EXHIBIT B-5
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$3,750,000,000
364-DAY REVOLVING CREDIT AGREEMENT
Dated as of November 15, 2000
CP&L ENERGY, INC.
(Borrower)
and
THE BANKS LISTED ON THE SIGNATURE PAGES HEREOF
(Banks)
and
CITIBANK, N.A.
(Administrative Agent)
and
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY, INC.
(Joint Lead Arrangers)
and
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
(Syndication Agent)
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THE CHASE MANHATTAN BANK
as Documentation Agent
TABLE OF CONTENTS
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SECTION PAGE
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms............................................1
SECTION 1.02. Computation of Time Periods.....................................11
SECTION 1.03. Accounting Terms................................................11
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The A Advances..................................................11
SECTION 2.02. Making the A Advances...........................................12
SECTION 2.03. The B Advances..................................................13
SECTION 2.04. Fees .................................................16
SECTION 2.05. Reduction of the Commitments....................................16
SECTION 2.06. Repayment of A Advances.........................................17
SECTION 2.07. Interest on Advances............................................17
SECTION 2.08. Additional Interest on Eurodollar Rate Advances.................18
SECTION 2.09. Interest Rate Determination.....................................18
SECTION 2.10. Voluntary Conversion of A Advances..............................19
SECTION 2.11. Prepayments of A Advances.......................................20
SECTION 2.12. Increased Costs.................................................20
SECTION 2.13. Illegality .................................................21
SECTION 2.14. Payments and Computations.......................................21
SECTION 2.15. Sharing of Payments, Etc........................................22
SECTION 2.16. Extension of Commitment Termination Date........................23
SECTION 2.17. Term Loan Conversion Option.....................................25
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Closing.................................25
SECTION 3.02. Conditions Precedent to Each A Borrowing and to the Extension
of the Commitment Termination Date.........................26
SECTION 3.03. Conditions Precedent to Each B Borrowing........................27
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower..................27
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ARTICLE V
COVENANTS OF THE COMPANY
SECTION 5.01. Affirmative Covenants...........................................29
SECTION 5.02. Negative Covenants..............................................32
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default...............................................33
ARTICLE VII
THE AGENTS
SECTION 7.01. Authorization and Action........................................35
SECTION 7.02. The Agents' Reliance, Etc.......................................35
SECTION 7.03. The Agents and their Respective Affiliates......................36
SECTION 7.04. Lender Credit Decision..........................................36
SECTION 7.05. Indemnification.................................................36
SECTION 7.06. Successor Administrative Agent..................................37
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc.................................................37
SECTION 8.02. Notices, Etc. .................................................38
SECTION 8.03. No Waiver; Remedies.............................................38
SECTION 8.04. Costs, Expenses, Taxes and Indemnification......................38
SECTION 8.05. Right of Set-off................................................41
SECTION 8.06. Binding Effect..................................................41
SECTION 8.07. Assignments and Participations..................................41
SECTION 8.08. Governing Law...................................................45
SECTION 8.09. Waiver of Jury Trial............................................45
SECTION 8.10. Execution in Counterparts.......................................45
SECTION 8.11. Severability....................................................46
SECTION 8.12. Headings........................................................46
SECTION 8.13. Entire Agreement................................................46
SCHEDULES
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SCHEDULE I - Existing Agreements
SCHEDULE II - Permitted Existing Indebtedness
EXHIBITS
--------
A-1 Form of Notice of A Borrowing
A-2 Form of Notice of B Borrowing
ii
A-3 Form of Notice of Conversion
B Form of Assignment and Acceptance
C-1 Form of Opinion of Counsel for the Borrower
C-2 Form of Opinion of Counsel for the Borrower upon Extension of the
Commitment Termination Date and Exercise of the Term Loan Conversion Option
D Form of Opinion of Counsel for the Administrative Agent and the Arrangers
E Form of Request for Extension of the Commitment Termination Date
F Form of Term Loan Conversion Notice
G Form of Compliance Certificate
iii
364-DAY REVOLVING CREDIT AGREEMENT
Dated as of November 15, 2000
This 364-Day Revolving Credit Agreement (this "AGREEMENT") is made by CP&L
ENERGY, INC., a North Carolina corporation (the "BORROWER"), the banks listed on
the signature pages hereof (the "BANKS"), CITIBANK, N.A. ("CITIBANK"), as
administrative agent (the "ADMINISTRATIVE AGENT") for the Lenders (as
hereinafter defined) hereunder, ▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY,
INC., as joint lead arrangers (the "ARRANGERS"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO., as
syndication agent (the "SYNDICATION AGENT").
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. CERTAIN DEFINED TERMS.
As used in this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):
"A ADVANCE" means an advance by a Lender to the Borrower as part of an A
Borrowing and refers to a Base Rate Advance or a Eurodollar Rate Advance, each
of which shall be a "TYPE" of A Advance.
"A BORROWING" means a borrowing consisting of simultaneous A Advances of
the same Type made by each of the Lenders pursuant to Section 2.01.
"ADVANCE" means an A Advance or a B Advance.
"AFFILIATE" means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by, or is under common control with such
Person or is a director or officer of such Person.
"AGENTS" means the Arrangers, the Administrative Agent and the Syndication
Agent.
"APPLICABLE LENDING OFFICE" means, with respect to each Lender, (i) such
Lender's Domestic Lending Office in the case of a Base Rate Advance, or (ii)
such Lender's Eurodollar Lending Office, in the case of a Eurodollar Rate
Advance.
"APPLICABLE MARGIN" means 0% per annum for Base Rate Advances, and, with
respect to any Eurodollar Rate Advance, at all times during which any Applicable
Rating Level set forth below is in effect, the rate per annum (except as
provided below) for such Advance set forth below next to such Applicable Rating
Level:
2
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APPLICABLE MARGIN
APPLICABLE RATING FOR EURODOLLAR
LEVEL RATE ADVANCES
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1 .270%
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2 .285%
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3 .400%
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4 .500%
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5 .700%
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6 .925%
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provided, that the Applicable Margin will increase upon the occurrence and
during the continuance of any Event of Default by 2.0%. A change in the
Applicable Margin resulting from a change in the Applicable Rating Level shall
become effective upon the date of announcement of a change in the ▇▇▇▇▇'▇ Rating
or the S&P Rating that results in a change in the Applicable Rating Level.
"APPLICABLE RATING LEVEL" shall be determined in accordance with the
then-applicable S&P Rating and the then-applicable ▇▇▇▇▇'▇ Rating as follows:
--------------------------------- -----------------------------
S&P RATING/▇▇▇▇▇'▇ RATING APPLICABLE RATING LEVEL
--------------------------------- -----------------------------
A or higher or A2 or higher 1
--------------------------------- -----------------------------
A- or A3 2
--------------------------------- -----------------------------
BBB+ or Baa1 3
--------------------------------- -----------------------------
BBB or Baa2 4
--------------------------------- -----------------------------
BBB- and Baa3 5
--------------------------------- -----------------------------
lower than BBB- and Baa3 or 6
unrated
--------------------------------- -----------------------------
In the event that the S&P Rating and the ▇▇▇▇▇'▇ Rating are not at the same
Applicable Rating Level but differ by only one Applicable Rating Level, then the
higher of the two ratings shall determine the Applicable Rating Level. In the
event that the S&P Rating and the ▇▇▇▇▇'▇ Rating differ by more than one
Applicable Rating Level, then the Applicable Rating Level immediately below the
higher of the two ratings shall be the Applicable Rating Level. The Applicable
Rating Level shall be redetermined on the date of announcement of a change in
the S&P Rating or the ▇▇▇▇▇'▇ Rating.
"ARRANGERS" has the meaning specified in the introductory paragraph of this
Agreement.
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"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered into
by a Lender and an Eligible Assignee, and accepted by the Administrative Agent,
in substantially the form of Exhibit B hereto.
"B ADVANCE" means an advance by a Lender to the Borrower as part of a B
Borrowing resulting from the auction bidding procedure described in Section
2.03.
"B BORROWING" means a borrowing consisting of simultaneous B Advances from
each of the Lenders whose offer to make one or more B Advances as part of such
borrowing has been accepted by the Borrower under the auction bidding procedure
described in Section 2.03.
"B REDUCTION" has the meaning specified in Section 2.01.
"BASE RATE" means, for any Interest Period or any other period, a
fluctuating interest rate per annum as shall be in effect from time to time,
which rate per annum shall at all times be equal to the higher from time to time
of:
(i) the rate of interest announced publicly by Citibank in New York,
New York, from time to time, as Citibank's base rate; and
(ii) 1/2 of one percent per annum above the Federal Funds Rate in
effect from time to time.
"BASE RATE ADVANCE" means an A Advance that bears interest as provided in
Section 2.07(a).
"BORROWER" has the meaning specified in the introductory paragraph of this
Agreement.
"BORROWING" means an A Borrowing or a B Borrowing.
"BUSINESS DAY" means a day of the year on which banks are not required or
authorized to close at the principal office of any Lender and, if the applicable
Business Day relates to any Eurodollar Rate Advances, on which dealings are
carried on in the London interbank market.
"CHANGE OF CONTROL" means the occurrence, after the date of this Agreement,
of (i) any Person or "group" (within the meaning of Rule 13(d) or 14(d) of the
Securities and Exchange Commission under the Securities Exchange Act of 1934, as
amended), directly or indirectly, acquiring beneficial ownership of or control
over securities of the Borrower (or other securities convertible into such
securities) representing 30% or more of the combined voting power of all
securities of the Borrower entitled to vote in the election of directors; or
(ii) individuals who immediately after giving effect to the FPC Transaction were
directors of the Borrower ceasing for any reason to constitute a majority of the
Board of Directors of the Borrower unless the Persons replacing such individuals
were nominated by the Board of Directors of the Borrower then in office.
"CLOSING PROJECTIONS" means the pro forma projected financial statements of
the Borrower and its Subsidiaries for the fiscal year 2001, and the assumptions
4
and variables therein reflected included in the Confidential Information
Memorandum dated September, 2000, which was previously delivered to the Lenders.
"COMMITMENT" has the meaning specified in Section 2.01.
"COMMITMENT TERMINATION DATE" means, with respect to a Lender, the earlier
to occur of (i) the later of the Extension Date and (x) with respect to all
Lenders other than Declining Lenders, upon the effectiveness of any extension to
the Commitment Termination Date, such date to which the Commitment Termination
Date is extended in accordance with Section 2.16 and (y) with respect to
Declining Lenders, the Extension Date without giving effect to any requested
extension, and (ii) the date of termination in whole of the Commitments pursuant
to Section 2.05 or 6.01.
"CONSOLIDATED" refers to the consolidation of the accounts of the Borrower
and the Subsidiaries in accordance with generally accepted accounting
principles, including principles of consolidation, consistent with those applied
in the preparation of the financial statements referred to in Section 4.01(e).
"CONVERT", "CONVERSION" and "CONVERTED" each refers to a conversion of A
Advances of one Type into A Advances of another Type, or the selection of a new,
or the renewal of the same, Interest Period for Eurodollar Rate Advances,
pursuant to Section 2.09 or 2.10.
"CP&L" means the Carolina Power & Light Company.
"DECLINING LENDER" has the meaning assigned to that term in Section 2.16.
"DOMESTIC LENDING OFFICE" means, with respect to any Lender, the office of
such Lender specified as its "DOMESTIC LENDING OFFICE" below its name on the
signature pages hereof or such other office of such Lender as such Lender may
from time to time specify to the Borrower and the Administrative Agent.
"ELIGIBLE ASSIGNEE" means (i) any other Lender or any Affiliate of a Lender
meeting the criteria set forth in clause (ii) hereof (without regard to the
proviso at the end of such clause) and (ii) (A) any other commercial bank
organized under the laws of the United States, or any State thereof, and having
a combined capital and surplus of at least $250,000,000 (as established in its
most recent report of condition to its primary regulator), (B) a savings and
loan association or savings bank organized under the laws of the United States,
or any State thereof, and having a combined capital and surplus of at least
$250,000,000 (as established in its most recent report of condition to its
primary regulator), (C) a commercial bank organized under the laws of any other
country that is a member of the OECD or has concluded special lending
arrangements with the International Monetary Fund associated with its General
Arrangements to Borrow of the Cayman Islands, or a political subdivision of any
such country, and having a combined capital and surplus of at least $250,000,000
(as established in its most recent report of condition to its primary
regulator).
"ENVIRONMENTAL LAWS" means any federal, state or local laws, ordinances or
codes, rules, orders, or regulations relating to pollution or protection of the
environment, including, without limitation, laws relating to hazardous
substances, laws relating to reclamation of land and waterways and laws relating
5
to emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or wastes
into the environment (including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata) or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollution, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"EUROCURRENCY LIABILITIES" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"EURODOLLAR LENDING OFFICE" means, with respect to each Lender, the office
of such Lender specified as its "EURODOLLAR LENDING OFFICE" below its name on
the signature pages hereof (or, if no such office is specified, its Domestic
Lending Office), or such other office of such Lender as such Lender may from
time to time specify to the Borrower and the Administrative Agent.
"EURODOLLAR RATE" means, for the Interest Period for each Eurodollar Rate
Advance comprising part of the same A Borrowing an interest rate per annum equal
to the average (rounded upward to the nearest whole multiple of 1/8 of 1% per
annum, if such average is not such a multiple) of the rates per annum at which
deposits in U.S. dollars are offered by the principal office of each of the
Reference Banks in London, England to prime banks in the London Interbank market
at 11:00 A.M. (London time) two Business Days before the first day of such
Interest Period for a period equal to such Interest Period and in an amount
substantially equal to the amount of such Eurodollar Rate Advance comprising
part of such A Borrowing to be outstanding during such Interest Period from such
Reference Bank. The Eurodollar Rate for the Interest Period for each Eurodollar
Rate Advance comprising part of the same A Borrowing shall be determined by the
Administrative Agent on the basis of the applicable rates furnished to and
received by the Administrative Agent from the Reference Banks two Business Days
before the first day of such Interest Period, subject, however, to the
provisions of Section 2.09.
"EURODOLLAR RATE ADVANCE" means an A Advance that bears interest as
provided in Section 2.07(b).
"EURODOLLAR RATE RESERVE PERCENTAGE" of any Lender for the Interest Period
for any Eurodollar Rate Advance means the reserve percentage applicable during
such Interest Period (or if more than one such percentage shall be so
applicable, the daily average of such percentages for those days in such
Interest Period during which any such percentage shall be so applicable) under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for such Lender with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities having a term equal
to such Interest Period.
"EVENTS OF DEFAULT" has the meaning assigned to that term in Section 6.01.
6
"EXCHANGE AGREEMENT" means the Agreement and Plan of Exchange, dated as of
August 22, 1999, as amended and restated as of March 3, 2000, by and among CP&L,
FPC and the Borrower (formerly CP&L Holdings, Inc.), and filed with the
Securities and Exchange Commission.
"EXTENSION DATE" means the 364th day following the date of this Agreement.
"FACILITY FEE PERCENTAGE" means, at all times during which any Applicable
Rating Level set forth below is in effect, the rate per annum set forth below
next to such Applicable Rating Level:
---------------- ----------------
APPLICABLE FACILITY FEE
RATING LEVEL PERCENTAGE
---------------- ----------------
1 0.080%
---------------- ----------------
2 0.090%
---------------- ----------------
3 0.100%
---------------- ----------------
4 0.125%
---------------- ----------------
5 0.175%
---------------- ----------------
6 0.200%
---------------- ----------------
provided, that the Facility Fee Percentage will increase at any time the
principal amount of Advances outstanding is equal to or greater than 33% of the
aggregate Commitments by .100% at Levels 1 and 2, by .125% at Levels 3 and 4 and
by .250% at Levels 5 and 6. A change in the Facility Fee Percentage resulting
from a change in the Applicable Rating Level shall become effective upon the
date of announcement of a change in the ▇▇▇▇▇'▇ Rating or the S&P Rating that
results in a change in the Applicable Rating Level.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"FIRST MORTGAGE BONDS" means those bonds issued by CP&L pursuant to the
Mortgage.
"FLORIDA POWER" means Florida Power Corporation.
"FLORIDA POWER MORTGAGE" means the Indenture, dated as of January 1, 1944,
between Florida Power, Guaranty Trust Company of New York and the Florida
National Bank of Jacksonville, as modified, amended or supplemented from time to
time.
7
"FLORIDA POWER MORTGAGE BONDS" means those bonds issued by Florida Power
pursuant to the Florida Power Mortgage.
"FPC" means Florida Progress Corporation.
"FPC TRANSACTION" means the share exchange transaction between the Borrower
and FPC as described in the Exchange Agreement.
"GUARANTY" of any Person means any obligation, contingent or otherwise, of
such Person (i) to pay any Liability of any other Person or to otherwise
protect, or having the practical effect of protecting, the holder of any such
Liability against loss (whether such obligation arises by virtue of such Person
being a partner of a partnership or participant in a joint venture or by
agreement to pay, to keep well, to purchase assets, goods, securities or
services or to take or pay, or otherwise) or (ii) incurred in connection with
the issuance by a third Person of a Guaranty of any Liability of any other
Person (whether such obligation arises by agreement to reimburse or indemnify
such third Person or otherwise). The word "GUARANTEE" when used as a verb has
the correlative meaning.
"INCREASING COMMITMENT LENDER" has the meaning assigned to that term in
Section 2.16(b).
"INDEBTEDNESS" of any Person means (i) any obligation of such Person for
borrowed money, (ii) any obligation of such Person evidenced by a bond,
debenture, note or other similar instrument, (iii) any obligation of such Person
to pay the deferred purchase price of property or services, except a trade
account payable that arises in the ordinary course of business but only if and
so long as the same is payable on customary trade terms, (iv) any obligation of
such Person as lessee under a capital lease, (v) any Mandatorily Redeemable
Stock of such Person (the amount of such Mandatorily Redeemable Stock to be
determined for this purpose as the higher of the liquidation preference and the
amount payable upon redemption of such Mandatorily Redeemable Stock), (vi) any
obligation of such Person to purchase securities or other property that arises
out of or in connection with the sale of the same or substantially similar
securities or property, (vii) any non-contingent obligation of such Person to
reimburse any other Person in respect of amounts paid under a letter of credit
or other Guaranty issued by such other Person to the extent that such
reimbursement obligation remains outstanding after it becomes non-contingent,
(viii) any Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by) a
mortgage, lien, pledge, charge or other encumbrance on any asset of such Person,
(ix) any Liabilities in respect of unfunded vested benefits under plans covered
by Title IV of ERISA and (x) any Indebtedness of others Guaranteed by such
Person.
