit assignments creating security interests,
including, without limitation, any pledge or assignment by a Lender of any
Revolving Credit Loan or Note to any Federal Reserve Bank in accordance with
applicable law.
10.7 Adjustments; Set-off. (a) If any Lender (a "benefitted
Lender") shall at any time receive any payment of all or part of its Revolving
Credit Loans or the Reimbursement Obligations owing to it, or interest thereon,
or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 8, or otherwise), in a greater proportion than any such
payment to or collateral received by any other Lender, if any, in respect of
such other Lender's Revolving Credit Loans or the Reimbursement Obligations
owing to it, or interest thereon, such benefitted Lender shall purchase for cash
from the other Lenders a participating interest in such portion of each such
other Lender's Revolving Credit Loan or the Reimbursement Obligations owing to
it, or shall provide such other Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
benefitted Lender to share the excess payment or benefits of such collateral or
proceeds ratably with each of the Lenders; provided, however, that if all or any
portion of such excess payment or benefits is thereafter recovered from such
benefitted Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise) to set-off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower. Each Lender agrees
promptly to notify the Borrower and the Agent after any such set-off and
application made by such Lender, provided that the failure to give such notice
shall not affect the validity of such set-off and application.
10.8 Counterparts. This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts
(including by facsimile transmission), and all of said counterparts taken
81
87
together shall be deemed to constitute one and the same instrument. A set of the
copies of this Agreement signed by all the parties shall be lodged with the
Borrower and the Agent.
10.9 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Borrower, the Agent and the Lenders with respect
to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Agent or any Lender relative to subject
matter hereof not expressly set forth or referred to herein or in the other Loan
Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.12 Submission To Jurisdiction; Waivers. The Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any
judgement in respect thereof, to the non-exclusive general
jurisdiction of the Courts of the State of New York, the courts of the
United States of America for the Southern District of New York, and
appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have
to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court
and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the Borrower at its address set forth in subsection 10.2
or at such other address of which the Agent shall have been notified
pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to ▇▇▇ in any other jurisdiction; and
82
88
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or
proceeding referred to in this subsection any special, exemplary,
punitive or consequential damages.
10.13 Acknowledgments. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution
and delivery of this Agreement and the other Loan Documents;
(b) neither the Agent nor any Lender has any fiduciary
relationship with or duty to the Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and
the relationship between Agent and Lenders, on one hand, and the
Borrower, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Borrower and the
Lenders.
10.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENT AND THE
LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN.
10.15 Confidentiality. Each Lender agrees to keep confidential
all non-public information provided to it by the Borrower pursuant to this
Agreement that is designated by the Borrower in writing as confidential;
provided that nothing herein shall prevent any Lender from disclosing any such
information (i) to the Agent or any other Lender, (ii) to any Transferee which
receives such information having been made aware of the confidential nature
thereof, (iii) to its employees, directors, agents, attorneys, accountants and
other professional advisors, (iv) upon the request or demand of any Governmental
Authority having jurisdiction over such Lender, (v) in response to any order of
any court or other Governmental Authority or as may otherwise be required
pursuant to any Requirement of Law, (vi) which has been publicly disclosed other
than in breach of this Agreement, or (vii) in connection with the exercise of
any remedy hereunder.
83
89
10.16 Rank. The parties hereto, for their own benefit and not for
the benefit of or for the purpose of creating any duty, obligation or liability
to any other Person (including, without limitation, any party to the Borrower
Indenture or any holder of any Borrower Indenture Security), specifically
designate that the Extensions of Credit made by the Lenders and the Issuing Bank
to the Borrower under this Agreement are neither senior nor subordinate to the
Borrower Indenture Securities in right of payment, except to the extent that the
Extensions of Credit are senior to the Borrower Indenture Securities as a result
of the Liens granted by CDH to the Agent pursuant to the Security Documents.
84
90
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their proper and duly authorized officers
as of the day and year first above written.