"INTEREST PERIOD" means, for each Eurodollar Rate Advance comprising part
of the same A Borrowing, the period commencing on the date of such A Advance or
the date of the Conversion of any A Advance into such an A Advance and ending on
the last day of the period selected by the Borrower pursuant to the provisions
below and, thereafter, each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the last day of the period
selected by the Borrower pursuant to the provisions below. The duration of each
such Interest Period shall be one, two, three or six months, as the Borrower
8
may, in the Notice of A Borrowing given by the Borrower to the Administrative
Agent pursuant to Section 2.02, select; provided, however, that:
(i) the Borrower may not select any Interest Period that ends after
the Commitment Termination Date;
(ii) Interest Periods commencing on the same date for A Advances
comprising the same A Borrowing shall be of the same duration; and
(iii) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such Interest
Period shall be extended to occur on the next succeeding Business Day;
provided that if such extension would cause the last day of such Interest
Period to occur in the next following calendar month, the last day of such
Interest Period shall occur on the next preceding Business Day.
The Administrative Agent shall promptly advise each Lender by or telecopy
transmission of each Interest Period so selected by the Borrower.
"LENDERS" means the Lenders listed on the signature pages hereof and each
Eligible Assignee that shall become a party hereto pursuant to Section 8.07.
"LIABILITY" of any Person means any indebtedness, liability or obligation
of or binding upon, such Person or any of its assets, of any kind, nature or
description, direct or indirect, absolute or contingent, due or not due,
contractual or tortious, liquidated or unliquidated, whether arising under
contract, applicable law, or otherwise, whether now existing or hereafter
arising.
"MAJORITY LENDERS" means at any time Lenders holding at least 66-2/3% of
the aggregate principal amount of the A Advances then outstanding, or, if no
such principal amount is then outstanding, Lenders having at least 66-2/3% of
the Commitments (provided that, for purposes hereof, neither the Borrower, nor
any of its Affiliates, if a Lender, shall be included in (i) the Lenders holding
such amount of the A Advances or having such amount of the Commitments or (ii)
determining the aggregate unpaid principal amount of the A Advances or the total
Commitments).
"MANDATORILY REDEEMABLE STOCK" means, with respect to any Person, any share
of such Person's capital stock to the extent that it is (i) redeemable, payable
or required to be purchased or otherwise retired or extinguished, or convertible
into any Indebtedness or other Liability of such Person, (A) at a fixed or
determinable date, whether by operation of a sinking fund or otherwise, (B) at
the option of any Person other than such Person or (C) upon the occurrence of a
condition not solely within the control of such Person, such as a redemption
required to be made out of future earnings or (ii) convertible into Mandatorily
Redeemable Stock.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc., or any successor thereto.
"▇▇▇▇▇'▇ RATING" means, on any date of determination, the debt rating most
recently announced by Moody's with respect to the Borrower's long-term senior
unsecured non-credit-enhanced debt.
9
"MORTGAGE" means the Mortgage and Deed of Trust, dated as of May 1, 1940,
from CP&L to The Bank of New York (formerly Irving Trust Company) and to
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (▇.▇. ▇▇▇▇▇▇▇▇▇▇, successor), as modified, amended or
supplemented from time to time.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA.
"NCNG" means North Carolina Natural Gas Corporation.
"NET CASH PROCEEDS" means, with respect to any sale, transfer or other
disposition of any asset or the sale or issuance of any debt or equity
securities, the aggregate amount of cash received from time to time (whether as
initial consideration or through payment or disposition of deferred
consideration) by or on behalf of Borrower or its Subsidiaries in connection
with such transaction after deducting therefrom (i) brokerage commissions,
underwriting fees and discounts, legal fees, finder's fees and other similar
fees and commissions, (ii) the amount of taxes payable in connection with or as
a result of such transaction, and (iii) the amount of any Indebtedness secured
by a lien on such asset that, by the terms of the transaction (the documents
governing each of which are listed on Schedule I hereto), is required to be
repaid upon such disposition.
"NOTICE OF A BORROWING" has the meaning specified in Section 2.02(a).
"NOTICE OF B BORROWING" has the meaning specified in Section 2.03(a).
"NOTICE OF CONVERSION" has the meaning specified in Section 2.10.
"OECD" means the Organization for Economic Cooperation and Development.
"PERSON" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a foreign state or
political subdivision thereof or any agency of such state or subdivision.
"PLAN" means an employee benefit plan (other than a Multiemployer Plan)
maintained for employees of the Borrower or any of its Affiliates and covered by
Title IV of ERISA.
"PUHCA" means the Public Utility Holding Company Act of 1935.
"REFERENCE BANKS" means Citibank and The Chase Manhattan Bank.
"REGISTER" has the meaning specified in Section 8.07(c).
"RESPONSIBLE OFFICER" means the President, any Vice President, the Chief
Financial Officer, the Treasurer, the Controller or any Assistant Treasurer of
the Borrower the signatures of whom, in each case, have been certified to the
Administrative Agent and each other Lender pursuant to Section 3.01(d), or in a
certificate delivered to the Administrative Agent replacing or amending such
certificate. Each Lender may conclusively rely on each certificate so delivered
10
until it shall have received a copy of a certificate from the Secretary or an
Assistant Secretary of the Borrower amending, canceling or replacing such
certificate.
"S&P" means Standard & Poor's Ratings Group or any successor thereto.
"S&P RATING" means, on any date of determination, the debt rating most
recently announced by S&P with respect to the Borrower's long-term senior
unsecured non-credit-enhanced debt.
"SEC ORDER" means the order of the Securities and Exchange Commission that
authorizes the Borrower to perform this Agreement at any time after it registers
as a holding company pursuant to PUHCA.
"SIGNIFICANT SUBSIDIARY" means CP&L, any other Subsidiary of the Borrower
that at any time constitutes a "significant subsidiary" of the Borrower, as such
term is defined in Regulation S-X of the United States Securities and Exchange
Commission as is effect on the date hereof (17 C.F.R. Part 210), and, on and
after the date of the FPC Transaction, FPC, Florida Power and Progress Capital
Holdings, Inc.
"SUBSIDIARY" means, with respect to any Person, any corporation or
unincorporated entity (other than, in the case of the Borrower, Mid-Continent
Life Insurance Company) of which more than 50% of the outstanding capital stock
(or comparable interest) having ordinary voting power (irrespective of whether
at the time capital stock (or comparable interest) of any other class or classes
of such corporation or entity shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly owned by
said Person (whether directly or through one or more other Subsidiaries).
"SYNDICATION AGENT" has the meaning specified in the introductory paragraph
of this Agreement.
"TERM LOAN CONVERSION NOTICE" has the meaning assigned to that term in
Section 2.17.
"TERM LOAN CONVERSION OPTION" means the option of the Borrower to convert
the A Advances into term loans in accordance with Section 2.17.
"TERMINATION DATE" means, with respect to all Lenders, the Commitment
Termination Date, unless the Term Loan Conversion Option has been effectively
exercised in accordance with Section 2.17, in which case the Termination Date
means the earliest to occur of (i) the date the A Advances become due and
payable in accordance with such Section, (ii) the date of repayment in full of
the A Advances pursuant to Section 2.11(b) and (iii) the date of acceleration of
the Borrower's payment obligations hereunder in accordance with Section 6.01.
"TERMINATION EVENT" means (i) a Reportable Event described in Section 4043
of ERISA and the regulations issued thereunder (other than a Reportable Event
not subject to the provision for 30-day notice to the Pension Benefit Guaranty
Corporation under such regulations), or (ii) the withdrawal of the Borrower or
any of its Affiliates from a Plan during a plan year in which it was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA, or (iii) the
filing of a notice of intent to terminate a Plan or the treatment of a Plan
amendment as a termination under Section 4041 of ERISA, or (iv) the institution
11
of proceedings to terminate a Plan by the Pension Benefit Guaranty Corporation,
or (v) any other event or condition that might constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan.
"TOTAL CAPITALIZATION" means the sum of "the current portion of long-term
debt" plus "total capitalization" appearing on the consolidated balance sheet of
the Borrower and its Subsidiaries, prepared as of the end of a fiscal quarter in
accordance with generally accepted accounting principles consistent with those
applied in the preparation of the financial statements referred to in Section
4.01(e), plus, without limitation or duplication, obligations as lessee under
leases and as purchaser under power purchase agreements that have been, in
accordance with such generally accepted accounting principles, recorded as
capitalized leases or capitalized power purchase agreements, as the case may be.
SECTION 1.02. COMPUTATION OF TIME PERIODS.
In this Agreement in the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and including" and
the words "to" and "until" each means "to but excluding".
SECTION 1.03. ACCOUNTING TERMS.
All accounting terms not specifically defined herein shall be construed in
accordance with generally accepted accounting principles consistent with those
applied in the preparation of the financial statements referred to in Section
4.01(e).
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. THE A ADVANCES.
(a) Each Lender severally agrees, on the terms and conditions hereinafter
set forth, to make A Advances to the Borrower from time to time on any Business
Day during the period from the date hereof to and including the Commitment
Termination Date, in an aggregate amount outstanding not to exceed at any time
the amount set opposite such Lender's name on the signature pages hereof or, if
such Lender has entered into any Assignment and Acceptance, set forth for such
Lender in the Register maintained by the Administrative Agent pursuant to
Section 8.07(c), as such amount may be reduced pursuant to Section 2.05 (such
Lender's "COMMITMENT"); provided, that the aggregate amount of the Commitments
of the Lenders shall be deemed used from time to time to the extent of the
aggregate amount of the B Advances then outstanding and such deemed use of the
aggregate amount of the Commitments shall be applied to the Lenders ratably
according to their respective Commitments (such deemed use of the aggregate
amount of the Commitments being a "B REDUCTION"). Each A Borrowing shall be in
an aggregate amount not less than $10,000,000 or an integral multiple of
$1,000,000 in excess thereof and shall consist of A Advances of the same Type
made on the same day by the Lenders ratably according to their respective
Commitments. Until the Commitment Termination Date, within the limits of each
Lender's Commitment, the Borrower may from time to time borrow, repay pursuant
12
to Section 2.06 or prepay pursuant to Section 2.11(b) and reborrow under this
Section 2.01.
(b) Any Lender may request that any A Advances made by it be evidenced by
one or more promissory notes. In such event, the Borrower shall prepare, execute
and deliver to such Lender one or more promissory notes payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its assignees)
and in a form approved by the Administrative Agent.
SECTION 2.02. MAKING THE A ADVANCES.
(a) Each A Borrowing shall be made on notice, given not later than 10:00
A.M. (New York City time) on the day of such proposed A Borrowing, in the case
of an A Borrowing comprised of Base Rate Advances, or on the third Business Day
prior to the date of the proposed A Borrowing, in the case of an A Borrowing
comprised of Eurodollar Rate Advances, by the Borrower to the Administrative
Agent, which shall give to each Lender prompt notice thereof by telecopier. Each
such notice of a Borrowing (a "NOTICE OF A BORROWING") shall be by telecopier,
confirmed promptly in writing, in substantially the form of Exhibit A-1 hereto,
specifying therein the requested (i) date of such A Borrowing, (ii) Type of
Advances comprising such A Borrowing, (iii) aggregate amount of such A
Borrowing, and (iv) in the case of an A Borrowing comprised of Eurodollar Rate
Advances, the Interest Period for each such A Advance. In the case of a proposed
A Borrowing comprised of Eurodollar Rate Advances, the Administrative Agent
shall promptly notify each Lender of the applicable interest rate under Section
2.07(b). Each Lender shall, before 12:00 P.M. (New York City time) on the date
of such A Borrowing, make available for the account of its Applicable Lending
Office to the Administrative Agent at its address referred to in Section 8.02,
in same day funds, such Lender's ratable portion of such A Borrowing. After the
Administrative Agent's receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article III, the Administrative Agent will
make such funds available to the Borrower at the Administrative Agent's
aforesaid address.
(b) Each Notice of A Borrowing shall be irrevocable and binding on the
Borrower and, in respect of any Borrowing comprised of Eurodollar Rate Advances,
the Borrower shall indemnify each Lender against any loss or expense incurred by
such Lender as a result of any failure by the Borrower to fulfill on or before
the date specified for such A Borrowing the applicable conditions set forth in
Article III, including, without limitation, any loss (including loss of
anticipated profits) or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund the A
Advance to be made by such Lender as part of such A Borrowing when such A
Advance, as a result of such failure, is not made on such date.
(c) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any A Borrowing that such Lender will not make
available to the Administrative Agent such Lender's ratable portion of such A
Borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the date of such A Borrowing in
accordance with subsection (a) of this Section 2.02 and the Administrative Agent
may, in reliance upon such assumption, make available to the Borrower on such
date a corresponding amount. If and to the extent such Lender shall not have so
13
made such ratable portion available to the Administrative Agent, such Lender and
the Borrower severally agree to repay to the Administrative Agent (without
duplication), forthwith on demand, such corresponding amount, together with
interest thereon for each day from the date such amount is made available to the
Borrower until the date such amount is repaid to the Administrative Agent, (x)
in the case of the Borrower, at the interest rate applicable at the time to A
Advances comprising such A Borrowing and (y) in the case of such Lender, at the
Federal Funds Rate. If such Lender shall repay to the Administrative Agent such
corresponding amount, such amount so repaid shall constitute such Lender's A
Advance as part of such A Borrowing for purposes of this Agreement.
(d) The failure of any Lender to make the A Advance to be made by it as
part of any A Borrowing shall not relieve any other Lender of its obligation, if
any, hereunder to make its A Advance on the date of such A Borrowing, but no
Lender shall be responsible for the failure of any other Lender to make the A
Advance to be made by such other Lender on the date of any A Borrowing.
(e) If, for any reason, an A Borrowing is not made on the date specified in
any Notice of A Borrowing, the Administrative Agent hereby agrees to repay to
each Lender the amount, if any, that such Lender has made available to the
Administrative Agent as such Lender's ratable portion of such A Borrowing,
together with interest thereon for each day from the date such amount is made
available to the Administrative Agent until the date such amount is repaid to
such Lender, at the Federal Funds Rate.
SECTION 2.03. THE B ADVANCES.
(a) Unless and until the Term Loan Conversion Option has been exercised,
each Lender severally agrees that the Borrower may request B Borrowings under
this Section 2.03 from time to time on any Business Day during the period from
the date hereof until the date occurring 30 days prior to the Commitment
Termination Date in the manner set forth below; provided that, following the
making of each B Borrowing, the aggregate amount of the Advances then
outstanding shall not exceed the aggregate amount of the Commitments of the
Lenders (computed without regard to any B Reduction).
(i) The Borrower may request a B Borrowing under this Section 2.03 by
delivering to the Administrative Agent, by telecopier, confirmed
immediately in writing, a notice of a B Borrowing (a "NOTICE OF B
BORROWING"), in substantially the form of Exhibit A-2 hereto, specifying
the date and aggregate amount of the proposed B Borrowing, the maturity
date for repayment of each B Advance to be made as part of such B Borrowing
(which maturity date may not be earlier than the date occurring 30 days
after the date of such B Borrowing or later than the Commitment Termination
Date and in no event may be later than 180 days following the date of such
B Borrowing), the basis for calculating the rate or rates of interest
applicable to each such B Advance (e.g., on the basis of the actual number
of days elapsed in a year of 360 days), the interest payment date or dates
relating thereto, and any other terms to be applicable to such B Borrowing,
not later than 10:00 A.M. (New York City time) (A) at least one Business
Day prior to the date of the proposed B Borrowing, if the Borrower shall
specify in the Notice of B Borrowing that the rates of interest to be
14
offered by the Lenders shall be fixed rates per annum and (B) at least four
Business Days prior to the date of the proposed B Borrowing, if the
Borrower shall instead specify in the Notice of B Borrowing the basis to be
used by the Lenders in determining the rates of interest to be offered by
them. The Administrative Agent shall in turn promptly notify each Lender of
each request for a B Borrowing received by it from the Borrower by sending
such Lender a copy of the related Notice of B Borrowing.
(ii) Each Lender may, if, in its sole discretion, it elects to do so,
irrevocably offer to make one or more B Advances to the Borrower as part of
such proposed B Borrowing at a rate or rates of interest specified by such
Lender in its sole discretion, by notifying the Administrative Agent (which
shall give prompt notice thereof to the Borrower), before 10:00 A.M. (New
York City time) (A) on the date of such proposed B Borrowing, in the case
of a Notice of B Borrowing delivered pursuant to clause (A) of paragraph
(i) above, and (B) three Business Days before the date of such proposed B
Borrowing, in the case of a Notice of B Borrowing delivered pursuant to
clause (B) of paragraph (i) above, of the minimum amount and maximum amount
of each B Advance that such Lender would be willing to make as part of such
proposed B Borrowing (which amounts may, subject to the proviso to the
first sentence of this Section 2.03(a), exceed such Lender's Commitment),
the rate or rates of interest therefor and such Lender's Applicable Lending
Office with respect to such B Advance; provided that if the Administrative
Agent in its capacity as a Lender shall, in its sole discretion, elect to
make any such offer, it shall notify the Borrower of such offer before 9:00
A.M. (New York City time) on the date on which notice of such election is
to be given to the Administrative Agent by the other Lenders. If any Lender
shall elect not to make such an offer, such Lender shall so notify the
Administrative Agent, before 10:00 A.M. (New York City time) on the date on
which notice of such election is to be given to the Administrative Agent by
the other Lenders, and such Lender shall not be obligated to, and shall
not, make any B Advance as part of such B Borrowing; provided that the
failure by any Lender to give such notice shall not cause such Lender to be
obligated to make any B Advance as part of such proposed B Borrowing.
(iii) The Borrower shall, in turn, (A) before 11:00 A.M. (New York
City time) on the date of such proposed B Borrowing, in the case of a
Notice of B Borrowing delivered pursuant to clause (A) of paragraph (i)
above, and (B) before 1:00 P.M. (New York City time) three Business Days
before the date of such proposed B Borrowing, in the case of a Notice of B
Borrowing delivered pursuant to clause (B) of paragraph (i) above, either
(x) cancel such B Borrowing by giving the Administrative Agent
notice to that effect, or
(y) in its sole discretion, accept one or more of the offers made
by any Lender or Lenders pursuant to paragraph (ii) above by giving
notice to the Administrative Agent of the amount of each B Advance
(which amount shall be equal to or greater than the minimum amount,
and equal to or less than the maximum amount, notified to the Borrower
by the Administrative Agent on behalf of such Lender for such B
Advance pursuant to paragraph (ii) above) to be made by each Lender as
15
part of such B Borrowing, and reject any remaining offers made by
Lenders pursuant to paragraph (ii) above by giving the Administrative
Agent notice to that effect; provided, however, that, in accepting any
such offers, the Borrower shall do so in the ascending order of
effective yield and, as among offers resulting in the same effective
yield, ratably among all such offers based upon the amount notified to
the Borrower by the Administrative Agent on behalf of each Lender for
such B Advance pursuant to paragraph (ii) above.
(iv) If the Borrower notifies the Administrative Agent that such B
Borrowing is canceled pursuant to paragraph (iii)(x) above, the
Administrative Agent shall give prompt notice thereof to the Lenders and
such B Borrowing shall not be made.
(v) If the Borrower accepts one or more of the offers made by any
Lender or Lenders pursuant to paragraph (iii)(y) above, the Administrative
Agent shall in turn promptly notify (A) each Lender that has made an offer
as described in paragraph (ii) above of the date and aggregate amount of
such B Borrowing and whether or not any offer or offers made by such Lender
pursuant to paragraph (ii) above have been accepted by the Borrower, (B)
each Lender that is to make a B Advance as part of such B Borrowing of the
amount of each B Advance to be made by such Lender as part of such B
Borrowing and (C) each Lender that is to make a B Advance as part of such B
Borrowing, upon receipt, that the Administrative Agent has received forms
of documents appearing to fulfill the applicable conditions set forth in
Article III. Each Lender that is to make a B Advance as part of such B
Borrowing shall, before 12:00 noon (New York City time) on the date of such
B Borrowing specified in the notice received from the Administrative Agent
pursuant to clause (A) of the preceding sentence or any later time when
such Lender shall have received notice from the Administrative Agent
pursuant to clause (C) of the preceding sentence, make available for the
account of its Applicable Lending Office to the Administrative Agent at its
address referred to in Section 8.02 such Lender's portion of such B
Borrowing, in same day funds. Upon fulfillment of the applicable conditions
set forth in Article III and after receipt by the Administrative Agent of
such funds, the Administrative Agent will make such funds available to the
Borrower at the Administrative Agent's aforesaid address. Promptly after
each B Borrowing the Administrative Agent will notify each Lender of the
amount of the B Borrowing, the consequent B Reduction and the dates upon
which such B Reduction commenced and will terminate.
(b) Each B Borrowing shall be in an aggregate amount not less than
$10,000,000 or an integral multiple of $1,000,000 in excess thereof and,
following the making of each B Borrowing, the Borrower shall be in compliance
with the limitation set forth in the proviso to the first sentence of subsection
(a) above.
(c) Within the limits and on the conditions set forth in this Section 2.03,
the Borrower may from time to time borrow under this Section 2.03 or repay
pursuant to subsection (d) below, and reborrow under this Section 2.03; provided
that a B Borrowing shall not be made within three Business Days of the date of
any other B Borrowing.
16
(d) The Borrower shall repay to the Administrative Agent for the account of each
Lender that has made a B Advance on the maturity date of each such B Advance
(such maturity date being not later than the earlier of the then effective
Commitment Termination Date and that date specified by the Borrower for
repayment of such B Advance in the related Notice of B Borrowing delivered
pursuant to subsection (a)(i) above), the then unpaid principal amount of such B
Advance. The Borrower shall have no right to prepay any principal amount of any
B Advance.
(e) The Borrower shall pay interest on the unpaid principal amount of each
B Advance from the date of such B Advance to the date the principal amount of
such B Advance is repaid in full, at the rate of interest for such B Advance
specified by the Lender making such B Advance in its notice with respect thereto
delivered pursuant to subsection (a)(ii) above, payable on the interest payment
date or dates specified by the Borrower for such B Advance in the related Notice
of B Borrowing delivered pursuant to subsection (a)(i) above; provided that upon
the occurrence and during the continuance of any Event of Default the unpaid
principal amount of each B Advance shall bear interest, until such amount is
paid in full, at a rate per annum equal to 2.0% per annum above such rate of
interest for such B Advance.
(f) Any Lender may request that any B Advances made by it be evidenced by
one or more promissory notes. In such event, the Borrower shall prepare, execute
and deliver to such Lender one or more promissory notes payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its assignees)
and in a form approved by the Administrative Agent.
SECTION 2.04. FEES.
(a) The Borrower agrees to pay to the Administrative Agent for the account
of each Lender a facility fee on each Lender's Commitment, irrespective of
usage, from the date hereof, in the case of each Bank, and from the effective
date specified in the Assignment and Acceptance pursuant to which it became a
Lender, in the case of each other Lender, until the Termination Date at the rate
per annum equal to the Facility Fee Percentage from time to time in effect. Such
fee shall be calculated on the basis of actual number of days elapsed in a year
of 360 days. Such fee shall be payable quarterly in arrears on the last day of
each March, June, September and December during the term of such Lender's
Commitment, and on the Termination Date.
(b) The Borrower agrees to pay to the Administrative Agent an agency fee in
such amounts and payable at such times, as shall be agreed to between them in
writing.
SECTION 2.05. REDUCTION OF THE COMMITMENTS.
(a) The Borrower shall have the right, upon at least three Business Days'
notice to the Administrative Agent, irrevocably to terminate in whole or reduce
ratably in part the respective Commitments of the Lenders; provided that the
aggregate amount of the Commitments of the Lenders shall not be reduced to an
amount that is less than the aggregate principal amount of the A Advances and
the B Advances then outstanding; and provided further, that each partial
reduction shall be in the aggregate amount of $10,000,000 or an integral
multiple of $1,000,000 in excess thereof.
17
(b) The Commitments shall automatically and permanently reduce (at the time
specified in the last sentence of this subsection (b)) by an amount equal to any
Net Cash Proceeds from (i) the issuance by the Borrower or any of its
Subsidiaries of debt or equity securities in the capital markets (other than (x)
commercial paper or other short term debt issued by any Subsidiary of the
Borrower, (y) debt securities issued by any Subsidiary of the Borrower to
refinance any outstanding debt, including but not limited to commercial paper,
other short-term debt and any debt issued to refinance outstanding long-term
debt previously issued in the capital markets and (z) debt securities issued by
NCNG in an amount not in excess of $300,000,000) and (ii) the sale of assets of
the Borrower or any of its Subsidiaries if the Net Cash Proceeds received from
such sales is in excess of $50,000,000 in any November 1 through October 31
period (except to the extent prohibited or restricted pursuant to any agreement
or contract in effect as of the date of this Agreement and listed on Schedule I
hereto). Each Commitment reduction under this subsection (b) will be effective
three days after the receipt of the applicable Net Cash Proceeds. Upon any such
reduction, the Borrower shall immediately comply with Section 2.11(c).
SECTION 2.06. REPAYMENT OF A ADVANCES.
The Borrower shall repay (i) 50% of the principal amount of each A Advance
outstanding on the Commitment Termination Date if the Borrower shall have
exercised the Term Loan Conversion Option and (ii) 100% of the principal amount
of each A Advance made by each Lender on the Termination Date, subject to
Section 2.17 hereof.
SECTION 2.07. INTEREST ON ADVANCES.
The Borrower shall pay interest on the unpaid principal amount of each A
Advance made by each Lender from the date of such A Advance until such principal
amount shall be paid in full, at the following rates per annum:
(a) Base Rate Advances. If such A Advance is a Base Rate Advance, a rate
per annum equal at all times to the Base Rate in effect from time to time, plus
the Applicable Margin, payable quarterly in arrears on the last day of each
December, March, June, and September and on the date such Base Rate Advance
shall be paid in full; provided, however, that if and for so long as an Event of
Default has occurred and is continuing, interest on the unpaid principal amount
of each Base Rate Advance shall be payable on demand.
(b) Eurodollar Rate Advances. If such A Advance is a Eurodollar Rate
Advance, a rate per annum equal at all times during the Interest Period for such
A Advance to the Eurodollar Rate for such Interest Period, plus the Applicable
Margin for Eurodollar Rate Advances, payable on the last day of such Interest
Period and, if such Interest Period has a duration of more than three months, on
each day that occurs during such Interest Period every three months from the
first day of such Interest Period; provided, however, that if and for so long as
an Event of Default has occurred and is continuing, interest on the unpaid
amount of each Eurodollar Rate Advance shall be payable on demand.
18
SECTION 2.08. ADDITIONAL INTEREST ON EURODOLLAR RATE ADVANCES.
The Borrower shall pay to each Lender additional interest on the unpaid
principal amount of each Eurodollar Rate Advance of such Lender, from the date
of such A Advance until such principal amount is paid in full, at an interest
rate per annum equal at all times to the remainder obtained by subtracting (i)
the Eurodollar Rate for the Interest Period for such A Advance from (ii) the
rate obtained by dividing such Eurodollar Rate by a percentage equal to 100%
minus the Eurodollar Rate Reserve Percentage of such Lender for such Interest
Period, payable on each date on which interest is payable on such A Advance. All
claims for such additional interest shall be submitted by such Lender to the
Borrower (with a copy to the Administrative Agent) as soon as is reasonably
possible and in all events within ninety days after the first day of such
Interest Period; provided, however, that if a claim is not submitted to the
Borrower within such ninety day period, such Lender shall thereby waive its
claim to such additional interest incurred during such ninety-day period but not
to any such additional interest incurred thereafter. A certificate as to the
amount of such additional interest, submitted to the Borrower (with a copy to
the Administrative Agent) by such Lender, shall be conclusive and binding for
all purposes, absent manifest error.
SECTION 2.09. INTEREST RATE DETERMINATION.
(a) Each Reference Bank agrees to furnish to the Administrative Agent
timely information for the purpose of determining the Eurodollar Rate. If any
one or more of the Reference Banks shall not furnish such timely information to
the Administrative Agent for determination of any such interest rate, the
Administrative Agent shall determine such interest rate on the basis of timely
information furnished by the remaining Reference Banks.
(b) The Administrative Agent shall give prompt notice to the Borrower and
the Lenders of the applicable interest rate determined by the Administrative
Agent for purposes of Section 2.07(a) or (b), and the applicable rate, if any,
furnished by each Reference Bank for determining the applicable interest rate
under Section 2.07(b).
(c) If fewer than two Reference Banks furnish timely information to the
Administrative Agent for determining the Eurodollar Rate for any Eurodollar Rate
Advances,
(i) the Administrative Agent shall forthwith notify the Borrower and
the Lenders that the interest rate cannot be determined for such Eurodollar
Rate Advances,
(ii) each such Advance will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base Rate Advance (or if
such Advance is then a Base Rate Advance, will continue as a Base Rate
Advance), and
(iii) the obligation of the Lenders to make, or to Convert A Advances
into, Eurodollar Rate Advances shall be suspended until the Administrative
Agent shall notify the Borrower and the Lenders that the circumstances
causing such suspension no longer exist.
(d) If, with respect to any Eurodollar Rate Advances, the Majority Lenders
notify the Administrative Agent that the Eurodollar Rate for any Interest Period
for such A Advances will not adequately reflect the cost to such Majority
19
Lenders of making, funding or maintaining their respective Eurodollar Rate
Advances for such Interest Period, the Administrative Agent shall forthwith so
notify the Borrower and the Lenders, whereupon
(i) each Eurodollar Rate Advance will automatically, on the last day
of the then existing Interest Period therefor, Convert into a Base Rate
Advance, and
(ii) the obligation of the Lenders to make, or to Convert A Advances
into, Eurodollar Rate Advances shall be suspended until the Administrative
Agent shall notify the Borrower and the Lenders that the circumstances
causing such suspension no longer exist.
(e) If the Borrower shall fail to select the duration of any Interest
Period for any Eurodollar Rate Advances in accordance with the provisions
contained in the definition of "INTEREST PERIOD" in Section 1.01, the
Administrative Agent will forthwith so notify the Borrower and the Lenders and
such Advances will automatically, on the last day of the then existing Interest
Period therefor, Convert into Base Rate Advances.
(f) On the date on which the aggregate unpaid principal amount of A
Advances comprising any A Borrowing shall be reduced, by prepayment or
otherwise, to less than $20,000,000, such A Advances shall, if they are Advances
of a Type other than Base Rate Advances, automatically Convert into Base Rate
Advances, and on and after such date the right of the Borrower to Convert such A
Advances into Advances of a Type other than Base Rate Advances shall terminate;
provided, however, that if and so long as each such A Advance shall be of the
same Type and have the same Interest Period as A Advances comprising another A
Borrowing or other A Borrowings, and the aggregate unpaid principal amount of
all such A Advances shall equal or exceed $20,000,000, the Borrower shall have
the right to continue all such A Advances as, or to Convert all such A Advances
into, Advances of such Type having such Interest Period.
SECTION 2.10. VOLUNTARY CONVERSION OF A ADVANCES.
The Borrower may, on any Business Day prior to the Termination Date
(including any date occurring on and after the effectiveness of the Term Loan
Conversion Option), upon notice given to the Administrative Agent not later than
10:00 A.M. (New York City time) on the third Business Day prior to the date of
the proposed Conversion, in the case of any proposed Conversion into Eurodollar
Rate Advances, and on the date of the proposed Conversion, in the case of any
proposed Conversion into Base Rate Advances, and subject to the provisions of
Sections 2.09 and 2.13 and so long as no Event of Default has occurred and is
continuing on the date of such proposed Conversion, Convert all A Advances of
one Type comprising the same A Borrowing into Advances of another Type;
provided, however, that any Conversion of any Eurodollar Rate Advances into
Advances of another Type shall be made on, and only on, the last day of an
Interest Period for such Eurodollar Rate Advances. Each such notice of a
Conversion (a "NOTICE OF CONVERSION") shall be by telecopier, confirmed promptly
in writing, in substantially the form of Exhibit A-3 hereto and shall, within
the restrictions specified above, specify (i) the date of such Conversion, (ii)
the aggregate amount of, Type of, and Interest Periods applicable to the A
Advances to be Converted, (iii) the Type of A Advance to which such A Advances
20
(or portions thereof) are proposed to be Converted, and (iv) if such Conversion
is into or with respect to Eurodollar Rate Advances, the duration of the
Interest Period for each such A Advance.
SECTION 2.11. PREPAYMENTS OF A ADVANCES.
(a) The Borrower shall have no right to prepay any principal amount of any
A Advances other than as provided in subsection (b) below.
(b) The Borrower may, upon notice given to the Administrative Agent at
least two Business Days prior to the proposed prepayment, in the case of any
Eurodollar Rate Advance, and on the date of the proposed prepayment, in the case
of any Base Rate Advance, and if such notice is given the Borrower shall, prepay
the outstanding principal amounts of the A Advances comprising the same
Borrowing in whole or ratably in part, together with accrued interest to the
date of such prepayment on the amount prepaid and, in the case of any Eurodollar
Rate Advance, any amount payable pursuant to Section 8.04(b); provided, however,
that each partial prepayment shall be in an aggregate principal amount not less
than $5,000,000 and in integral multiples of $1,000,000 in excess thereof.
(c) If after giving effect to any reduction of the Commitments pursuant to
Section 2.05(b), the aggregate principal amount of A Advances shall exceed the
aggregate Commitments, the Borrower shall immediately prepay A Advances in a
principal amount equal to such excess, and in the case of any Eurodollar Rate
Advance, any amount payable pursuant to Section 8.04(b).
SECTION 2.12. INCREASED COSTS.
(a) If, due to either (i) the introduction of or any change (other than any
change by way of imposition or increase of reserve requirements, in the case of
Eurodollar Rate Advances, included in the Eurodollar Rate Reserve Percentage),
in or in the interpretation of any law or regulation, or (ii) the compliance
with any guideline or request from any central bank or other governmental
authority (whether or not having the force of law), there shall be any increase
in the cost to any Lender of agreeing to make or making, funding or maintaining
Eurodollar Rate Advances, then the Borrower shall from time to time, upon demand
by such Lender (with a copy of such demand to the Administrative Agent), pay to
the Administrative Agent for account of such Lender additional amounts
sufficient to reimburse such Lender for such increased cost. All claims for
increased cost shall be submitted by such Lender to the Borrower (with a copy to
the Administrative Agent) as soon as is reasonably possible and in all events
within ninety days after such introduction, such change, or the beginning of
such compliance, the occurrence of which resulted in such increased cost, and
the Borrower shall make such payment within five Business Days after notice of
such claim is received; provided, however, that if a claim is not submitted to
the Borrower within such ninety-day period, such Lender shall thereby waive its
claim to such increased cost incurred during such ninety-day period but not to
any such increased cost incurred thereafter. A certificate as to the amount of
such increased cost, submitted to the Borrower (with a copy to the
Administrative Agent) by such Lender, shall be conclusive and binding for all
purposes, absent manifest error.
21
(b) If any Lender determines that compliance with any law or regulation or
any guideline or request from any central bank or other governmental authority
(whether or not having the force of law) affects or would affect the amount of
capital required or expected to be maintained by such Lender or any corporation
controlling such Lender and that the amount of such capital is increased by or
based upon the existence of such Lender's commitment to lend hereunder and other
commitments of this type, then, upon demand by such Lender (with a copy of such
demand to the Administrative Agent), the Borrower shall immediately pay to the
Administrative Agent for the account of such Lender, from time to time as
specified by such Lender, additional amounts sufficient to compensate such
Lender or such corporation in the light of such circumstances, to the extent
that such Lender reasonably determines such increase in capital to be allocable
to the existence of such Lender's commitment to lend hereunder. All claims for
such additional amounts shall be submitted by such Lender (with a copy to the
Administrative Agent) as soon as is reasonably possible and in all events within
ninety days after such determination by such Lender, and the Borrower shall make
such payment within five Business Days after notice of such claim is received;
provided, however, that if a claim is not submitted to the Borrower within such
ninety-day period, such Lender shall thereby waive its claim to such additional
amounts incurred during such ninety-day period but not to any such additional
amounts incurred thereafter. A certificate as to such amounts submitted to the
Borrower and the Administrative Agent by such Lender shall be conclusive and
binding for all purposes, absent manifest error.
SECTION 2.13. ILLEGALITY.
Notwithstanding any other provision of this Agreement, if any Lender shall
notify the Administrative Agent that the introduction of or any change in or in
the interpretation of any law or regulation makes it unlawful, or any central
bank or other governmental authority asserts that it is unlawful, for such
Lender or its Eurodollar Lending Office to perform its obligations hereunder to
make Eurodollar Rate Advances or B Advances based upon the Eurodollar Rate or to
fund or maintain Eurodollar Rate Advances or B Advances based upon the
Eurodollar Rate hereunder, (i) the obligation of the Lenders to make Eurodollar
Rate Advances or B Advances based upon the Eurodollar Rate, or to Convert A
Advances into Eurodollar Rate Advances, shall be suspended until the
Administrative Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist, (ii) the Borrower shall
forthwith prepay in full all Eurodollar Rate Advances of all Lenders then
outstanding, together with interest accrued thereon, unless the Borrower, within
five Business Days of notice from the Administrative Agent, Converts all
Eurodollar Rate Advances of all Lenders then outstanding into Advances of
another Type in accordance with Section 2.10 and (iii) the Borrower shall
forthwith prepay all B Advances based upon the Eurodollar Rate of all Lenders
then outstanding, together with interest thereon.
SECTION 2.14. PAYMENTS AND COMPUTATIONS.