COGENTRIX ENERGY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President-Finance
and Treasurer
AUSTRALIA AND NEW ZEALAND BANKING
GROUP LIMITED,
as Agent, as a Lead Arranger, as the
Issuing Bank and as a Lender
By: /s/ ▇▇▇▇▇▇▇▇ PACK
----------------------
Name: ▇▇▇▇▇▇▇▇ Pack
Title: Senior Vice President
THE BANK OF NOVA SCOTIA,
as a Lead Arranger and a Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Relationship Manager
85
91
CIBC ▇▇▇▇▇▇▇▇▇▇▇ CORPORATION,
as a Lead Arranger
By: /s/ ▇▇▇▇▇ ▇'▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇'▇▇▇▇▇
Title: Executive Director
By:
--------------------------
Name:
Title:
CIBC INC.,
as a Lender
By: /s/ ▇▇▇▇▇ ▇'▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇'▇▇▇▇▇
Title: Executive Director
By:
--------------------------
Name:
Title:
DRESDNER BANK AG, NEW YORK BRANCH,
as a Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Assistant Treasurer
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Assistant Treasurer
86
92
THE ROYAL BANK OF SCOTLAND PLC,
as a Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
By:
-------------------------
Name:
Title:
87
93
Schedule I to
Credit Agreement
----------------
LENDERS' COMMITMENTS
AND ADDRESSES FOR NOTICES
-------------------------
COMMITMENT
LENDER PERCENTAGE COMMITMENT
------ ---------- ----------
AUSTRALIA AND NEW ZEALAND BANKING GROUP 30.000% $30,000,000
LIMITED
ADDRESS FOR NOTICES:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ Pack/
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇/▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
THE BANK OF NOVA SCOTIA 25.000% $25,000,000
ADDRESS FOR NOTICES:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇/
▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇/▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇/▇▇▇-▇▇▇-▇▇▇▇
CIBC INC. 25.000% $25,000,000
ADDRESS FOR NOTICES:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇'▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
CIBC, Inc.
2 Paces West
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
DRESDNER BANK AG, NEW YORK BRANCH 10.000% $10,000,000
ADDRESS FOR NOTICES:
North America LLC
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇/▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
THE ROYAL BANK OF SCOTLAND 10.000% $10,000,000.00
ADDRESS FOR NOTICES:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
94
Schedule II to
Credit Agreement
----------------
REVOLVING CREDIT FACILITY
APPLICABLE MARGIN
-----------------
STATUS: ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇ 5
Commitment Fee: 0.45% 0.50% 0.60 % 0.70% 0.80 %
Eurodollar Loans: 1.25% 1.50% 1.875% 2.25% 2.625%
ABR Loans: 0.60% 0.85% 1.225% 1.60% 1.975%
Financial Letters
of Credit: 1.25% 1.50% 1.875% 2.25% 2.625%
Performance Letters
of Credit: 1.05% 1.30% 1.675% 2.05% 2.425%
For purposes of this Schedule, capitalized terms shall have the meanings
assigned to them in the Credit Agreement (as amended from time to time) to which
this Schedule is appended, provided that the following terms shall have the
following meanings:
"Level 1 Status" exists at any date if, at such date, the Borrower Indenture
Securities are rated BBB- or higher by S&P and Baa3 or higher by Moody's.
"Level 2 Status" exists at any date if, at such date, (i) the Borrower Indenture
Securities are rated BB+ or higher by S&P and Ba1 or higher by Moody's and (ii)
Level 1 Status does not exist.
"Level 3 Status" exists at any date if, at such date, (i) the Borrower Indenture
Securities are rated BB or higher by S&P and Ba2 or higher by Moody's and (ii)
neither ▇▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇▇ exists.
"Level 4 Status" exists at any date if, at such date, (i) the Borrower Indenture
Securities are rated BB- or higher by S&P and Ba3 or higher by Moody's and (ii)
none of ▇▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇▇ exists.
"Level 5 Status" exists at any date if, at such date, no other Status exists or
the Borrower Indenture Securities are not rated by both S&P and Moody's or no
Borrower Indenture Securities are outstanding.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"S&P" means Standard & Poor's Rating Group.
"Status" refers to the determination which of ▇▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇ ▇▇▇▇▇▇,
▇▇▇▇▇ 3 Status, Level 4 Status or Level 5 Status exists at any date. For
purposes of this determination, the credit rating in effect at any date is that
in effect at the close of business on such date.