(a) The Borrower shall make each payment hereunder, without condition or
deduction for any counterclaim, defense, recoupment or setoff, not later than
11:00 A.M. (New York City time) on the day when due in U.S. dollars to the
Administrative Agent at its address referred to in Section 8.02 in same day
funds. The Administrative Agent will promptly thereafter cause to be distributed
like funds relating to the payment of principal or interest or fees (other than
22
pursuant to Section 2.03, 2.08 or 2.12) ratably to the Lenders for the account
of their respective Applicable Lending Offices, and like funds relating to the
payment of any other amount payable to any Lender to such Lender for the account
of its Applicable Lending Office, in each case to be applied in accordance with
the terms of this Agreement. Upon its acceptance of an Assignment and Acceptance
and recording of the information contained therein in the Register pursuant to
Section 8.07(d), from and after the effective date specified in such Assignment
and Acceptance, the Administrative Agent shall make all payments hereunder in
respect of the interest assigned thereby to the Lender assignee thereunder, and
the parties to such Assignment and Acceptance shall make all appropriate
adjustments in such payments for periods prior to such effective date directly
between themselves.
(b) All computations of interest based on the base rate referred to in
clause (i) of the definition of Base Rate shall be made by the Administrative
Agent on the basis of a year of 365 or 366 days, as the case may be, and all
computations of interest based on the Eurodollar Rate or Federal Funds Rate or
of fees payable hereunder shall be made by the Administrative Agent, and all
computations of interest pursuant to Section 2.08 shall be made by a Lender, on
the basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period of
which such interest or fees are payable. Each determination by the
Administrative Agent (or, in the case of Section 2.08, by a Lender) of an
interest rate hereunder shall be conclusive and binding for all purposes.
(c) Whenever any payment hereunder shall be stated to be due on a day other
than a Business Day, such payment shall be made on the next succeeding Business
Day, and such extension of time shall in such case be included in the
computation of payment of interest or fees, as the case may be; provided,
however, that if such extension would cause payment of interest on or principal
of Eurodollar Rate Advances to be made in the next following calendar month,
such payment shall be made on the next preceding Business Day.
(d) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Lenders hereunder
that the Borrower will not make such payment in full, the Administrative Agent
may assume that the Borrower has made such payment in full to the Administrative
Agent on such date and the Administrative Agent may, in reliance upon such
assumption, cause to be distributed to each Lender on such due date an amount
equal to the amount then due such Lender. If and to the extent the Borrower
shall not have so made such payment in full to the Administrative Agent, each
Lender shall repay to the Administrative Agent forthwith on demand such amount
distributed to such Lender, together with interest thereon for each day from the
date such amount is distributed to such Lender until the date such Lender repays
such amount to the Administrative Agent at the Federal Funds Rate.
SECTION 2.15. SHARING OF PAYMENTS, ETC.
If any Lender shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise) on account of the A
Advances made by it (other than pursuant to Section 2.03, 2.08 or 2.12) in
excess of its ratable share of payments on account of the A Advances obtained by
all the Lenders, such Lender shall forthwith purchase from the other Lenders
such participation in the A Advances made by them as shall be necessary to cause
23
such purchasing Lender to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each Lender
shall be rescinded and such Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery, together with an amount equal to
such Lender's ratable share (according to the proportion of (i) the amount of
such Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 2.15 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect
to such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.
SECTION 2.16. EXTENSION OF COMMITMENT TERMINATION DATE.
(a) Unless the Commitment Termination Date shall have occurred, then at
least 30 days but not more than 45 days prior to the Extension Date, the
Borrower may request that the Lenders, by written notice to the Administrative
Agent (in substantially the form attached hereto as Exhibit E), with a copy to
the Arrangers, consent to a 364-day extension of the Commitment Termination
Date. Each Lender shall, in its sole discretion, determine whether to consent to
such request and shall notify the Administrative Agent of its determination at
least 20 days but not more than 30 days prior to such Extension Date. The
failure to respond by any Lender within such time period shall be deemed a
denial of such request. The Administrative Agent shall deliver a notice to the
Borrower and the Lenders at least 15 days but not more than 20 days prior to the
Extension Date of the identity of the Lenders that have consented to such
extension and the Lenders that have declined such consent (the "DECLINING
LENDERS"). If Lenders holding in the aggregate 50% or less of the Commitments
(without regard to any B Reductions) have consented to the requested extension,
the Commitment Termination Date shall not be extended, and the Commitments of
all Lenders shall terminate on the then current Commitment Termination Date.
(b) If Lenders holding in the aggregate more than 50% but less than 85% of
the Commitments (without regard to any B Reductions) have consented to the
requested extension, subject to the conditions set forth in Section 2.16(c), the
Borrower will within 5 Business Days after notice from the Administrative Agent
of the Lenders' determinations irrevocably notify the Administrative Agent in
writing whether it still requests an extension of the Commitment Termination
Date. If the Borrower still requests such extension or if Lenders holding in the
aggregate 85% or more of the Commitments (without regard to any B Reductions)
have consented to the requested extension, subject to the conditions set forth
in Section 2.16(c) the Commitment Termination Date shall be extended as to such
consenting Lenders only (and not as to any Declining Lender) for a period of 364
days from the then current Commitment Termination Date, the Commitments of any
Declining Lenders shall terminate on the Commitment Termination Date (as
theretofore in effect), and all Advances of such Declining Lenders shall be
repaid to them on such date. If the Borrower so requests, each Lender consenting
to such request shall be given the opportunity at least seven days but not more
than 15 days prior to such Extension Date, in each Lender's sole discretion, to
commit to increase its Commitment by submission of a written notice setting
forth the desired increase in such Lender's Commitment to the Administrative
24
Agent in amounts such that the aggregate Commitments hereunder after giving
effect to any such extension and increase in the Commitments shall not exceed
the aggregate Commitments immediately prior to the Extension Date. If the
Administrative Agent receives commitments to increase the Commitments from the
Lenders, that, when aggregated with the existing Commitments, (i) are less than
or equal to the Commitments immediately prior to the Extension Date, the
Administrative Agent shall accept all such Commitments, (ii) are greater than
the Commitments on the date hereof, the Administrative Agent may determine, in
its reasonable discretion, which Commitments to accept and the amounts by which
each submitting Lender's Commitments shall be increased so that the aggregate
Commitments after the Extension Date shall equal the aggregate Commitments
immediately prior to the Extension Date (any Lender whose commitment to increase
its Commitment hereunder is accepted by the Administrative Agent, an "INCREASING
COMMITMENT LENDER"). If Lenders do not consent to increase the aggregate
Commitments to an amount equal to the Commitments immediately prior to the
Extension Date, the Borrower may, at least two days but not more than seven days
prior to the Extension Date, request that the Administrative Agent, in its sole
discretion, accept the Commitment or Commitments of an Eligible Assignee or
Eligible Assignees such that the aggregate Commitments hereunder after the
Extension Date shall not be greater than the aggregate Commitments hereunder
immediately prior to the Extension Date. If the Administrative Agent shall
accept the Commitment of any Increasing Commitment Lender or Eligible Assignee,
the Commitments of the Declining Lenders shall terminate on the Extension Date,
and any Advances made by such Declining Lenders shall be repaid on such date in
accordance with this Agreement.
(c) Each such accepted Eligible Assignee and each Increasing Commitment
Lender shall deliver a signature page hereto indicating that it is bound by the
terms hereof and setting forth its aggregate Commitment hereunder. Such new
signature page shall constitute a part hereof upon acceptance by the
Administrative Agent and, in the case of any signature page submitted by any
Increasing Commitment Lender, shall replace such Increasing Commitment Lender's
signature page. Any such extension shall become effective upon the Extension
Date, if the Borrower shall have delivered to the Administrative Agent and each
Lender, on or prior to the Extension Date, (i) an opinion of counsel to the
Borrower substantially in the form of Exhibit C-2 attached hereto upon which
each Lender and the Administrative Agent may rely, together with any
governmental order referred to therein attached thereto and (ii) a certificate
of a duly authorized officer of the Borrower (the statements contained in which
shall be true) to the effect that (x) the representations and warranties
contained in Section 4.01 are correct on and as of the Extension Date before and
after giving effect to the extension of the Commitment Termination Date, as
though made on and as of the Extension Date, and (y) no event has occurred and
is continuing, or would result from such extension of the Commitment Termination
Date, that constitutes an Event of Default or that would constitute an Event of
Default but for the requirement that notice be given or time elapse, or both.
Upon satisfaction of such conditions and the effectiveness of such extension,
each new Lender and Increasing Commitment Lender shall make A Advances to the
Borrower (A) in the case of each new Lender, equal to such Lender's ratable
portion of the A Advances outstanding immediately prior to the Extension Date
25
and (B) in the case of each Increasing Commitment Lender, equal to such portion
of such Lender's ratable portion of the A Advances (assuming that such Lender's
Commitment consists only of the increased portion thereof) outstanding
immediately prior to the Extension Date, in each case, without giving effect to
any repayment of A Advances to Declining Lenders made on the Extension Date.
SECTION 2.17. TERM LOAN CONVERSION OPTION.
At least one Business Day but not more than 45 Business Days prior to any
Commitment Termination Date, and subject to the delivery on or prior to such
Commitment Termination Date of an opinion of counsel to the Borrower
substantially in the form of Exhibit C-2 attached hereto, together with any
required governmental approvals referred to therein and attached thereto, to the
Administrative Agent and each of the Lenders, by submission of a written notice
(substantially in the form of Exhibit F) to the Administrative Agent, the
Borrower may request that the Lenders convert 50% of all A Advances outstanding
hereunder on such Commitment Termination Date into term loans. Upon satisfaction
of such conditions and delivery of such notice (the "TERM LOAN CONVERSION
NOTICE"), 50% of all A Advances outstanding on the then current Commitment
Termination Date shall convert into term loans on such Commitment Termination
Date, and all such converted A Advances shall become due and payable on the
first anniversary of such Commitment Termination Date. Notwithstanding the
foregoing, any Term Loan Conversion Notice may be delivered by the Borrower in
conjunction with (and simultaneously with) any request for extension of the
Commitment Termination Date pursuant to Section 2.16, above. If such extension
of the Commitment Termination Date shall occur as provided in Section 2.16, such
Term Loan Conversion Notice shall be deemed withdrawn and shall be of no further
effect.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. CONDITIONS PRECEDENT TO CLOSING.
The Commitments of the Lenders shall not become effective unless and until
all fees due and payable by the Borrower in connection with this Agreement have
been paid and the Administrative Agent shall have received the following:
(a) Promissory notes, in a form acceptable to the Administrative Agent,
payable to the order of each Lender that has requested such a note.
(b) Certified copies of the Exchange Agreement and copies of each contract
and agreement listed on Schedule I hereto.
(c) Copies of the resolutions of the Board of Directors of the Borrower
approving this Agreement, the FPC Transaction, and of all documents evidencing
other necessary corporate action, certified by the Secretary or an Assistant
Secretary of the Borrower to be true and correct, and in full force and effect
on and as of the date hereof.
(d) A certificate of the Secretary or an Assistant Secretary of the
Borrower, dated as of the date hereof, certifying the names and true signatures
of the officers of the Borrower authorized to sign this Agreement and the other
documents to be delivered hereunder.
26
(e) A certificate of a Responsible Officer of the Borrower, dated as of the
date hereof, certifying (i) the accuracy of the representations and warranties
contained herein and (ii) that no event has occurred and is continuing that
constitutes an Event of Default or that would constitute an Event of Default but
for the requirement that notice be given or time elapse, or both.
(f) Certified copies of all governmental approvals and authorizations
required to be obtained in connection with the execution, delivery and
performance by the Borrower of this Agreement (other than, if not yet issued,
the SEC Order).
(g) Certified copies of the Restated Charter and By-Laws of the Borrower.
(h) A favorable opinion of Hunton & ▇▇▇▇▇▇▇▇, counsel for the Borrower,
substantially in the form of Exhibit C-1 hereto and as to such other matters as
any Lender through the Administrative Agent may reasonably request.
(i) A favorable opinion of King & Spalding, counsel for the Administrative
Agent and the Arrangers, substantially in the form of Exhibit D hereto.
SECTION 3.02. CONDITIONS PRECEDENT TO EACH A BORROWING AND TO THE EXERCISE
OF THE TERM LOAN CONVERSION OPTION.
The obligation of each Lender to make an A Advance on the occasion of each
A Borrowing (including the initial A Borrowing) and the obligation to convert
the A Advances into term loans in accordance with Section 2.17 shall be subject
to the further conditions precedent that (i) in the case of the making of an A
Advance, the Administrative Agent shall have received the written confirmatory
Notice of A Borrowing with respect thereto, (ii) in the case of the making of
the first A Advance hereunder after the Borrower shall have registered as a
holding company pursuant to Section 5 of PUHCA, the Administrative Agent shall
have received a certified copy of the SEC Order, and (iii) on the date of such A
Borrowing or exercise of the Term Loan Conversion Option, as the case may be,
the following statements shall be true (and each of the giving of the applicable
Notice of A Borrowing or Term Loan Conversion Notice, as the case may be, and
the acceptance by the Borrower of the proceeds of such A Borrowing, in the case
of an A Borrowing, or the conversion of the A Advances into term loans, in the
case of such exercise, shall constitute a representation and warranty by the
Borrower that, on the date of such A Borrowing or exercise, as the case may be,
such statements are true):
(i) The representations and warranties contained in Section 4.01 are
correct on and as of the date of such A Borrowing or the date of
effectiveness of the Term Loan Conversion Option, as the case may be,
before and after giving effect to (x) such A Borrowing and to the
application of the proceeds therefrom or (y) such effectiveness, as the
case may be, as though made on and as of such date; and
(ii) No event has occurred and is continuing, or would result from
such A Borrowing or from the application of the proceeds therefrom or the
exercise of such Term Loan Conversion Option, as the case may be, that
constitutes an Event of Default or that would constitute an Event of
Default but for the requirement that notice be given or time elapse, or
both.
27
SECTION 3.03. CONDITIONS PRECEDENT TO EACH B BORROWING.
The obligation of each Lender that is to make a B Advance on the occasion
of a B Borrowing (including the initial B Borrowing) to make such B Advance as
part of such B Borrowing is subject to the conditions precedent that (i) the
Administrative Agent shall have received the written confirmatory Notice of B
Borrowing with respect thereto, (ii) in the case of the making of the first B
Advance hereunder after the Borrower shall have registered as a holding company
pursuant to Section 5 of PUHCA, the Administrative Agent shall have received a
certified copy of the SEC Order, and (iii) on the date of such B Borrowing the
following statements shall be true (and each of the giving of the applicable
Notice of B Borrowing and the acceptance by the Borrower of the proceeds of such
B Borrowing shall constitute a representation and warranty by the Borrower that,
on the date of such B Borrowing, such statements are true):
(i) The representations and warranties contained in Section 4.01 are
true and correct on and as of the date of such B Borrowing, before and
after giving effect to such B Borrowing and to the application of the
proceeds therefrom, as though made on and as of such date; and
(ii) No event has occurred and is continuing, or would result from
such B Borrowing or from the application of the proceeds therefrom, that
constitutes an Event of Default or that would constitute an Event of
Default but for the requirement that notice be given or time elapse or
both.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWER.
The Borrower represents and warrants as follows:
(a) Each of the Borrower and each Significant Subsidiary is a corporation
duly incorporated, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated and is duly qualified to do business in
and is in good standing under the laws of each other jurisdiction where the
nature of its business or the nature of property owned or used by it makes such
qualification necessary (except where failure to so qualify would not have a
material adverse affect on the financial condition, operations or properties of
the Borrower and its Subsidiaries, taken as a whole).
(b) The execution, delivery and performance by the Borrower of this
Agreement are within the Borrower's corporate powers, have been duly authorized
by all necessary corporate action, and do not contravene (i) the Borrower's
charter or by-laws or (ii) any law or contractual restriction binding on or
affecting the Borrower or its properties.
(c) No authorization or approval or other action by, and no notice to or
filing with any governmental authority or regulatory body is required for the
due execution, delivery and performance by the Borrower of this Agreement, other
than, at any time after the Borrower shall have registered as a holding company
28
pursuant to Section 5 of PUHCA, the SEC Order, and at any time after such
registration, the SEC Order will have been duly issued and in full force and
effect.
(d) This Agreement has been duly executed and delivered by the Borrower and
is, and any promissory note when delivered pursuant to Section 2.01(b) or
2.03(f) will be, the legal, valid and binding obligations of the Borrower
enforceable against the Borrower in accordance with their respective terms.
(e) The Consolidated balance sheets of CP&L and FPC and their respective
Subsidiaries as at December 31, 1999, and the related Consolidated statements of
income and retained earnings of CP&L and FPC and their respective Subsidiaries
for the fiscal year then ended, and the Consolidated balance sheets of CP&L and
FPC and their respective Subsidiaries as at June 30, 2000, and the related
Consolidated statements of income and retained earnings of CP&L and FPC and
their respective Subsidiaries, copies of each of which have been furnished to
each Lender, fairly present (subject, in the case of such financial statements
dated June 30, 2000, to yearend adjustments) the financial condition of CP&L and
FPC and their respective Subsidiaries as at such dates and the results of the
operations of CP&L and FPC and their respective Subsidiaries for the periods
ended on such dates, all in accordance with generally accepted accounting
principles consistently applied. Since December 31, 1999, there has been no
material adverse change in the financial condition, operations or properties of
CP&L and its Subsidiaries, taken as a whole, or FPC and its Subsidiaries, taken
as a whole. Since the date of the first audited Consolidated financial
statements of the Borrower, there has been no material adverse change in the
financial condition, operations or properties of the Borrower and its
Subsidiaries, taken as a whole, as set forth in such financial statements (with
it being understood that the representation and warranty set forth in this
sentence shall be deemed made, at the times and in the manner specified
elsewhere in this Agreement, only following the delivery of such financial
statements pursuant to Section 5.01(i)).
(f) Except as described in the reports and registration statements that the
Borrower, CP&L, FPC, Florida Power and NCNG have filed with the Securities and
Exchange Commission prior to the date of this Agreement, there is no pending or
threatened action or proceeding affecting the Borrower or any Subsidiary before
any court, governmental agency or arbitrator, that may materially adversely
affect the financial condition, operations or properties of the Borrower and its
Subsidiaries, taken as a whole.
(g) No proceeds of any Advance will be used to acquire any security in any
transaction that is subject to Sections 13 and 14 of the Securities Exchange Act
of 1934, as amended and in effect from time to time.
(h) The Borrower is not engaged in the business of extending credit for the
purpose of buying or carrying margin stock (within the meaning of Regulation U
issued by the Board of Governors of the Federal Reserve System), and no proceeds
of any Advance will be used to buy or carry any margin stock or to extend credit
to others for the purpose of buying or carrying any margin stock.
29
(i) Following application of the proceeds of each Advance, not more than 5
percent of the value of the assets (either of the Borrower only or of the
Borrower and the Subsidiaries on a Consolidated basis) subject to the provisions
of Section 5.02(a) or 5.02(e) will be margin stock (within the meaning of
Regulation U issued by the Board of Governors of the Federal Reserve System).
(j) No Termination Event has occurred or is reasonably expected to occur
with respect to any Plan.
(k) The Borrower is not an "investment company" or a company "controlled"
by an "investment company", within the meaning of the Investment Company Act of
1940, as amended.
(l) The Borrower is in substantial compliance with all applicable laws,
rules, regulations and orders of any governmental authority, the noncompliance
with which would materially and adversely affect the business or condition of
the Borrower, such compliance to include, without limitation, substantial
compliance with Environmental Laws and paying before the same become delinquent
all material taxes, assessments and governmental charges imposed upon it or upon
its property, except to the extent compliance with any of the foregoing is then
being contested in good faith by appropriate legal proceedings.
(m) All written information (other than the Closing Projections) furnished
by the Borrower to the Agents and the Lenders in connection with this Agreement
and the FPC Transaction (the "DISCLOSED INFORMATION") was (and all information
furnished in the future by the Borrower to the Agents and the Lenders will be)
complete and correct in all respects material to the creditworthiness of the
Borrower when delivered. The Closing Projections were arrived at in good faith
and were based on reasonable assumptions. As of the date hereof, the Disclosed
Information and the Closing Projections, taken as a whole, do not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements contained therein not misleading in light of the
circumstances under which made.
ARTICLE V
COVENANTS OF THE COMPANY
SECTION 5.01. AFFIRMATIVE COVENANTS.
So long as any Advance or any other amount payable by the Borrower
hereunder shall remain unpaid or any Lender shall have any Commitment hereunder,
the Borrower shall, unless the Majority Lenders shall otherwise consent in
writing:
(a) Compliance with Laws, Etc. Except to the extent contested in good
faith, comply, and cause each Subsidiary to comply, with all applicable laws,
rules, regulations and orders (such compliance to include, without limitation,
paying before the same become delinquent all taxes, assessments and governmental
charges imposed upon it or upon its property), the non-compliance with which
would materially adversely affect the Borrower's business or credit.
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(b) Preservation of Corporate Existence, Etc. Except as provided in Section
5.02 (d), preserve and maintain, and cause each Significant Subsidiary to
preserve and maintain, its corporate existence, rights (charter and statutory)
and franchises.
(c) Visitation Rights. At any reasonable time and from time to time, permit
the Administrative Agent or any of the Lenders or any agents or representatives
thereof to examine and make copies of and abstracts from the records and books
of account of, and visit the properties of, the Borrower and any Subsidiary, and
to discuss the affairs, finances and accounts of the Borrower and any Subsidiary
with any of their respective officers or directors.
(d) Keeping of Books. Keep, and cause each Subsidiary to keep, proper books
of record and account, in which full and correct entries shall be made of all
financial transactions and the assets and business of the Borrower and such
Subsidiary in accordance with generally accepted accounting principles
consistently applied.
(e) Maintenance of Properties, Etc. Maintain and preserve, and cause each
Subsidiary to maintain and preserve, all of its properties that are used or
useful in the conduct of its business in good working order and condition,
ordinary wear and tear excepted.
(f) Maintenance of Insurance. Maintain, and cause each Subsidiary to
maintain, insurance with responsible and reputable insurance companies or
associations in such amounts and covering such risks as is usually carried by
companies engaged in similar businesses and owning similar properties in the
same general areas in which the Borrower or such Subsidiary operates.
(g) Taxes. File, and cause each Subsidiary to file, all tax returns
(federal, state and local) required to be filed and paid and pay all taxes shown
thereon to be due, including interest and penalties except, in the case of
taxes, to the extent the Borrower or such Subsidiary is contesting the same in
good faith and by appropriate proceedings and has set aside adequate reserves
for the payment thereof in accordance with generally accepted accounting
principles.
(h) Material Obligations. Pay, and cause each Subsidiary to pay, promptly
as the same shall become due each material obligation of the Borrower or such
Subsidiary.
(i) Reporting Requirements. Furnish to the Lenders:
(i) as soon as available and in any event within 60 days after the end
of each of the first three quarters of each fiscal year of the Borrower, a
Consolidated balance sheet of the Borrower and the Subsidiaries as at the
end of such quarter and Consolidated statements of income and retained
earnings of the Borrower and the Subsidiaries for the period commencing at
the end of the previous fiscal year and ending with the end of such
quarter, certified by the treasurer or the chief financial officer of the
Borrower, together with a certificate of the chief financial officer of the
Borrower, setting forth in reasonable detail the calculation of the
Borrower's compliance with Section 5.01(j) and stating that no Event of
Default and no event that, with the giving of notice or lapse of time or
both, would constitute an Event of Default has occurred and is continuing,
or if an Event of Default or such event has occurred and is continuing, a
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statement setting forth details of such Event of Default or event and the
action that the Borrower has taken and proposes to take with respect
thereto;
(ii) as soon as available and in any event within 120 days after the
end of each fiscal year of the Borrower, a copy of the annual report for
such year for the Borrower and the Subsidiaries, containing Consolidated
financial statements for such year certified by Deloitte & Touche or other
independent public accountants acceptable to the Majority Lender, together
with a certificate of the chief financial officer of the Borrower,
substantially in the form of Exhibit G hereto, setting forth in reasonable
detail the calculation of the Borrower's compliance with Section 5.01(j)
and stating that no Event of Default and no event that, with the giving of
notice or lapse of time or both, would constitute an Event of Default has
occurred and is continuing, or if an Event of Default or such event has
occurred and is continuing, a statement setting forth details of such Event
of Default or event and the action that the Borrower has taken and proposes
to take with respect thereto;
(iii) promptly after the sending or filing thereof, copies of all
reports that the Borrower sends to any of its security holders, and copies
of all reports and registration statements that the Borrower or any
Subsidiary files with the Securities and Exchange Commission or any
national securities exchange;
(iv) immediately upon any Responsible Officer's obtaining knowledge of
the occurrence of any Event of Default or any event that, with the giving
of notice or lapse of time, or both, would constitute an Event of Default,
a statement of the chief financial officer or treasurer of the Borrower
setting forth details of such Event of Default or event and the action that
the Borrower proposes to take with respect thereto;
(v) immediately upon obtaining knowledge thereof, notice of any change
in either the ▇▇▇▇▇'▇ Rating or the S&P Rating;
(vi) as soon as possible and in any event within five days after the
commencement thereof or any adverse determination or development therein,
notice of all actions, suits and proceedings that may adversely affect the
Borrower's ability to perform its obligations under the Agreement;
(vii) as soon as possible and in any event within five days after the
occurrence of a Termination Event, notice of such Termination Event; and
(viii) such other information respecting the condition or operations,
financial or otherwise, of the Borrower or any Subsidiary as any Lender
through the Administrative Agent may from time to time reasonably request.
(j) Indebtedness to Total Capitalization. Maintain at all times a ratio of
Consolidated Indebtedness of the Borrower and its Subsidiaries to Total
Capitalization of not more than .70:1.0.
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(k) Use of Proceeds. Use the proceeds of each Advance solely to facilitate
the FPC Transaction and for general corporate purposes (including, in each case,
without limitation, as a commercial paper back-up). No proceeds of any Advance
will be used to acquire any equity security of a class that is registered
pursuant to Section 12 of the Securities Exchange Act of 1934, as amended and in
effect from time to time, or any security in any transaction that is subject to
Sections 13 and 14 of the Securities Exchange Act of 1934, as amended and in
effect from time to time.
(l) Ownership of Subsidiaries. Own at all times, directly or indirectly and
free and clear of all liens and encumbrances, 100% of the common stock of CP&L
and, on and after the date of the FPC Transaction, FPC and Florida Power.
SECTION 5.02. NEGATIVE COVENANTS.
So long as any Advance or any other amount payable by the Borrower
hereunder shall remain unpaid or any Lender shall have any Commitment hereunder,
the Borrower will not, without the written consent of the Majority Lenders:
(a) Liens, Etc. Create, incur, assume or suffer to exist, or permit any
Subsidiary to create, incur, assume or suffer to exist, any lien, security
interest or other charge or encumbrance, or any other type of preferential
arrangement, upon or with respect to any of its properties, whether now owned or
hereafter acquired, or assign, or permit any Subsidiary to assign, any right to
receive income, in each case to secure any Indebtedness of any Person, other
than (i) liens, mortgages and security interests created by the Mortgage and, on
and after the date of the FPC Transaction, the Florida Power Mortgage, (ii)
liens and security interests against the fuel used by the Borrower in its power
generating operations in favor of the suppliers thereof, and (iii) liens,
mortgages and security interests securing other Indebtedness of the Borrower and
its Subsidiaries not exceeding $100,000,000 in the aggregate.
(b) Indebtedness. Create, incur, assume or suffer to exist, or permit any
Subsidiary to create, incur, assume or suffer to exist, any Indebtedness other
than (i) Indebtedness hereunder, (ii) Indebtedness secured by liens and security
interests permitted pursuant to clauses (ii) and (iii) of subsection 5.02(a),
(iii) Indebtedness evidenced by the First Mortgage Bonds, on and after the date
of the FPC Transaction, and the Florida Power Mortgage Bonds, (iv) unsecured
Indebtedness, including guarantees issued in connection with the financing of
pollution control facilities operated by CP&L or, on and after the date of the
FPC Transaction, FPC, guarantees of Indebtedness incurred by any wholly-owned
Subsidiary and guarantees of debt securities issued by any financing Subsidiary
established to secure debt financing in the offshore markets and (v) other
Indebtedness outstanding on the date of this Agreement, as described on Schedule
II hereto.
(c) Lease Obligations. Create, incur, assume or suffer to exist, or permit
any Subsidiary to create, incur, assume or suffer to exist, any obligations for
the payment of rental for any property under leases or agreements to lease
having a term of one year or more that would cause the direct or contingent
Consolidated liabilities of the Borrower and the Subsidiaries in respect of all
such obligations payable in any calendar year to exceed 10% of the Consolidated
33
operating revenues of the Borrower and the Subsidiaries for the immediately
preceding calendar year.
(d) Mergers, Etc. Merge with or into or consolidate with or into, or
acquire all or substantially all of the assets or securities of, any Person,
unless, in each case, (i) immediately after giving effect thereto, no event
shall occur and be continuing that constitutes an Event of Default or an event
that with the giving of notice or lapse of time, or both, would constitute an
Event of Default, and (ii) in the case of any such merger to which the Borrower
is a party, such other Person is a utility company and the resulting or
surviving corporation, if not the Borrower, (x) is organized and existing under
the laws of the United States of America or any State thereof, (y) is a
corporation satisfactory to the Majority Lenders, and (z) shall have expressly
assumed, by an instrument satisfactory in form and substance to the Majority
Lenders, the due and punctual payment of all amounts due under this Agreement
and the performance of every covenant and undertaking of the Borrower contained
in this Agreement.
(e) Sales, Etc. of Assets. Sell, lease, transfer or otherwise dispose of,
or permit any Subsidiary to sell, lease, transfer or otherwise dispose of, any
of its assets, other than the following sales: (i) sales of generating capacity
to the wholesale customers of the Borrower and the Subsidiaries, (ii) sales of
nuclear fuel, (iii) sales of accounts receivable, (iv) sales in connection with
a transaction authorized by subsection (d) of this Section, (v) sales of
investments in securities with a maturity of less than one year, or (vi) other
sales not exceeding $150,000,000 in the aggregate in any fiscal year of the
Borrower.
(f) Margin Stock. Use any proceeds of any Advance to buy or carry margin
stock (within the meaning of Regulation U issued by the Board of Governors of
the Federal Reserve System).
(g) Change in Nature of Business. Engage in, or cause or permit CP&L or, on
and after the date of the FPC Transaction, Florida Power, to engage in a
material manner in, businesses other than those in which they are engaged on the
date hereof and businesses reasonably related thereto.
(h) Modification of Exchange Agreement. Wave, amend or modify, in any
material respect, the terms of the Exchange Agreement.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. EVENTS OF DEFAULT.
If any of the following events ("EVENTS OF DEFAULT") shall occur and be
continuing:
(a) The Borrower shall fail to pay any principal of any Advance when due,
or shall fail to pay any interest on the principal amount of any Advance or any
fees or other amount payable hereunder within five Business Days after such
interest or fees or other amount shall become due; or
34
(b) Any representation or warranty made by the Borrower herein or by the
Borrower (or any of its officers) in any document delivered pursuant to this
Agreement shall prove to have been incorrect in any material respect when made
or deemed made; or
(c) The Borrower shall fail to perform or observe any other term, covenant
or agreement contained in Section 5.01(b), 5.01(i)(iv), 5.01(j), 5.01(l) or 5.02
on its part to be performed or observed; or the Borrower shall fail to perform
or observe any other term, covenant or agreement contained in this Agreement on
its part to be performed or observed and any such failure shall remain
unremedied for 30 days after written notice thereof shall have been given to the
Borrower by the Administrative Agent or any Lender; or
(d) The Borrower or any Subsidiary shall fail to pay any amount in respect
of any Indebtedness in excess of $10,000,000 (but excluding Indebtedness
hereunder) of the Borrower or such Subsidiary (as the case may be), or any
interest or premium thereon, when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument relating to such Indebtedness; or any other default under any
agreement or instrument relating to any such Indebtedness, or any other event,
shall occur and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such default or
event is to accelerate, or to permit the acceleration of, the maturity of such
Indebtedness; or any such Indebtedness shall be declared to be due and payable,
or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof; or
(e) The Borrower or any Subsidiary shall generally not pay its debts as
such debts become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors; or
any proceeding shall be instituted by or against the Borrower or any Subsidiary
seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief, or
composition of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, or other similar official for
it or for any substantial part of its property; or the Borrower or any
Subsidiary shall take any corporate action to authorize any of the actions set
forth above in this subsection (e); or
(f) Any judgment or order for the payment of money in excess of $10,000,000
shall be rendered against the Borrower or any Subsidiary and either (i)
enforcement proceedings shall have been commenced by any creditor upon such
judgment or order or (ii) there shall be any period of 30 consecutive days
during which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; or
(g) Any Termination Event with respect to a Plan shall have occurred, and,
30 days after the occurrence thereof, (i) such Termination Event (if
correctable) shall not have been corrected and (ii) the then present value of
such Plan's vested benefits exceeds the then current value of assets accumulated
in such Plan by more than the amount of $20,000,000 (or in the case of a
Termination Event involving the withdrawal of a "substantial employer" (as
defined in Section 4001(a)(2) of ERISA), the withdrawing employer's
proportionate share of such excess shall exceed such amount); or
35
(h) The Borrower or any of its Affiliates as employer under a Multiemployer
Plan shall have made a complete or partial withdrawal from such Multiemployer
Plan and the plan sponsor of such Multiemployer Plan shall have notified such
withdrawing employer that such employer has incurred a withdrawal liability in
an annual amount exceeding $20,000,000; or
(i) A Change of Control shall occur;
then, and in any such event, the Administrative Agent shall at the request, or
may with the consent, of the Majority Lenders, by notice to the Borrower, (i)
declare the Commitments and the obligation of each Lender to make Advances to be
terminated, whereupon the same shall forthwith terminate, and (ii) declare the
principal amount of the Advances then outstanding, all interest thereon and all
other amounts payable under this Agreement to be forthwith due and payable,
whereupon such principal amount, all such interest and all such amounts shall
become and be forthwith due and payable, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by the
Borrower; provided, however, that in the event of an actual or deemed entry of
an order for relief with respect to the Borrower or any Subsidiary under the
Federal Bankruptcy Code, (A) the obligation of each Lender to make Advances
shall automatically be terminated and (B) the principal amount of the Advances
then outstanding, all such interest and all such other amounts shall
automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by
the Borrower.
ARTICLE VII
THE AGENTS
SECTION 7.01. AUTHORIZATION AND ACTION.
Each Lender hereby appoints and authorizes the Administrative Agent to take
such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Administrative Agent by the terms hereof,
together with such powers as are reasonably provided for by this Agreement
(including, without limitation, enforcement or collection of the Advances), the
Administrative Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Majority Lenders, and such instructions shall be binding upon all Lenders;
provided, however, that the Administrative Agent shall not be required to take
any action that exposes the Administrative Agent to personal liability or that
is contrary to this Agreement or applicable law.
SECTION 7.02. THE AGENTS' RELIANCE, ETC.
None of the Agents nor any of their directors, officers, agents or
employees shall be liable for any action taken or omitted to be taken by each or
any of them under or in connection with this Agreement, except for their own
gross negligence or willful misconduct. Without limitation of the generality of
the foregoing, the Administrative Agent: (i) may consult with legal counsel
(including counsel for the Borrower), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (ii) makes no warranty or representation to any Lender
36
and shall not be responsible to any Lender for any statements, warranties or
representations made in or in connection with this Agreement; (iii) shall not
have any duty to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of this Agreement on the part of the
Borrower or to inspect the property (including the books and records) of the
Borrower; (iv) shall not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or any other instrument or document furnished pursuant hereto; and (v)
shall incur no liability under or in respect of this Agreement by acting upon
any notice, consent, certificate or other instrument or writing (which may be by
telegram, telecopy or e-mail) believed by it to be genuine and signed or sent by
the proper party or parties.
SECTION 7.03. THE AGENTS AND THEIR RESPECTIVE AFFILIATES.
With respect to its Commitments and, the Advances made by it, each Agent
shall have the same rights and powers under this Agreement as any other Lender
and may exercise the same as though it were not an Agent; and the term "Lender"
or "Lenders" shall, unless otherwise expressly indicated, include each Agent in
its individual capacity, as applicable. The Agents and their respective
Affiliates may accept deposits from, lend money to, act as trustee under
indentures of, and generally engage in any kind of business with, the Borrower,
any Subsidiary and any Person who may do business with or own securities of the
Borrower or any Subsidiary, all as if the Agents were not the Arrangers, the
Administrative Agent or the Syndication Agent, as applicable, and without any
duty to account therefor to the Lenders.
SECTION 7.04. LENDER CREDIT DECISION.
Each Lender acknowledges that it has, independently and without reliance
upon the Agents or any other Lender and based on the financial statements
referred to in Section 4.01(e) and such other documents and information as it
has deemed appropriate, made its own credit analysis and decision to enter into
this Agreement. Each Lender also acknowledges that it will, independently and
without reliance upon the Agents or any other Lender and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement.
SECTION 7.05. INDEMNIFICATION.
The Lenders agree to indemnify each Agent (to the extent not reimbursed by
the Borrower), ratably according to the respective principal amounts of the A
Advances then held by each of them (or if no A Advances are at the time
outstanding, ratably according to the respective amounts of their Commitments),
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever that may be imposed on, incurred by, or asserted
against such Agent in any way relating to or arising out of this Agreement or
any action taken or omitted by such Agent under this Agreement; provided that no
Lender shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from such Agent's gross negligence or willful misconduct. Without
limitation of the foregoing, each Lender agrees to reimburse the Administrative
Agent promptly upon demand for its ratable share of any out-of-pocket expenses
(including reasonable counsel fees) incurred by the Administrative Agent in
37
connection with the preparation, execution, administration, or enforcement of,
or legal advice in respect of rights or responsibility under, this Agreement, to
the extent that the Administrative Agent is not reimbursed for such expenses by
the Borrower.
SECTION 7.06. SUCCESSOR ADMINISTRATIVE AGENT.
The Administrative Agent may resign at any time by giving written notice
thereof to the Lenders and the Borrower and may be removed at any time with or
without cause by the Majority Lenders. Upon any such resignation or removal, the
Majority Lenders shall have the right to appoint a successor Administrative
Agent. If no successor Administrative Agent shall have been so appointed by the
Majority Lenders, and shall have accepted such appointment, within 30 days after
the retiring Administrative Agent's giving of notice of resignation or the
Majority Lenders' removal of the retiring Administrative Agent, the
Administrative Agent may appoint a successor Administrative Agent, which shall
be a commercial bank organized under the laws of the United States of America or
of any State thereof and having a combined capital and surplus of at least
$500,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring Administrative Agent's resignation or removal
hereunder as Administrative Agent, the provisions of this Article VII shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. AMENDMENTS, ETC.
No amendment or waiver of any provision of this Agreement, nor consent to
any departure by the Borrower therefrom, shall in any event be effective unless
the same shall be in writing and signed by the Majority Lenders, in the case of
any such amendment, waiver or consent of or in respect of this Agreement, or the
Lender that shall have made the B Advance to which such amendment, waiver or
consent relates, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that no amendment, waiver or consent shall, unless in writing and
signed by all of the Lenders, do any of the following: (i) waive any of the
conditions specified in Section 3.01, 3.02 or 3.03, (ii) change the Commitment
of any Lender or subject any Lender to any additional obligations, (iii) reduce,
or waive the payment of, the principal of, or interest on, the A Advances or any
fees hereunder, (iv) postpone any date fixed for any payment of principal of, or
interest on, the A Advances or any fees hereunder, (v) change the percentage of
the Commitments or of the aggregate unpaid principal amount of the A Advances,
or the number of Lenders, which shall be required for the Lenders or any of them
to take any action under this Agreement, and (vi) amend, waive, or in any way
modify or suspend any provision requiring the pro rata application of payments
or of Section 2.16 or of this Section 8.01; and provided, further, that (A) no
amendment, waiver or consent shall, unless in writing and signed by each Agent
38
in addition to the Lenders required hereinabove to take such action, affect the
rights or duties of such Agent under this Agreement and (B) this Agreement may
be amended and restated without the consent of any Lender or Agent if, upon
giving effect to such amendment and restatement, such Lender or Agent, as the
case may be, shall no longer be a party to this Agreement (as so amended and
restated) or have any Commitment or other obligation hereunder and shall have
been paid in full all amounts payable hereunder to such Lender or Agent, as the
case may be.
SECTION 8.02. NOTICES, ETC.
All notices and other communications provided for hereunder shall, unless
otherwise stated herein, be in writing (including telegraphic communication) and
mailed, telecopied, e-mailed or delivered, if to the Borrower, at its address at
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Manager of
Financial Operations; if to any Lender, at its Domestic Lending Office set forth
under its name on the signature pages hereof; and if to the Administrative
Agent, at its address at ▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Bank Loan Syndications; or, as to each party, at such other address
as shall be designated by such party in a written notice to the other parties.
All such notices and communications shall be effective when received by the
addressee thereof.
SECTION 8.03. NO WAIVER; REMEDIES.
No failure on the part of any Lender or the Administrative Agent to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 8.04. COSTS, EXPENSES, TAXES AND INDEMNIFICATION.
(a) The Borrower agrees to pay on demand all costs and expenses of the
Agents (and as described in clause (iv) below, the Lenders) in connection with
(i) the preparation, execution, negotiation, syndication and delivery of this
Agreement and the other documents to be delivered hereunder, (ii) the first
Borrowing under this Agreement, (iii) any modification, amendment or supplement
to this Agreement and the other documents to be delivered hereunder and (iv) the
enforcement of the rights and remedies of the Lenders and the Agents under this
Agreement and the other documents to be delivered hereunder (whether through
negotiations or legal proceedings), all the above costs and expenses to include,
without limitation, the reasonable fees and out-of-pocket expenses of counsel
for the Agents and each of the Lenders with respect thereto. In addition, the
Borrower shall pay any and all stamp and other taxes payable or determined to be
payable in connection with the execution and delivery of this Agreement and the
other documents to be delivered hereunder, and agrees to save the Agents and
each Lender harmless from and against any and all liabilities with respect to or
resulting from any delay in paying or omission to pay such taxes.
(b) If, due to payments made by the Borrower due to acceleration of the
maturity of the Advances pursuant to Section 6.01 or due to any other reason,
any Lender receives payments of principal of any Eurodollar Rate Advance based
upon the Eurodollar Rate other than on the last day of the Interest Period for
39
such A Advance, the Borrower shall, upon demand by such Lender (with a copy of
such demand to the Administrative Agent), pay to the Administrative Agent for
the account of such Lender any amounts required to compensate such Lender for
any additional losses, costs or expenses that it may reasonably incur as a
result of such payment, including, without limitation, any loss (including loss
of anticipated profits), cost or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by any Lender to fund or
maintain such A Advance. In addition, if the Borrower fails to prepay any A
Advance on the date for which notice of prepayment has been given, the Borrower
shall, upon demand by any Lender (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender any amounts required to compensate such Lender for any losses, costs or
expenses (including loss of anticipated profits) that it may reasonably incur as
a result of such prepayment not having been made on the date specified by the
Borrower for such prepayment.
(c) Any and all payments by the Borrower hereunder shall be made, in
accordance with Section 2.14, free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Lender and the Agents, taxes imposed on its income, and franchise taxes
imposed on it, by the jurisdiction under the laws of which such Lender or Agent
(as the case may be) is organized or any political subdivision thereof and, in
the case of each Lender, taxes imposed on its income, and franchise taxes
imposed on it, by the jurisdiction of such Lender's Applicable Lending Office or
any political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "TAXES"). If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder to any Lender or Agent, (i) the sum
payable shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 8.04) such Lender or Agent (as the case may be) receives an amount
equal to the sum it would have received had no such deductions been made, (ii)
the Borrower shall make such deductions and (iii) the Borrower shall pay the
full amount deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(d) The Borrower will indemnify each Lender and the Agents for the full
amount of Taxes (including, without limitation, any Taxes imposed by any
jurisdiction on amounts payable under this Section 8.04) paid by such Lender or
Agent (as the case may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not such Taxes
were correctly or legally asserted. This indemnification shall be made within 30
days from the date such Lender or Agent (as the case may be) makes written
demand therefor.
(e) Prior to the date of the initial Borrowing or on the date of the
Assignment and Acceptance pursuant to which it became a Lender, in the case of
each Lender that becomes a Lender by virtue of entering into an Assignment and
Acceptance, and from time to time thereafter if requested by the Borrower or the
Administrative Agent, each Lender organized under the laws of a jurisdiction
outside the United States shall provide the Administrative Agent and the
Borrower with the forms prescribed by the Internal Revenue Service of the United
States certifying that such Lender is exempt from United States withholding
taxes with respect to all payments to be made to such Lender hereunder. If for
any reason during the term of this Agreement, any Lender becomes unable to
submit the forms referred to above or the information or representations
40
contained therein are no longer accurate in any material respect, such Lender
shall notify the Administrative Agent and the Borrower in writing to that
effect. Unless the Borrower and the Administrative Agent have received forms or
other documents satisfactory to them indicating that payments hereunder are not
subject to United States withholding tax, the Borrower or the Administrative
Agent shall withhold taxes from such payments at the applicable statutory rate
in the case of payments to or for any Lender organized under the laws of a
jurisdiction outside the United States.
(f) Any Lender claiming any additional amounts payable pursuant to Section
8.04(c) or (d) shall use its reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) (i) to change the jurisdiction of
its Applicable Lending Office if the making of such a change would avoid the
need for, or reduce the amount of, any such additional amounts that may
thereafter accrue and would not, in the reasonable judgment of such Lender, be
otherwise disadvantageous to such Lender and (ii) to otherwise minimize the
amounts due, or to become due, under Sections 8.04(c) and (d).
(g) If the Borrower makes any additional payment to any Lender pursuant to
Sections 8.04(c) and (d) in respect of any Taxes, and such Lender determines
that it has received (i) a refund of such Taxes or (ii) a credit against or
relief or remission for, or a reduction in the amount of, any tax or other
governmental charge solely as a result of any deduction or credit for any Taxes
with respect to which it has received payments under Sections 8.04(c) and (d),
such Lender shall, to the extent that it can do so without prejudice to the
retention of such refund, credit, relief, remission or reduction, pay to the
Borrower such amount as such Lender shall have determined to be attributable to
the deduction or withholding of such Taxes. If such Lender later determines that
it was not entitled to such refund, credit, relief, remission or reduction to
the full extent of any payment made pursuant to the first sentence of this
Section 8.04(g), the Borrower shall upon demand of such Lender promptly repay
the amount of such overpayment. Any determination made by such Lender pursuant
to this Section 8.04(g) shall in the absence of bad faith or manifest error be
conclusive, and nothing in this Section 8.04(g) shall be construed as requiring
any Lender to conduct its business or to arrange or alter in any respect its tax
or financial affairs so that it is entitled to receive such a refund, credit or
reduction or as allowing any Person to inspect any records, including tax
returns, of any Lender.
(h) The Borrower hereby agrees to indemnify and hold harmless each Lender,
the Agents, counsel to the Agents and their respective officers, directors,
partners, employees, Affiliates and advisors (each, an "INDEMNIFIED PERSON")
from and against any and all claims, damages, losses, liabilities, costs, or
expenses (including reasonable attorney's fees and expenses, whether or not such
Indemnified Person is named as a party to any proceeding or is otherwise
subjected to judicial or legal process arising from any such proceeding), joint
and several, that may be incurred by or asserted or awarded against any
Indemnified Person (including, without limitation, in connection with any
investigation, litigation or proceeding or the preparation of a defense in
connection therewith) in each case by reason of or in connection with the
execution, delivery, or performance of this Agreement, or the use by the
Borrower of the proceeds of any Advance, except to the extent that such claims,
damages, losses, liabilities, costs, or expenses are determined in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
solely from the gross negligence or willful misconduct of the party seeking
indemnification.
41
(i) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 8.04 shall survive the payment in full of principal and interest
hereunder and the termination of the Commitments.
SECTION 8.05. RIGHT OF SET-OFF.
Upon (i) the occurrence and during the continuance of any Event of Default
and (ii) the making of the request or the granting of the consent specified by
Section 6.01 to authorize the Administrative Agent to declare the Advances due
and payable pursuant to the provisions of Section 6.01, each Lender is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Lender to or for the credit or the account of the Borrower
now or hereafter existing under this Agreement, irrespective of whether or not
such Lender shall have made any demand under this Agreement and although such
obligations may be unmatured. Each Lender agrees promptly to notify the Borrower
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. The rights of each Lender under this Section are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) that such Lender may have.
SECTION 8.06. BINDING EFFECT.
This Agreement shall become effective when it shall have been executed by
the Borrower and the Agents and when the Administrative Agent shall have been
notified by each Lender that such Lender has executed it and thereafter shall be
binding upon and inure to the benefit of the Borrower, the Agents and each
Lender and their respective successors and assigns, except that the Borrower
shall not have the right to assign its rights hereunder or any interest herein
without the prior written consent of each Lender.
SECTION 8.07. ASSIGNMENTS AND PARTICIPATIONS.
(a) Each Lender may, with the consent of the Administrative Agent and the
Borrower (such consent not to be unreasonably withheld and, in the case of the
Borrower, such consent shall not be required if an Event of Default has occurred
and is continuing), assign to one or more banks or other entities all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment and the A Advances owing to it);
provided, however, that (i) each such assignment shall be of a constant, and not
a varying, percentage of all rights and obligations under this Agreement (other
than any B Advances), (ii) prior to the effectiveness of the Term Loan
Conversion Option, the amount of the Commitment of the assigning Lender being
assigned pursuant to each such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event be
less than the lesser of (A) $10,000,000 and (B) all of such Lender's rights and
obligations and, if the preceding clause (A) is applicable, shall be an integral
multiple of $1,000,000, (iii) each such assignment shall be to an Eligible
Assignee, and (iv) the parties to each such assignment shall execute and deliver
to the Administrative Agent, for its acceptance and recording in the Register,
an Assignment and Acceptance and such parties (other than when an Arranger is an
42
assigning party) shall also deliver to the Administrative Agent a processing and
recordation fee of $3,500. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Assignment and
Acceptance, (x) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder and (y) the Lender assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto).
(b) By executing and delivering an Assignment and Acceptance, the Lender
assignor thereunder and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or the performance or observance by the Borrower of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to in
Section 4.01(e) and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Administrative Agent, such assigning Lender or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Administrative Agent by the terms hereof,
together with such powers as are reasonably incidental thereto; and (vii) such
assignee agrees that it will perform in accordance with their terms all of the
obligations that by the terms of this Agreement are required to be performed by
it as a Lender.
(c) The Administrative Agent shall maintain at its address referred to in
Section 8.02 a copy of each Assignment and Acceptance (and copies of the related
consents of the Borrower and the Administrative Agent to such assignment)
delivered to and accepted by it and a register for the recordation of the names
and addresses of the Lenders and the Commitment of, and principal amount of the
A Advances owing to, each Lender from time to time (the "REGISTER"). The entries
in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrower, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register as a Lender hereunder
for all purposes of this Agreement. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
43
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee representing that it is an Eligible Assignee,
the Administrative Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit B hereto, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Borrower.
(e) Each Lender may assign to one or more banks or other entities any B
Advance made by it.
(f) Each Lender may sell participations to one or more banks or other
entities in or to all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitment,
the Advances owing to it); provided, however, that (i) such Lender's obligations
under this Agreement (including, without limitation, its Commitment to the
Borrower hereunder) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender shall remain the holder of any promissory note held pursuant
to Section 2.01(b) or 2.03(f) for all purposes of this Agreement, (iv) the
Borrower, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and (v) the holder of any such participation,
other than an Affiliate of such Lender, shall not be entitled to require such
Lender to take or omit to take any action hereunder, except action (A) extending
the time for payment of interest on, or the final maturity of any portion of the
principal amount of, the Advances or (B) reducing the principal amount of or the
rate of interest payable on the Advances. Without limiting the generality of the
foregoing: (i) such participating banks or other entities shall be entitled to
the cost protection provisions contained in Sections 2.08, 2.12 and 8.04(b) only
if, and to the same extent, the Lender from which such participating banks or
other entities acquired its participation would, at the time, be entitled to
claim thereunder; and (ii) such participating banks or other entities shall
also, to the fullest extent permitted by law, be entitled to exercise the rights
of set-off contained in Section 8.05 as if such participating banks or other
entities were Lenders hereunder.
(g) If any Lender (or any bank, financial institution, or other entity to
which such Lender has sold a participation) shall make any demand for payment
under Section 2.12(b), then within 30 days after any such demand (if, but only
if, such demanded payment has been made by the Borrower), the Borrower may, with
the approval of the Administrative Agent (which approval shall not be
unreasonably withheld) and provided that no Event of Default or event that, with
the passage of time or the giving of notice, or both, would constitute an Event
of Default shall then have occurred and be continuing, demand that such Lender
assign in accordance with this Section 8.07 to one or more Eligible Assignees
designated by the Borrower all (but not less than all) of such Lender's
Commitment (if any) and the Advances owing to it within the period ending on the
later to occur of such 30th day and the last day of the longest of the then
current Interest Periods for such Advances. If any such Eligible Assignee
designated by the Borrower shall fail to consummate such assignment on terms
acceptable to such Lender, or if the Borrower shall fail to designate any such
Eligible Assignees for all or part of such Lender's Commitment or Advances, then
such demand by the Borrower shall become ineffective; it being understood for
purposes of this subsection (g) that such assignment shall be conclusively
deemed to be on terms acceptable to such Lender, and such Lender shall be
compelled to consummate such assignment to an Eligible Assignee designated by
the Borrower, if such Eligible Assignee (i) shall agree to such assignment by
44
entering into an Assignment and Acceptance in substantially the form of Exhibit
B hereto with such Lender and (ii) shall offer compensation to such Lender in an
amount equal to all amounts then owing by the Borrower to such Lender hereunder
made by the Borrower to such Lender, whether for principal, interest, fees,
costs or expenses (other than the demanded payment referred to above and payable
by the Borrower as a condition to the Borrower's right to demand such
assignment), or otherwise.
(h) Any Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 8.07, disclose to
the assignee or participant or proposed assignee or participant, any information
relating to the Borrower furnished to such Lender by or on behalf of the
Borrower; provided that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree to preserve the
confidentiality of any confidential information relating to the Borrower
received by it from such Lender.
(i) Anything in this Section 8.07 to the contrary notwithstanding, any
Lender may (i) assign and pledge all or any portion of its Commitment and the
Advances owing to it to any Federal Reserve Bank (and its transferees) as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal Reserve
Bank; provided, that no such assignment shall release the assigning Lender from
its obligations hereunder; or (ii) assign its Commitments, Advances and other
rights and obligations hereunder to any of its Affiliates upon notice to, but
without the consent of, the Borrower and the Administrative Agent.
(j) Notwithstanding anything to the contrary contained herein, any Lender
(a "GRANTING LENDER") may grant to a special purpose funding vehicle (an "SPC")
of such Granting Lender identified as such in writing from time to time by the
Granting Lender to the Administrative Agent and the Borrower, the option to
provide to the Borrower all or any part of any Advance that such Granting Lender
would otherwise be obligated to make to the Borrower pursuant to this Agreement;
provided that (i) nothing herein shall constitute a commitment by any such SPC
to make any Advance, (ii) if such SPC elects not to exercise such option or
otherwise fails to provide all or any part of such Advance, the Granting Lender
shall be obligated to make such Advance pursuant to the terms hereof and (iii)
no SPC or Granting Lender shall be entitled to receive any greater amount
pursuant to Section 2.08 or 2.12 than the Granting Lender would have been
entitled to receive had the Granting Lender not otherwise granted such SPC the
option to provide any Advance to the Borrower. The making of an Advance by an
SPC hereunder shall utilize the Commitment of the Granting Lender to the same
extent, and as if, such Advance were made by such Granting Lender. Each party
hereto hereby agrees that no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement for which a Lender would otherwise be
liable so long as, and to the extent that, the related Granting Lender provides
such indemnity or makes such payment. In furtherance of the foregoing, each
party hereto hereby agrees (which agreement shall survive the termination of
this Agreement) that, prior to the date that is one year and one day after the
payment in full of all outstanding commercial paper or other senior indebtedness
of any SPC, it will not institute against or join any other person in
instituting against such SPC any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings under the laws of the United States or any
State thereof. Notwithstanding the foregoing, the Granting Lender
unconditionally agrees to indemnify the Borrower, the Agents and each Lender
against all liabilities, obligations, losses, damages, penalties, actions,
45
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be incurred by or asserted against the Borrower, the Agents
or such Lender, as the case may be, in any way relating to or arising as a
consequence of any such forbearance or delay in the initiation of any such
proceeding against its SPC. Each party hereto hereby acknowledges and agrees
that no SPC shall have the rights of a Lender hereunder, such rights being
retained by the applicable Granting Lender. Accordingly, and without limiting
the foregoing, each party hereby further acknowledges and agrees that no SPC
shall have any voting rights hereunder and that the voting rights attributable
to any Advance made by an SPC shall be exercised only by the relevant Granting
Lender and that each Granting Lender shall serve as the administrative agent and
attorney-in-fact for its SPC and shall on behalf of its SPC receive any and all
payments made for the benefit of such SPC and take all actions hereunder to the
extent, if any, such SPC shall have any rights hereunder. In addition,
notwithstanding anything to the contrary contained in this Agreement any SPC may
with notice to, but without the prior written consent of any other party hereto,
assign all or a portion of its interest in any Advances to the Granting Lender.
This Section may not be amended without the prior written consent of each
Granting Lender, all or any part of whose Advance is being funded by an SPC at
the time of such amendment.
SECTION 8.08. GOVERNING LAW.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York. The Borrower (i) irrevocably submits to the
non-exclusive jurisdiction of any New York State court or Federal court sitting
in New York City in any action arising out of this Agreement, (ii) agrees that
all claims in such action may be decided in such court, (iii) waives, to the
fullest extent it may effectively do so, the defense of an inconvenient forum
and (iv) consents to the service of process by mail. A final judgment in any
such action shall be conclusive and may be enforced in other jurisdictions.
Nothing herein shall affect the right of any party to serve legal process in any
manner permitted by law or affect its right to bring any action in any other
court.
SECTION 8.09. WAIVER OF JURY TRIAL.
THE COMPANY, THE AGENTS, AND EACH LENDER EACH HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT IT MAY EFFECTIVELY AND LAWFULLY DO SO, ALL RIGHT TO TRIAL BY
JURY AS TO ANY ISSUE RELATING TO THIS AGREEMENT IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
INSTRUMENT OR DOCUMENT DELIVERED HEREUNDER OR THEREUNDER.
SECTION 8.10. EXECUTION IN COUNTERPARTS.
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
46
SECTION 8.11. SEVERABILITY.
Any provision of this Agreement that is prohibited, unenforceable or not
authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition, unenforceability or non-authorization without
invalidating the remaining provisions hereof or affecting the validity,
enforceability or legality of such provision in any other jurisdiction.
SECTION 8.12. HEADINGS.
Section headings in this Agreement are included herein for convenience of
reference only and shall not constitute a part of this Agreement for any other
purpose.
SECTION 8.13. ENTIRE AGREEMENT.
This Agreement constitutes the entire contract between the parties relative
to the subject matter hereof. Any previous agreement among the parties with
respect to the subject matter hereof is superseded by this Agreement. Except as
is expressly provided for herein, nothing in this Agreement, expressed or
implied, is intended to confer upon any party other than the parties hereto any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
S-1
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
CP&L ENERGY, INC.
By
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Treasurer
S-2
CITIBANK, N.A., as Administrative Agent
By
--------------------------------------
Title:
Name:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO, as Joint Lead
Arranger and Syndication Agent
By
--------------------------------------
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY, INC., as Joint
Lead Arranger
By
--------------------------------------
Name:
Title:
S-3
COMMITMENT AMOUNT LENDERS
----------------- -------
CITIBANK, N.A.
$700,000,000.00 By
--------------------------------------
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL CORPORATION
$500,000,000.00 By
--------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK
$500,000,000.00 By
--------------------------------------
Name:
Title:
THE BANK OF TOKYO-MITSUBISHI, LTD.
$400,000,000.00 By
--------------------------------------
Name:
Title:
BANK OF AMERICA, N.A.
$400,000,000.00 By
--------------------------------------
Name:
Title:
S-4
FIRST UNION NATIONAL BANK
$400,000,000.00 By
--------------------------------------
Name:
Title:
BANK ONE, NA
$400,000,000.00 By
--------------------------------------
Name:
Title:
WACHOVIA BANK, NATIONAL ASSOCIATION
$250,000,000.00 By
--------------------------------------
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ BANK USA
$200,000,000.00 By
--------------------------------------
Name:
Title:
[ADD OTHER LENDERS & COMMITMENTS]
SCHEDULE I
EXISTING AGREEMENTS
[TO COME]
SCHEDULE II
PERMITTED EXISTING INDEBTEDNESS
[TO COME]
EXHIBIT A-1
NOTICE OF A BORROWING
[Date]
Citibank, N.A., as Administrative Agent
for the Lenders parties to the
Credit Agreement referred to below
▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Bank Loan Syndications
Ladies and Gentlemen:
The undersigned, CP&L ENERGY, INC. refers to the $3,750,000,000 364-Day
Revolving Credit Agreement, dated as of November 15, 2000 (the "CREDIT
AGREEMENT", the terms defined therein being used herein as therein defined),
among the undersigned, certain Lenders from time to time parties thereto,
CITIBANK, N.A., as Administrative Agent for the Lenders, ▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO. and
▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY, INC., as Joint Lead Arrangers, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO., as
Syndication Agent, and hereby gives you notice pursuant to Section 2.02 of the
Credit Agreement that the undersigned hereby requests an A Borrowing under the
Credit Agreement, and in that connection sets forth below the information
relating to such A Borrowing (the "PROPOSED A BORROWING") as required by Section
2.02(a) of the Credit Agreement:
(i) The Business Day of the Proposed A Borrowing is ,
-----------------
20 .
----
(ii) The Type of A Advances comprising the Proposed A Borrowing is
[Base Rate Advances][Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed A Borrowing is $ .
-----
(iv) The Interest Period for each Eurodollar Rate Advance that is an A
Advance made as part of the Proposed A Borrowing is [days][months].
-----
Very truly yours,
CP&L ENERGY, INC.
By
---------------------------------
Name:
Title:
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
▇▇▇▇▇▇ ▇▇ ▇ BORROWING
, 20
------------------ ----
Citibank, N.A., as Administrative Agent
for the Lenders parties to the
Credit Agreement referred to below
▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Bank Loan Syndications
Ladies and Gentlemen:
The undersigned, CP&L ENERGY, INC. refers to the $3,750,000,000 364-Day
Revolving Credit Agreement, dated as of November 15, 2000 (the "CREDIT
AGREEMENT", the terms defined therein being used herein as therein defined),
among the undersigned, certain Lenders from time to time parties thereto,
CITIBANK, N.A., as Administrative Agent for the Lenders, ▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO. and
▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY, INC., as Joint Lead Arrangers, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO., as
Syndication Agent, and hereby gives you notice pursuant to Section 2.03 of the
Credit Agreement that the undersigned hereby requests a B Borrowing under the
Credit Agreement, and in that connection sets forth the terms on which such B
Borrowing (the "PROPOSED B BORROWING") is requested to be made:
(A) Date of B Borrowing
(B) Amount of B Borrowing
(C) Maturity Date
(D) Interest Rate Basis
(E) Interest Payment Date(s)
(F)
---------------------
(G
---------------------
(H)
---------------------
The undersigned hereby certifies that the aggregate amount of the Proposed
B Borrowing and all other Borrowings to be made on the same day under the Credit
Agreement is within the aggregate amount of the unused Commitments of the
Lenders.
The undersigned hereby confirms that the Proposed B Borrowing is to be made
available to it in accordance with Section 2.03(a)(v) of the Credit Agreement.
A-2-1
Very truly yours,
CP&L ENERGY, INC.
By
--------------------------------
Name:
Title:
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
NOTICE OF CONVERSION
[Date]
Citibank, N.A., as Administrative Agent
for the Lenders parties to the
Credit Agreement referred to below
▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Bank Loan Syndications
Ladies and Gentlemen:
The undersigned, CP&L ENERGY, INC. refers to the $3,750,000,000 364-Day
Revolving Credit Agreement, dated as of November 15, 2000 (the "CREDIT
AGREEMENT", the terms defined therein being used herein as therein defined),
among the undersigned, certain Lenders from time to time parties thereto,
CITIBANK, N.A., as Administrative Agent for the Lenders, ▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO. and
▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY, INC., as Joint Lead Arrangers, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO., as
Syndication Agent, and hereby gives you notice pursuant to Section 2.10 of the
Credit Agreement that the undersigned hereby requests a Conversion under the
Credit Agreement, and in that connection sets forth the terms on which such
Conversion (the "PROPOSED CONVERSION") is requested to be made:
(i) The Business Day of the Proposed Conversion is ,
------------------
20 .
----
(ii) The Type of, and Interest Period applicable to, the Advances (or
portions thereof) proposed to be Converted: .
----------------
(iii) The Type of Advance to which such Advances (or portions thereof)
are proposed to be Converted: .
------------------------
(iv) Except in the case of a Conversion to Base Rate Advances, the
initial Interest Period to be applicable to the Advances resulting from
such Conversion:
------------------------------.
(v) The aggregate amount of Advances (or portions thereof) proposed to
be Converted is $ .
--------
A-3-1
The undersigned hereby certifies that, on the date hereof, and on the date
of the Proposed Conversion, no event has occurred and is continuing, or would
result from such Proposed Conversion, that constitutes an Event of Default.
Very truly yours,
CP&L ENERGY, INC.
By
--------------------------------------
Name:
Title:
A-3-2
EXHIBIT B
ASSIGNMENT AND ACCEPTANCE
DATED , 20
---------- ---
Reference is made to the $3,750,000,000 364-Day Revolving Credit Agreement,
dated as of November 15, 2000 (as amended, modified and supplemented from time
to time, the "CREDIT AGREEMENT", the terms defined therein being used herein as
therein defined), among CP&L ENERGY, INC., certain Lenders (as defined in the
Credit Agreement) from time to time parties thereto, CITIBANK, N.A., as
Administrative Agent for the Lenders (the "ADMINISTRATIVE Agent"), ▇▇▇▇▇▇▇ ▇▇▇▇▇
& CO. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY, INC., as Arrangers, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO., as
Syndication Agent.
(the "ASSIGNOR") and (the "ASSIGNEE") agree as
------------ -----------
follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, that interest in and to
all of the Assignor's rights and obligations under the Credit Agreement as of
the date hereof (other than in respect of B Advances) that represents the
percentage interest specified on Schedule 1 of all outstanding rights and
obligations under the Credit Agreement (other than in respect of B Advances),
including, without limitation, such interest in the Assignor's Commitment (to
the extent it has not been terminated), the A Advances owing to the Assignor.
After giving effect to such sale and assignment, the Assignee's Commitment (if
any) and the amount of the A Advances owing to the Assignee will be as set forth
in Section 2 of Schedule 1.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Agreement
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement or any other instrument or document furnished
pursuant thereto; and (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations under the
Credit Agreement or any other instrument or document furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 4.01(e) thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance; (ii) agrees that it will, independently and
without reliance upon the Administrative Agent, the Assignor or any other Lender
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Credit Agreement; (iii) confirms that it is an Eligible Assignee; (iv)
appoints and authorizes the Administrative Agent to take such action as agent on
B-1
its behalf and to exercise such powers under the Credit Agreement as are
delegated to the Administrative Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; (v) agrees that it will perform in
accordance with their terms all of the obligations that by the terms of the
Credit Agreement are required to be performed by it as a Lender; [and] (vi)
specifies as its Domestic Lending Office (and address for notices) and
Eurodollar Lending Office the offices set forth beneath its name on the
signature pages hereof [and (vii) attaches the forms prescribed by the Internal
Revenue Service of the United States certifying as to the Assignee's status for
purposes of determining exemption from United States withholding taxes with
respect to all payments to be made to the Assignee under the Credit Agreement or
such other documents as are necessary to indicate that all such payments are
subject to such rates at a rate reduced by an applicable tax treaty].1
4. Following the execution of this Assignment and Acceptance by the
Assignor and the Assignee, it will be delivered to the Administrative Agent for
acceptance and recording by the Administrative Agent. The effective date of this
Assignment and Acceptance shall be the date of acceptance thereof by the
Administrative Agent, unless otherwise specified on Schedule 1 hereto (the
"EFFECTIVE DATE").
5. Upon such acceptance and recording by the Administrative Agent, as
of the Effective Date, (i) the Assignee shall be a party to the Credit Agreement
and, to the extent provided in this Assignment and Acceptance, have the rights
and obligations of a Lender thereunder and (ii) the Assignor shall, to the
extent provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Administrative Agent,
from and after the Effective Date, the Administrative Agent shall make all
payments under the Credit Agreement in respect of the interest assigned hereby
(including, without limitation, all payments of principal, interest and
commitment fees with respect thereto) to the Assignee. The Assignor and Assignee
shall make all appropriate adjustments in payments under the Credit Agreement
for periods prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed
in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed by their respective officers thereunto duly
authorized, as of the date first above written, such execution being made on
Schedule 1 hereto.
------------------------
1 If the Assignee is organized under the laws of a jurisdiction outside the
United States.
B-2
SCHEDULE 1
TO
ASSIGNMENT AND ACCEPTANCE
DATED , 20
---------- ----
Section 1
---------
Percentage Interest Assigned: %
-----
Section 2
---------
Assignee's Commitment2: $
Aggregate Outstanding Principal
Amount of A Advances owing to Assignee: $
Section 3
---------
Effective Date3
[NAME OF ASSIGNOR]
By
-------------------------------------
Title:
[NAME OF ASSIGNEE]
By
-------------------------------------
Title:
Domestic Lending Office (and address
for notices):
[Address]
------------------------
2 For use in connection with the Extension.
3 This date should be no earlier than the date of acceptance by the
Administrative Agent.
Eurodollar Lending Office:
[Address]
Accepted this day of
-----------
, 20
--------------- ---
CITIBANK, N.A.,
as Administrative Agent
By
-------------------------
Title:
CP&L ENERGY, INC.4
By
--------------------------
Title:
------------------------
4 If required.
EXHIBIT C
FORM OF OPINION OF COUNSEL FOR THE COMPANY
, 20
------------------- ---
To each of the Lenders parties to the $3,750,000,000
364-Day Revolving Credit Agreement referred to
below
Re: CP&L Energy, Inc.
Ladies and Gentlemen:
This opinion is furnished to you by us as counsel for CP&L Energy, Inc.
(the "Borrower") pursuant to Section 3.01(h) of the $3,750,000,000 364-Day
Revolving Credit Agreement, dated as of November 15, 2000 (the "CREDIT
AGREEMENT", the terms defined therein being used herein as therein defined),
among CP&L Energy Inc., certain lenders from time to time parties thereto (the
"LENDERS"), Citibank, N.A., as Administrative Agent for the Lenders, ▇▇▇▇▇▇▇
▇▇▇▇▇ & Co. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney, Inc., as Joint Lead Arrangers, and ▇▇▇▇▇▇▇
▇▇▇▇▇ & Co., as Syndication Agent.
In connection with the preparation, execution and delivery of the Credit
Agreement, we have examined:
(1) The Credit Agreement.
(2) The documents furnished by the Borrower pursuant to Section 3.01 of
the Credit Agreement.
(3) The Restated Charter of the Borrower (the "CHARTER").
(4) The By-Laws of the Borrower and all amendments thereto (the
"BY-LAWS").
(5) The NCUC Order and the SCPSC Order [OTHERS?].
We have also examined the originals, or copies of such other corporate
records of the Borrower, certificates of public officials and of officers of the
Borrower and agreements, instruments and other documents as we have deemed
necessary as a basis for the opinions expressed below. As to questions of fact
material to such opinions, we have, when relevant facts were not independently
established by us, relied upon certificates of the Borrower or its officers or
C-1
of public officials. We have assumed the authenticity of all documents submitted
to us as originals, the conformity to originals of all documents submitted as
certified or photostatic copies and the authenticity of the originals, and the
due execution and delivery, pursuant to due authorization, of the Credit
Agreement by the Lenders, the Agents and the validity and binding effect thereof
on such parties.
We are qualified to practice law in the States of North Carolina, South
Carolina, Florida and New York, and the opinions expressed herein are limited to
the laws of the States of North Carolina, South Carolina, Florida and New York
applicable to public utilities and the Federal laws of the United States. No
opinion is expressed as to the choice of law provisions contained in Section
8.08 of the Credit Agreement.
Based upon the foregoing and upon such investigation as we have deemed
necessary, we are of the following opinion:
1. Each of the Borrower and CP&L is a corporation duly organized,
validly existing and in good standing under the laws of the State of North
Carolina, and is duly qualified to do business and in good standing in the State
of South Carolina. FPC is a corporation duly organized, validly existing and in
good standing under the laws of the State of Florida
2. The execution, delivery and performance by the Borrower of the
Credit Agreement are within the Borrower's corporate powers, have been duly
authorized by all necessary corporate action, and do not contravene (i) the
Charter or the By-Laws or (ii) any law, rule or regulation applicable to the
Borrower (including, without limitation, Regulation X of the Board of Governors
of the Federal Reserve System) or (iii) any contractual or legal restriction
binding or affecting the Borrower. The Credit Agreement has been duly executed
and delivered on behalf of the Borrower.
3. No authorization, approval or other action by, and no notice to or
filing with any governmental authority or regulatory body is required for the
due execution, delivery and performance by the Borrower of the Credit Agreement,
other than the NCUC Order and the SCPSC Order [OTHERS?], each of which has been
duly issued, is final and in full force and effect, and all periods for review
or appeal thereof have expired, and no such request for review or appeal has
been filed and is pending.
4. The Credit Agreement is the legal, valid and binding obligation of
the Borrower enforceable against the Borrower in accordance with its terms.
5. To the best of our knowledge, except as described in the reports
and registration statements that the Borrower, CP&L and FPC have filed with the
Securities and Exchange Commission, there are no pending or overtly threatened
actions or proceedings against the Borrower or any of the Subsidiaries before
any court, governmental agency or arbitrator that purport to affect the
legality, validity, binding effect or enforceability of the Credit Agreement or
that are likely to have a materially adverse effect upon the financial condition
or operations of the Borrower or any of the Subsidiaries.
The opinions set forth above are subject to the following qualifications:
C-2
(a) The enforceability of the Borrower's obligations under the Credit
Agreement is subject to the effect of any applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or similar law affecting
creditors' rights generally.
(b) The enforceability of the Borrower's obligations under the Credit
Agreement is subject to the effect of general principles of equity, including
(without limitation) concepts of materiality, reasonableness, good faith and
fair dealing (regardless of whether considered in a proceeding in equity or at
law). Such principles of equity are of general application, and, in applying
such principles, a court, among other things, might not allow a contracting
party to exercise remedies in respect of a default deemed immaterial, or might
decline to order an obligor to perform covenants.
(c) In addition to the application of equitable principles described above,
courts have imposed an obligation on contracting parties to act reasonably and
in good faith in the exercise of their contractual rights and remedies, and may
also apply public policy considerations in limiting the right of parties seeking
to obtain indemnification under circumstances where the conduct of such parties
is determined to have constituted negligence.
(d) No opinion is expressed herein as to (i) Section 8.05 of the Credit
Agreement, (ii) the enforceability of provisions purporting to grant to a party
conclusive rights of determination, (iii) the availability of specific
performance or other equitable remedies, (iv) the enforceability of rights to
indemnity under federal or state securities laws or (v) the enforceability of
waivers by parties of their respective rights and remedies under law.
The foregoing opinion is solely for your benefit and may not be relied upon
by any other Person other than (i) any other Person that may become a Lender
under the Credit Agreement after the date hereof and (ii) King & Spalding, in
connection with their opinion delivered on the date hereof under Section 3.01 of
the Credit Agreement.
Very truly yours,
C-3
EXHIBIT C-2
FORM OF OPINION OF COUNSEL FOR THE COMPANY UPON EXTENSION
OF THE COMMITMENT TERMINATION DATE
AND EXERCISE OF THE TERM LOAN CONVERSION OPTION
, 20
------------------ ---
To each of the Lenders parties to the $3,750,000,000
364-Day Revolving Credit Agreement referred to
below
Re: CP&L Energy, Inc.
Ladies and Gentlemen:
This opinion is furnished to you by us as counsel for CP&L Energy, Inc.
(the "Borrower") in connection with [the extension of the Commitment Termination
Date until , under Section 2.16 (the "EXTENSION")]1 [the
-------- -- -----
exercise of the Term Loan Conversion Option under Section 2.17 (the
"EXERCISE")]2 of the $3,750,000,000 364-Day Revolving Credit Agreement, dated
as of November 15, 2000 (the "CREDIT AGREEMENT", the terms defined therein being
used herein as therein defined), among CP&L Energy, Inc. certain lenders from
time to time parties thereto (the "LENDERS"), Citibank, N.A., as Administrative
Agent for the Lenders, ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney, Inc., as
Joint Lead Arrangers, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., as Syndication Agent.
In connection with the preparation, execution and delivery of the Credit
Agreement, we have examined:
(1) The Credit Agreement.
(2) The documents furnished by the Borrower pursuant to
Section 3.01 of the Credit Agreement.
[(3) The Request for Extension of Commitment Termination Date and
Certificate, dated , submitted by the Borrower in connection with the
-----
Extension.]1
[(4) The Notice of Term Loan Conversion Option, dated _____, submitted by
the Borrower in connection with the Exercise.]2
------------------------
1 For use in connection with the Extension.
2 For use in connection with the Exercise.
1 For use in connection with the Extension.
2 For use in connection with the Exercise.
C-2-1
(4) The Restated Charter of the Borrower (the "CHARTER").
(5) The By-Laws of the Borrower and all amendments thereto
(the "BY-LAWS").
We have also examined the originals, or copies of such other corporate
records of the Borrower, certificates of public officials and of officers of the
Borrower and agreements, instruments and other documents as we have deemed
necessary as a basis for the opinions expressed below. As to questions of fact
material to such opinions, we have, when relevant facts were not independently
established by us, relied upon certificates of the Borrower or its officers or
of public officials. We have assumed the authenticity of all documents submitted
to us as originals, the conformity to originals of all documents submitted as
certified or photostatic copies and the authenticity of the originals, and the
due execution and delivery, pursuant to due authorization, of the Credit
Agreement by the Lenders, the Agents and the validity and binding effect thereof
on such parties.
We have also reviewed the NCUC Order and the SCPSC Order [OTHERS?], each of
which is attached hereto.
We are qualified to practice law in the States of North Carolina, South
Carolina, Florida and New York, and the opinions expressed herein are limited to
the laws of the States of North Carolina, South Carolina, Florida and New York
applicable to public utilities and the Federal laws of the United States. No
opinion is expressed as to the choice of law provisions contained in Section
8.08 of the Credit Agreement.
Based upon the foregoing and upon such investigation as we have deemed
necessary, we are of the following opinion:
(6) The Borrower is a corporation duly organized, validly
existing and in good standing under the laws of the State of
North Carolina, and is duly qualified to do business and in good
standing in the State of South Carolina.
(7) The execution, delivery and performance by the Borrower
of the Credit Agreement, [after giving effect to the Extension,]1
[after giving effect to the Exercise,]2 are within the Borrower's
corporate powers, have been duly authorized by all necessary
corporate action, and do not contravene (i) the Charter or the
By-Laws or (ii) any law, rule or regulation applicable to the
Borrower (including, without limitation, Regulation X of the
Board of Governors of the Federal Reserve System) or (iii) any
contractual or legal restriction binding or affecting the
Borrower. The Credit Agreement has been duly executed and
delivered on behalf of the Borrower.
(8) No authorization, approval or other action by, and no
notice to or filing with any governmental authority or regulatory
C-2-2
body is required for the due execution, delivery and performance,
by the Borrower of the Credit Agreement, [after giving effect to
the Extension,]1 [after giving effect to the Exercise,]2 other
than the NCUC Order and the SCPSC Order [OTHERS?], each of which
has been duly issued, is final and in full force and effect, and
all periods for review or appeal thereof have expired, and no
request for review or appeal has been filed and is pending.
(9) The Credit Agreement [after giving effect to the
Extension] [after giving effect to the exercise of the Term Loan
Conversion Option] is the legal, valid and binding obligation of
the Borrower enforceable against the Borrower in accordance with
its terms.
(10) To the best of our knowledge, except as described in
the reports and registration statements that the Borrower has
filed with the Securities and Exchange Commission, there are no
pending or overtly threatened actions or proceedings against the
Borrower or any of the Subsidiaries before any court,
governmental agency or arbitrator that purport to affect the
legality, validity, binding effect or enforceability of the
Credit Agreement or that are likely to have a materially adverse
effect upon the financial condition or operations of the Borrower
or any of the Subsidiaries.
The opinions set forth above are subject to the following qualifications:
(a) The enforceability of the Borrower's obligations under the Credit
Agreement is subject to the effect of any applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or similar law affecting
creditors' rights generally.
(b) The enforceability of the Borrower's obligations under the Credit
Agreement is subject to the effect of general principles of equity, including
(without limitation) concepts of materiality, reasonableness, good faith and
fair dealing (regardless of whether considered in a proceeding in equity or at
law). Such principles of equity are of general application, and, in applying
such principles, a court, among other things, might not allow a contracting
party to exercise remedies in respect of a default deemed immaterial, or might
decline to order an obligor to perform covenants.
(c) In addition to the application of equitable principles described above,
courts have imposed an obligation on contracting parties to act reasonably and
in good faith in the exercise of their contractual rights and remedies, and may
also apply public policy considerations in limiting the right of parties seeking
to obtain indemnification under circumstances where the conduct of such parties
is determined to have constituted negligence.
(d) No opinion is expressed herein as to (i) Section 8.05 of the Credit
Agreement, (ii) the enforceability of provisions purporting to grant to a party
conclusive rights of determination, (iii) the availability of specific
performance or other equitable remedies, (iv) the enforceability of rights to
indemnity under federal or state securities laws or (v) the enforceability of
waivers by parties of their respective rights and remedies under law.
C-2-3
The foregoing opinion is solely for your benefit and may not be relied upon
by any other Person other than (i) any other Person that may become a Lender
under the Credit Agreement after the date hereof and (ii) King & Spalding, in
connection with their opinion delivered on the date hereof under Section 3.01 of
the Credit Agreement.
Very truly yours,
C-2-4
EXHIBIT D
FORM OF OPINION OF COUNSEL
TO THE ADMINISTRATIVE AGENT
AND THE ARRANGERS
[DATE]
To Citibank, N.A. ("CITIBANK"), as Administrative
Agent for the Lenders referred to below, and to each
of the Arrangers and Lenders parties to the Credit
Agreement referred to below
Re: CP&L Energy, Inc.
Ladies and Gentlemen:
We have acted as counsel to the Administrative Agent and the Arrangers in
connection with the preparation, execution and delivery of the $3,750,000,000
364-Day Revolving Credit Agreement, dated as of November 15, 2000 (the "CREDIT
AGREEMENT", the terms defined therein being used herein as therein defined),
among CP&L Energy, Inc., certain Lenders from time to time parties thereto,
Citibank, N.A., as Administrative Agent for the Lenders, ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. and
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney, Inc., as Joint Lead Arrangers, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., as
Syndication Agent.
In this connection, we have examined the following documents:
1. a counterpart of the Credit Agreement, executed by the parties
thereto;
2. the documents furnished by or on behalf of the Borrower pursuant to
subsections (b) through (h) of Section 3.01 of the Credit Agreement,
including, without limitation, the opinion of Hunton & ▇▇▇▇▇▇▇▇ (the
"BORROWER OPINION").
In our examination of the documents referred to above, we have assumed the
authenticity of all such documents submitted to us as originals, the genuineness
of all signatures, the due authority of the parties executing such documents and
the conformity to the originals of all such documents submitted to us as copies.
We have also assumed that you have independently evaluated, and are satisfied
with, the creditworthiness of the Borrower and the business terms reflected in
the Credit Agreement. We have relied, as to factual matters, on the documents we
have examined.
To the extent that our opinions expressed below involve conclusions as to
matters governed by law other than the law of the State of New York, we have
relied upon the Borrower Opinion and have assumed without independent
D-1
investigation the correctness of the matters set forth therein, our opinions
expressed below being subject to the assumptions, qualifications and limitations
set forth in the Borrower Opinion.
Based upon and subject to the foregoing, and subject to the qualifications
set forth below, we are of the opinion that the Credit Agreement is the legal,
valid and binding obligation of the Borrower, enforceable against the Borrower
in accordance with its terms.
Our opinion is subject to the following qualifications:
(a) The enforceability of the Borrower's obligations under the Credit
Agreement is subject to the effect of any applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or similar law affecting
creditors' rights generally.
(b) The enforceability of the Borrower's obligations under the Credit
Agreement is subject to the effect of general principles of equity, including
(without limitation) concepts of materiality, reasonableness, good faith and
fair dealing (regardless of whether considered in a proceeding in equity or at
law). Such principles of equity are of general application, and, in applying
such principles, a court, among other things, might not allow a contracting
party to exercise remedies in respect of a default deemed immaterial, or might
decline to order an obligor to perform covenants.
(c) We note further that, in addition to the application of equitable
principles described above, courts have imposed an obligation on contracting
parties to act reasonably and in good faith in the exercise of their contractual
rights and remedies, and may also apply public policy considerations in limiting
the right of parties seeking to obtain indemnification under circumstances where
the conduct of such parties is determined to have constituted negligence.
(d) We express no opinion herein as to (i) the enforceability of Section
8.05 of the Credit Agreement, (ii) the enforceability of provisions purporting
to grant to a party conclusive rights of determination, (iii) the availability
of specific performance or other equitable remedies, (iv) the enforceability of
rights to indemnity under federal or state securities laws or (v) the
enforceability of waivers by parties of their respective rights and remedies
under law.
(e) Our opinions expressed above are limited to the law of the State of New
York, and we do not express any opinion herein concerning any other law.
The foregoing opinion is solely for your benefit and may not be relied upon
by any other person or entity.
Very truly yours,
D-2
EXHIBIT E
FORM OF REQUEST FOR EXTENSION
OF THE COMMITMENT TERMINATION DATE
$3,750,000,000 364-DAY REVOLVING CREDIT AGREEMENT
dated as of November 15, 2000
-----------------------------------
CP&L ENERGY, INC.
(Borrower)
AND
THE BANKS LISTED ON THE SIGNATURE PAGES HEREOF
(Banks)
and
CITIBANK, N.A.
(Administrative Agent)
and
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY, INC.
(Joint Lead Arrangers)
and
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
(Syndication Agent)
Request for Extension of Commitment Termination Date
and
Certificate of Representations and Warranties and No Default
I, [ ], [ ] of CP&L Energy, Inc., do hereby
-------------- -----------------
request that the Commitment Termination Date of the $3,750,000,000 364-Day
Revolving Credit Agreement, dated as of November 15, 2000 (the "CREDIT
AGREEMENT", the terms defined therein being used herein as therein defined),
among CP&L Energy, Inc., certain Lenders from time to time parties thereto,
Citibank, N.A., as Administrative Agent for the Lenders, ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. and
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney, Inc., as Joint Lead Arrangers, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., as
Syndication Agent, be extended for an additional 364-day period (hereinafter the
"PROPOSED EXTENSION") pursuant to Section 2.16 of the Credit Agreement and, in
E-1
connection therewith, hereby certify as follows: (i) as of the date hereof, the
representations and warranties set forth in Section 4.01 (including without
limitation those regarding any required approvals of or notices to governmental
bodies) of the Credit Agreement are and will be as of the effective date of the
Proposed Extension accurate both before and after giving effect to the Proposed
Extension; and (ii) as of the date hereof, no Event of Default, as defined in
Section 6.01 of the Credit Agreement, has occurred, nor has any event occurred,
that with the giving of notice or the passage of time or both, would constitute
an Event of Default, in either case both before and after giving effect to the
Proposed Extension.
Witness my hand this day of , .
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------------------------
[ ]
----------------
E-2
EXHIBIT F
FORM OF REQUEST FOR
TERM LOAN CONVERSION OPTION
$3,750,000,000 364-DAY REVOLVING CREDIT AGREEMENT
dated as of November 15, 2000
-----------------------------------
CP&L ENERGY, INC.
(Borrower)
AND
THE BANKS LISTED ON THE SIGNATURE PAGES HEREOF
(Banks)
and
CITIBANK, N.A.
(Administrative Agent)
and
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY, INC.
(Joint Lead Arrangers)
and
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
(Syndication Agent)
Request for Term Loan Conversion Option
and
Certificate of Representations and Warranties and No Default
I, [ ], [ ] of CP&L Energy, Inc., do hereby
-------------- ---------------
exercise the Term Loan Conversion Option of the $3,750,000,000 364-Day Revolving
Credit Agreement, dated as of November 15, 2000 (the "CREDIT AGREEMENT", the
terms defined therein being used herein as therein defined), among CP&L Energy,
Inc., certain Lenders from time to time parties thereto the Banks, Citibank,
N.A., as Administrative Agent for the Lenders, ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. and ▇▇▇▇▇▇▇
▇▇▇▇▇ Barney, Inc., as Joint Lead Arrangers, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., as
Syndication Agent, pursuant to Section 2.17 of the Credit Agreement and, in
connection therewith, hereby certify as follows: (i) as of the date hereof, the
F-1
representations and warranties set forth in Section 4.01 (including without
limitation those regarding any required approvals of or notices to governmental
bodies) of the Credit Agreement are and will be as of the effective date of the
Term Loan Conversion Option accurate both before and after giving effect
thereto; and (ii) as of the date hereof, no Event of Default, as defined in
Section 6.01 of the Credit Agreement, has occurred, nor has any event occurred,
that with the giving of notice or the passage of time or both, would constitute
an Event of Default, in either case both before and after giving effect to the
effectiveness of the Term Loan Conversion Option.
Witness my hand this day of , .
------ --------- ----
------------------------
[ ]
----------------
Vice President and Treasurer
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EXHIBIT G
FORM OF COMPLIANCE CERTIFICATE
[Letterhead of CP&L Energy, Inc.]
[DATE]
To the Lenders party to the
Credit Agreement referred
to below and to Citibank, N.A.
as Administrative Agent
CP&L Energy, Inc.
-----------------
Ladies and Gentlemen:
This compliance certificate is furnished to you pursuant to Section 5.01(i)(ii)
of the Credit Agreement, dated as of November 15, 2000 (the "Credit Agreement"),
among CP&L Energy, Inc., a North Carolina corporation (the "BORROWER"), the
banks listed on the signature pages hereof (the "BANKS"), Citibank, N.A.
("CITIBANK"), as administrative agent (the "ADMINISTRATIVE AGENT") for the
Lenders (as hereinafter defined) hereunder, ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. and ▇▇▇▇▇▇▇
▇▇▇▇▇ Barney, Inc., as joint lead arrangers (the "ARRANGERS"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇
& Co., as syndication agent (the "SYNDICATION AGENT"). Terms defined in the
Credit Agreement are used herein as therein defined.
1. As of [ ], 2001, the ratio of Consolidated Indebtedness of the
-------
Borrower and its Subsidiaries to Total Capitalization was to 1.0,
-----
calculated, in accordance with Section 5.01(j) of the Credit Agreement, as
follows:
A. Indebtedness as of such date was $ , calculated as follows:
--------
Current Indebtedness: Amount
------
[List all forms of current Debt]
---------------------------------- $
----------------------------------
---------------------------------- ----------
---------------------------------- ----------
Total current Indebtedness $
----------
G-1
Long-term Indebtedness : Amount
------
[list all forms of long-term Indebtedness ]
---------------------------------- $
----------------------------------
---------------------------------- ----------
---------------------------------- ----------
Total long-term Indebtedness $
----------
Total Indebtedness (current Indebtedness plus $
---- ----------
long-term Indebtedness )
B. Total Capitalization as of such date was $ , calculated as follows:
-----
["the current portion of long-term debt"] $
["total capitalization"] $
capitalized leases $
capitalized power purchase agreements $
Total Capitalization ("the current portion of long-term debt"
plus "total capitalization" plus capitalized leases plus
---- ---- ----
capitalized power purchase agreements) $
----------
2. As of [ ], 2001, and as of the date hereof, no Event of Default
-------
and no event that, with the giving of notice or lapse of time or both, will
constitute an Event of Default, has occurred and in continuing.
F-2
I hereby certify that the calculations set forth in paragraph 1 hereof were
prepared in accordance with generally accepted accounting principles consistent
with those applied in the preparation of the financial statements referred to in
Section 4.01(e) of the Credit Agreement.
Very truly yours,
CP&L ENERGY, INC.
By:
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Treasurer:
F-3